Arecor Therapeutics plc (6UI.F) Earnings Call Transcript & Summary

Welcome, everybody, to this panel discussion. We're going to be talking today about a potential new solution for patients with diabetes. It's an innovation that combines a unique ultra-concentrated, ultra-rapid-acting insulin that's in development at Arecor Therapeutics with Sequel Med Tech's automated insulin delivery system, twiist, which was launched in the U.S. last year. I'm Melanie Senior. I'm your host today. I write for the Nature Portfolio and EvaluatePharma. I'm delighted to have with me today Dr. Sarah Howell, who's the CEO of Arecor. Arecor is an AIM-listed company based in Cambridge, U.K. Also joining me here, Dr. Alan Lotvin, who is the CEO and Co-Founder of Sequel Med Tech based in New Hampshire in the U.S. And last but not least, we're also joined by Dr. Thomas Blevins, who is a practicing endocrinologist. He's based in Austin, Texas and also founder of the Texas Diabetes & Endocrinology Treatment Center. Our road map for the discussion broadly, we're going to probably talk about 30 or 40 minutes, first of all, initially about the remaining unmet need in diabetes care, which remains significant despite the plethora of devices and therapies available. We'll talk about how Arecor's insulin with Sequel's innovative device may help address some of that unmet need. We'll also detail the collaboration between those 2 companies, which was signed last September and look at the forthcoming milestones from that deal and partnership. And then finally, we will open up for your audience questions. And thank you to those of you who've already submitted them. It's great to see. So we'll leave time for that, too. So I'm going to start, if I may, with Dr. Blevins welcome. Could you start, please, just reminding us how challenging diabetes is to manage still for many, many patients and their health care professionals supporting them. And also just tell us which particular category of patients are those using this very intensive insulin therapy that we'll be talking about today.

Right. Thanks, Mel, and good to be here. So we take care of people. And I know in this audience, there are people who are experts and know all the terms and everything, and there are people who probably don't. And so I'm going to try to explain things a little bit. And so in diabetes care, we take care of people, of course, with type 1 and type 2 diabetes. And we -- the people with type 1 diabetes tend to be on intensive therapy and a high percentage are on insulin pumps and automated insulin delivery. And automated insulin delivery is the sensors that we use of the various brands, talk to the pumps and there are various algorithms, and we have a number of excellent pumps available. In the type 1 world, it is sort of a standard. In the type 2 world, we're just kind of getting into that. There are a very high number of people with type 2 that are on insulin and a high percentage of them are on multiple daily injection or we might call it intensive insulin therapy. And increasingly, we're getting into automated insulin delivery, again, sensor talking to pump, pump pumps the insulin in. And so people with diabetes typically start with oral agents, diet oral agents, weight loss. Now GLP-1s, which delays the onset of starting insulin, but still a significant percent of the people with type 2 are on insulin and on more like multiple daily injection. People with type 2 have to -- not only in type 1, but also have to take insulin multiple times per day, paraphernalia, they have to have prescriptions, multiple prescriptions. And it's a whole new dimension to life, changes in food, we tell them you have to change your food activity, all of that. And so there is a bit of a treatment. There's no question, there's a treatment burden, ask people with type 2. And so that is a typical thing for people with type 2 diabetes. And increasingly, as I mentioned, we're getting into more automated treatment, which is going to make their treatment burden, I think, a little bit less. And I liken it to using automatic transmission in the car versus the stick shift. I mean having things automated helps and eventually automated cars, driving cars like robo cars and things like that, I think are going to help all of us in a way. And people with type 2 and type 1 both benefit from this automation.

So can I just come in to the automation, I mean, I'm imagining -- so they don't have to do anything, the sensor and the delivery of the dose just happens. So they have their device and then that's it, no needles, no nothing, that's just taken care of, correct?

That is fairly correct. They still have to insert the sensors. It's not totally easy, but they have to insert the sensors. The sensors are lasting longer. And that is a very important word, longer and more miniaturized makes life better, I think, for people with diabetes. And we'll get into this a little bit later, but one of the sort of enemies of miniaturization is high-dose insulin need and using an insulin like U100, only 100 units per cc versus a more concentrated insulin, which would allow lower volumes and more miniaturization. But yes, that is exactly right, longer wear infusion sets for the pumps, the automated pumps, insulin that can be last longer because of concentration and especially people with higher doses. This morning, I was in my office seeing patients. That's what I do. I'm a clinician and we do a lot of clinical research. But one patient, type 1 was on 190 units of insulin per day, the other type 2 on 230. So this thing about high-dose insulin is real. And to get those people, and that's a significant percentage of the people with type 2 diabetes and type 1 as well these days. We can talk more about that, but I want to be brief. But to get those people onto the automated systems, we need to have a concentrated, I think, a concentrated insulin. So longer, smaller is a big deal.

Yes. Okay. And we'll come on to this, of course, but thank you for teeing that up. And just -- can I just push you the high number of T2, type 2s, on insulin, I mean, we're talking what, over 50% roughly. I mean a significant proportion...

I would say it's -- on insulin, it's probably not 50%. The -- it's probably like 25%, 30%, but a significant percentage of a very high number of people with type 2 diabetes.

Yes. Okay. And you mentioned the GLP-1s, and I know they're in everyone's mind, and we'll come on to that. That's not going to take away the need for insulin, not now, not in the future.

You're right.

Absolutely. Thank you very much for setting out that. I mean just the challenge of management and the daily burden, I suppose, and I know that patients just want to forget they have this condition, right, and get on with their lives and the easier that is to do the better. So we're teeing this up really nicely. And I'll invite Alan to come in now, to talk a bit more about the twiist system, the automated insulin delivery. And I think we also have some slides to bring up at this point.

You're bringing the slides up to me, I make one point, and that is this burden makes it so that many times people with type 2, especially really don't take their insulin. So having a system that would actually -- and they have hypoglycemia, they're worried about that, having a system that would reduce their risk of hypoglycemia, reduce their worry and actually give them the medicine that they're supposed to be taking would be very helpful.

Because if they don't take it, then we get into the proper complication from the safety issue, anyway we'll talk about that. Alan, tell us -- so there are some really big competitors out there when it comes to insulin delivery systems. We're seeing MiniMed spin out of Medtronic, et cetera. Tell us about the twiist. You've launched recently. How does that technology stand out in relation to -- let's face it, a pretty competitive market with some big players. Maybe you could speak to how the launch is going as well.

Sure. So I'll take 4 or 5 minutes. So the first thing is I'll agree with Dr. Blevins completely here in that despite the fact that there are a lot of people in this space, it is a significantly -- it is a market that suffers from -- has a ton of unmet needs, right? Less than half the people with type 1 who should be using these devices are the people who are using them will switch between 5% and 15% a year. So what we see is that despite years of good devices and clearly better than pens, we still have less than half the people in the United States and far less overseas. So I think there's a large unmet need. So what did we do? Why did we come to market? What we came to market with was the first really new technology in 25 years. I'll just hold up so you can see kind of the real size. And just to be clear, I'm not 6 feet, 9 inches tall or 205 centimeters. I can't palm a basketball. This is a pretty small device, but it holds 300 units of insulin. So getting to the U100, so 3 cc of fluid. So getting to Dr. Blevins' point about the people who need lots of insulin or longer duration. So what this technology does that's unique is it's the only piece of technology that directly measures how much insulin is given with every microshot. And we measure that to 50 billion of a liter of accuracy. Why is that important? Well, 2 reasons. One, with respect to AT278, if you're giving 5x concentrated insulin, you really want to know how much you've given, right? And you want to be sure that it's consistent and reliable. Number two is you're feeding more accurate information into the algorithm, right? You're telling the algorithm, this is how much insulin I have on board exactly or plus or minus 5% at a 50 billion of a liter level of accuracy. The -- and there are other advantages that we don't need to go into for time. We've also built this device on completely modern architecture, which is why we're able to do things like CGM integration relatively quickly, and we have some other really interesting integrations like the Apple Watch that were relatively straightforward because we're dealing with literally 21st century technology. That turns into really the opportunity for people to personalize their experience, right? So number one, this is small. It's lightweight. You can wear it on your body, you can stick it in your pocket, you can move it around without losing insulin, without losing anything. Like I said, smallest form factor that still holds 300 units. And we use the twiist loop algorithm derived from the do-it-yourself community, but is the FDA-cleared version that we modified for use in our device. And that has the widest glucose range, right? It goes down as low as a target glucose of 87 milligrams per deciliter, which for those in the U.K. is 4.83 millimoles per liter. All the data would say the lower your set point that you can safely set at, the better your clinical outcomes are going to be. And we've started to see in our early real-world evidence outstanding clinical outcomes. So we're excited about that. And finally, with respect to our launch, which you mentioned, Melanie, we have outstanding access on the pharmacy benefit and only on the pharmacy benefit in the United States. We chose that because it's the lowest out-of-pocket for people living with diabetes. It is the most convenient and simplest way. We have coverage with over 140 million commercial lives in the United States right now, which is almost close to 80% of the entire population, and we're incredibly pleased with the response that we've gotten from payers. We're also incredibly pleased with the response we've gotten from prescribers. We have over 2,700 unique prescribers that during our limited launch, where we were controlling how many people we put on at a time, sent us a referral or a prescription. So all in all, we're very excited. And we'll be -- we're launching kind of broadly nationally this month, and very excited to be able to work with the folks at Arecor because we think the combination of the twiist device plus AT278 creates not just the opportunity that Dr. Blevins talked about for miniaturization, but also the opportunity to create a device that everyone using intensive insulin type 1 and type 2, can use for 3, 5, 7 days as we continue to pursue approvals for longer wear. So I'll stop there and turn it over to Sarah.

Great. Thank you very much. I'm getting this message then, very accurate measurement, small device, but with a big reservoir, flexible target flexibility, but also pairing into the Apple ecosystem, that makes sense. A lot of people have Apple technology. So thanks for setting out those advantages and the coverage as well, and I'll maybe come on to some of the feedback. But first of all, Sarah, I think we should talk about insulin. Let's get on to the insulin then and perhaps you can tell us about the Arecor insulin AT278, how you developed it and just the need it serves and how it's different to what's out there already?

Sure. So AT278 is the only highly concentrated ultra-rapid acting insulin in development. So it's 5x more concentrated than the insulins that are out there today that are approved for use in these AID systems. So it's a 500 unit per mL insulin compared with those 100 unit per mL insulins. And what we did here is we took existing insulin that's already out there and approved and develop a novel form of insulin that's not only 5x more concentrated, but also has this ultra-rapid acting profile, and that's important, and we'll come on to that. And we've demonstrated its superiority in clinical studies in people with type 1 diabetes as well as with type 2 diabetes with high BMI. I'm not going to talk through we don't have time today. I'm happy to do that offline with anyone that's interested in detail in our clinical data. But what you're seeing here on this slide is our most recent clinical study. So this was comparing AT278 to 500 units per mL with 100 unit per mL insulin aspart. So this is Novo Nordisk, NovoRapid or NovoLog, as it's called in the U.S. and is really to demonstrate that superior profile. So this is in type 2, very similar data in type 1 patient population. So what you're seeing here at a very high level is we've accelerated that absorption of insulin. We're getting more insulin on board faster. In fact, we saw in that first hour post injection 48% in favor of AT278, and then this translates to a greater glucose lowering profile. And again, we saw 66% more insulin action in that first hour post dosing. And the reason why this is quite remarkable here is if you don't do anything special with insulin, if you simply just concentrate up 5x, then you end up with a blunting of this time action profile. So you see a very long and slow absorption of insulin and that converts to a slower and more depressed glucose lowering profile, which means it wouldn't be a good insulin then for use in an AID system. We need fast insulin to be able to control precisely, I'm sure Dr. Blevins will talk about this in more detail, blood glucose and time and range to improve those outcomes for patients. And that's what we've achieved with AT278.

Great. And just for my benefit here as well, Sarah, the highly concentrated, highly rapid acting, I mean, immediately, I think of, well, is there an increased risk of hypoglycemia. So just remind us of why that precision and the dosing kind of reduces or minimizes that risk.

Yes. So we're very much looking at this as an insulin [indiscernible] AID systems as we identified some really key, and Alan has spoken about this and to a certain extent, Dr.Blevins, is key patient unmet needs. We know it's undisputed that people do better using an AID system versus MDI, multiple daily injection. Alan talked about the fact that even in the U.S., where the uptake is highest, you still got less than 50% of people with type 1 diabetes using an AID system and less than 10%, we think it's around 5% of people with type 2. So why is that here? And this is around burden, reducing burden and how do we improve those controls here. So with a really concentrated insulin that's also rapid acting, you can move more people over to AID systems, more people, you can get to 3-day wear. And then if we take the accuracy and precision of dosing that Alan talked about with the twiist device, we can then be really sure about that safety. We know exactly how much insulin is being dosed. The algorithm can be fine tuned [Technical Difficulty].

We're losing your sound a bit, Sarah. Can you -- sorry, can you just say that last piece again?

I'm not sure where you left me...

Just couple of sentences ago, just a couple of sentences.

Okay. Yes, I was talking about the fact of if we couple AT278 with superior kinetics with an AID system, which has that precision and accuracy and safety, we can then fine-tune the algorithms. It's the algorithm which is deciding how much insulin is needed relative to those blood glucose readings there. And if we can fine-tune that, not only can we get the best out of the fast-acting superior kinetics, we can also really tightly control that time and range. And that's really then tightly controlling those hyperglycemic events as well as those hypo events.

I understand. So there really is this perfect marriage between the accuracy side on Alan's device and the characteristics, PK characteristics of your insulin. And just can I just come back to even in the U.S., less than 50% of patients are using automated insulin delivery systems. And I'm thinking why is that? And I think you didn't spell it out or spell it out for me, it's because they're not quite good enough? Or is it because of something else?

So maybe I'll talk a little bit, but I think Alan as well, you should talk about this as well. I'll talk about it in relation to the insulin. AID systems that are out there today, they're great systems. There's no doubt about that technology has advanced significantly. So we're really looking at now how can we get even better, how can we lower the burden for people living with diabetes and transition more people across to their use. And from an insulin perspective, one really key obvious area is, and Dr. Blevins, talked about this, of the 4 million people, around 4 million people in the U.S. that are on intensive insulin therapy, around 1 million of those are on more than 100 units of insulin a day. So with current AID systems holding up to a maximum of 300 units, they can't get to 3-day wear today. So never mind that longer wear, future miniaturization. So if we can make the AID systems practical for use and lower that burden for that 1 million people that are on more than 100 units a day, we can increase that accessibility and hopefully increase the number of people using AID systems.

Alan, do you want to comment on anything on that to add or?

I'll make a very quick comment, and then I'm going to turn it over to the true expert, which is the comment I'd make is that you asked the question why is that? And the answer is there are -- there isn't a single answer. These are a group of diverse heterogeneous patients who all have different reasons for why they've made the treatment decisions that they've made. It's clear that AID systems improve the clinical outcome. So if people are choosing not to, it's a very personal reason. Some of it has to do with cost. Some of it has to do with usability. Some of it has to do with -- the one thing I've heard from a lot of people who are still using pens is when I inject myself, I know for sure that I have insulin on board, and I'm not going to end up in DKA or hyperglycemic comas. But I'll turn it over to Tom for his much more informed view.

No, your view are very informed. And a couple of comments. One is, well, we're in the dawn of a new era when it comes to type 2 and AID because there are now 3 companies that have gotten approval and for type 2. That's recent, really recent. And twiist is undergoing studies currently to get approved for type 2. So we're just getting there, and we have a lot to learn. And to put that thing into perspective about the number of units in those 2 patients I described this morning, with U100, if they're using a 3 cc cartridge in a pump, if a person is on 200 units a day, they're going to have to change that cartridge out and the whole thing out every day or 1.5 days. And that is not practical. That is not prolonged. That's not convenient. And so the real next level or next sort of kind of barrier to get through is to get an insulin that we can use that allows people to wear for 3 days at least or 7 days. And we have one company that has a 7-day wear infusion set. Another will have one very soon. Excellent. And -- but if you have an insulin -- now you can change the cartridge out and not the infusion set, but if you have an insulin that you have to use a high consumption U100 with these high insulin users, then they're going to have to change this whole set out repeatedly, really frequently. So we really need a concentrated insulin. In a sense, I mean, I love insulin, one of my favorite hormones. And -- but U100 is sort of the enemy of the prolonged use of the AID systems. And so we do have a U500 currently. You know that. And it has peak -- it's really neat, Sarah is your PK/PD because you're looking at U500 that looks better than U100 aspart. And it's U500 and it gets in quickly, peaks quickly, gets out quickly. We need that to get that better time and range, number one, for the better postprandial control and the lower duration. The current U500, and then I'll pause. But the current U500 we have peaks in 4 to 8 hours, terrible, totally nonphysiologic and has a duration of 24 hours. It's not usable. So we need a U500 concentrated to prolong the duration of what we give people for insulin, make their life better.

It's extraordinary to me 100 years or more since insulin was first isolated that we're still -- there's still just more to do. So no -- and I'm also very interested in your point, Alan, about patients some of them wanting that feeling of I know I've injected this sort of almost not trusting the algorithm. That's just an interesting angle, but we won't get into all that today. I want to come on to the partnership that Sarah and Alan, you signed, you teamed up just a few months ago. We've already got a really clear sense of why these 2 innovations are so well suited to each other, given their characteristics, the precision, the sensor precision and the convenience of the device with the PK and the characteristic [indiscernible]. Sarah, can you just outline the sort of key elements of the partnership and maybe some of the milestones we can expect?

Sure. So I think Melanie, as you mentioned at the beginning, we entered into a partnership, so it's a co-development partnership in September of last year. And that's the initial partnership essentially here to undertake all of the activities that we need to do for a Phase II clinical study of AT278 in the twiist AID system here. So it's really so that we can get going on that and take all of that off the critical path. So we're co-funding those Phase II-enabling activities under that agreement. We've been to the FDA together, had a really successful meeting and positive feedback on a pretty innovative Phase II clinical study design there as well, where we'll be using time and range as our primary endpoint. So the teams are busy getting on with that currently, and we're working together now on a broader more strategic partnership to move through Phase II and beyond.

Okay. Alan, do you want to comment on any of that or Sarah covered the main features on it? Perhaps you can talk about the sort of milestones. I know there are some questions around timing and things.

So I think we are extremely excited by the opportunity to work with Sarah and the Arecor team on AT278. I think the opportunity to put rapid-acting U500 in the Twist device creates real clinical advantages for patients. We have -- with 3 cc, that's 1,500 units, which is a week's worth of wear for most -- every -- almost every patient with type 1 and a good chunk of the patients with type 2. Now we don't have a week approval yet. I want to be clear. I don't want to get out ahead of myself. But by the time we get through the development path for AT278, we would anticipate having done the work to have long wear infusion sets as well.

Brilliant. And your -- I think your system -- so I'm interested just looking back to the twiist system and your experience on the market already. So obviously, using other kinds of insulin, not rapid-acting U500 yet. What's the most typical use at the moment then out there and the feedback you're getting so far from just the system in itself?

Yes. I mean, so far, it's been very positive, right? We have a fairly good sized, sample size of people in our limited launch. We're using U100, both Humalog and NovoLog. We're seeing time and range that we've reported in abstract form at 75.6% of time, people are time and range. We've demonstrated that, again, in abstract form, when we alarm for an occlusion, people's time -- people's glucose is 153. And while it's rising quickly in the half hour before that, it starts coming down right after that. So we think that's a contributor. And again, when I mentioned that we can measure precisely how much insulin we give with each microshot, well, obviously, if I measure it and it's 0, I know that there's an occlusion. And everyone using these devices gets occlusion. It's the nature of insulin, forming fibrils under the skin. It's the nature of teflon catheters. So any of that form the infusion sets. So this is an opportunity to create confidence for people that they're receiving insulin when we tell them receiving insulin. And it doesn't force them to rely on their CGM and get to a glucose of 240 or 300, which might take 2 or 3 hours and then 2 or 3 hours come back down. So we're seeing really, really positive results, and we have a pretty long waiting list of people who are eager to try the device. So, so far, so good. Like as I said to my team, I'm sure we're going to run into bumps in the road. I mean we have a lot of very good, very experienced competitors who spent 10 years or more optimizing systems, and we're still new, but we're moving really quickly.

Great. No, great to have innovators. I just to be clear, this is type 1 cleared. These are type 1 patients primarily for now?

Yes. We have a clearance for type 1. We've completed our type 2 trial. We would anticipate collecting all that data and submitting at the end of the first quarter or so and having presumably, assuming everything goes the way we expect, having a clearance in the beginning of the second half of 2026 for type 2 with twiist.

Brilliant. And then, Sarah, coming back to you, that sort of dovetails with the time frame for the partnership, the plan to start the Phase II clinical study with the marriage of the 2 products would be the end of next year then is in line.

Yes. I mean, as I said, we're working on the -- all of the activities that are needed to get into that clinical study. We've had positive feedback from the FDA. So we'd be targeting second half of this year to be in a position to initiate that clinical study.

Brilliant. Very exciting. I want to come back to you, Dr. Blevins, if I may, after this. And obviously, come in as and when you like as well. So let's say, let's be optimistic. Let's say this all goes to plan and this combination does arrive. How much of a difference would that make to the lives of some of your patients? And maybe you could describe a sort of typical day now and what's involved in a typical day or week in the future with whatever it will be called the twiist-Arecor combination.

Yes, I think it's going to help. I think it's going to make it -- if everything kind of follows through and happens, and I think it's going to make it, so that they have to flow with the machinery and the paraphernalia less. And that is going to help not only compliance, but we know that the machine is going to work for them. I always tell people, you got a machine working for you while you're sleeping, to keep you from getting low and to keep you from getting high during the day. Of course, we'd like to see evolutions in this automation and something that would actually handle meals spontaneously, that's still kind of in the works. But even if people have to announce meals, it's going to really help. And again, the anemia prolongation is an insulin that's too dilute that has to be changed out too often. And the concentrated insulin is really going to help. I hope it's not lost on the audience when I mentioned those 2 patients who I did see this morning. It's not unusual in an endocrine practice to see people on high-dose insulin type 1, type 2. Remember, type 2s don't have a lock-on overweight and insulin resistance. Type 1s have it too. And -- but those 2 patients would have to change their -- the whole system out, their infusion set out every day or 1.5 days. With the U500, as Alan pointed out, they could go on -- that's 3 cc is 1,500 units. And both of those patients could go for a full week with the appropriate pump that worked. and they get better control probably better time and range and because they have a pump working for them all the time, they have an automated system. So I think patients will really like it, and it will make life better and let them not think as much about diabetes. And I could go on and on about that. But people tell me every day, they have to think too much about having the extra bolus, change everything out, and it's a challenge.

That's exactly what I hear from experts and from friends and family that they just don't want it to be visible. They don't want to think about it, just not have it there. So no, thank you. I can see how that -- and just this sort of changing and replacing it, is that a sort of 10-minute job or a 5-minute job or a half hour job normally? Give us a sense of that.

I can say yes to all of those. It just all depends. It's a pain. And the people of diabetes do so well. They have to take on this whole new dimension to life, and they do it. And it's a hassle. It's a lot of -- lot of expenses, a lot of changing things and paying attention to things that people who don't have diabetes don't have to pay attention to. making life more automated for them would be very helpful.

Yes. And I can definitely see what's driven Sarah and her team and Alan and his team to create this. Look, I'm -- at this point, there are lots of questions coming in. So I want to just have Jake from the platform just come in and tell everyone how to submit questions because we're going to just carry on. We've got a couple more questions I want to ask and topics we want to bring up. But just so that you all know in the audience how to do this. There are plenty, but maybe not everyone does. So Jake, could you just tell everyone how to do the submission of questions?

Absolutely [Operator Instructions]

Great. And then I will, if I may, moderators privilege come in with a question of my own. And that's really being optimistic and assuming this does come together, which I very much hope it does and does sound like a really valuable combination. We've heard that there's huge pressure on insulin pricing in the U.S. We saw it with the IRA, the Inflation Reduction Act, et cetera. Novo Nordisk, even I think, has discontinued some of the insulin presentation. So I think it's something in many people's minds. And I wonder how you're thinking about -- I mean, you mentioned your coverage, Alan, for the device, but -- how are you thinking about marrying that drive to increase access and improve lives with the sort of commercial realities, if you like, of companies? Alan, Sarah, either of you.