Cybin Inc. (HELP) Earnings Call Transcript & Summary

Good afternoon, everyone. I'm Sumant Kulkarni, a senior biotech analyst here at Canaccord Genuity, and I'm very pleased to have Cybin here today. Cybin is at the forefront of tackling what is now a crisis in terms of mental health, and they have a very different approach. It's part of the evolving psychedelic wave of products, and they have a slightly different approach even within that evolving space. So I'm very happy to have Cybin here today. For Cybin, we have CEO, Doug Drysdale here with us. This is going to be a very interactive type of presentation. If you have any questions for me and you're tune into the webcast, please feel free to e-mail them to me at skulkarni@cgf.com. With that, I'll turn it over to Doug for a few opening remarks, and then we'll go straight into Q&A. Thanks, Doug.

Yes. Thanks, Sumant. So at Cybin, we're working with developing the psychedelic drugs for mental health disorders as you said. From the outset, we wanted to create molecules that were commercially viable, of course. We're very fortunate, though, to be starting at a point where there are several decades of human data, academic studies that show -- clearly show efficacy. So it's a great place to be starting drug development promise, quite an unusual advantage to be starting from there and sort of derisking the programs. When I look at some of the molecules that are in development today, some of them are very long acting. And a question there, the ability of these molecules to be scaled to larger populations, for example, psilocybin has a treatment duration that's about 6 hours in duration. And what I mean by that is a patient might be in a clinical setting under observation for 6 hours in a clinic. So that's taking up that treatment room for really the whole day. LSD has a duration of 8 to 10 hours. NDMA, 6 hours or so, but with effects that last for a couple of days after that. So when we took a look at that landscape, we wanted to tap into the efficacy of course of psilocybin and DMT specifically, but we wanted to create shorter-acting treatments that could then be scaled. And that's what we've been doing with our 2 lead programs that we're calling CYB003 and CYB004. CYB003, we're developing for major depressive disorder and CYB004 for anxiety disorders. And very happy that over the last couple of years, we've managed to transition the business from being early stage at the bench. Now with 2 -- both of those programs in the clinic.

Nice to see all the progress here. So you mentioned that the traditional psychedelic molecules, even though not approved, they're still kind of traditional because they've been around for a long time, they take a long time to take effect, a long time spent in the clinic. Yours is the other way, it's potentially a shorter time in the clinic. What makes you confident that your approach and the way you tweak your molecules could make them work where they're supposed to work?

Yes. That's an important question and a good thing to clarify. We have developed a number of molecules, about 50 of them actually, that are completely novel. And there, we've got to do work to understand the receptor-binding properties and the side effect profiles. We did not want to change the receptor binding profiles of psilocybin and DMT, so we're retaining the same active ingredients. We're simply modifying the pharmacokinetics, simply making them more efficient at getting into and out of the brain. So that should derisk any clinical development. And really these molecules should behave from an efficacy point of view the same as the classic molecule.

So what are the specific challenges involved then in tweaking those PK/PD characteristics? And how confident are you that you will be successful in tweaking those to your liking?

Pretty confident, actually. So we have -- we've done preclinical work in multiple species, the PK profiles are consistent across those species. We've taken a slightly different approach with psilocybin and DMT because they're kind of the opposite in terms of duration. So to shorten psilocybin part of the trick there is to remove the need to metabolize psilocybin into psilocin, which is effective. So we don't have that need within our molecule. There's no need for metabolism. And that metabolism leads to a very long onset of action, very long duration and a lot of inter-patient variability because the liver is involved. So we can remove all those issues. And CYB003 preclinically has been shown to be twice as fast in terms of onset, half as long in terms of duration and far less into subject variability. So we're not really relying on an any tricks, if you like, that could go wrong in clinical studies. And typically, the PK profiles once you see consistency transferred pretty well for those preclinical models to the human studies.

And so far, we've seen a lot of these approaches involved, an assistance in terms of therapy. If you have a shorter time spent in the clinic during your therapeutic effect, how do you expect that to affect the therapy going in and after?

Yes. And so I think the industry as a whole has a little bit of work to do to optimize the whole patient throughput for sure. We're making sure in our early depression study that we're doing in New Jersey to make sure the patients are very well prepared. Preparation is important, setting clear expectations for the patient, setting clear goals for the patient. During the treatment session, the patients are wearing a mask, they have headphones on, listening to music and they're going inwards. They're doing the psychological work themselves. But in order to do that effectively, they have to be well prepared. So there's certainly going to be some need for preparation. We can probably optimize and streamline that through use of telemedicine and various other tools. So I'm confident that the industry will figure that out that these clinics are pretty good at figuring how to make money. And so I think we'll do that. But there does need to be some good preparation, for sure.

So there's no easy way to ask this question. Psychedelics have been in the public eye for some time now. There has been a lot of hype for lack of a better word. We also have Netflix series and things like that. So people are looking at this. So when you have that kind of backdrop, how do you prevent that hype from taking over? And how do you prevent that hype from creeping into the clinical trial mindset for a patient?

Yes, there's some pros and cons on there. So for sure, I think I'm kind of surprised why -- how acceptable psychedelics have become in the last couple of years. I thought it was going to be a bit more of an uphill battle. But because of positive media, because of Netflix, for example, I speak to friends and family all the time, that's -- they are very accepting of the approach now, which is quite a big mind shift change. However, the downside of that is unrealistic expectations. I think we saw some of that in the reaction to the COMP360 Phase IIb study, very encouraging results. Certainly, far better results than you would see with SSRIs in depression. But market reaction maybe disappointment because of this hype. So I think we do have to temper that a little bit. Remember that there's no one size fits all. No drug works for every patient. There's going to be a portion of patients that these are very effective for and others that will need something else. And it is important not to get about -- over our schemas.

Thanks for that measured approach. So I'll move on now to some specific questions on 003. How is enrollment progressing in your recently initiated Phase I/IIa trial?

It's going well. We're getting a lot of interest, as you can imagine, as we've seen in other studies. So we've screened several hundred patients already. I expect that we will have the first patient dosed, round about the end of this month. So it's on track. And then we expect to get pharmacokinetic data from the first cohort at least which is 2 different doses. So 2 different doses of CYB003. We should get that data around the year-end. And I think that's important because the main premise of what we're trying to do is to show this faster onset and shorter duration. And we should get a picture of that by the end of this year, which is exciting, right?

So what should we expect to see exactly in terms of an interim readout? And what would you qualify as success on that interim readout at the end of this year?

Yes. So this readout will only really be PK data. The rest of the data will be locked up and blinded. And also, these early doses won't be psychedelic, there'll be sub psychedelic most likely. We won't likely see psychedelic effects until the second and then the third cohorts. But we should, with these 2 doses that we're using in the first cohort, get a pretty good indicator of what that PK curve looks like. And if it matches what we saw in a preclinical model.

Right. What's the risk if the PK doesn't behave the way you'd like it to in this part of the interim readout?

I think it's fairly low risk, quite honestly. And we've run these PK analysis multiple times in multiple species. It tends to translate pretty well. The molecule is, because of deuteration is highly lipophilic, gets into the brain very rapidly. And so we expect to see a pretty good match. I'd be surprised if we didn't see a good match. Yes.

What are you thinking of -- in strategy-wise in terms of a plan B, just in case deuteration doesn't proceed the way you'd like?

Well, I'd say that we've approached the 2 molecules, psilocybin and DMT differently in terms of deuteration. So with DMT, the deuteration, because you can deuterate the molecule at various points, and there are many different ways to do it. And during the development process, we created different levels of deuteration for these molecules, and we compared them if we -- 2 hydrogen atoms, 4 hydrogen atoms, et cetera. And then we picked up the ones that we wanted. With DMT, the deuteration is driving an extended half-life, so about 3x the duration than typical DMT. So about a 20- or 30-minute session. The deuteration for psilocybin, of course, we don't want to do that. We don't want to extend it. So the short-term properties of CYB003 are not driven by the deuteration, they're driven by the fact that it's not a prodrug. So deuteration isn't really so much of a factor. Deuteration with CYB003 effects dosing. And because the molecule is more lipophilic and gets into the brain more efficiently, we think that dose is likely to be in the 7- to 8-milligram range. compared to 25 milligram of psilocybin. So it's certainly more potent. So that's really what the deuteration is doing here. So we might be off on the dosing a little, and we'll figure that out in the study, but it shouldn't impact the PK.

Yes. When should we expect to see full results from the Phase I/IIa trial?

Yes, around about the middle of next year.

Okay. Got it. What do you think the key bottlenecks, if any, are to achieving that time line? Because enrollment should be pretty quick in an indication like MDD, right?

Yes. So enrollment at least patient interest is there. It's very high. I think the challenge with any study is enrolling the right patients. And so we've got a double screening process. The patients are first screened and evaluated by the investigator. But then we're using a second tool called [ SAFR ] which is developed by Maurizio Fava, who's Chair of Psychiatry Mass General. And they think that this tool can reduce placebo effect by maybe 15% or so. But of course, it means it's a stricter set of screens. And so that's going to knock out some patients. So we may see some slightly slower enrollment because of that. But so far, we're seeing a lot of interest.

Why would placebo effect be a worry in this case because you do have a psychedelic compound. People should hopefully know that they're on psychedelic or not.

Well, yes, you would think so. You would think so. However, I saw a study last year, I think it was 60 students that were told they've been given the psychedelic, they were all given placebo, 50% of them thought they had psychedelic experience. So you can disregard the placebo effect.

Got it. So as we move to potentially later-stage trials here on 003, how do you ensure the standardization of the therapy part of that component of the trial versus the earlier phases where you don't really have as much of a structured component?

Our therapy is really very structured, actually. So we've developed a program called EMBARK. It's 6 domains set of best practices in psychotherapy that we were using to train therapists for the study. Facilitators, I should say. And that tool enables us to ensure consistent training and as far as we can -- consistent delivery of therapy. But remember, this isn't really psychotherapy. You can't do psychotherapy in 3 sessions. It's really about psychological support and preparation, so there's less variability from that perspective.

And I've asked you this question before, but I'm going to ask it again because it's, I think, still relevant. You are enrolling patients with major depressive disorder. What drove the choice of MDD versus something like treatment-resistant depression? And when you fast forward to a time when maybe your product is approved and out in the market, do you expect it to be use in the MDD population, not in the TRD population first?

Yes, we are targeting MDD. I think historically, companies have tackled TRD because historically, these new depression treatments have been only incrementally better. And so competing against low-cost generics, SSRIs is a challenge, right, challenging [indiscernible]. Here, we have a complete paradigm shift where we're seeing vastly superior effect sizes, and durable effects that last for months and months at a time, maybe up to 12 months from just a couple of doses. So that's such a paradigm shift away from SSRIs that I think that justifies developing these treatments for MDD. And of course it's a much larger patient population as well.

Right. So if you had any early guesses, do you think the shortening of the duration of the treatment has any impact on the durability of the treatment effect?

I certainly believe that there needs to be a good amount of time for patients to be in that space. Now psilocybin analog, we think might be 2.5-, 3-hour session. Our DMT session is going to be 20 to 30 minutes. So if we believe that, then that doesn't really fit. It maybe it's a one-size-fits-all and it's a different approach for different patients. It may be that patients with deep set depression, maybe PTSD, do better with a slightly longer session than for 2 to 3 hours. It may be those that are suffering from anxiety disorders or need a top-up perhaps or reboot at some point, a shorter session by being up. And I think it also gives physicians a choice, I don't know they want to use that in to the treatment.

How about the need for retreatment or the frequency of retreatment? Will that vary by duration of the initial treatment?

Yes. We don't know that. We don't know that yet. And that's part of the work we're going to need to do, certainly part of the thesis for extending DMT from 5 or 10 minutes to 20 to 30 minutes. And that's driven by the need for durable effects. We want to make sure patients who are in that space for long enough to be able to do that psychological work to overcome their sort of maladaptive habits.

Do you think weight based dosing makes any -- has any merit in this kind of setting?

Yes, we will see. With psilocybin, there certainly seems to be some variability, but then psilocybin is a prodrug and needs to be metabolized, there may be some other issues going on there with food or say, weight, liver function. I would expect less variability with CYB003 because it's not a prodrug. But also expect in our later studies, we may well test more than one dose.

Right. In your preclinical studies for 003, what did you see as the most -- I guess, the most risky aspect of that, the preclinical [ talk ] studies that you had?