Regulus Therapeutics - Q2 2021

Transcript

Speaker 0

Ladies and gentlemen, thank you for standing by. And welcome to the Regulus Therapeutics Second Quarter 2021 Financial Results Conference Call. At this time, all participants' lines are in a listen only mode. After the speakers' presentation, there will be a question and answer session. Please be advised that today's conference is being recorded.

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

Speaker 1

Thank you. Good afternoon and thank you for joining us to discuss Regulus Therapeutics' 2nd 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 AD PKD 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 James.

Speaker 2

Thanks, Chris, and welcome everyone to our Q2 earnings call and business update. The team at Regulus had a very productive Q2 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 receipt 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 1st cohort of patients in our Phase 1b clinical trial of RGLS-four thousand 2 hundred and twenty six in patients with ADPKD. The additional data demonstrated clinical proof of mechanism by showing that short term treatment with RGLS-four thousand three hundred and twenty six 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-seventeen 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, Doctor. Vishal Patel. These new data were from a certain preclinical model that is very analogous to the human disease and showed that treatment with RGLS-four thousand three hundred and twenty six 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 ADPKD.

With regards to safety, as previously reported, RGLS-four thousand three hundred and twenty six 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 1b clinical study of ARGULIST 4,326. We're also pleased to announce today that we've recently completed enrollment of the 2nd cohort of patients. Now these patients are being administered 0.3 milligrams per kilogram of RGLS-four thousand three hundred and twenty six every other week for 4 doses.

The dose of RGLS-four thousand three hundred and twenty six for the 3rd and final cohort will be chosen based on the results of the second cohort in relation to what we've been able to demonstrate already at 1 milligram per kilogram. And enrollment in that 3rd and final cohort would be expected to commence sometime in the Q4 this year. We anticipate top line data from the 2nd cohort in the 4th 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-seventeen, We have formally nominated the molecule as a clinical candidate named RGLSA429. GMP manufacturing for GLP tox and Phase 1 clinical studies is underway with an IND anticipated in the Q1 next year.

Recall this molecule was designed to have an overall improved profile compared to RGLS-four thousand three hundred and twenty six. By retaining all of the key beneficial aspects, including its potency for the target, miR-seventeen, as well as preferential kidney distribution, while also dialing out activity towards the putative receptor underlying the clinical signs associated at the dose limiting tox level of our GLS-four thousand three hundred and twenty six. And finally, the 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 Chris for a discussion of our financial results before we get to your questions. Chris?

Speaker 1

Thanks, Jay. Turning to our financial results. As of June 30, 2021, our cash and cash equivalents totaled approximately $41,400,000 which is approximately $9,800,000 more than our $31,600,000 cash balance at the end of March 31, 2021. During the 3 months ended June 30, 2021, we raised $15,400,000 in gross proceeds through our ATM facility at a weighted average price per share of 1.26 dollars With this addition to the balance sheet, we now expect our existing cash can fund planned activity into Q4 2022. Research and development expenses for the Q2 of 2021 totaled $4,200,000 compared to $4,200,000 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 Q2 of 2021 totaled $2,500,000 compared to 2 point $3,000,000 for the same period in 2020. These amounts reflect personnel related and ongoing general business operating costs. Net loss for the Q2 of 2021 was $6,000,000 compared to a net loss of $6,900,000 for the same period in 2020. Basic and diluted net loss per share for the Q2 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.

Speaker 2

Thanks, Chris. Obviously, a quick update about a couple of important milestones that the team has hit on. And now we're ready to take your questions. Operator, please open the lines.

Speaker 0

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

Speaker 3

Hi. Thanks for taking my questions. So with regard to the FDA meeting that you have requested, would 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 elaborate a little more on what is the input and what is the output of the model and what is FDA looking for in a model? Thanks.

Speaker 2

Good question. I'll try to tackle that in stride here. So yes, our objectives are twofold. 1, to get feedback on our approach, which is basically the model that we've built to predict exposure of extended duration. That's number 1.

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 1st cohort to finalize the model, because we wanted data from patients for plasma to predict exposure of extended durations. 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.

Speaker 3

Great. And a quick follow-up. Would you be able to share any Cohort 2 data with FDA by the time the meeting occurs? And lastly, how would you like to communicate the FDA meeting results to investors? Thank you.

Speaker 2

Yes. So as far as Cohort 2 data, just as we did with Cohort 1, Janan, 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 2 data within the next month. And as we've guided that 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 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 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 ask the question, but the biomarker changes whether or not we see them in the 2nd cohort is not necessarily relevant to addressing the remaining hold requirements.

Speaker 4

And then as far

Speaker 2

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 a meeting.

Speaker 0

And your next question is from the line of Andres R. D. Roth with Wedbush Securities.

Speaker 5

Good afternoon. It's Andres on for Liano. 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 timeline there?

Speaker 2

Yes. So typically the way it works, Andres is that we may get even draft feedback to the questions ahead of the meeting within say 48 hours of the meeting. So we have a sense of going in, is there additional last minute prep we need to make or otherwise. Then you and you can further define your 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 then the Then the meeting minutes are finalized, which typically come within a month after the meeting.

Speaker 5

Okay. That's all. I mean, you guys are pretty straightforward on timelines and clear on all these things. So appreciate it. Thanks, Jay.

Speaker 2

Sure.

Speaker 0

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

Speaker 4

Thank you for taking my questions. Jay, just to clarify, you have completed all the required tests by the FDA and now you are just meeting with the FDA to see whether the results meet their expectations. Is that correct?

Speaker 2

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? And so those are the 2 main objectives.

Speaker 4

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?

Speaker 2

That's what we're hoping for.

Speaker 4

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

Speaker 2

8,429, yes.

Speaker 4

8,429, okay. So what additional preclinical studies need to be conducted before this molecule enters a clinical trial?

Speaker 2

I'll ask my colleague, our Chief Scientific Officer, Doctor. Dennis Dryden to maybe chime in on what work is ongoing there.

Speaker 3

Good afternoon. We are currently in the process of completing the IND enabling studies as well as manufacturing supply for the Phase 1 trial. There are also some minor avenues studies, which are just a common battery

Speaker 2

you go through before starting the clinical trial, which are still ongoing. And we also just from an exploratory standpoint, we've been asked how does you've seen in our corporate deck how 4,326 stacks up against Tilvapta. And we similarly have conducted some efficacy studies looking at head to head and also in combination and see nice additive effects there. Those data have not yet been published, but That is correct. Yes.

Speaker 3

This is the work that is done by Doctor. Schalk Patel, our collaborator.

Speaker 4

Got it. So is the development status of 4,326 going to affect in any way the future development of CD4-29?

Speaker 2

That's a good question. And we look at

Speaker 4

it as this is a

Speaker 2

2 pronged approach providing optionality. One is for lifecycle and we could spend a bit of time talking about that in greater detail. Right now, 4,226 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 physician's office. That's part of the reason why we're interested in looking at monthly dosing.

And then 8,429, 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 4,326 in a different niche setting. And so there is some of the options that we are kicking around internally as we think about development. A129 should benefit if I showed you the two structures that look awfully alike. And so it should benefit from the work that we've done already validating miR-seventeen with the changes in polycystin levels, both from a dose and dose frequency standpoint, such that the clinical development can be accelerated for 8429, because we will be doing less dose range finding work and basically following quickly in the footsteps here of 4,326. And obviously, as a contingency plan too, if it turns out that in our discussions with FDA that there is more extensive work that needs to be done such that 4,226 no longer retains 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 gen molecules with improved profiles. And so we've similarly done that here.

Speaker 4

Got it. Thank you.

Speaker 0

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

Speaker 2

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 Pac Growth Healthcare Conference tomorrow. And we appreciate your time and support of Regulus. Thank you.

Speaker 0

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