Regulus Therapeutics - Q1 2021

Transcript

Speaker 0

I would now like to hand the conference over to Chris Calzada. Thank you.

Please go ahead.

Speaker 1

Good afternoon, everyone, and thank you for joining us to discuss Regulus Therapeutics' 1st quarter 2021 Financial Results and Corporate Highlights. Joining me on today's call is Jay Hagen, President and Chief Executive Officer and Dennis Dreygen, 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.

Speaker 2

Thanks, Chris, 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 RGLS-four thousand three hundred and twenty six in patients with ADPKD. We were successful in showing that measured levels of polycystin I and II increased greater than 50% 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-seventeen 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 9th patient anticipated in the next couple of weeks.

That 9th 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 will 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 our new compelling preclinical data validating the impact of RGLS-four thousand three hundred and twenty six treatment in animal models of the disease. Recall that the design of the molecule is to bind the miR-seventeen in the kidney. This then leads to increased expression of the PKD1 and PKD2 genes and the resultant proteins these genes encode for, polycystin-one 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 PC2 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-seventeen, while the PKD2 gene has 2 predicted binding sites, potentially contributing to differential response rates between the biomarkers.

On the safety front, RGLS-four thousand three hundred and twenty six 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 RGLS-four thousand two hundred and twenty six in patients was similar to that observed in a prior healthy volunteer study. Concentrations of the drug in plasma were greater in patients with a 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 4th 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 Onilum to develop a specific proprietary kidney targeting technology. In preclinical models, we have demonstrated that RGLS-four thousand three hundred and twenty six preferentially distributes to the kidney and collecting DUC derived kidney cysts.

Treatment with RGLS-four thousand three hundred and twenty six inhibits miR-seventeen 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 to 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: RGLS-four thousand three hundred and twenty six, the lead molecule, which is being tested in the ongoing Phase 1b 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-seventeen family of micronase, 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 2nd cohort later this summer as well as engaging FDA on the remaining 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 Chris, I wanted to welcome our recent addition to our Board of Directors, Doctor. Alice Wong. Doctor. Wong brings an extensive scientific background to the Board to help direct the company's drug discovery and development efforts. Doctor.

Wong 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. Chris?

Speaker 1

Thanks, Jay. Turning to our financial results. Our cash balance totaled $31,600,000 at the end of Q1 2021, which is approximately $500,000 more than our $31,100,000 cash balance at the end of Q4 2020. We expect our cash runway to extend through the Q1 of 2022. R and D expenses in Q1 2021 and Q1 2020 were substantially similar at $3,300,000 for Q1 2021 $3,100,000 for Q1 2020.

These amounts reflect the internal and external costs associated with advancing our clinical and preclinical pipeline. G and A expenses were $2,500,000 for the Q1 of 2021 compared to $2,400,000 for Q1 2020. These amounts reflect personnel related and ongoing general business operating costs. Net loss for Q1 2021 was $6,000,000 consistent with a Q1 2020 net loss of 5,900,000 dollars Our net loss per share on both a basic and diluted basis decreased to $0.08 per share in the Q1 of 2021, down from a net loss per share on both a basic and diluted basis of $0.25 per share in the Q1 of 2020. With that, I will turn the call back over to Jay.

Speaker 2

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

Speaker 0

Thank you, sir. We have our first question from Shveta Dijk. Your line is open.

Speaker 3

Hi. This is Shveta for Liana Moussatos. Thank you for taking my question. So for the RGLS-four thousand three hundred and twenty six 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 was out.

Can you provide some thoughts around it?

Speaker 2

Sure. Yes, Shveta. We were puzzled by that as well. Frankly, going into the data set, we'd spent a significant amount of time with a number of institutional investors, setting expectations for what we thought we might see and described 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 will be sharing at the PKD Connect Conference, that would continue 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 study.

Speaker 3

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

Speaker 2

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 is 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.

Speaker 3

Got it. Thank you.

Speaker 0

We have our next question from Yi Chen. Your line is open.

Speaker 4

Hi. Thank you for taking my questions. My first question is for patients with the PKD1 gene mutation, which represents 85% of the total 80 PKD patients, does it matter how much improvement does RGL-four thousand three hundred and twenty six deliver for the PC2 expression in order to achieve disease improvement?

Speaker 2

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 nice 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 are probably all or nearly all patients with a PKD1 mutation.

Speaker 4

So it is possible that even 4,326 doesn't improve the doesn't increase the PC2 expression that much, the drug can still actually achieve statistical significance in terms of achieving the endpoint for improving the patient's symptoms with PKD1 gene mutation, right?

Speaker 2

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. So 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 as 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, 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 the target and having the subsequent genetic changes that this molecule is designed to do.

Speaker 4

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

Speaker 2

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 advisors as well as potential strategic partners quite compelling on this novel mechanism to address the disease. And with 4,326, 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 a 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 in ultimately in GFR, which we would do in a Phase II study after this, we didn't in this short duration study measure total kidney volume or calculate GFR with just a view that it would take longer treatment durations to see those kinds of impacts. But it 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 Kym-one and NGAL in more aggressive animal models of 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 ml. And we did have one patient that came in though who had nearly twice the upper limit of normal and saw a after each dose reduction in n gout back to the normal level. And it's a net of 1, 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 could 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.

Speaker 4

So in your view, which biomarker or measurement will likely become the primary efficacy endpoint in the future Phase 2 trial?

Speaker 2

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 2 study, so long as they commit to fully enrolling a Phase 3 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 2 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 $250,000,000 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.

Speaker 4

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

Speaker 2

Yes. I think as Chris mentioned in her prepared remarks, we ended the Q1 with more cash than 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 $2,000,000 a month and we got $31,000,000 nearly $32,000,000 on the balance sheet. So my quick math would suggest that that's 16 months or so.

Okay. Yes. And that's obviously without raising any additional capital.

Speaker 4

Right. Thank you.

Speaker 2

Thank you, Yi.

Speaker 0

We have our next question from Yanan Zhu. Your line is open.

Speaker 5

Hi, thanks for taking my questions. 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 registrational study that you just mentioned?

Speaker 2

Yes. We've thought a lot about that, Jan, and 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 a call it a 3 month study at a certain dose level to see additional markers. And so that's all under consideration.

Speaker 5

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

Speaker 2

Yes. We're still in the process of analyzing those data. But I think as Dennis 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 enriched for patients that were even more advanced in their disease.

Speaker 5

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 do the genotyping work or look for the past molecular diagnosis to pinpoint that.

But before that data is available, just wondering, in those two patients, what's their PC1 increase look like? I guess if they

Speaker 2

It's also 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.

Speaker 5

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?

Speaker 2

It's approximately, I think, 3 to 5 fold lower in patients with the disease than in healthy volunteers. And we have that on our investor deck, Jan, 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 1e male classification have the lowest levels of polycystin. And then amongst healthies, you've got quite a bit of variability.

So the trend of up, we think is good. We believe it's good. And we know that with fairly minimal changes, we see an impact in animal models.

Speaker 5

Right. Just a quick clarification. For a PC1 patient, PC1 mutation patient, is PC1, PC2 down to the decrease similar or PC1 is down much more than PC2?

Speaker 2

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 to 3 of polycystin 1 and polycystin 2 and then are assembled on cilia and involved in flux.

Speaker 5

Got it. And my last question is with regard to the assay that you used to measure PC1, PC2 on the exosomes. If that assay, I don't understand, is immunoassay, 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? Thanks.

Speaker 4

This is Dennis Dredgen, 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, there's because of their nature, their stability is very low and they are being rapidly degraded.

Speaker 2

So the ELISA wouldn't we would expect the ELISA to be up.

Speaker 0

Yes.

Speaker 5

Okay, great. Thank you.

Speaker 2

Thank you.

Speaker 0

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

Speaker 2

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 and Orphan Disease Summit later next week and we appreciate your time and support of Regulus. Thank you.

That concludes the