Crinetics Pharmaceuticals, Inc. (CRNX) Earnings Call Transcript & Summary

Greetings, and welcome to the Crinetics Pharmaceuticals Conference Call. [Operator Instructions] As a reminder, this conference is being recorded Tuesday, August 10, 2021. I would now like to turn the conference over to Corey Davis, LifeSci Advisers. Please go ahead.

Thank you, operator, and thanks to everyone for participating in today's call. Before we start, I'd like to point out there is a slide deck that's going to accompany today's presentation. The deck can be viewed using the webcast link that's on the IR section of the Crinetics website, and you can download a copy of the slide deck as well. Also posted on that same IR website is a news release issued earlier today, announcing data from the Phase I single ascending dose study evaluating CRN04894. A press release announcing the company's financial results for the quarter ended June 30, 2021, is also available on the company's website, though that is not the focus of today's call. Before handing it off to Crinetics to talk about their newly announced data, I'd like to remind everyone listening that some of the information contained in the news release and on this call is covered in the safe harbor provisions of the Private Securities Litigation Reform Act and contains forward-looking statements based on current expectations, including statements about the initiation of planned clinical trials. Such forward-looking statements are not a guarantee of performance, and the company's actual results could differ materially from those stated or implied in such statements due to the risks and uncertainties associated with the company's business. These forward-looking statements are qualified in their entirety by the cautionary statements contained [indiscernible] for these other news releases and Crinetics' SEC filings, including its annual report on Form 10-K. I'd also like to point out that the content of this call contains time-sensitive information that is accurate only as of the date of this live broadcast, August 10, 2021. Crinetics takes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call. With that, I'd like to turn it over to Dr. Scott Struthers, Founder and CEO of Crinetics. Scott, over to you.

Thanks, Corey, and thanks to all of you listening this afternoon. I'm joined today by Dr. Alan Krasner, our Chief Medical Officer. Marc Wilson, our Chief Financial Officer, will also be available to answer questions following our prepared remarks. As Corey mentioned, the purpose of today's call is to discuss results of our Phase I single ascending dose study evaluating the safety, pharmacokinetics and pharmacology of CRN04894, our oral nonpeptide ACTH antagonist that is being developed for Cushing's disease in congenital adrenal hyperplasia. Let me cut to the chase. We are all very excited to let you know that CRN04894 has demonstrated pharmacologic proof of concept and good drug-like properties in the SAD portion of our first-in-human healthy volunteer Phase I study. Pharmacokinetic analysis showed that 4894 was orally bioavailable with dose proportional exposure and favorable half-life of about 24 hours. 4894 was also well tolerated at single doses up to 80 milligrams. We saw no serious SAEs in the SAD study, and all reported adverse events were mild. Finally, our pharmacologic analysis showed strong dose-dependent suppression of both basal cortisol and ACTH-induced cortisol. Further, 4894 treatment resulted in clinically meaningful cortisol suppression as study participants treated with 4894 maintained their normal cortisol levels in the face of a disease-relevant ACTH challenge. Collectively, we believe these clinical findings provide pharmacologic proof of concept for 4894 in Cushing's disease, congenital adrenal hyperplasia and any other disease driven by excess ACTH. We look forward to building on them with data from our multiple ascending dose study, which are expected in the fourth quarter. That being said, I'd like to put these results in context by first giving a high-level overview of our drug development strategy, 4894's mechanism of action and a potential role in the treatment of diseases of ACTH excess. Then Alan will go through the details of the study results and our conclusions. For those of you who have followed our company for some time now know that the beauty of endocrinology drug development is the ability to follow and utilize endocrine biomarkers from preclinical studies to healthy volunteers to patients. We saw good hormonal suppression in the first-in-human pharmacologic proof-of-concept study for paltusotine, and now it's in Phase III registrational studies. And now we have successfully applied this development strategy to 4894. While I realize that you don't typically see history slides in a presentation like this, with today's results, I believe it's justified. This is a picture of Harvey Cushing, he's a giant in the field of endocrinology and a father of neurosurgery. His index patient for Cushing's disease was -- first visited him in 1910, so the field of ACTH is now more than 110 years old. There are more than 60,000 papers discussing ACTH in the scientific literature. Today, Alan and I will be presenting initial clinical studies from the first-ever ACTH antagonist to be evaluated in humans. This is a significant milestone for the field of endocrinology and especially for Crinetics as we have now clinically demonstrated pharmacologic proof of concept for our second internally discovered drug candidate. The hypothalamic-pituitary adrenal axis is the body's emergency response system for stress. To provide a simplified explanation of the way this axis works, inputs from the environment or the body indicating the presence of stress, say, for example, a lion chasing you across the Savannah, will converge on the pituitary gland to stimulate the secretion of ACTH through a variety of different mechanisms, most prominently via peptide hormones, CRF and AVP. ACTH, however, only has one job, which is to bind with the specific receptor of the MC2/MRAP complex on the adrenal gland. This results in activation of pathways leading to cortisol synthesis and secretion. Cortisol will then act on peripheral target tissues throughout the body via glucocorticoid receptors, regulating a wide range of physiologic adaptations to stress. Cortisol also provides important and negative feedback to shut off ACTH secretion to prevent excessive responses to stress. Because the upstream pathway is activating the stress response all converged on the ACTH receptor in the green [ one ], we believe this represents the best point of the ACTH -- of the HPA axis to target in order to effectively counteract the effects of excess ACTH, as blocking it can inhibit everything else happening downstream. Turning our attention to Slide 10. You can see that the cortisol levels in healthy subjects follow a diurnal cycle with higher levels in the early morning and lowest levels late at night. However, if excess ACTH is consistently present as it is the case for Cushing's disease patients, cortisol levels will be both elevated and remain relatively constant throughout the day. This unremitting excessive endocrine stress response leads to symptoms such as weight gain, hypertension, hyperglycemia and psychiatric disorders. In fact, the causative link between excess ACTH and elevated cortisol levels in Cushing's disease is so well established that cortisol levels are used as the registrational end point for trials in Cushing's disease treatments. The hypothesis that forms the basis of our 4894 program is that an oral and selective ACTH antagonist would have utility in treating not only Cushing's disease but in treating any disease of ACTH excess, including congenital adrenal hyperplasia or CAH. Looking at the middle portion of the slide, you'll see the pathophysiology of Cushing's disease where an ACTH secreting pituitary adenoma, which is not the subject of negative feedback, which I mentioned earlier, results in elevated ACTH levels and overstimulation of the adrenal gland. This causes excess cortisol production resulting in the symptoms I discussed on the previous slide. CAH is another example of a disease of ACTH axis. CAH patients have an inactivating mutation in the enzyme that is required for the final step of synthesis of cortisol. As you can see in the right-hand column, this lack of cortisol production breaks the negative feedback loop leading to overproduction of ACTH and therefore, excess stimulation of the adrenal. However, although the adrenal is activated, the lack of necessary enzyme for conversion of precursors into cortisol results in the accumulation of these precursors, which are androgenic. The loss of cortisol and production of excess androgens results in symptoms such as adrenaline insufficiency, infertility, testicular rest tumors, short stature, hirsutism and other issues. 4894 is designed to prevent the overproduction of both cortisol and its adrenergic precursors by inhibiting the action of ACTH on the ACTH receptor, which represents a single choke point that controls all downstream ACTH-induced signaling in the adrenal. Now in the healthy volunteer study we'll be talking about today, we assessed 4894's ability to inhibit this receptor by measuring changes in cortisol levels before and after challenging healthy volunteers with synthetic ACTH. While this protocol briefly mimics Cushing's disease, it's important to remember that cortisol levels are surrogate for adrenal stimulation. This means that the results from this study and 4894 in general are broadly applicable not only to Cushing's disease but any disease driven by ACTH excess. Other drugs that are currently available or in development take 1 of 3 major approaches to counteract the effects of ACTH -- excess ACTH. One of these 3 approaches is to target the pituitary gland to prevent ACTH secretion. Examples of agents that seek to do this are glucocorticoids for CAH; pasireotide for Cushing's disease, which are in use; and CRF antagonists, which are in development. The second approach is to [ act at ] the adrenal gland to inhibit the enzymes responsible for synthesizing cortisol and other adrenal hormones. This class of agents is often referred to as adrenal steroidogenesis inhibitors with notable drugs in the class being ketoconazole, metyrapone and osilodrostat, while the agent levoketoconazole is in development. Finally, there are glucocorticoid receptor antagonists, which seek to counteract the effects of elevated cortisol by acting on the peripheral target cell. An example of an available drug in this class is mifepristone, while the agent relacorilant is in development. Now despite there being FDA-approved drugs in each of these 3 classes, and talking to thought leaders in our field, we realized that a very significant unmet medical need still exists for patients with diseases of ACTH excess. It's because each of these drugs have shortcomings related to their safety and/or limiting efficacy resulting in an unfavorable risk/benefit profile for many patients. To fill this need several years ago, we launched an internal drug discovery effort to create orally available nonpeptide ACTH antagonist. We did this because we believe that any new drug in 1 of the 3 currently available classes would have similar shortcomings and thus not solve the core issue that currently hampers the treatment of patients with diseases of ACTH excess. As mentioned above, the ACTH receptor represents a single and selective choke point through which we can potentially counteract the effects of excess ACTH, which makes it a compelling drug target. Like all our drug candidates, 4894 was crafted by our in-house discovery group with the goal of incorporating optimal pharmacologic and pharmaceutical properties, including oral bioavailability and other drug-like properties. It was designed to potently and selectively inhibit the action of ACTH on the adrenal gland by competing for a common binding site. The balance of 4894 or ACTH occupancy in this binding site is determined by the relative affinities and concentrations of the 2 molecules, a concept known as competitive antagonism that we evaluated as part of the SAD study we're discussing today. Following our overall endocrine development strategy after designing 4894, we then tested its ability to block the action of ACTH in rats. As you can see on the graph on the right side of this slide, 4894 was able to suppress adrenal activity in a dose-dependent fashion, both in a basal state and after challenge with the exogenous ACTH. We anticipated observing similar in vivo pharmacology in healthy volunteers. And after appropriate manufacturing and first-in-human enabling toxicology studies, we launched a Phase I healthy volunteer study to test those -- to test this. Those results, I'll ask our Chief Medical Officer, Dr. Alan Krasner, to present. Alan?

Thank you, Scott, and good afternoon, everyone. Our Phase I single ascending dose study was designed to assess safety, tolerability, pharmacokinetics and the pharmacologic effects of single doses of CRN04894 on healthy volunteers. We evaluated 4 different 4894 dose levels in the study, 10, 20, 40 and 80 milligrams, escalating the doses sequentially after a safety review of the previous cohort. By doing this, we were able to assess safety, tolerability and PK in healthy volunteers as a standard practice in first-in-human studies. Now as Scott alluded to earlier, what is unique about this single dose study is that it was also designed to establish pharmacologic proof-of-concept for 4894. In order to establish proof of concept, we evaluated 4894's ability to block the action of ACTH on the adrenal gland, which should be predictive of the molecule's efficacy. To make this assessment, we measured levels of cortisol in the blood before and after administration of synthetic ACTH to healthy volunteers in the presence and absence of 4894. The ACTH challenge is based on a well-established technique to assess adrenal function that has been used by endocrinologists for many years. Now if I can turn your attention to the diagram on the right side of the slide, I'll briefly explain how we have adapted this technique to explore the pharmacology of 4894. On day minus 1, we took blood draws to establish baseline cortisol values, administered synthetic ACTH and then took blood draws at various times to see how cortisol levels respond to the ACTH challenge. The next day, we treated study participants with oral 4894 or placebo, took measurements to see the effect of 4894 on basal cortisol levels, then repeated the ACTH challenge and again measured blood cortisol to determine how 4894 affects the adrenal response. You may have noticed on this slide that we performed the challenge assay using 2 different doses of ACTH, 250 micrograms and 1 microgram. We did this because we hoped to accomplish 2 distinct goals with our pharmacodynamic analyses. First, we wanted to show that we could achieve dose-dependent suppression of both basal cortisol and of cortisol secretion following maximal stimulation of the adrenal gland with ACTH. Second, we hope to show that we could achieve clinically meaningful levels of cortisol suppression following a disease-relevant ACTH challenge. This would provide pharmacologic proof of concept for 4894 and would help derisk demonstration of efficacy in subsequent clinical trials in patients. Now because 4894 works via competitive inhibition, the 250-microgram challenge was best suited to evaluate dose-dependent pharmacology, and the 1 microgram assay was employed to provide evidence of a clinically meaningful level of suppression. That's because a 250-microgram challenge is known to result in ACTH exposures that are orders of magnitude greater than what would be seen in congenital adrenal hyperplasia or Cushing's disease patients. Having these supra-pathophysiologic levels of ACTH present provides an extremely robust assay for dose response studies, as 4894 will be competing with enough ACTH to achieve full target receptor occupancy. It was for this reason, as well as the fact that this assay is familiar to endocrinologists, that we utilized it, along with measuring basal cortisol levels to determine the dose-dependent pharmacological effects of 4894. In order to generate evidence of 4894's ability to achieve clinically meaningful levels of cortisol suppression, we utilized the 1-microgram ACTH challenge. Injection of 1 microgram of ACTH briefly results in a supra-pathophysiologic ACTH peak that promptly falls to levels seen in CAH and Cushing's disease patients, making this assay more relevant to disease states compared to the 250-microgram assay. Moving on now to discuss the data. I'd first like to again emphasize that to date, the study drug has been well tolerated with no serious adverse events and only mild AEs observed. Our pharmacokinetic analyses showed that 4894 had favorable pharmaceutical properties as it demonstrated oral bioavailability with dose proportional exposure, a half-life of approximately 24 hours and a time to maximal concentration of approximately 1 hour. We are now collecting additional PK data in the multiple ascending dose portion of the study, which together with these data will inform our future study design and dosing strategy. Shifting focus now to our pharmacodynamic analyses, let's first look at the effects of 4894 on basal cortisol levels. These levels are measured prior to ACTH challenge. As you can see from the graph on the slide, 4894 administration resulted in rapid and dose-dependent reductions in basal cortisol levels in healthy volunteers. One important aspect to note is that at 80 milligrams, we saw a reduction near the theoretical maximum. This theoretical maximum is based on how long it would take existing cortisol in the blood to be degraded assuming 4894 prevented the production of all new cortisol upon its administration. On Slide 14, you can see that 4894 was able to inhibit adrenal secretion of cortisol following challenge with 250 micrograms of ACTH, which, as I mentioned, is a supra-pathophysiologic challenge that is known to result in ACTH exposures that are orders of magnitude higher than those seen in Cushing's disease or CAH patients. On the left-hand side of the slide, you can see the full-time course of suppression. For clarity, we are only showing the data for the 80-milligram dose in this graph, but the shapes of the curves were similar for all doses tested. On the right, you can see that when evaluating the area under the cortisol curves for each dose, we see an effect that is dose dependent with 80 milligrams of 4894 resulting in a 41% reduction in ACTH-induced cortisol. When considering the rigor of this assay, which involves maximally stimulating the adrenal gland, this result is impressive. Turning our attention to Slide 15. We can see how 4894 performed in response to the 1-microgram ACTH challenge. The success of the 250-microgram ACTH challenge allowed us to focus on the 80-milligram dose when we evaluated 4894 using the disease-relevant 1-microgram ACTH challenge. Focusing first on the baseline curve, which was taken on day minus 1 when no 4894 was administered, you can see that the healthy volunteers saw their plasma cortisol level spike above 18 micrograms per deciliter in response to a 1-microgram ACTH challenge, well above their normal baseline and mimicking a transient Cushing's disease-like state. If we compare these data to the data taken from the same subjects after 4894 was administered on day 1, you can see that we were able to achieve meaningful cortisol suppression, as the study participants maintain their normal cortisol levels in the face of the disease-relevant ACTH challenge, which is exactly what we hope to see. In fact, if we look at the 30-minute time point, which is when cortisol levels peaked in response to the ACTH challenge in the absence of 4894, you can see that the measured cortisol levels on drug are virtually unchanged from the cortisol levels observed in these subjects prior to the administration of 4894 or ACTH. This also is an impressive result that clearly demonstrates pharmacologic proof-of-concept for 4894, and I look forward to the continued clinical evaluation of the molecule. Now before I hand it back to Scott to make some concluding remarks, I just wanted to sum up the key conclusions from our single ascending dose data and speak a bit about where 4894 could fit into the therapeutic armamentarium for diseases of ACTH excess. With regard to the data, single doses of 4894 up to 80 milligrams were generally safe and well tolerated as we saw no serious adverse events and all reported adverse events were mild. Our pharmacokinetic analyses showed that we achieved our target PK profile. 4894 was rapidly absorbed following oral administration with a tmax of about 1 hour, dose proportional exposure and a favorable half-life of about 24 hours. And finally, we clinically established pharmacologic proof of concept by demonstrating the activity of 4894 in healthy volunteers. We were able to achieve strong dose-dependent suppression of both basal and ACTH-induced cortisol even when anticipated levels of ACTH exposure were orders of magnitude higher than those seen in disease states. Further, we showed that 4894 treatment resulted in clinically meaningful cortisol suppression as study participants treated with 4894 maintained their normal cortisol levels in the face of disease-relevant ACTH challenge. With these data, we believe we have taken a major step toward introducing a new drug class for patients with ACTH-driven diseases. These data show that 4894 is acting as an ACTH antagonist, which clearly differentiates the molecule from other agents that are currently used, approved or in development. Importantly, we believe this unique mechanism of action, which is highly specific for the target receptor, positions 4894 to overcome the shortcomings associated with competing assets. Looking ahead, we are currently in the process of conducting the multiple ascending dose portion of our 4894 Phase I study. We expect the multiple dose data to further demonstrate 4894's pharmacologic effects, provide additional insights into the therapeutically relevant doses and inform the design of subsequent trials. We plan to report these data in the fourth quarter. With that, I'll now hand the call back over to Scott.

Thanks, Alan. Before we move on to Q&A, I just wanted to quickly mention next steps and some of the milestones we are looking forward to later this year across our pipeline, which now includes 2 candidates beyond pharmacologic proof of concept. With regard to the 4894 program, our next step is to complete our MAD study to inform subsequent trials that seek to further develop the molecule as a treatment for Cushing's disease and CAH, which collectively affect about 37,000 patients in the United States. Our results today have established pharmacologic proof of concept for both these diseases, and we look forward to the program's continued advancement. In addition to reporting data from this MAD study in the fourth quarter, we also expect to achieve several milestones outside our 4894 program between now and year-end. As you can see on this slide, the first of these milestones will be the reporting of similar SAD data for our Phase I trial evaluating CRN04777, which is an oral nonpeptide SST5 agonist being developed for the treatment of congenital hyperinsulinism. This program also follows the endocrine drug development blueprint we utilized for both paltusotine and have now further validated with 4894. This Phase I trial for 4777 is designed to generate proof-of-concept data in healthy volunteers by assessing the ability of the molecule to inhibit insulin secretion and elevate blood glucose levels in different provocation paradigms. We anticipate these results to be predictive of efficacy in patients and, if positive, allow for early derisking of the program. We expect to announce the single ascending dose data in September. In addition to this study, we also expect to initiate our Phase III PATHFNDR-2 acromegaly trial and a Phase II trial evaluating paltusotine in patients with carcinoid syndrome in the second half of the year. Collectively, we expect the execution of these clinical milestones to further solidify our leadership position in the field of endocrinology. We look forward to the continued advancement of our programs and remain committed to working to improve the lives of our patients. I'm extremely proud of the Crinetics drug hunters and drug developers who have brought us to this important milestone in our history, but also of all the Crinetizens who have been building and supporting a company that continues to innovate new therapeutics and bring them closer to more patients each day. I'm also grateful to the investigators and participants in our clinical studies that are so critical to the success of clinical development of new drug candidates. With that, I'd like to thank everyone for joining our call and then open it up to questions. Operator?

[Operator Instructions] Our first question comes from the line of Charles Duncan with Cantor Fitzgerald.

Congratulations on these early results. So I had a couple of questions. First of all, could you give a little bit more detail? Were these normal human volunteers, were they tested on a fed or fasted state? And then regarding, call it, maximal tolerated dose, I guess you will need to establish that in multiple ascending dose studies.

Alan, do you want to take that, please?

Yes, Chaz. So these patients are all fasting as you would ordinarily do in a first in human. We are not evaluating the -- any food effect at this point. That would come later. It's not an important issue for this patient population. And the second question, Chaz, again?

Yes. Regarding maximal tolerated dose.

Yes. Yes. I would say that's not a specific objective of the SAD. We certainly have been well tolerated to date. We do have to establish, as you mentioned, safety in the multiple dosing section of the study, which is ongoing.

And then with regard to the tox testing that you've done with this, what is the length of coverage that you have? How long could you pursue dosing over time?

Well, as with any program, Chaz, the tox coverage continues to increase. We initiated these with 1 month of tox coverage in rats and dogs. And we have additional toxicology studies ongoing now to support longer-term studies in Phase II.

Okay. Last question is you mentioned the positioning of this mechanism relative to, say, CRF antagonists or cortisol receptor modulators. I guess I'm wondering if you think that for either Cushing's or CAH patients, if this particular mechanism has a potential better utility than some of the others and what its advantage is.

Well, we have a lot to learn still about ACTH antagonists. This is just SAD data, very encouraging SAD data. But from a theoretical perspective, I think it all comes down to ACTH, its professional single job is to stimulate the adrenal gland. And so all the signaling that may occur from various stressors, whether it's psychological or hemorrhage or whatever is causing the stress, converges on the ACTH receptor, and by blocking that, we block at a single choke point of the HPA axis. And so I think that offers kind of a unique angle compared to any other type of target. I mean, as you know, CRF is a wonderfully interesting peptide. I was in the lab that my PhD adviser discovered it and has some remarkable CNS activities and activities throughout the gut and activities at the pituitary to create -- to stimulate the discretion of ACTH. But the only real professional HPA axis player is ACTH and then later glucocorticoids. But of course, glucocorticoids have broad-spectrum activities throughout the body. So I think that's the main thing. It's the specificity of the underlying biological mechanism.

Okay. That's helpful. Look forward to additional data later on this year with this program. Congrats.

Thanks very much, Charles.

Our next question comes from the line of Joseph Schwartz with SVB Leerink.

Congratulations, Scott, and all the Crinetizens. It's a pretty exciting milestone in the field.

Thanks, Joe.

So I was wondering, you mentioned that cortisol levels are considered a valid surrogate end point for approval of medicines for patients with Cushing's. So I was wondering how should we think about the plasma cortisol reductions that you're reporting here in the context of urinary-free cortisol, which I think is the metric that's used for approval. Do they move together in a predictable fashion? Or are there any heuristics that we should keep in mind in order to try to envision how this data might progress at later stages of development?

Yes. No, great question, Joe. Alan, do you want to give some context there and why physicians use urinary instead of plasma for registrational end point?

Absolutely. So you're right that urine-free cortisol, which is a measure of integrated cortisol exposure over the course of an entire 24 hours, is a common tool used to diagnose Cushing's syndrome in clinical medicine. And it's also used as sort of the registrational end point by FDA and other regulatory agencies for approval of new drugs for Cushing's disease. If you asked me how do these data that we presented -- we are presenting sort of predict what would happen with continuous dosing to UFC over time, I mean, I would expect it to be lowered. Especially if you look at our disease-relevant ACTH challenge test, the 1-microgram test, I mean, you can see that the overall exposure to cortisol in the setting of relevant ACTH exposures is clearly lower and even with a single dose. So I would predict with time, we would see this integrated measure of cortisol -- overall cortisol exposure drop with time as well.

Makes sense. Thanks for that explanation. Maybe as a follow-up to that, how are you thinking about the dosing schedule that would be most appropriate for 4894 given what we know about the diurnal rhythm of cortisol synthesis? Are you -- how do you feel about the ability for 4894 to be administered in a manner that could accomplish a natural -- a mimicking of the natural diurnal rhythm that we all probably take for granted.

Go ahead, Al.