Savara, Inc. Stock

Good afternoon, everyone, and welcome to the 44th Annual JPMorgan Healthcare Conference. Today, we are pleased to be joined by Savara. My name is Tam Safonov, and I'm going to be moderating this session. Savara team today is represented by Matt Pauls, the CEO; Braden Parker, Chief Commercial Officer; and Brian Robinson, EVP, Global Medical Affairs. The format is going to be standard. The team is going to present, and then we will subsequently open the floor up for any Q&A from the audience. And with that, Matt, over to you.

Thank you very much. Welcome, everyone, and I guess, almost good evening or good afternoon. I'm Matt Pauls, Chair and CEO of Savara. I want to thank JPMorgan for the invitation to participate again this year, second year in a row for Savara and for us. I'm joined by my colleagues, Braden Parker, Chief Commercial Officer; and Dr. Brian Robinson, Head of Global Medical Affairs. Standard safe harbor statement for your consideration and assessments.

At Savara, we have -- we're in the process of continuing to build out a world-class experienced orphan rare disease company predominantly. And this is a group of people who have been there and done it and done it on multiple occasions. So I'm thrilled to have the opportunity to work with this esteemed group of people. Savara is a single-asset company. We have one late-stage product, MOLBREEVI, a novel inhaled biologic, which we'll talk about in detail. And it -- we currently have submitted our BLA in the U.S. for MOLBREEVI's application for use in autoimmune pulmonary alveolar proteinosis or autoimmune PAP, a severe, rare lung disease, a very serious disease that does not have any approved therapeutic options in the United States, Europe or the U.K.

So what is autoimmune PAP? It is a lung disease of macrophage dysfunction in the alveolus in the lungs. So it's caused by GM-CSF autoantibodies that go in and block really GM-CSF signaling and therefore, reduce the ability of surfactant to be cleared. So then surfactant, this oily protein will build up in the lungs. And it blocks movement of oxygen from the alveoli into the blood. And that reduced blood oxygenation causes significant issues, especially as it builds up in the lungs over time around breathing and many other sequelae that flow from that, unfortunately.

So as I mentioned, autoimmune PAP is rare. It is a chronic long-term disease. By definition, as an autoimmune condition, it is something that, unfortunately, for patients, they'll probably be grappling with, dealing with their whole entire lives. So how does it present? Patients will show up to the pulmonologist, and they will complain of shortness of breath, dyspnea that's getting worse over time, and it's marked. It affects then their exercise tolerance, their ability to be active, activities of daily living progressively decline as, of course, like any of us, their breathing is impaired and continues to be impaired. They have chronic cough often, fever. They have -- they'll complain of and will be evidenced by ongoing lung infections that can't clear, that don't clear. And it makes sense if you have surfactant buildup that's not clearing, it's a good breeding ground, unfortunately, for infection.

And for patients who are deemed severe and/or have been dealing with autoimmune PAP for a lengthy amount of time, unfortunately, for some patients, they may, in fact, have to deal with fibrosis and some patients ultimately have lung transplant. The unfortunate part about patients who get to that stage is, given the autoimmune nature of the disease, even with lung transplant, the disease very often comes back.

So how are patients treated today in the U.S., U.K. and in the EU? Well, unfortunately, and patients go through a long journey, and it's -- there's a lengthy time to diagnosis, which I'll talk about in more detail shortly. There is one rescue procedure that is done at specialty centers, a nonstandardized, arguably barbaric procedure called lung lavage. So this is for patients whose breathing gets so impaired that they need to have their lungs basically power washed. So they go into the hospital. They -- this is often a couple of days -- it's often a daylong procedure, the lung lavage. And then the recovery is intensive care because it is -- it takes a great toll on patients.

So they go in, they go under general anesthesia. There's multiple members of the treatment team that are helping to power wash the lung. They will isolate one lung at a time, and they will use a double-lumen endobronchial tube that they'll put in the mouth. They will then basically drown the lung with saline and use gravity to drain out the surfactant as much as they possibly can. Now oftentimes, the patient will need to be percussed. So there is a physical mechanical component to this as well to help loosen up the surfactant.

It is, I think, safe to say that as a rescue procedure, patients are fortunate to have this at some specialty centers, very few specialty centers around the world as an option when things are really bad. I think what we also can agree is this is not the answer that a patient needs on a day-to-day basis. They need a chronic therapeutic to help reduce surfactant burden.

So let me pause here for a second and talk about what's it like for a patient to live with autoimmune PAP. And so we have developed a relationship with Karli. And Karli has an autoimmune PAP, and she has been so generous as to share her story with us and agreed to allow us to share it with you. Karli's journey has been actually rather typical for many autoimmune PAP patients, long and arduous process to finally get a diagnosis. For example, Karli saw 9 specialists before a pulmonologist finally diagnosed her with autoimmune PAP. That's because when she -- the symptoms started to show up when she was 18, it resembled a bad cold with cough and shortness of breath. Her breathing progressively got worse. It eventually started to really limit her day-to-day activities. And she describes simple tests like walking short distances or climbing stairs causing exhaustion, quite frankly.

She also talked about when she would lie flat, she felt like she was drowning. And I don't know about you, but that to me is a terrifying description for anyone. And unfortunately, for her, it became a regular thing. She lived with severe fatigue, coughing fits and her breathlessness just continued to get worse and worse. And as I mentioned earlier, it took her 9 specialists and about 3 years before she was able to get properly diagnosed. And so you can see here, there's not just the physical impact of the disease that is devastating. But for a college age young woman to lose basically 3 years of her life trying to sort out what's going on, it's pretty tragic.

Now the good news is she finally got diagnosed. And -- but there's still bad news. There's not a chronic therapeutic that's approved for her, and we are very hopeful that in the near term, there will be with MOLBREEVI. So as I mentioned, the journey is long. It's -- our company is -- we take it very seriously that it's our responsibility, quite frankly, to help disrupt this and improve it and make it better to help patients shorten the time to diagnosis, and we'll talk in much more detail shortly about how we are already doing that, and we will continue to do it and even increase the effort to do that.

So let's talk about MOLBREEVI. MOLBREEVI or molgramostim inhalation solution is our novel inhaled biologic that we currently have under -- or soon to have, hopefully, under review with the FDA and in Europe and the EU. It is a drug device combination. It is delivered through nebulization. It's once daily 300 micrograms. And it is delivered through a proprietary eFlow nebulizer system that we have partnered with one of the global leaders in nebulizer manufacturers, and that is PARI. It is optimized to deliver a large molecule like MOLBREEVI. And fortunately, PARI, our partner, has already 5 FDA-approved nebulizers based on the same technology, the eFlow technology.

As you will see, there's an eBase controller and then an eFlow nebulizer handset that is replaced every month for the patients when they receive their shipment. It is about a 20-minute once-a-day procedure. Set up, 3 to 5 minutes of nebulization and then clean up. So very user-friendly. We filed the BLA last month, December, with -- based on the positive results of our global Phase III registrational trial, IMPALA-2. IMPALA-2 enrolled 164 subjects, 48-week double-blind placebo-controlled trial. Of the 164 patients, 159 completed the trial. And of the 159 that completed the trial, all 159, 100% enrolled in the open-label extension. In my career, that's really unprecedented. And I think there's nothing but positive read-through or interpretation of that.

So the results. The primary endpoint was DLCO, and the primary endpoint was measured at week 24. DLCO, MOLBREEVI versus placebo and statistically significantly better results for MOLBREEVI versus placebo. In addition, key secondary endpoints was change from baseline to week 48 in DLCO. So while the trial was a 48-week double-blind placebo-controlled trial, the primary endpoint was a look back at 24 weeks. So to have a winning study, DLCO to win at 24 weeks and key secondary endpoints were measured at both 24 and 48 as well. SGRQ or St. George's Respiratory Questionnaire, both total as well as activity, 2 separate key secondary endpoints. SGRQ total, stat sig, SGRQ activity, nominally stat sig at week 24. And then the final key secondary endpoint was the measurement of exercise tolerance via -- exercise capacity via treadmill test. And at 48 weeks, exercise capacity was statistically significantly better than placebo.

So DLCO is deemed a surrogate endpoint. The cost of entry on a winning study was we had to win at 24 weeks on DLCO and MOLBREEVI won and performed better than placebo at 24 weeks. Also, because of the surrogate endpoint nature of DLCO, the key secondary endpoints had to help be supportive regarding clinical benefit. And it is our belief that based on the results that, that, in fact, did happen.

Safety and tolerability, very well tolerated, only about 3% discontinuation and as I mentioned, 100% of the patients, 159, all enrolled in the open-label extension. In addition, we have some real-world data. This is a case study of 5 patients in Europe who were treated in patient assistance program in Europe. And all 5 patients -- well, 4 of the 5 patients had whole lung lavage prior to starting MOLBREEVI. One was queued up and ready to have a lung lavage, but then was instead started on MOLBREEVI. Mean duration of therapy, over 4 years. And since initiation of therapy, none of the patients have had a lung lavage. And as you can see on the right, the pictures of their high-res CT scans markedly improved post MOLBREEVI therapy. So compelling additional supportive open-label case study data of 5 subjects.

The results from IMPALA -2 were published in the New England Journal of Medicine last August. And there we did have a proof-of-concept Phase II/III study, the IMPALA study. Those data were published also in the New England Journal of Medicine in September of 2020. So as I mentioned, we submitted the BLA at the end of December. We anticipate FDA acceptance and filing at the end of February. We also -- our base case is that MOLBREEVI will be assigned priority review and that would put PDUFA in the U.S. in the August time frame. In addition, we are committed to filing the MAA in both Europe and U.K. by the end of the first quarter. So we're on track. Also, multiple designations, including importantly in the U.S., Breakthrough designation upon approval, 12 years of regulatory exclusivity in the U.S. in Europe based on orphan drug designation 10 years. And we have emerging both patent protection. So one patent issued drug device combo in Europe, a liquid formulation patent forthcoming in Europe, and those patents are also being prosecuted around the world. So very long runway with regard to exclusivity.

On the commercial front, we are, the team, very active, and we're working feverishly to prepare the market. In the epi literature, the current -- and the low end of the epi literature is about 6 to 8 per 1 million. At the high end, the Kitamura data from 2019 is approximately 26 per 1 million. We have recently run a second U.S. claims database analysis project, and it yielded approximately 5,500 autoimmune PAP patients in the United States, which equates to about 16 per 1 million right down the middle of the epi fairway. So a robust market opportunity, and we are actively, as we speak, working to prepare the market for the potential approval in the U.S. of MOLBREEVI later this year.

The U.S. PAP market is concentrated. You'll see that top 500 accounts manage about 65% of the identified PAP patients. So efficient and actionable with a field-based team of approximately 30 employees. So with regard to segmentation, patient segmentation, about 2/3 of patients are deemed moderate to severe and about 1/3 mild. Interestingly, though, given this long-term chronic nature of the disease, we believe that any patient with a confirmed diagnosis of autoimmune PAP will -- should and hopefully will be offered MOLBREEVI. And one could argue also that the earlier in the course of the disease, the better, turn the signal on, start to reduce surfactant burden as early as you possibly can. And while we can't prove it yet, is there a potential for delaying patients moving from mild to moderate, moderate to severe and maybe potentially avoiding the lung lavage.

Our commercial planning is off and running. We have a small group already of market development managers and field medical. We are in the process right now of recruiting and bringing on the rest of the market development team by the beginning of the second quarter. So they will have approximately 6 months to continue to organize structure and prepare the market for the potential approval and launch of MOLBREEVI later this year. Approximately just over 2 years ago, the team developed a diagnostic, a free blood test that will diagnose autoimmune PAP patients. It is a 100% sensitive and specific test Again, no cost. It's one that we fully support. And it is a -- started out as a serum-based test. We've evolved it since then to a dry blood spot test, 4 drops of blood in a card and within 7 days, the physician gets a yes or no and a titer level.

We are currently in the process of scaling up across the United States, flowing from our University of Florida ILD clinic pilot, additional ILD clinic sites to see if we can accelerate time to diagnosis for currently undiagnosed patients. We're excited to continue to support that, and we're making a real impact on that front. So as I mentioned, we are actively in process of getting the field-based team up and running, and they'll be hired and ready to go early in the second quarter. Again, very efficient, 1,700 targeted accounts, about 4,500 targeted health care professionals, predominantly pulmonology. And in addition, already to date, the small, very efficient and productive team that we have -- of the 5,500 currently diagnosed patients in the U.S., we've already been out and done confirmatory characterization work of about 1000-or-so patients to help accelerate potential uptake upon approval of MOLBREEVI. So great work by the team on that front, too.

In addition, recently, we announced that we've entered an agreement with arguably the best-in-class specialty pharmacy, PANTHERx. They are going to be our exclusive specialty pharmacy partner, and they will provide traditional specialty pharmacy, rare disease claim adjudication, medication shipments and education as well as the wraparound white glove services to support very importantly, patients, but also physicians. So we're excited to work with them, and they are a tremendous partner already. And as I mentioned, the wraparound white glove services, which are so important. It's for the rare disease community, and we're thrilled to be working with PANTHERx on that front, too.

Continuing to advance the commercial prep. We have guided to a pricing corridor still to be determined where we end up landing, about $400,000 to $500,000 per patient per year. It will be pharmacy benefits in the Medicare population, it will be a Part D benefit. On the commercial side, you can imagine specialty tier, typical prior auth criteria and payers have told us in this price range that there's not much concern with regard to budget impact. On the right-hand side, you'll see about 60% or so of patients we believe will be in the commercial part of the payer mix, about 1/3 Medicare and a small number of low -- mid- to low single digits in Medicaid.

So in summary, around commercial prep, very concentrated efficient market opportunity, significant unmet need. This is a serious disease in need of a serious solution, right, or at least a serious tool to help them reduce surfactant burden, improve breathing, activities of daily living and maybe potentially avoid some of the long-term, very negative potential outcomes that many patients like Karli have had to deal with. From a financial perspective, our company is very well capitalized pro forma, about $264 million in cash. We have a strong -- very strong biotech specialist investors who are our biggest shareholders and great coverage on the equity research side of the equation.

So in summary, the investment thesis, approximately 5,500 patients in the United States, pricing corridor of $400,000 to $500,000, long, long runway. We believe the terminal value here is big. It's significant. And therefore, the durability of the revenue opportunity here long. It has blockbuster potential. There's no question about it. Thank you very much.

Thank you, Matt, for this insightful presentation. We will now open the room for any Q&A that audience might have. Please do raise your hand if you have any questions at this point.

You mentioned about the testing. How many tests do you believe you are going to be ready to distribute in your country?

Yes, sure. Thanks. So we've not talked specific numbers on current administered tests. And the reason is very simple because the minute we start going down that path, we get asked about it every few minutes. So we've not talked specifically about the numbers, but I will say this, that we commissioned a small pilot at University of Florida in the ILD Clinic. And it has -- it's very, very clear that there are a number of undiagnosed patients with autoimmune PAP in the ILD clinic setting. Therefore, we're expanding that now to the ILD clinic setting. In addition, patients or physicians right now can go online on our website, apapclearpath.com, and they can order the dry blood spot test at no cost right now. And that's happening as well. So as we get closer to, again, hopefully, potential approval and launch, we'll talk in more specifics about numbers around testing.

Next question, anyone.

Just given it's an autoimmune disease, are patients treated with steroids or IVIG or plasmapheresis [indiscernible]

I'll ask my colleague, Dr. Robinson, to comment.

Yes, sure. So it turns out that steroids may be detrimental in these patients. So it's not recommended that steroids be used at all. But having said that, it tends to be a catchall in both the pulmonary and autoimmune space to use steroids. But those studies have shown that it doesn't work and the fact it can exacerbate the disease. As far as other approaches, like you mentioned plasmapheresis, there have been some studies that have looked at plasmapheresis as a modality to help these patients. And while it does work, it's very -- it does work as been shown in a few case studies. There haven't been extensive studies looking at it. And it turns out that if you do have to do plasmapheresis, you have to do it like weekly and it becomes untenable because you have to repeat it several times. So it's really not a practical approach. And as I said, the studies are really small, limited to case studies.

Any more questions from the audience at this stage? If not, I think I have one online. I guess getting back to the commercial opportunity, maybe you can tell us a bit more about how you're thinking about the size and what gives you confidence about the size in particular? Have you undertaken any recent exercises assessing it or anything like that?

Yes, sure. So Braden, do you want to comment on that?

Yes. We're fortunate in this category in the sense that there is a specific ICD-10 code for PAP. Autoimmune PAP represents 90% plus of it. So as Matt showed on one of the slides, we had done some recent database work with an extremely large data set of about 10 billion records -- or 100 billion records, excuse me, open and closed data source claims data. And in that analysis, we identified 5,500 patients that have a known diagnosis today. And if you look at the epidemiology in the published literature, the range can be anywhere from 6 patients per million to 26 patients per million and the 5,500 that we identified is about 16 patients per million.

So we do believe that, that is the floor of the marketplace in the U.S. And with no founders' effect, it should be -- we should see similar numbers around the world. Now what gives us great confidence in these data are the way the analysis was conducted. So patients were tokenized in the data set. So we know that they're unique. They had to be active in the system with some type of treatment procedure done in the last 2.5 years of that analysis. And then there was additional clinical criteria applied to the data set, whether it's multiple diagnosis codes or multiple pulmonology visits or signs and symptoms that are captured in the claim as well. And so misdiagnosis or miscoding, I should say, was minimized as well. So for all of those reasons, we have a strong degree of confidence in the 5,500. And as Matt mentioned, with the testing program in place, again, we think this is the floor. And over time, we'll see how large the market can get.

I think we have another question here.

I'm curious, do we target severe patients or also moderate and mild patients?

Yes. So I'll comment on that. So as I mentioned earlier, we believe -- I mean, it's a natural -- often a natural market dynamic for moderate to severe patients to be the first patients that are -- that physicians look to and also patients whom are feeling really bad looking for a solution to try something like MOLBREEVI assuming approval. I think the way to think about this disease, though, is it's a little different. And it's not just me. It's what we hear from our key opinion leaders and pulmonologists who diagnose and treat autoimmune PAP. Even a patient that is mild, right, but is symptomatic enough to have gone through the long arduous journey of getting the diagnosis, they should be offered MOLBREEVI, right? They should. And the reason is very logical. The earlier that you can turn the signal on and improve gas exchange, right, and reduce surfactant burden, the better. And so we -- while again, natural for the more severe patients to be considered first, our efforts will be targeted at anyone diagnosed with autoimmune PAP.

Thank you, Matt. Any further questions from the audience? I guess getting back to the commercial point, commercialization point, you've obviously shown us the targeted pricing for MOLBREEVI. Were you looking at any other comparable rare disease drug launches recently that would give you the confidence into the set pricing range?

Braden?

Yes. We had conducted some pricing research with payers a little while ago as the slide indicated. And it's not surprising payers are unfamiliar with autoimmune PAP as they are typically with any other rare disease. But once you educate them on the disease state, they understand the burden of it. When you educate them on the clinical data for MOLBREEVI, they understand the real value there as well. And we identified a pricing corridor of $300,000 to $500,000 per patient per year, which we've since narrowed as you saw on the slide, to $400,000 to $500,000 per patient per year. And in that corridor, you would see coverage with typical prior auth criteria. And as Matt mentioned, a little concern about budget impact.

And part of the process with this pricing research is really to look at some analogs as well and across a whole host of different types of metrics for first-in-class, is it a biologic? What's the prevalence of the disease state? And it's oftentimes difficult to compare apples-to-apples in that because we know every rare disease is slightly different. But we have a high degree of confidence in the pricing corridor that was identified in the research for all the reasons that we mentioned. So this is something that we continue to monitor like we do all the different aspects of the commercial launch, and we'll see where we're at by the time of the PDUFA, but we're certainly confident in the range that we've identified will give us a reimbursement environment that should provide access.

I guess you touched on PDUFA, but -- and that leads to the next question, which is when do you expect to hear from the FDA if they've accepted your BLA resubmission and whether that would be the same date when you will find out your PDUFA date?

Yes. So we resubmitted the BLA in December -- late December and anticipate it's a 60-day -- often 60-day review that puts us kind of at the end of February time frame. So we'll expect to hear then. And we also, as mentioned, are expecting that we'll also receive priority review. So we'll either hear it at that time or at day 74 kind of in that time frame. But that is the -- again, the base case assumption.

Thank you. Let me check if there are any more questions from the audience at this stage. I guess, if not, we can wrap it up.

Great.

Thank you, Matt.

Thank you very much.