Regulus Therapeutics Inc (RGLS) 2021 Q4 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to the Regulus Therapeutics Q4 2021 Conference Call. (Operator Instructions)

I would now like to turn the call over to your host, Cris Calsada. You may begin.

Thank you, operator. Good afternoon, and thank you for joining us to discuss Regulus Therapeutics' fourth quarter and full year 2021 financial results and corporate highlights. With me on today's call Jay Hagan, President and Chief Executive Officer; and Dr. Denis Drygin, Chief Scientific Officer. Jay will provide opening remarks and share progress on our ADPKD program, and I will review the financial results before we open the line for questions.

Before we begin, I would like to remind that this call will contain forward-looking statements concerning Regulus Therapeutics' future expectations, plans, prospects, corporate strategy and performance, which constitute forward-looking statements for the purpose of the safe harbor provision under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in our filings with the SEC. In addition, any forward-looking statements represent our views only as of the date of this webcast and should not be relied upon as representing our views as of any subsequent date. We specifically disclaim any obligations to update such statements.

I will now turn the call over to Jay.

Thank you, Cris. Welcome, everyone, to our fourth quarter and full year 2021 earnings call and business update. 2021 was a transformational year for Regulus with the accomplishments in our ADPKD program and steady progress in our Alport syndrome program made by our partner, Sanofi.

I'll begin first by mentioning the financing last November, in which we successfully closed a $34.6 million private placement on favorable terms that included several new institutional investors and support from several of our existing institutional investors. Given the challenging recent market conditions in the biotechnology sector, and more broadly, our ability to secure this financing, speaks to the promise and viability of our pipeline, which continues to move steadily forward.

In December, we announced the appointment of Dr. Mohammad Ahmadian as Vice President, Chemistry and Pharmaceutical Development. Mohammad's deep experience leading operations for life science companies and background managing various projects, including the development and manufacture of therapeutic oligonucleotides, make him a natural fit for helping to guide our programs forward. His hiring came at a particularly opportune time as we entered into discussions with the FDA regarding the IND for our RGLS8429 ADPKD program.

In January, we announced the successful completion of the pre-IND meeting for RGLS8429, which included minutes detailing the FDA's overall agreement with the sufficiency of the nonclinical package, the overall trial design and the length of our planned Phase I study. With this feedback, we remain on track with our plan to submit an IND application in the second quarter of this year.

As a reminder, our Phase I study plan involves a single-dose escalation study in healthy volunteers, followed by a multiple-dose escalation study in patients with ADPKD, with the goal to establish a dose response around the dose level where robust clinical biomarker effects were demonstrated with RGLS4326, the first-generation compound. Top line biomarker data in the first cohort of RGLS8429-treated patients with ADPKD is anticipated in the first half of next year, and we look forward to providing updates on progress.

Importantly, we are leveraging the clinical pharmacology data from the first-generation molecule to better understand the relationship between dose and exposure, which we intend to use in fine-tuning the dose selection in the SAD and MAD portions of the Phase Ib program. We plan to extrapolate the dose for the fourth and final cohort based on the PK data from the first 2 cohorts of the SAD in healthy volunteers and the exposure at the NOAELs in the IND-enabling tox studies. This will allow us to demonstrate safety and tolerability in humans at the exposure levels from the NOAELs.

We will also use these data, along with learning from the first-generation PK results, to ensure that the dose levels chosen in the MAD portion of the study in patients will provide the exposure that was achieved at the 1 milligram per kilogram level and that produced the robust increases in polysystem levels noted last year. Importantly, we believe our completed IND-enabling tox studies for RGLS8429 will allow us to dose significantly higher than the 1 mg per kg where we saw the impressive increases in polysystems in the first-generation compound.

And one other bit about the upcoming study. We also look at changes in GFR, total kidney volume and cystic architecture over the 3-month dosing period. Since this is a short-term dosing study, we're not likely to see meaningful improvements in these parameters. However, we may be able to correlate polysystem changes with cystic improvements, a potentially significant advancement in understanding the impact of targeting miR-17 in this disease.

Turning briefly to the Lademirsen, our RG-012 program for the treatment of Alport syndrome. Last month, we announced Sanofi's completion of enrollment in the Phase II global HERA clinical study evaluating Lademirsen for the treatment of adult patients with Alport syndrome under our collaboration and license agreement with Sanofi. Alport syndrome represents a significant unmet need with no approved therapies. Final data from this Phase II study is expected in the first half of 2023.

Under the terms of the agreement, the company is eligible to receive $25 million upon successful completion of the ongoing HERA study or initiation of the next phase of development for Lademirsen and, more importantly, potentially provide further validation of our platform technology designed to address genetic kidney diseases. This potential additional cash infusion would further our cash runway into 2024.

We have an ambitious but achievable year ahead of us, and I look forward to continuing our work to further understand the role of microRNA in disease where we can leverage our technology to ultimately improve the lives of the patients.

I'll now turn the call back over to Cris for a discussion of our financial results. Cris?

Thank you, Jay. Turning to our financial results. As of December 31, 2021, our cash and cash equivalents totaled approximately $60.4 million. We expect that our existing cash will fund plan activities through 2023. This guidance does not include the potential Sanofi milestone.

Research and development expenses for the fourth quarter of 2021 totaled $4.4 million compared to $4 million in the same period for 2020. For the full year 2021, R&D expenses were $17.8 million compared to $15.3 million for the prior year. These amounts reflect the internal and external costs associated with advancing our ADPKD program and our other research efforts in our pipeline.

General and administrative expenses for the fourth quarter of 2021 totaled $2.6 million compared to $2.1 million for the same period in 2020. General and administrative expenses for the full year 2021 were $10 million compared to $8.8 million for the prior year. These amounts reflect personnel-related and ongoing general business operating costs.

Net loss for the fourth quarter of 2021 was $7.1 million compared to a net loss of $1.3 million for the same period in 2020, which included an interim enrollment milestone of $5 million from our ongoing collaboration with Sanofi for Lademirsen. Basic and diluted net loss per share for the fourth quarter of 2021 was $0.07 per share compared to basic and diluted net loss per share of $0.03 per share for the same period in 2020. Net loss for 2021 was $27.8 million compared to $15.7 million for the previous year. Basic and diluted net loss per share for 2021 was $0.32 per share compared to $0.45 per share for the prior year.

With that, I will turn the call back over to Jay.

Thanks, Cris. We're happy to take any questions now. Operator, please open the lines.

(Operator Instructions) Our first question comes from Brian Cheng with Cantor.

So first question is on your Phase I study. I'm just curious how you view COVID as a factor in meeting the time line that you have laid out for data from the Phase I SAD portion and also Phase Ib inpatient portion as well? And I have one follow-up.

Sure. Thanks, Brian. Yes. With respect to the SAD, we're planning to conduct the study at the same site we used before where, a couple of years ago, COVID was a much more significant impact. It happened to be in a state that tend to be a little more liberal with respect to COVID restrictions and didn't really encounter any significant issues in terms of recruiting healthy volunteers at a single Phase I unit. So we don't anticipate any impact on that. Of course, these are forward-looking statements and things could change with respect to the pandemic.

And then with respect to the Phase Ib inpatients, we're targeting about double the number of sites we had in the study of the first-generation molecule, which should alleviate concerns about hitting time lines with respect to the time to getting data here.

Okay. And to follow up on your comments about some of the efficacy measures for the second-gen molecule, in the Phase Ib, you'll be looking at GFR and total kidney volume. Based on what you've seen in preclinical data, what's your thoughts about how long will it need for the patients to be on the study, to be on treatment, to see a meaningful response on GFR or total kidney volume?

Yes. In patients with the disease, we've only studied treatment for 6 weeks thus far. So I'm basing our commentary primarily based on what has been required for other compounds in development. And of course, though, our mechanism is quite unique. I think the impact on cystic architecture we've seen with targeting miR-17, to our knowledge, we haven't seen that with any other mechanism. So we're hopeful that we can see something in a short period of time, but that's why we guided that we're cautiously optimistic with respect to seeing something in short of 3 months.

In terms of where we think it would take ultimately in the trial design, we've discussed before in a Phase II study of 1 year in duration to see an impact on TKV. We may see something in GFR in that time frame, but it may take a bit longer. And that's, again, based on historical precedent.

But importantly, there are advancements in MRI imaging that enable one to look at what we're describing as cystic architecture, cyst count and cyst volume. And that's where we're particularly intrigued to see if we can't correlate a change in polysystem levels from baseline with changes in that architecture, which would be quite interesting. And that's where we might be able to see something in the shorter-term duration study.

Our next question comes from Yi Chen with H.C. Wainwright.

My first question is, could you clarify what exactly needs to happen for the company to receive the additional $25 million milestone payment from Sanofi?

Yes. So some of this is obviously confidential with respect to negotiated agreement. We tried to describe it here, Yi. And that is success in the Phase II, meaning hitting the primary end point, or their decision to advance further into clinical development because often, when you prospectively design a study, you're not quite sure of the treatment effect. And so you might see trends that don't quite reach statistical significance and you still may decide to move forward in the clinical development. So in our view, there's sort of 2 ways to win here.

Got it. So my next question is, recently, Reata received the complete response letter for bardoxolone. So how do you see that affect the field for Alport syndrome and for ADPKD as well?

Yes. I don't know any more than what's been disclosed by Reata but, obviously, they've indicated they plan to work with FDA to find what additional information they can provide to address the complete response letter with respect to the CRL for Alport syndrome. So I do know, in discussions with our partner, that we still have the potential here to be the potentially first approved therapy, which is a very significant unmet need, as was discussed at the AdCom, and it's what we know with our work with the with the Alport community.

And given the pharmacology that was described in that Advisory Committee, I don't expect there to be much of a difference in the ADPKD setting where you do have an approved therapy, and it is an older patient population who might be at a greater risk for potential cardiovascular events. So we shall see. They have made a number of adjustments to the trial design, including the amount of follow-up. I think they extended from 4 weeks to 8 weeks and they increased the sample size. So that's ongoing, and we'll see.

(Operator Instructions) And I'm not showing any further questions at this time. I'd like to turn the call back to Jay for any closing remarks.

Great. Thanks, everyone, for joining us today. We appreciate your interest and support of Regulus and look forward to providing updates as we move forward with our programs. Thank you.

Ladies and gentlemen, this does conclude today's presentation. You may now disconnect, and have a wonderful day.