Regulus Therapeutics Inc (RGLS) 2021 Q2 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to the Regulus Therapeutics Second Quarter 2021 Financial Results Conference Call. (Operator Instructions) Please be advised that today's conference is being recorded. (Operator Instructions)

I would now like to hand the conference over to Cris Calsada, Chief Financial Officer of Regulus Therapeutics. Thank you. Please go ahead.

Thank you. Good afternoon, and thank you for joining us to discuss Regulus Therapeutics Second Quarter 2021 Financial Results and Corporate Highlights.

Joining me on today's call is Jay Hagan, President and Chief Executive Officer; and 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'd like to remind you 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 purposes 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.

Thanks, Cris, and welcome, everyone, to our second quarter earnings call and business update. The team at Regulus had a very productive second quarter continuing through the last several weeks, which I'm pleased to share with you today.

We just completed our preparations and associated documents and have requested a Type A meeting with FDA. The objective for this meeting is to get feedback on our overall approach to addressing the remaining hold requirements and the data generated to date that forms the basis of the modeling requirements laid out by FDA. When a Type A meeting is requested, FDA typically grants a meeting or provides feedback within 30 days from the seat of the meeting request. We look forward to sharing updates on that progress.

This past June at PKD Connect, we announced additional data from the first cohort of patients in our Phase Ib clinical trial of RGLS4326 in patients with ADPKD. The additional data demonstrated clinical proof of mechanism by showing that short-term treatment with RGLS4326 led to target engagement in the kidneys and consequently led to statistically significant increases in both polycystin-1 and polycystin-2. The overall trend in these protein changes show increasing levels of both PC1 and PC2 over time with a sustained effect 1 month after completion of dosing, which suggests to us that less frequent dosing could be utilized. Measured levels of PC1 and PC2 have previously been shown to be inversely correlated with disease severity. Thus, these data serve to further validate miR-17 as a target for ADPKD treatment.

Also at PKD Connect in June, we presented new data generated by our collaborator at University of Texas Southwestern, Dr. Vishal Patel. These new data were from a certain preclinical model that is very analogous to the human disease and showed that treatment with RGLS4326 results in increased gene and polycystin levels in vitro as well as significant improvements in total kidney size, cyst count and overall kidney health. The model is relevant in that it harbors a PKD1 mutation equivalent to human at ADPKD.

With regards to safety, as previously reported, RGLS4326 was well tolerated by all 9 patients in this first cohort with no serious adverse events reported, and all reported AEs or adverse events were mild and generally transient in nature.

Returning to our ongoing Phase Ib clinical study of RGLS4326, we're also pleased to announce today that we've recently completed enrollment of the second cohort of patients. Now these patients are being administered 0.3 milligrams per kilogram of RGLS4326 every other week for 4 doses. The dose of RGLS4326 for the third and final cohort will be chosen based on the results of this second cohort in relation to what we've been able to demonstrate already at 1 milligram per kilogram, and enrollment in that third and final cohort would be expected to commence sometime in the fourth quarter this year. We anticipate top line data from the second cohort in the fourth quarter as well.

And finally, after completing what we believe is a robust and extensive non-GLP tox assessment of our next-generation compound targeting miR-17, we have formally nominated the molecule as a clinical candidate named RGLS8429. GMP manufacturing for GLP tox and Phase I clinical studies is underway with an IND anticipated in the first quarter next year. Recall, this molecule was designed to have an overall improved product profile compared to RGLS4326. By retaining all of the key beneficial aspects, including its potency for the target miR-17 as well as preferential kidney distribution while also dialing out activity towards the putative receptor underlying the clinical signs associated at the dose limited tox level of RGLS4326.

And finally, a team back in our labs at Regulus continues to advance our understanding of the role of microRNA in important disease areas.

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

Thanks, Jay. Turning to our financial results. As of June 30, 2021, our cash and cash equivalents totaled approximately $41.4 million, which is approximately $9.8 million more than our $31.6 million cash balance at the end of March 31, 2021. During the 3 months ended June 30, 2021, we raised $15.4 million in gross proceeds through our ATM facility at a weighted average price per share of $1.26. With this attention to the balance sheet, we now expect our existing cash can fund planned activity into Q4 2022.

Research and development expenses for the second quarter of 2021 totaled $4.2 million compared to $4.2 million in the same period for 2020. These amounts reflect the internal and external costs associated with advancing our preclinical and clinical pipeline.

General and administrative expenses for the second quarter of 2021 totaled $2.5 million compared to $2.3 million for the same period in 2020. These amounts reflect personnel-related and ongoing general business operating costs.

Net loss for the second quarter of 2021 was $6 million compared to a net loss of $6.9 million for the same period in 2020. Basic and diluted net loss per share for the second quarter of 2021 was $0.08 per share compared to basic and diluted net loss per share of $0.23 per share for the same period in 2020.

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

Thanks, Cris. Obviously, a quick update, but a couple of point important milestones that the team has hit on, and now we're waiting to take your questions.

Operator, please open the lines.

(Operator Instructions) And your first question is from the line of Yanan Zhu with Wells Fargo Securities.

So with regard to the FDA meeting that you have requested, will the topic of the meeting mainly be the model? Or would you also be talking about your clinical data from at least the first cohort? And by the time -- and also could -- with regard to the model, could you talk and elaborate a little more on what is the input and what is the output of the model? And what is FDA looking for in the model?

Yes. Good question. I'll try to tackle that in stride here. So yes, the -- our objectives are twofold. One, to get feedback on our approach, which is basically the model that we've built, to predict exposure of extended duration. That's number one. And then the second objective would be then, what level of safety margins would they want us to see in any simulated dosing -- dose level and dose frequency. And so the model incorporates data, and I think we've discussed this in the past. We were waiting to get data from the first cohort to finalize the model because we wanted data from patients for plasma to predict exposure of extended duration, and so we have that data. That was the final piece that went into the model. It took us a bit of time to get it right. We wanted to be as prepared as possible before we requested the meeting. So we've included those data with the submission as well as the biomarker changes in addition to the safety and PK data.

Great. And a quick follow-up. Would you be able to share any cohort II data with FDA by the time the meeting occurs? And lastly, how would you like to communicate the FDA meeting results to investors?

Yes, yes. So as far as cohort II data, just as we did with cohort I, Yanan, we are blinded and don't have access to the data until it's complete. And so right now I wouldn't anticipate that we'll have cohort II data within the next month, and as we've guided that the FDA typically provides feedback or meeting date within 30 days of the request. So unlikely.

But importantly, we don't need the data, we don't believe, because we've got the requisite plasma exposure data for which the model is built. And we know earlier in our MAD studies in healthy volunteers that exposure was dose proportional, so it wouldn't really serve to necessarily improve the model significantly over what we have already. Longer term, we may include it when we get to a complete response. Because the step after this, if we have a positive engagement with FDA and get this feedback would be a complete response to the remaining hold requirements, which we then could determine whether or not we want to include it.

And lastly, I'll just make sure I know you didn't answer it or asked the question, but the biomarker changes whether or not we see them in the second cohort is not necessarily relevant to addressing the remaining hold requirements.

And then as far as how we communicate with investors, I think, let us have the meeting and then we'll figure out how best to communicate. As you know, from your experience, sometimes you choose to wait to get meeting minutes in the event there's not clarity in the meeting. So we'll make that call when we have the meeting.

And your next question is from the line of Andreas Argyrides with Wedbush Securities.

Just a quick one from us following up from the FDA question. What -- when can you expect following the meeting and the feedback that you get from there -- well, what can you expect feedback from the FDA following the meeting? What's the usual time line there?

Yes. So typically, the way it works, Andreas, is that we may get even draft feedback to the questions ahead of the meeting like within, say, 48 hours of the meeting. So on the sense of going in, is there additional last minute prep we need to make or otherwise, then you -- and you can further define your sort of topics of engagement with FDA based on the preliminary feedback you get right before the meeting. And then you obviously have a meeting. And they can choose to just provide written feedback and say, "We don't see the need for a meeting." But we don't suspect that to be the case here. And then through the course of the meeting, obviously, a discussion there, then the meeting minutes are finalized from which typically come within a month after the meeting.

Okay. That's all. You guys are pretty straightforward on time lines and clear on all these things. So I appreciate it.

And your next question is from the line of Yi Chen with H.C. Wainwright.

Jay, just to clarify, you have completed all the required tests by the FDA. And now you're just meeting with the FDA to see whether their results meet their expectations. Is that correct?

Yes, correct. We were told that we needed to build a model to predict exposure of extended duration. And obviously, that's a, how do I describe it, a mathematical simulation, which involves assumptions and all sorts of stuff. So we want to get their feedback on the approach we've taken. These are population PK models that you build. And so do they find our model to be robust and predictive? And so that's question 1. And question 2, if so, at what dose level and dose frequency, i.e., that equates to a safety margin? Are they comfortable with us moving forward with that? And so those are the 2 main objectives.

Got it. So if the FDA is satisfied with the output of the model and the PK data, they should remove the remaining part of the partial clinical hold, right?

That's what we're hoping for.

Okay. With respect to the new molecule, the 429, is that right?

8429, yes.

8429, 8429. Okay. So what additional preclinical studies need to be conducted before this molecule enters a clinical trial?

I'll ask my colleague, our Chief Scientific Officer, Dr. Denis Drygin, to maybe chime in on what work is ongoing there.

We are currently in the process of completing the IND-enabling studies as well as manufacturing of the supply for the Phase I trial. There are also some minor avenue studies, which are just a common battery you go through before starting the clinical trial, which is still ongoing.

And we also -- just from an exploratory standpoint, we've been asked how does -- you've seen in our corporate deck, how 4326 stacks up against tolvaptan. We similarly have conducted some efficacy studies looking at head-to-head and also in combination and see nice additive effects there. Those data has not yet been published, but...

That is correct.

Yes.

This is the work -- is done by Dr. Vishal Patel, our collaborator.

Got it. So is the development status of 4326 going to affect in any way the future development of 8429?

That's a good question. And we look at it as this is a two-pronged approach providing optionality. One is for life cycle, and we could spend a bit of time talking about that in greater detail. Right now, 4326 is dosed in a weight-based approach, milligrams per kilogram. And so unless we switch that to a fixed dose with an auto-injector, it presumably would be administered in a physician's office. That's part of the reason why we're interested in looking at monthly dosing.

And then 8429, it's earlier in development. Obviously, not yet in the clinic. Could be positioned as a potential fixed-dose approach with an auto-injector and could ultimately cannibalize or put 4326 in a different niche setting. And so those are some of the options that we're kicking around internally as we think about development.

We -- 8429 should benefit, if I showed you the 2 structures that they look awfully alike, and so it should benefit from the work that we've done already validating miR-17 with the changes in polycystin levels both from a dose frequency standpoint, such that the clinical development can be accelerated for 8429 because we'll be doing less dose range finding work and basically falling quickly in the footsteps here of 4326. And obviously, as a contingency plan, too. If it turns out that in our discussions with FDA that there's more extensive work that needs to be done such that 4326 no longer retains a significant lead in terms of time potentially to market, then we may choose to pursue 8429.

So we'll see how that plays out, but we like where we're at from a positioning standpoint having this optionality. And I think you and I have discussed in the past, like every small molecule developer, you're always developing next-gen molecules with improved profiles, and so we've similarly done that here.

And sir, there are no further questions at this time. I will now turn the call back over to Jay Hagan, CEO of Regulus Therapeutics.

Well, thank you very much for joining us today, everyone. And I do want to mention that on the investor front, we'll be participating in the upcoming Wedbush PacGrow Healthcare Conference tomorrow, and we appreciate your time and support of Regulus. Thank you.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.