Cyclerion Therapeutics, Inc. (CYCN) Earnings Call Transcript & Summary

Thank you all for coming. I'm Peter Hecht. I'm the CEO of Cyclerion. It's great to have you all here this morning. And it's really a great pleasure to debut our company. We're a brand-new startup in Kendall Square. We're 9 months old. And we're -- I think, a really interesting investment opportunity. I think to -- right at this point, is an entry point for investors to capture tremendous upside value and a company that has a leadership team that's proven that they can create medicines and create value for shareholders. We have a portfolio of starting assets that were developed by a team that has expertise in the category. We're focused on around the nitric oxide and cyclic GMP pathway. World experts, from Mark Currie, our President and the innovator around many of these molecules and Andy Busch, who's our head of R&D, who has a very long track record in multiple companies around this mechanism. Mike Mendelsohn, who is on our board and has been working in this category for a long time. And a terrific R&D team who have brought forward 5 exquisite assets that are targeted in different ways to this mechanism into different tissues. And so it's a great pleasure to be able to introduce you to this story. We are a public company, so I'll be warning you about forward-looking statements. And I want to focus you today on 3 core priorities that the company is focused on for 2020. We have a drug called praliciguat. That's in -- that recently finished some Phase II studies, and we're working very hard to out-license that product and to get it into the hands of a partner who has global capabilities and can advance the program for a huge market and huge unmet need as quickly as we possibly can. We're working very hard on a molecule called olinciguat that we believe has real benefit for patients in sickle cell, and that's in Phase II. And we have a very exciting molecule that's recently completed Phase I and called 6463. And I'll take you through each of these stories in the next 15 or 20 minutes and tell you why we're excited about the potential of the opportunity for patients and for shareholders. So let's start with praliciguat. We have Phase II data that were -- that we believe supports further development of the molecule. And as I said, our priority is to, as rapidly as possible, get it into the hands of a player with global capabilities to develop and get the drug approved and commercialized on a global basis. It's a compound that has the potential to help patients in diabetic nephropathy. And actually, the class has recently been validated in heart failure with reduced ejection fraction by computing company's molecule that had positive outcomes benefit as well. So these are very large categories. Huge unmet need and huge potential. And we're -- we believe that based on the data we saw in Phase II that our molecule praliciguat has a unique profile and an opportunity to offer real benefit to patients. We saw improvements on the primary endpoint of UACR on top of standard of care that were very impressive. And we also saw metabolic improvements that are unique to this class that -- in other words, haven't been seen before in the clinic on blood pressure, HbA1c, total and LDL cholesterol. And again, these are on top of standard of care. The patients in this trial were diabetics. And I think 71% of them were taking multiple medicines, at least 5 or more. All the patients who are taking ACEs and ARBs, I think, almost all we're taking statins. And we saw really quite good benefit on top of the existing therapies that the patients were taking. We saw a very good safety profile. It's a once a day drug. It has very low renal clearance, and it doesn't require any dose titration on initiation of therapy. So these are all potential benefits. And here's just a sampling of the data. This is the primary endpoint. And you can see first week improvement. We studied 2 doses in this study, 20 milligrams and 40 milligrams. You can see clear separation from placebo in the first week and continued improvement out through 12 weeks. And at the 12-week point, on an absolute basis, close to 30% improvement. And on a relative basis in the mid-20s. So again, on top of the standard of care. So very large market. A scarcity of assets in this class, very large unmet need in the category and a strategy which we set from the outside of the company that longs to be developed and commercialized, really not by a small biotech company that's 9 months old, but by a global player with significant capabilities. The interesting thing here in addition to what I said so far is that depending on the partner, this molecule in the development program and the strategy can be tailored to the specific portfolio of the company. And so there's an opportunity, I think, to customize the profile in development into the market as well. So we're very excited, and we're working diligently to transfer this molecule as quickly as we can. We're excited to see the benefit in the market with patients. Let me turn now to sickle cell. Olinciguat is our offering there. We believe that olinciguat has the potential to really raise the standard of care in a category that, historically, has had a huge unmet need. There's now some exciting new therapies coming into the market. And as I think you all know, a lot of interest in the industry to bring new therapies to market. There remains quite a lot of unmet need, both on top of the existing just approved drugs and also in some therapeutic outcomes where there are no good therapies yet. Our molecule has the potential for both upstream and downstream pharmacological intervention. I'll take you through that in a minute. And we believe it has the potential to impact all 4 clinical domains that are critical to patients, anemia, both the daily symptoms and the longer-term symptoms of VOC and in the longer-term organ protection as well. It's -- as we saw with praliciguat, this is a different molecule that shows a great PK profile. It's a once-a-day drug, with a very low peak to trough. It will be a pill once a day. Can be used orally in either co-administration and potentially in combination with other therapies. And I'll take you through the design of the trial that's ongoing. As I said, we believe that the drug has the potential to work upstream and downstream. When red blood cells break open, they release both arginase, which degrades arginine, which is the precursor for nitric oxide, the top of this signaling pathway and also heme, and heme is a spectacular sequestrant of nitric oxide. It's actually in the inside of the receptor, cyclic GMP that we're -- sGC that we're working on. And so it leads to depletion of nitric oxide. And actually largely the downstream consequences and the symptoms that patients with sickle cell report are the consequences of nitric oxide signaling depletion. We believe that both an sGC stimulator that restores deficient signaling in the pathway can help upstream by increasing fetal hemoglobin expression and downstream to improve the consequences of the NO depletion that I was just describing, both by improving vascular blood flow, decreasing the endothelial damage and vascular inflammation and cell adhesion and improving the integrity of the endothelial cell layer as well. We have some very good preclinical data on this, and we're excited to see the clinical outcomes as well. As I said, there are really 4 key domains that are important to patients. And the 2 newly approved therapies are great entries to a category that's really been terribly underserved for a long time. And as you guys all know, sickle cell is, I think, the largest of the orphan diseases. It's a very important category and olinciguat has the potential to affect, not just one, but all 4 of these categories, and to add on top of the benefit that each of the current therapies has shown and also to work in daily symptoms and in outcomes where there's currently no good therapies. So just to give you a quick overview of the STRONG study that's ongoing. It's a patient that -- it's an 88 patient trial. We're studying a broad therapeutic range. We have 4 doses in the study. And it's a 12-week study. We're looking, of course, at safety and tolerability. This is a novel mechanism and confirming the PK profile that I described to you. We're confirming a fit-to-purpose PRO that is the vehicle through which we're looking at daily symptoms. We have a great amount of expertise in our company in understanding and developing and measuring patient outcomes from a variety of backgrounds. And we think we can help there and we're looking at a broad range of symptoms. And we have a high bar for what we're looking for advancement given that there are some good therapies, but we really are excited to see the data. We expect to see top line results midyear. And we're working very hard to advance to that program. So let me turn in the remaining minutes to our third area of focus IW-6463. We just put out a press release on Monday on this program. There's been quite a lot of data over the years on the nitric oxide cyclic GMP pathway and its involvement in a variety of critical aspects of brain health. And there haven't been good ways to test those clinically because none of the previous attempts to get sGC stimulators or other modulators of the pathway into the brain have been effective. And our teams have been working on that for quite a number of years and actually just really cracked the code a couple of years ago. And so we're super excited about being able to develop 6463 and to understand the impact that modulating nitric oxide has on -- nitric oxide signaling has on brain health. And so what we believe is that, based on preclinical data that restoring the reduced nitric oxide signaling in the CNS can decrease both vaso inflammation and CNS inflammation and improve cerebral vascular blood flow. There's quite a lot of evidence for neuro degeneration and effects on memory and cognition. And so we're excited, again, to be able to test all of those. Given that this was first in mechanism class, of course, we want to be smart and thoughtful about how we develop the drug. And so we just completed -- it was a quite thorough Phase I study. Remember, this first in the mechanism to get into the CNS and we wanted to be careful. And so we -- it was a quite substantial Phase I study. It's a 110 healthy volunteers total, with 3 different stages of the Phase I study, including a food interaction study. And we saw what's really a quite exquisite profile. We see a nice wide therapeutic index. We see good CNS exposure measured by a spinal tap and a nice ratio of CNS exposure to the peripheral exposure. And because of the blood pressure effect that you can see in the periphery, and in this case, because it worked well, we saw a nice gentle effect on blood pressure. We have good confirmation that the drug binds through and engages with the target, and we saw no food effects. So the drug is going to be comfortably taken with or without food. It's, again, a nice once a day oral pill with quite linear and predictable PK. So the team really nailed it. And in terms of safety, we saw a very good safety and tolerability. And really, the most prevalent AE was headache, and this is an in-center study where the subjects are not able to drink coffee. The headache was balanced between placebo and active. So with that, we want to do smart development and begin to explore some of the pharmacology that I was describing. We've already initiated a proof-of-mechanism study, looking at translational pharmacology in elderly subjects with reduced vascular flow to understand the impact that we have on blood flow in the CNS. And we expect to have data on that by midyear. And we're expected to do one or several smaller smart studies to look at the pharmacology of the molecule that I was describing and to do translational pharmacology studies to look at each of the aspects of the predicted pharmacology of the molecule. And we'll be kicking off at least one of those in the first half, and we'll have an Investor Day or Investor Meeting to take you through that in the first half of the year. We're also continuing to do both preclinical work on the mechanism and on 6463 itself and on additional molecules. We really believe this is a very rich area for drug discovery and development and that we can take advantage of our leadership position to develop multiple therapies in this category. So to wrap up in a couple of slides, let me just reiterate. We have multiple near term catalysts, both deals in business development to demonstrate value and to advance the molecule most efficiently either by ourselves, or in the hands of partners. We have near-term clinical data coming from each of the 3 programs that I described. Although, we're a 9-month old startup, we did start the year with $102 million of cash, and we've managed our operating business such that we should have cash into the second quarter, at least of 2021, that's not assuming any deal revenue. And we have a fabulous team that's very passionate about these medicines and very intense on their intent to deliver value for patients and for shareholders. So that's where we're at in terms of priorities and focus. It's exciting to be a 9-month old startup with such rich portfolio and such a great team. And we look forward to keeping you updated during the course of the year and welcome you as shareholders. Thanks very much. And since I'm my own host, we have a breakout in the Sussex room in a few minutes. Thanks.

Okay. Thank you all for coming. And mics are on. We're webcast so I'm Peter Hecht, the CEO at Cyclerion. There's a number of leadership team folks here with me to answer questions as they get asked. Grateful to you all for being here during the Q&A session. We'll repeat questions that get asked to make sure that they get through. Are there any questions?

Can you talk a little bit about the timing for sickle cell as you think about olinciguat? I think you said midyear. Anything else you wanted to add on that?

Chris Wright is our Chief Medical Officer and these are his development efforts. Chris, can you take that?

Sure. I'll just repeat it for those online. How is our sickle cell program going and is there any updates on the timing for the data? Sickle cell program is going really quite well. We've made a lot of progress in terms of recruitment and also opening up sites ex-U.S. which has really made an important difference for us. And so we looking forward to having the data available midyear this year.

Great. And you just had your readout for 6463. Can you talk about potential indications in CNS?

Sure. So the question was we just had a readout for 6463 and can you tell us a bit more about that and possible indications.

Go for it.

So that's correct. We really are excited about 6463 and the data that we received from our first-in-human study. And we were able to demonstrate that 6463 is well tolerated over a range of doses that it has a once daily PK and that's unimpacted by food. And we also -- we're able to show that we had exposures in CSF that we're at levels that we had expect to see activity based on our preclinical experiments. So that's really exciting. We're currently engaged in a translational pharmacology study where we're looking at some biomarkers of CNS functioning, particularly looking at cerebral blood flow. We think that's an important area in older individuals as well as some other biomarkers of CNS activity. And there's really a lot of ways. You could go with this mechanism. It's a very novel area. It's the first sGC stimulator that we're aware of that gets in the blood-brain -- gets in the brain. And given its activities you've seen preclinically, so we've seen impacts on blood flow, impacts on neuroinflammation, impacts on reducing neurodegeneration and also improvements in cognition. So there's -- we're really excited about the possibilities from the indication perspective. And we're planning some smaller studies to look at how this may impact different individual diseases. So we look forward to discussing more about those upcoming trials in the near future.

Great presentation, Peter. I have some thoughts on lots of opportunities for business development for all of you in 2020. So can you give a little more color on maybe some of the conversations you've been having or feedback you've been getting in the course of some of those conversations from last year and you've been kicking off this year?

Sure. Thanks for the question. And the question is about our ongoing business development efforts. We're primarily focused on praliciguat, our Phase II drug that we've recently completed studies in diabetic nephropathy and it's a very large unmet need, and our strategy from quite a while ago, has been that the optimal value transfer and capability transfer point for that molecule, given the global need in diabetic kidney disease and the capabilities fit with it. With this data, we would transfer it over to a global partner and we're working very hard to get that transfer both to the best partner, but as efficiently and rapidly as possible because we see a huge need for the medicine in the world. And given the scarcity of assets in this category and also in heart failure with reduced ejection fraction, where this category has been validated recently by a competitor molecule with positive outcomes data. We believe that, really, there's only 2 molecules in this category and the right partner could customize the development program and the attributes of the -- ultimately, of the label and the product. So we want to make sure we get it to the right partner, but we also want to do it quickly so that we're not holding up value transfer to patients. And I can't really give you details on the ongoing conversations and have learned over time not to promise timing, but we're working diligently on it. We also have, as I mentioned at the beginning of the talk, 4 other programs, 2 of which I talked about today that are in the clinic. And 2 very exquisitely targeted compounds, one that's about 500-fold specific to the liver and a program to deliver a sGC stimulator to the lung. And we're -- that's a pretty big portfolio for a small startup that's 9 months old. So we're having conversations with a number of potential partners about how best to optimize the work we do with work that maybe get done by other partners and create some value that way as well. More of a bandwidth question.

I'd like to talk about the sickle cell space. How much sickle cell drug that you all have pivot the sort of newly approved therapies in this space?

Thanks. It's a great question. Cheryl Gault, who is our Head of Strategy and Commercial. Can you repeat the question and take that one?

Sure. The question was the drug that we're developing, which is olinciguat in sickle cell disease, how is that going to fit into sort of the marketplace or competitive landscape in sickle cell? I will say, it's certainly a very exciting time in the sickle cell space. The approval of 2 new medicines is a very important advancement for patients suffering from this disease which has been about lack of innovation in the space for a very long time. So those 2 new approvals represent important new medicines. They also individually treat a single symptom domain. So the way we think about the unmet need in sickle cell diseases across 4 key clinical domains. Those are daily symptoms, vaso-occlusive crisis, anemia as well as end-organ damage. And so when you think about the 2 recently approved drugs, one treats anemia and the other treats VOC. And while they have improvements in those domains, it's unlikely that they will completely solve that issue within this population. So we believe there's room for incremental improvement on both anemia and vaso-occlusive crisis. And consistent with our mechanism and work that we've done preclinically, we think this is an area where olinciguat could add incremental clinical value. We also believe from the work that we've done preclinically that we could push into the white space, which is the other 2 untouched therapeutic domains. So that will be a daily symptoms as well as end-organ damage. And daily symptoms is of particular interest to us. We do a lot of work engaging with patients to understand how they suffer from their disease to make sure that we're developing therapies that will serve a significant unmet need and patients tell us that daily symptoms, even above VOC are the things that are most bothersome to them. So that's chronic pain, fatigue and lack of concentration. So we're excited about the possibility of olinciguat in sickle cell and believe it has the potential to come forward as either a stand-alone or an add-on therapy in the space and add incremental clinical value.

And Cheryl, can you just kind of expand on the importance of those patients kind of reported outcomes and thinking about the patient experience and how in sickle cell that really -- are you seeing that in sickle cell that's really an important kind of metric or kind of work that into the trial?

Sure. In the work that we've done...

Cheryl, can you repeat the question?

Oh, sorry. The question was just talking a little bit more about symptoms and how from a patient perspective, how important is that really and how we incorporated that into the design of our program? I think, historically, people have thought about vaso-occlusive crisis as being the domain that matters the most and the domain that should be targeted for the introduction of new drugs. And it's certainly an important one. But when we talk to patients, they are expressing to us that the things they most want out of new therapeutics in this space are relief from daily chronic pain, which is quite debilitating, fatigue, lack of concentration and cognitive impairment because these are the symptoms that are holding patients back from being able to actively participate in school or work. And so that's the most urgent of the unmet needs from the patient perspective. Certainly, an improvement in VOC is valuable as well but we believe that the ability to impact symptoms is a potentially unique benefit of olinciguat and one that would be very valuable from a patient perspective. So we've incorporated that into our ongoing Phase II trial. We'll be validating our patient-reported outcome instrument, which is a proprietary fit-for-purpose instrument that was designed by us, specifically for this patient population. And that's an area where we have a lot of in-house expertise within our team. And so we're quite confident in our ability to do that effectively to understand and translate the patient needs and also be able to work with regulatory authorities to incorporate that into late-stage development and into the label as well.

You mentioned additional work in the CNS arena beyond the IW-6463, if I have that number, right? Can you say any more about that addition?

So the question was...

I should introduce you too. Andy Busch, he's our Head of R&D, Head of the Innovation Center. Can you take that question?

Yes. I can.

Thank you.

So the question was, what is a potential total portfolio of indications to be addressed with CNS permeable sGC stimulators? And I think I probably like to start with a helicopter fuel first saying, there are obvious large indications as well as rare indications, which have NO deficiency as a potential pathophysiological mechanism. It's very obvious that there are vascular deficiencies as a consequence of NO deficiencies, which cause a number of CNS diseases. And there are other diseases we want to address. So at this point, I just would like to say, we elaborate on clinical development in 2 different directions, for large as well as for small diseases. And we do, at this point, also work on more -- on developing more than 1 compound. 6463 clearly is our frontrunner, but we do have an idea how to further specify a profile of a small molecule to address more specifically, CNS diseases small versus large for the future.

Andy, can you talk a little bit more about the innovation center, the model and really how you approach R&D through that model?

In my big pharma past...

Repeat the question, Andy.

Oh, the question was, what could be potential benefit of the innovation center, and what actually is the model of the innovation center? I think in my pharma past, what I have experienced is very often high fences between different functions, like research and development, development and commercial, commercial and strategy. We tried to really put together at Cyclerion everything under one roof and make sure that there is absolutely an absolute seamless and aligned progression start and progression of compounds through the value chain. And this is what my leadership team is completely committed to perform against. And I'm extremely pleased to see how really this works out, at least in our scale. This is obviously a way we can go.

Any other questions? Terrific. Thank you very much for your time. We appreciate it, and you can always find us through our IR team. And we're always available directly as well. So thank you very much for the time this morning. Have a great conference.