Regulus Therapeutics Inc (RGLS) 2021 Q1 法說會逐字稿

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

I would now like to hand the conference over to Cris Calsada. Thank you. Please go ahead.

Good afternoon, everyone, and thank you for joining us to discuss Regulus Therapeutics first 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 would 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 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 the 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'll now turn the call over to Jay.

Thanks, Cris, and welcome, everyone, to our Q1 earnings call and business update. Last week, we were very pleased to announce top line data from the first cohort of patients who completed dosing and follow-up in our ongoing Phase Ib mechanism of action study of RGLS4326 in patients with ADPKD. We were successful in showing that measured levels of polycystin-1 and 2 increased greater than 50% and 20%, respectively, by the end of study compared to baseline levels in this short treatment duration study.

We shared those preliminary results from the available data set because we believe these initial data demonstrate human proof of mechanism that the drug hits the target, miR-17, in the kidney as designed. You may recall that we indicated in the press release that 8 of the 9 patients had completed the study follow-up with the remaining ninth patient anticipated in the next couple of weeks. That ninth patient's trends through day 44 or end of dosing were very encouraging. And as we complete the overall data analysis and have any material updates, we'll be sure to share them with you. We are also planning an earlier scientific presentation at PKD Connect in late June of this year with more detailed top line data as well as what we believe are new compelling preclinical data validating the impact of RGLS4326 treatment in animal models of the disease.

Recall that the design of the molecule is to bind the miR-17 in the kidney. This then leads to increased expression of the PKD1 and PKD2 genes and the resultant proteins these genes encode for, polycystin-1 and 2. Measured levels of PC1 and PC2 have been shown to inversely correlate with disease severity and are believed to be directly linked to the underlying genetic drivers of the disease. The overall trend that we saw in polycystin showed increasing levels of both PC1 and 2 over time, with a sustained effect 1 month after completion of dosing, suggesting that less frequent dosing could be utilized.

Understanding patient mutational status may further contribute to understanding impacts on response rates. Approximately 85% of patients with ADPKD are reported to have a mutation in the PKD1 gene with the remaining 15% having a mutation in the PKD2 gene. Additionally, the PKD1 gene has one predicted binding site for miR-17, while the PKD2 gene has 2 predictive binding sites, potentially contributing to differential response rates between the biomarkers.

On the safety front, RGLS4326 was well tolerated by all 9 patients with no serious adverse events reported. All reported AEs were mild and generally transient in nature. Overall, the PK profile of RGLS4326 in patients was similar to that observed in a prior healthy volunteer study. Concentrations of the drug in plasma were greater in patients with the Cmax of approximately 3 micrograms per milliliter relative to healthy volunteers where the Cmax is approximately 2 micrograms per milliliter, which suggests that lower doses may be effective in achieving the desired exposure in the kidney, the target organ of interest.

In this disease, there are approximately 160,000 diagnosed in the U.S. alone. And it is the fourth leading cause of end-stage renal disease. As I mentioned earlier, ADPKD is caused by a mutation in either the PKD1 or PKD2 gene. A mutation in either of these genes disrupts the normal functions of their encoded proteins, polycystin-1 and 2, and reduces their levels and leads to excessive proliferation of the kidney epithelium, formation of multiple cysts, which eventually leads to kidney failure. 50% of ADPKD patients eventually develop end-stage renal disease requiring dialysis or transplant by the age of 60. There's only one recently approved therapy in the U.S., pointing to the need for new treatment options.

Regulus has evolved a strong foundational technology from its inception from Ionis and Alnylam to develop a specific proprietary kidney targeting technology. In preclinical models, we have demonstrated that RGLS4326 preferentially distributes to the kidney and collecting duct-derived kidney cysts. Treatment with RGLS4326 inhibits miR-17 function, increasing the expression of the PKD1 and 2 genes as well as their encoded proteins, polycystin-1 and 2, and most importantly, slows down cyst growth in primary human ADPKD cyst cultures and multiple ADPKD mouse models of the disease. Additionally, both kidney weight and body weight and kidney injury markers are reduced compared to untreated mice, both signs of improved kidney health through treatment with this drug in these disease models.

Our ADPKD program consists of 2 compounds: RGLS4326, the lead molecule, which is being tested in the ongoing Phase Ib study reported last week; as well as our next-generation molecule, which is moving towards the clinic and should be IND-ready around year-end or early Q1 of next year. These molecules are designed to do the same thing, and that is inhibit the function of the miR-17 family of microRNAs, which is upregulated in both humans with the disease as well as in mouse models with the disease.

So in summary, we are very pleased with these data and look forward to the results from the second cohort later this summer as well as engaging FDA on the remaining hold requirements that would permit us to move 4326 into Phase II and beyond. The research team at Regulus also continues to advance our platform technology with some exciting earlier-stage programs in the laboratory.

And finally, before I turn the call back over to Cris, I wanted to welcome our recent addition to our Board of Directors, Dr. Alice Huang. Dr. Huang brings an extensive scientific background to the Board to help direct the company's drug discovery and development efforts. Dr. Huang is currently Senior Faculty Associate of Biology and Biologic Engineering at the California Institute of Technology. We are pleased to add someone of her caliber to the Regulus Board. Cris?

Thanks, Jay. Turning to our financial results. Our cash balance totaled $31.6 million at the end of Q1 2021, which is approximately $0.5 million more than our $31.1 million cash balance at the end of Q4 2020. We expect our cash runway to extend through the first quarter of 2022.

R&D expenses in Q1 2021 and Q1 2020 were substantially similar at $3.3 million for Q1 2021 and $3.1 million for Q1 2020. These amounts reflect the internal and external costs associated with advancing our clinical and preclinical pipeline.

G&A expenses were $2.5 million for the first quarter of 2021 compared to $2.4 million for Q1 2020. These amounts reflect personnel-related and ongoing general business operating costs.

Net loss for Q1 2021 was $6 million, consistent with the first quarter 2020 net loss of $5.9 million. Our net loss per share on both a basic and diluted basis decreased to $0.08 per share in the first quarter of 2021, down from a net loss per share on both a basic and diluted basis of $0.25 per share in the first quarter 2020.

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

Thanks, Cris. We're happy to take your questions now. Operator, can you open the lines?

(Operator Instructions) We have our first question from Shveta Dighe.

This is Shveta for Liana Moussatos. So for the RGLS4326 cohort 1 data, that data achieved the company's main objective of establishing safety and PK to address clinical hold and establish the proof of concept with biomarkers. But the stock had a negative reaction post the data without. Can you provide some thoughts around it?

Sure. Yes, Shveta. We were puzzled by that as well. Frankly, going into the data set, we've spent a significant amount of time with a number of institutional investors, setting expectations for what we thought we might see and describe that if we saw positive trends in biomarkers, we think that would be a win because this is a very short treatment duration, meaning just 6 weeks of dosing.

And so to see the magnitude of change that we saw in both PC1 and PC2 was very encouraging to us in demonstrating proof of concept and hitting the target, and as I alluded to in my comments, would suggest that just based on the trajectory, which we'll be sharing at the PKD Connect conference, that with continued dosing, you would expect it to continue going up. And so both markers, we could anticipate going up higher than what was recorded at the end of this study at day 71.

I also mentioned the highest levels achieved were at day 71, which was a full 28 days after completion of dosing. We've known that the half-life in the kidney is approximately 2 weeks, and I think this evidence from a pharmacodynamic standpoint supports that understanding of half-life in a human kidney and suggests that less frequent dosing could also be utilized, which would be obviously much more advantageous in the commercial setting.

Got It. And I just have one follow-up question. When can we expect updates from the FDA meeting on the clinical hold?

Yes. So we plan to reach out to them. I think we've said in the past they've been very cooperative with us, our experience with them, and this division seems focused on helping sponsors innovate in areas of significant unmet need. And so we plan to reach out to them to better understand should this be a formal informal process of engaging them on the remaining hold requirements initially because we want to get their feedback. So it could either be informal or through a Type A meeting.

And once we get that, we'll be prepared to follow either route. In the latter route with a Type A meeting, we'd be submitting a briefing book at the time of a meeting request. So our timing will materialize once we understand that route. The team is busy now finalizing the modeling with these data and finalizing the touches on a potential briefing book. And that's why we've guided to sort of a mid-summer interaction with FDA. Per PDUFA, upon request of a Type A meeting, they have 30 days to grant it. And so you're set sort of on a clock at that time.

We have our next question from Yi Chen.

My first question is for patients with the PKD1 gene mutation, which represents 85% of the total ADPKD patients. Does it matter how much improvement does RGLS4326 deliver for the PC2 expression in order to achieve disease improvement?

One could hypothesize that the need in increase in PC2 would be less than in PC1 because they don't have a mutation in the PKD2 gene. And so we've already shared these results with some of our key scientific consultants in the community. And they're equally enthusiastic for the results. And obviously understanding mutational status, they all anticipated that we're likely -- these 9 patients, given their Mayo classification of being Cs, Ds and Es, which is the more advanced disease, and the reported data that those with the mutation in the PKD1 gene have more advanced and aggressive disease, that these were probably all or nearly all patients with a PKD1 mutation.

So it is possible that even 4326 doesn't improve the -- doesn't increase the PC2 expression that much, the drug that can still actually achieve statistical significance in terms of achieving the end point for improving the patient's symptoms with PKD1 gene mutation, right?

Yes. Here's how I would answer that, Yi. so remember, we anticipate this is a chronic treatment that we're not going to give 4, 6, 8 doses and it's done and they're cured. And with the trends that we've observed, as I said, we'd expect both biomarkers to continue to go up with continued treatment. Reaching statistical significance can be achieved through continued dosing or adding more subjects.

Where the disconnect is, well, how much does it have to go up to have a clinical benefit. There, we have some exciting data we hope to share soon where as little as 20% increase in PC1 and PC2 is associated with significant efficacy in animal models. And obviously, we're pioneering work here in this first-in-human study with this first-in-class mechanism. And the great news is though we've got a biomarker that's downstream of the gene target -- or the microRNA target that demonstrates that we're hitting a target and having the subsequent genetic changes that this molecule is designed to do.

So how soon can we expect to see results indicating how much increase in the levels of PC1 and/or PC2 can lead to clinical benefit?

Yes. So we plan to present some -- these data at PKD Connect, including the trends as well as additional preclinical data. What we know is that all of the preclinical validation, which is, in our view and those of our advisers as well as potential strategic partners, quite compelling on this novel mechanism to address the disease. And with 4326, we hit the target. We see increased PKD1 and PKD2 expression. We see increased protein levels of polycystin-1 and polycystin-2. And all of that is associated with the reduction in cyst count and size and basically arresting the cystic expansion associated with the disease in animal models.

Now in humans, we obviously have to advance the program to understand how long will it take to lead to a change in total kidney volume, which would likely be the next marker as well as in -- as well as in ultimately in GFR, which we would do in a Phase II study after this. We didn't, in the short-duration study, measure total kidney volume or calculate GFR with just a view that it would take longer treatment duration to see those kinds of impacts.

But I would also remind you that there are other markers that are indicative of kidney health where we have seen statistically significant improvements in animal models, particularly in KIM-1 and NGAL in more aggressive animal models with the disease. And in this study, we shared last week that although 8 of the 9 patients had NGAL levels within the normal range, which is quite broad, I would say as well, it goes up to units of 0 to 72 nanograms per mil. And we did have one patient that came in, though, who had nearly twice the upper limit of normal and saw after each dose reduction in NGAL back to the normal level.

And it's a net of one, so we don't want to make too much out of it. But it does beg the question in a larger study or one where you can enrich for some of those markers of kidney damage might you be able to demonstrate efficacy -- earlier efficacy than, say, a total kidney volume change or a GFR change.

So in your view, which biomarker or measurement will likely become the primary efficacy endpoint in the future Phase II trial?

I think the primary -- we're very encouraged with the division's cooperation with Sanofi on venglustat, where they are -- can receive an accelerated approval on a change in total kidney volume in a Phase II study so long as they commit to fully enrolling a Phase III cohort that would continue on in the post-marketing setting for full approval if they demonstrate an improvement in GFR over placebo.

And based on our estimates of trial size and design, that would be -- effectively the Phase II accelerated portion would be approximately 250 patients dosed for 1 year to see that impact on total kidney volume with perhaps an interim look at 6 months and then an additional 250 that would be added to that for the full approval a year after that, 2 years of follow-up for the GFR.

So that theoretically could be something that could be starting for us sometime next year, and obviously, if we're successful in addressing remaining hold requirements and we've got alignment with the division as to what that pathway looks like for moving the product forward.

Got it. Got it. Does the company currently have sufficient capital to fund the operations into 2022?

Yes. I think as Cris mentioned in her prepared remarks, Yi, we ended the first quarter with more cash we ended the year with. And so you'll see in our quarterly filing that we had utilized the ATM in the earlier part of the quarter, and we're able to add to the balance sheet. So we haven't changed our guidance that we've got cash through Q1, but you can imagine we're burning right now about $2 million a month, and we got $31 million -- nearly $32 million on the balance sheet. So my quick math would suggest that that's 16 months or so. Yes. And that's obviously without raising any additional capital.

We have our next question from Yanan Zhu.

So first question, you mentioned continued dosing may further increase the effect on the PD markers. When might be the opportunity to see that? I mean after this -- the current study, the 3 cohorts, which are all -- have the same duration, is there an opportunity to have another study to have a longer duration but not necessarily the kind of final or registrational study that you just mentioned?

Yes. We've thought a lot about that, Yanan. That's a really good question. What additional derisking could we do at a given dose level. And we've considered that after we discuss these results with FDA, perhaps we take an interim step of doing, call it, a 3-month study at a certain dose level to see additional markers. And so that's all under consideration.

Okay. Got it. And then you mentioned NGAL, but also, I think you tracked KIM-1. Could you talk a little bit about the findings on KIM-1 in terms of the baseline and also any changes for all the patients?

Yes. We're still in the process of analyzing those data. But I think as Denis is talking with me here internally, we would anticipate that those are probably all likely within the normal range as well. That marker as well as NGAL is used to diagnose acute kidney injury. And that, we would suspect, would come if we enrich for patients that were even more advanced in their disease.

Right. Okay. And then you -- I think on your last call, you mentioned 2 of the 9 patients have PC2 increase more than 50%. So that certainly looks consistent with your estimate of 15% of the patient might be PC2 mutations. Of course, you'll do the genotyping work or look for the past molecular diagnosis to pinpoint that. But before that data is available, just wondering in those 2 patients, what does their PC1 increase look like? I guess if they...

It was also -- and we'll share all this at the upcoming scientific conferences, but they also had an increase in PC1 that was quite notable. It wasn't as if the PC2 goes up and PC1 doesn't go up. They had -- those patients had low baseline levels of both, too.

I see. And lastly, maybe can you give a sense of in a PC1 patient, for example, what's the level of PC1 and PC2 relative to the normal level?

It's approximately, I think, three to fivefold lower in patients with the disease than in healthy volunteers. And we have that on our investor deck, Yanan, where you can see that it's variable amongst the disease severity. The lower the level of polycystin looks to clearly correlate with the higher disease burden as measured by height-adjusted total kidney volume. And so -- and we see that.

So the most advanced patients with one E Mayo classification have the lowest levels of polycystin. And then amongst healthy, you've got quite a bit of variability. So the trend of up, we think, is good, and we believe it's good. And we know that with fairly minimal changes, we see an impact in animal models.

Right. Just a quick clarification. For a PC 1 patient -- PC1 mutation patient, is PC1/PC2 down to the -- is the decrease similar? Or PC1 is down much more than PC2?

PC1 tends to be more down than PC2. PC2 is more abundant. And as you, I think, know, these form, these heterodimers, in a ratio of 1:3 of polycystin-1 and polycystin-2 and then are assembled on cilia and involved in flux.

Got it. And my last question is with regard to the assay that you used to measure PC1, PC2 on the exosomes. Is that assay -- I understand it's immunoassay. Does that -- is that assay -- does that also pick up the mutant form of the protein? I guess unless the mutant is all truncation mutations, but could there be a possibility that part of the truncated protein or a point mutation protein get expressed on the exosome and being detected by the assay?

This is Denis Drygin, the CSO. I'll take this question. So we have just recently had a teleconference with key opinion leaders in the field. And they told us that they do not believe or there is no evidence that any of those truncated proteins are hanging around enough. Basically, their -- because of their nature, their stability is very low and they are being rapidly degraded.

Yes. So the ELISA wouldn't -- so we wouldn't expect the ELISA to [go down].

Yes.

There are no further questions at this time. And I would like to turn the call over back to Jay Hagan.

Great. Thank you, and thanks, everyone, for joining us today. I do want to mention on the investor front, we'll be participating in Oppenheimer's upcoming Rare & Orphan Disease Summit later next week. And we appreciate your time and support of Regulus. Thank you. That concludes the call.

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