Disc Medicine, Inc. (IRON) Earnings Call Transcript & Summary

Welcome, everybody. I'm Doug Tsao, senior analyst at H.C. Wainwright. We are thrilled to have our next session with Disc Medicine, represented by John Quisel -- sorry. My apologies. And so we'll sort of jump into it. So you're a relatively new company to the public markets after your merger with Gemini Therapeutics. So maybe provide a quick overview of the company, what it was founded and your vision and what you're trying to accomplish.

Yes, thanks, and it's great to be here today. I appreciate the time. So Disc Medicine we went public through a reverse merger with Gemini Therapeutics just at the end of last year. So we've been public now for a few months. Our vision is to build a great hematology company. We think this is a fantastic area for drug development, a lot of great biomarker-driven drug development is possible. Many diseases with high unmet medical need. Our approach into hematology has been to go after targets that are validated in humans, whether through genetics or through clinical data. So everything we're doing, we should know that the mechanism is going to engage as expected in the human setting. We're focused on what we view as fundamental biology of red blood cells. This is targets that control iron and heme metabolism because these are key components of the red blood cell compartment. We expect that we're going to be able to have an influence or an effect therapeutically on a wide range of disorders that arise in the red blood cell compartment. So with that as our focus, highly validated targets, fundamental biology, applicability to a broad range of diseases. We've built first actually an expertise in the area and then a portfolio of assets that are now in multiple Phase II and Phase I studies with readouts coming this year. The soonest readout is projected for June coming up this year, an interim readout is expected.

And so you're -- I guess, I'd characterize your lead asset bitopertin. And we've got 2 readouts that are coming: the AURORA and BEACON, both are Phase II studies in EPP. Maybe provide some perspective on what we'll learn from each one. BEACON is a placebo-controlled study, so that will obviously provide some additional confidence. But maybe sort of start with AURORA and what should people be focused on learning from that study?

Right. Yes. So just to briefly recap, so bitopertin is a negative regulator of heme biosynthesis. These disorders are called porphyrias, they are rare diseases that arise from genetic defects in the heme biosynthetic pathway. So it's a very hand-in-glove mechanistic fit between the drug and the effect we're looking for in these patients. The disease is driven by a metabolite called protoporphyrin IX or PPIX. This is created in the process of heme biosynthesis. In normal humans it doesn't accumulate significantly, but in the disease population called EPP or erythropoietic protoporphyria, you see a tremendous accumulation of this metabolite. And the metabolite is toxic. It leads to extreme photosensitivity. And it also accumulates in the liver and can ultimately lead to liver failure and the need for transplant or mortality. So we have this rare patient population, these EPP patients who are incredibly sensitive to light. And we have a drug that we expect to be disease modifying. And we're running now 2 Phase II trials, one, is open label called the BEACON trial being conducted in Australia, about 20 patients. And the other is the AURORA trial, which is placebo-controlled, 25 patients per group being run in the U.S. So we're -- we've guided that we'll have interim data from the open label study coming in June this year, so just about a month or so away. And then we'll have top line data from both studies by the end of the year is our guidance. So this interim readout that we're doing, we've suggested it's going to be about 5 to 10 patients' worth of data. The clinically meaningful endpoint in the study is looking at patients' ability to withstand light exposure. So the median in this population is about 30 minutes. These patients can only really expose themselves to sunlight for about 30 minutes in a day. The goal of our therapy is to dramatically improve that. So what we'll be looking at is, of course, the drug safety. The primary biochemical marker of the drug activity is to reduce the levels of this toxic metabolite called protoporphyrin IX. That's the root cause of the disease and where we expect to get to disease modification. And then we have several different endpoints looking at patients' ability to tolerate sunlight exposure. So that's a body of data that we'll be able to provide as well. And I think an ideal result would be that we're able to show the drug is generally safe in the small number of patients. We're seeing a meaningful reduction in PPIX. And then hopefully, we'll be able to share some evidence but, that's translating to an improvement in the clinical aspects of the disease and the ability to tolerate light.

And do we really -- or how strong understanding do you think you have in terms of that correlation between PPIX levels and light tolerance?

Right, right. Yes. So if you look at the literature, there have been only a handful of studies where efforts have been made to reduce PPIX. And when that has been studied, the results are typically a very powerful effect on the disease when that level gets reduced below by about 30% or more. So the literature would suggest if you reduce PPIX levels by more than 30%, you can get to -- actually in several anecdotes, patients have become symptom-free. So they're no longer responsive to sunlight exposure. And obviously, if you get deeper reduction of PPIX levels, you'd probably get an increased response rate, more reliable and durable effects. So I think -- it's a small disease, a small field. The literature is not as rich as you'd find in a larger indication, but there are a lot of case histories where that reduction of greater than 30% has a profound effect on the course of disease.

And will you be thinking -- you mentioned liver damage is another consequence of this accumulation of PPIX. Is that a component of the study? And how are you thinking about that sort of end of the disease for us?

Right. Yes. So about 25% to 30% of patients have evidence of ongoing liver disease. It can manifest as a need for a gallbladder removal. It can manifest as elevated liver enzyme markers of liver damage. We've been advised and have followed the course in our initial -- these 2 initial trials, we're only enrolling patients who have relatively normal livers. So no higher than 2x of the normal range on standard liver enzyme biomarkers. So it's not -- right now, these studies are not designed to deliver meaningful data on that front. However, we may have people who have sporadically elevated liver enzymes. There's certainly ongoing damage probably in essentially all of these patients. And so if we're able to see some effect on those biomarkers, we'll certainly gather that up and add it to what we report. Over the long run, we'll be adding some kind of separate cohort to address the effects of the drug on liver health, which, again, we expect to be an important activity of the drug.

And for most of these patients, right, there's some light tolerance can be as little as 30 minutes a day, which is pretty remarkable, right? Even as a New Yorker probably get that walking to the subway back and forth. Do you have a sense from your interactions with the FDA in terms of what they would view as clinically meaningful. So when we think about sort of the benchmarks that they'll ultimately want to see you achieve for potential approval?

Yes. I mean, I think, the bar is actually quite low from an FDA point of view. So -- and just to say 30 minutes is actually the median. So there are many of these patients who can tolerate at baseline as little as 1 minute of sunlight exposure, which is obviously tremendous impact on quality of life in that situation. So there's one approved drug that's called Scenesse. It stimulates tanning. And so by providing some block to visible light in the skin, avoids some of the damage that accumulates in these patients. That drug was approved on an endpoint, which was accumulated time in light patients are able to spend over a 6-month study duration. They were able to add about a day of light time for these patients in the course of 6 months. So it comes out to somewhere around 10, 15 minutes per day. That was statistically significant in the study that I believe was around 80 or 90 patient. And the FDA clearly accepted that as clinically meaningful. So I think that's a threshold that is something we feel very comfortable. This mechanism of controlling PPIX can drive towards given what I said earlier about case histories where reductions in PPIX can lead to complete symptom resolution.

And, I guess, from a practical standpoint, when we think about these patients, they obviously have this hesitation to go into sunlight because it can become very painful. How do you ensure that your trials are actually capturing bitopertin's efficacy, right? Because you're basically sort of asking them willingly to risk causing pain for themselves. And as much as they might have this willingness because they understand this experiment. It's still a little -- it can be a challenge, right? There's a leap of faith that they're potentially taking.

Right. Yes, it is a question that arises in this field. It may be that in some prior clinical trials of other agents the endpoints, well, useful for providing FDA regulatory input, maybe underestimate slightly the benefit the drug is having. That said, these endpoints have been reliable. The patients are highly motivated. This is something remarkable in talking to people from this community. I mean, people want to be able to engage in things that all of us take for granted. So, yes, there is a fear of going out into light and experiencing pain. But at the same time, these patients have lived with this their entire lives. There are signals they get on their skin when a pain attack is about to happen. It's referred to as a prodrome. And so, I think, there's general willingness to test yourself up to that prodrome moment, and I think they have a fair amount of confidence and lifetime experience about how to then retreat from the light and avoid a painful attack. So the feedback we've gotten is that these endpoints and the historical precedents. These endpoints are robust. They do capture drug benefits. And so we don't anticipate that to be a major problem.