Conference Transcript - RLAY 2026-06-03

Akash, Analyst — Jeffries

This is our New York City Healthcare Conference, and it's a pleasure to see you all. We have the Relay Management Team, fresh from their flights from ASCO, as I am as well. So they are full of energy and really can talk for days. But no, I'm very grateful to have the team here, especially as we're starting to see, I think, the HR-positive breast cancer space play out and understanding where there's different therapeutic opportunities. so I'm actually quite excited to have this conversation with you. Sanjeev, why don't I hand it off to you to give some intro remarks, and we'll get going.

Sanjeev Patel, CEO

Yes, excellent. Thanks, Akash, for the invitation, and thanks to Jeffries. We had a very productive year so far. We've shown three data sets in three large commercial opportunities. The first data set we showed was in second line, hormone receptor positive, HER2 negative breast cancer, or desmotat. We showed in our pivotal trial dose of 400 milligrams BID, an 11-month PFS with an oral regimen, which, you know, we're going up against capivacertib with its five-and-a-half-months' worth of PFS. So we feel very confident as we run our pivotal trial that it will be a success and that we'll offer patients a paradigm shift in treatment. The second data set we shared was in looking at our frontline hormone receptor-positive, HER2-negative breast cancer trial that we'd like to run, where we announced that we will use a novel selective-selective regimen with Zovega and a termocyclic Pfizer's selective CDK4. And we showed what we believe to be a very clean safety profile with great efficacy in third-line patients, and we're excited to bring that into the front line as rapidly as we possibly can. And then a couple of weeks ago at the ISPA conference in Philadelphia, which is the largest conference for vascular anomalies, we showed what we believe to be paradigm-shifting data for these patients that are chronically underserved, where we showed a 60% volumetric rate of response in a field where, you know, the traditional characteristic has been somewhere between 11 and 20%. And so we're kind of full speed ahead now to try and execute all three pivotal trials as rapidly as we can and get these medicines to patients.

Akash, Analyst — Jeffries

Understood. I'm going to start with the breast cancer opportunity, though I want to acknowledge I think the orphan story is just as interesting and, frankly, I think has had an even bigger impact in terms of your near-term stock performance, but we're fresh from ASCO. And I think we've got two really, really interesting data sets. We had, finally, the Persevera data, and then also we got data from Cellcuity, which I think was really interesting. I want to just start off a bit with Cellcuity. And, you know, like, look, this is – it does look like it was an impressive PFS benefit. But no additive benefit on the triplet versus the doublet. And then, you know, 11 months, when we think about the absolute benefit on PFS, was kind of in the range that your team had shown. I'd love to get your take in terms of how you look at the cell QT data. What did you learn about, you know, your own product and how it gets positioned post that data set?

Sanjeev Patel, CEO

Yeah, I mean, obviously, as those of you who have been close to us, It has definitely been a question that we've been asking and I'm trying to answer for the last year. So it's great to actually have the data and the experiment run in the public domain. And for those of you who didn't follow it, what they showed with their triplet regimen, which is a weekly IV regimen of get a tolisib with palbocyclib and endocrine therapy, an 11-month PFS, which is an impressive result, given the standard of care there on the control arm was five and a half months. And so we think it will be a step forward for patients. I think as we, as retains to us, I think the question was, would it be a commercial headwind if we were to then launch into that market? And I think our belief is, you know, having shown now, you know, two large cohorts of patients showing with our oral regimen an 11-month PFS, that it will not. and that we should be able to take share from that market that CellCuity will build very rapidly as patients are going to prefer an oral regimen. I think the concern was that they were going to show 15, 18 months, whatever the numbers that were being bandied around, which obviously would have been more challenging for us to compete against. So I think in terms of just how we feel about the commercial opportunity, I think we feel very confident. In terms of their triplet versus doublet, yes, it was an interesting result to see that in the end there was potentially perceived no benefit for adding a CDK 4.6. Now, we don't know if that's actually the conclusion. As you know, their doublet arm was there really only for a contribution of components. And so it's hard to kind of statistically be accurate that they actually have no benefit. I think our belief is what we saw in the wild-type arm is probably play out in the mutant arm in that there will probably be a little bit of benefit, one to two months, for having the CDK4-6 on board. But really now it does create some confusion for prescribers. Do they prescribe the triplet or the doublet, given the data that has been seen there?

Akash, Analyst — Jeffries

Understood. And look, this is a tricky question, and I'm struggling with this as well. how do you forget for Pete then forget patients how about you I mean you have a partnership with Pfizer with the termo and um really interesting early data but early data yeah um uh and a potential to move this into kind of a first-line setting so you know has your confidence on kind of the termo PIK3 alpha combo changed at all as a result of the cell QD and if not why why does that data point not necessarily point you know read across to the trials you're running yeah no So, it really hasn't.

Donald Bergstrom

As we're moving into a front-line setting, we have proof today from Roche's and AVO120 trial of inovolacib in an endocrine-resistant patient population, front-line treated, where we saw doubling of PFS and an OS benefit for the triplet regimen of inovolacib with palbo and in fulvestrin versus fulvestrin plus palbo. So, we know from that experiment that adding a PI3K inhibitor on top of the CDK4-6 inhibitor in frontline patients can have a very meaningful efficacy benefit. Now one of the shortcomings of that trial was it was highly contrived, run in a heavily selected patient population to avoid some of the metabolic liabilities of inovolacib, and those data have therefore been challenging for prescribers to translate into real-world usage, and we've seen that as a headwind to uptake of inovolusib. But I think when we look at that and when we look at the fact that in endocrine-sensitive patients in frontline, patients with a PIK3CA mutation do not receive the full benefit of the CDK4-6 regimens and perform slightly poorer on PFS, about a year poorer than patients who are PI3K wild type, tell us that as you get into early line breast cancer, Being able to hit both the endocrine node, being able to hit the PI3K node, and then being able to complement that with CDK4 inhibition is really going to be optimal for maximizing outcomes for patients.

Akash, Analyst — Jeffries

And I do want to kind of stratify that a bit because, if I remember correctly, Roche's run endocrine-resistant, that triplet front line. The sensitive population is still coming out. Now, how do you, and again, this will be a nice bridge to Persevera and this topic of endocrine sensitivity, how do you expect the benefit of, you know, a PIK3 alpha triplet in a resistant versus sensitive population? I mean, it sounds like you also expect the Roche trial in the sensitive population, despite the safety liabilities, to still read out positively.

Donald Bergstrom

If patients can stay on interval, that's going to be the key question, because the The resistant, you know, they only needed to stay 15 months. When you get into the sensitive population, the statistics of the ANAVA123 trial are such that the assumption for performance of the control arm, the CDK4-6 doublet in that trial is 20 months. And they're looking for about 30 months in the triplet treated arm. So they'd have to keep patients on a fairly challenging regimen for about twice as long as they did in the ANAVA120 endocrine resistant population.

Akash, Analyst — Jeffries

Okay, understood.

Pete Wehmer

I think, you know, part of your question was how do we have confidence that in the endocrine-sensitive patient population that addiction to the pathway holds that we saw in the endocrine-resistant population? And that's probably best explained if you look at the Mona Lisa 2 results of ribo plus AI in that study. We saw a good, robust subset in PIC3CA mutant versus PIC3CA wild type, and there's still a clear delta in performance there. The mutant population was about 19 and a half months in that study, and the wild type population was closer to 30 months, clearly articulating that there's addiction to the PI3K alpha mutant pathway in that patient population.

Akash, Analyst — Jeffries

That's a great point. Now, heading to the other data set, which was Persevera, and, you know, it's interesting. I think certainly on the pharma investor side, there's this idea that frontline adjuvant for SIRDS is this kind of 20 to even 40 billion opportunity. I can tell you I'm very much skeptical on that. I don't think we saw necessarily that same uptake with the CDK4-6s, with the Natalie trials. Again, major revenue contributor, but not to that level. And when I look at the Roche monotherapy data, I say, okay, maybe these stage two, like there's a subset of patients as a monotherapy. Okay, that's a group, that's not 20 billion, that's three to five, right? Like substantial, but not what I think people talk about. And to me, the uptake is really the combo. But I'd love to get your take, now that you've seen the Persevera data. Let's start with the first biological question. Do you feel like SIRDs work, quote-unquote, in first line? Or do they work in a subset population?

Donald Bergstrom

So there's no question they work. What the question is, do they work better than our existing drugs, aromatase inhibitors? And if you go back, you know, so you mentioned the LIDERA adjuvant trial that was monotherapy, therapy, where clearly the CERD was superior to the available investigator's choice endocrine therapy, in a monotherapy setting, right, where you're really just targeting the estrogen receptor node, and where slightly better targeting, in that case translated into a meaningful difference in terms of clinical outcomes. The challenge when you get into the combination setting is now you've got your CDK4-6 inhibitor on board, which we know from the registrational trials of the CDK4-6 inhibitors versus endocrine therapy monotherapy, like, transformed the outcome for patients in terms of PFS. That CDK4-6 inhibitor is driving a lot of the benefit, and I think it's challenging in that setting to have slightly better endocrine inhibition and have that translate into a meaningful difference on PFS, which is what we've seen in Persevera. Now, there's some suggestion when you look at the PFS curves that there may be some late separation of the curves that could be accounted for by suppressing the emergence of ESR1 mutations with the oral SIRT as opposed to the aromatase inhibitor, which would then place more into the Serena VI type approach where you actually use the emergence of ESR1 mutation potentially as the trigger for identifying patients who would receive the more broadly potent SIRD inhibitor or SIRD.

Akash, Analyst — Jeffries

Understood, though. That outcome did not go, let's say, to AstraZeneca's plan, but understood. Now, when we think about the CDK4, because, again, these are all external data sets but directly apply to your team, we're starting to see frontline data, neoadjuvant data with Etermo. And, you know, there's also that even second-line data that they've only top-lined. But, you know, to me the question is really can we get separation faster and then obviously the safety benefit, could that late emergency tail occur as well? What have you seen so far with CDK4 that makes your team, you know, confident that this would have a benefit over, let's say, CDK4-biased drug like Virginio, right? Again, because I know there's going to be extrapolation, but what data sets are you seeing that's driving your confidence on this partnership?

Sanjeev Patel, CEO

Look, I think the main data is the data that we've generated. We know that in the front line, tolerability is everything. These patients are going to need to be on drug for multiple years, and we know from the Inalvo 120 trial that the efficacy is there of adding a PI3K inhibitor to a CDK4-6 backbone. The challenge is just adding a CDK4-6 background to a PI3K inhibitor leads to tolerability challenges, and patients just can't keep on drug, and the dose intensity declines, and that's what's potentially going to lead to these trials not doing as well as they could. And so our data in these late-line patients, third-line on average, with both the selective profiles of a CDK4 selective and a PI3K selective has shown a very tolerable, safe profile. And so I think in these late-line patients, if we're seeing what we're seeing, I think we feel great that when we bring this to the front line, you will see both the dose intensity and the longevity of these patients on treatment, which will then inevitably lead to the efficacy. And I think that's what's given us confidence to put this in the front line and run this trial.

Akash, Analyst — Jeffries

So it's really more about how many patients are still on drug right now rather than just looking at the initial response rate. Exactly. understood and um there's a possibility i mean if you look at those curves you're at 44 there's a few patients there which are pretty borderline and i mean this is a discussion we've even had on your vascular malformations where like we haven't seen any patient not respond to this drug they just may have not been on the drug long enough um when you think about how that early data set with the termo will evolve over time is there a potential for responses to deepen is there any historical precedents we can maybe point to. And in terms of data disclosure on relay side, when can we expect another update with the Atermo combo?

Sanjeev Patel, CEO

Can we take Don the first one and Pete the second one?

Donald Bergstrom

Yeah, so with regard to responses deepening, I think there could be a possibility of responses deepening. You know, we, the data we presented or that we disclosed in April was across all of the doses that we had tested for the triplet at or below our recommended phase 2 dose. So a number of those patients were treated at dose levels below what we would ultimately take into phase 3. And our experience in the Fulvestrant doublet was that at some of the lower doses were active, but sometimes the responses came later. So I think in this patient population, you know, with the triplet we'll just have to continue following the patients to see if some of those near responses on subsequent scans are able to deepen further.

Pete Wehmer

And on the disclosure, we've guided to showing additional triplet data in the first half of next year. I think what to expect with that update would be obviously more follow-up from the dose-finding portion of the study that we've already reported on, but we've also since moved into dose expansions as we've talked about in that disclosure at the recommended, the potential recommended phase 3 dose of 150 milligrams of Vega, 300 a termo. So we'll show at that point in time the data we have from some of those expansion cohorts also. So it would be a good level of maturity from the dose-finding data and then early data from the expansion cohorts.

Akash, Analyst — Jeffries

I mean, could that update next year, could we start seeing signs on PFS? I mean, is that still going to be mostly just focused on duration of response, focused on ORR? But are we going to get enough maturity where you could start to see differentiation versus what you'd expect in kind of a first-line standard of care setting?

Pete Wehmer

If we continue to just isolate the dose-funding portion of the study, that portion would have over a year of follow-up at that point in time, and so it's possible to potentially start to estimate a median PFS point estimate.

Donald Bergstrom

Okay. With the caveat that we're in median third-line patients right now. So there'd have to be a correction. you know, it's...

Akash, Analyst — Jeffries

Understood. Another tough question in terms of how to design these studies, but again, I selfishly ask because we're trying to figure it out. When you think about powering and your expectations on, let's just say, you know, CDK4, 6 plus AI in a frontline population, I mean, if we think about it in the broader population, okay, it can be about 25 months, but we've seen that PIK3 alpha mutated patients seem to have worse prognostic outcomes where, you know, PFS might actually be more like 18 months. What's the right assumption in terms of the comparator arm for your phase three design? How have you powered that?

Pete Wehmer

Yeah, so we have a few different data points to look at. The one I just cited recently was the Mona Lisa II study where they did good sub-characterization of the PIC-3-state mutated population, and in that study you saw 19 and a half months of meeting PFS. Additionally, in the ENAVIL-123 study, they have posted their statistical plan on CTIS, and they are assuming a 20-month performance in the control arm for that study, and you would imagine they have pretty good real-world information in the fact that they own Five Iron Foundation of Medicine. And then the most recent data set we could look at a little bit, too, is in the Victoria I data that was just reported, they did give the median duration of treatment of the first line metastatic therapy that those patients were just on, and you saw somewhere between 17 and 22 months of median PFS there, too, or median duration of treatment. Not a perfect one, but again, all things, as you're saying, kind of triangulate back to about that 19, 20 months.

Akash, Analyst — Jeffries

And when you think about powering for a phase three to show kind of a clinically meaningful effect, I mean, we're thinking PFS, are we thinking OS? Like, what are we thinking on hazard ratios for both of those endpoints?

Pete Wehmer

Yeah, I think we'll fall short of giving the precise hazard ratios, but I think the way to think about it is, you know, we've done some primary market research asking physicians what would be a clinically meaningful improvement against that 20 months in those patients. And generally, the answer is about six months. And so I think from obviously the primary endpoint in these studies is progression-free survival. We will certainly be conservative in how we power this to make sure we have enough powering for OS as a key secondary. And knowing that the threshold for clinically meaningful improvement is about six months, all these things will go into our statistical assumptions.

Akash, Analyst — Jeffries

Understood. I mean, but bottom line, I mean, if in a frontline population that's not PIK3 alpha mutated, it's 25 months you're saying look we're going to fix that problem and then let's hope cdk4 can add something on beyond but that's is that the right way to think about this yeah the our hypothesis is not at all based upon a termo yeah needing to add anything new or different on the efficacy side it's simply that it needs to be safer and i think the data we have to date is very supportive of that now um as we think about um uh let's let's go maybe on to the vascular malformation side because i think again that's an incredibly important part of that story and since you i want you to talk about this in terms of roi because i don't think that gets talked about enough help us understand how much additional capital will you really need to get this to the commercial stage onto the market? When we think about, you know, pros versus, you know, the broader kind of population, what is that? What's the capital cost? What's the timelines as your base case right now?

Sanjeev Patel, CEO

I mean, I think, you know, in contrast to breast cancer, which is a well-established market where, you know, we see capi versertib, you know, closing on a billion dollars of sales and the trials that we're running both in the second and the frontline, it's a very kind of definite kind of path to market there. You kind of know what the trials are. There are 500 patients in the second line. You know the kinds of sales forces that are out there in the U.S. So I think that world is relatively clear. This one is a little bit more opaque, but I think what we can tell you is, you know, the historical trials here have been relatively small. The Novartis retrospective chart review of 37 patients was what they got accelerated approval on, and their confirmatory trial was just over 100 patients. And so obviously we showed 32 patients' worth of data last week on the safety, 20 on the efficacy, and we're continuing to enroll at a rapid rate. So to answer your question, it could be a very rapid pathway to an accelerated approval and then the confirmatory trials are, you know, in this zone of 100 patients at the upper end here. So this could move both very rapidly and with, you know, relatively modest dollars. And then on the commercial build, it's relatively similar. There are only a small number of vascular anomaly centers in each kind of large European country, and there's probably somewhere between 20 to 30 in the U.S. And so you could probably build yourself a relatively modest commercial presence and footprint here to generate significant revenues. And so all in all, on one side it seems very attractive in that it's very small numbers of dollars here. The kind of unknown on this side, obviously, is how actually, you know, we build this market, because it's a nascent market. You know, it's not a kind of very kind of well-developed market as we see on the breast cancer. And so the dynamics of both are attractive to us. One is, you know, well-trodden pathway, you know, very clear, just produce the data, get share of voice, generate market share. And the other one is, you know, a huge potential for us with relatively modest dollars. But it may take a little bit of time to develop that to fruition.

Akash, Analyst — Jeffries

So, I mean, just to put a finer point on that, would it be fair to say the amount of additional capital needed to run the clinical trials, we're talking about $50 million?

Sanjeev Patel, CEO

I think that's a fair estimate. It's going to be between $50 and $100 million worth of investment.

Akash, Analyst — Jeffries

$50 to $100 million in terms of running the clinical trials. And then in terms of sales force build, I mean, if we look at historical precedents, we're thinking about maybe something $100 million in terms of annualized run rate. Yeah, probably less than that. Even less than that.

Pete Wehmer

Interesting.

Akash, Analyst — Jeffries

Now, you gave really encouraging early data. There's going to be more cohorts that are enrolled. There's going to be more subtypes. And then there's also an FDA discussion to really be had. So let's start with kind of where are you in terms of your dialogue with the FDA? Have you had initial conversation after this top line press release? Any updates Yes.

Pete Wehmer

We're currently guiding that we will have a regulatory interaction this year and come back to the street later this year with the outcome of output from that interaction the goal there is to have a conversation around what would be required if accelerated approval is available to us which we think it is and then what would be required to accomplish that and the two key questions there are going to be around dose and the end required to to support accelerated approval And our going in assumption there will be that we would pool together both pros and at least pool together pros and lymphatic malformations. And so that's where we have a number of topics to try to get through with them. And we would come back and report the outcome of that later this year.

Akash, Analyst — Jeffries

And can you, I know, what I think would be very helpful is can you kind of prospectively lay out the outcomes? Because there seems to be kind of three. One is, all right, we have data in pros. that's what we're gonna let you do the expansion in which seems to be I think a bit restrictive there's the one that I think your team hints is probably most likely which is you know we'll go after at least the two sub types through the two biggest markets and we'll say hey we have enough we show consistency of data in both of these malformations and let us run a confirmatory trial there and then in VM you know if you we may have to run another separate study and then there's the other outcome where look you can run a trial in all three um first of all is that the right framework and then when you set investor expectations what's the reasonable base case right now yes so the one thing you a key point you mentioned there is consistency of data across

Pete Wehmer

these subtypes which is something that the agency will look at today we have since we've reported on four patients in lymphatic malformations three out of the four patients responded two of our Our deepest responses are coming from the lymphatic malformation patients. So I would say today we're seeing signs of consistency of data between the PROS and the LM patients. We're not seeing a difference in safety profile across those two patient populations. And so we need to now grow that end in lymphatic malformations and that consistency has to continue to stay there. But we would, there's no drug approved systemic therapy approved for lymphatic malformations and we believe it to be a severe unmet medical need. And so, yes, our going-in hypothesis is a base case of keeping those two pooled together. Now, if you landed in just an initial label in PROS and you had to separate out lymphatic malformations into a separate single-arm study for accelerated approval, perfectly fine outcome also. You know, alpelisib with just a PROS label and all the shortcomings of that drug had probably treated on the neighborhood of about 5,000 patients or so since they've received accelerated approval. We know in this context, if you could have an agent that could really be used chronically, every 2,000 to 3,000 patients would be about $1 billion in peak sales. So if that's where we land for an initial label and we do sequential close-in SNDAs for lymphatic malformations and venous malformations, that's a perfectly fine outcome also.

Akash, Analyst — Jeffries

Understood. Good. Now, I know you have, I think, four, you know, you had eight LM patients, four that were clinically evaluable. So we may get more data on that subtype as well, and that might feed into the discussion of kind of consistency. Can you kind of remind us what dose those other four patients are going to be on and really how, you know, what's the data cut we could get with that other subgroup by the end of the year?

Pete Wehmer

Yeah, they're spread across the dose randomization doses, so 400, 300, and 100. And so those eight patients total from the dose randomization portion of the study, so 25% of the 32 patients are fully enrolled. And then we've also started expansions. We started expansions a couple of months ago, or a month or so ago at this point. And so we'll also have patients coming in on the expansion cohorts. that could be included in an update later this year. And so we could have more than those eight lymphatic malformation patients.

Akash, Analyst — Jeffries

Okay, understood. So it sounds like more updates to come there. Maybe just, Sanjeev, this is kind of the question for you. You're in this kind of unique perspective where, again, you talk about risk adjustment and spend and then TAM, and both are very, very attractive markets. But the de-risking component on the breast cancer side is certainly going to take longer than maybe the orphan side. And you're also, to a certain extent, capital constraint. How do you think about, I mean, we've seen external financing, royalty agreements, debt agreements. What other sources of capital do you think investors should be paying attention to when you kind of counterbalance both of these opportunities? And number two, is there an appetite to maybe spin off one of these indications entirely, because you feel like that could actually be a value unlock.

Sanjeev Patel, CEO

Okay, so we'll take those slowly. So, as you know, we had ended the quarter with over $600 million of cash, and then we just did a $300 million financing. So we have a pretty robust balance sheet that should take us through to having top-line data on both the breast cancer and the VA's pivotal trials, and we don't imagine there would be too much difference in the timing of those two approvals. In terms of the frontline trial, we have now money to prosecute that all the way out to the readouts of these two. So in terms of just our ability in the near term to execute and generate meaningful value-creating data, we feel pretty confident. And then I think you're in a great situation because, obviously, you sit on two registrational data sets. You sit halfway through a frontline trial. And so I think all of the tools that you just listed, debt, further equity, royalty financing, partnerships, all become available to us. And so I think we feel pretty confident now of our ability to get into the next decade and commercialize in all three indications.

Akash, Analyst — Jeffries

I'm going to sneak in one more question. Post the ASCO data set, because, again, there's multiple CDK4 players. there's multiple people looking at what to do in HR positive. Do you feel like there's been kind of this renewed interest externally of your drug and breast cancer specifically?

Sanjeev Patel, CEO

I think absolutely. If you go back kind of 18, 24 months, there's a lot of unanswered questions. You know, PI3K inhibitors, were they going to be meaningful? You know, what would happen to the oral CERS? Would they dominate in the front line? What about CAT6 in PI3K, alpha-mutated patients, CDK4? CDK463 treatment all of these things I think are starting to resolve themselves and you come back to the simple basics of 40% of patients have a PI3K alpha mutation in those patients the best way to treat them in any line early, first line, metastatic, second line is to have a PI3K alpha inhibitor so I think that is becoming clearly understood by everyone in the field, providers, strategics and biotechs Understood, on that note I really do appreciate it, thanks so much Thank you.