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

From Disc is John Quisel, CEO of the company, John?

Thank you, [indiscernible]. Great to be here. All right. So Disc Medicine, we're a newly public company, flipped public at the end of 2022. So still a new story for a lot of folks. We're very excited. We have our first Phase II clinical data coming out just in 2 days. There's been a lot of anticipation around that. But today, I'll just run through the general overview of the company. And so let's see if this works. Great. So I will be making forward-looking statements. You should take those into consideration along with our materials on our website as well as our SEC filings. So Disc, we're working on building a great hematology company. This is a fantastic area for drug development, and a lot of very objective endpoints that can be used to understand success in clinical trials early on. We put a lot of attention into derisking our programs early. So all of our programs, the targets are understood from either human genetics or from previous clinical experience to be engaged in the human population. And we work on what we consider to be fundamental biology of red blood cells. So everything we do circles around the metabolism of heme and iron. These are the fundamental building blocks of red blood cells and by manipulating heme and iron, our goal is to have broad impact across a wide range of diseases of red blood cells. And so we've been busy. Our Series A was only in late 2019. We were entirely preclinical then. Now we have multiple patient clinical trials running, another 2 molecules in the clinic, a third one close. And as I mentioned, first data coming in just 2 days with additional data across all our programs projected to arrive by the end of the year. So a very busy year of catalyst for us. And so this is our pipeline chart. Our lead program is called bitopertin. It controls heme biosynthesis in newly forming red blood cells. Our lead indication is called erythropoietic protoporphyria or EPP. We'll talk more about that in a minute. That's where the data is coming in just a couple of days. From an open-label trial called BEACON. We're also running a placebo-controlled trial that will have readout by the end of the year. Our second program, DISC-0974 is an antibody designed to mobilize iron in the setting of anemias and inflammation. We ran a very successful healthy volunteer study. I'll show a bit of that data today. And we're now in 2 Phase Ib/II trials in anemias of myelofibrosis and chronic kidney disease. We have a second-generation product called DISC-0998 that's shown there as well, same mechanism. And then lastly, we recently in-licensed an antibody to a target called TMPRSS6. This is designed to actually restrict iron availability, which has proven to be useful in the setting of polycythemia vera, a disease of excess red blood cell production. So that's a quick rundown of the portfolio. We're really proud of the operational excellence that we've shown. As I mentioned, going from fully preclinical in late 2019 to now in 2023 with readouts coming across 4 different trials just this year, and we hope to be progressing with good data into pivotal studies as early as next year. So that's the quick overview of the company. Now, I'm going to plunge into a brief review of each of the programs. So bitopertin is our lead program in Phase II. What it does is control heme biosynthesis by restricting the availability of glycine. This is the disease we're aiming at first, a rare disease called erythropoietic protoporphyria because that's a mouthful, we call it EPP. It's a rare genetic disease caused by a mutation in an enzyme in heme biosynthesis. And the result of that is a buildup of a toxic metabolite or byproduct of heme biosynthesis that leads to a horrible disease where these patients become extremely photosensitive and some photos of the effects this disease can have on patients. Because this metabolite builds up in the skin, when light strikes that, it causes an intense burning sensation that can last for days or even weeks and can also lead to physical damage. Additionally, this metabolite, which is called protoporphyrin IX or PPIX, can build up in the liver and lead to liver toxicity and even liver failure. So quite a severe disease. There are no disease-modifying treatments. Generally, these patients are just trying to avoid light throughout their day and the visible range of lights, we're talking light through windows, et cetera. There is one approved agent called afamelanotide, surgically implanted -- the agent that causes tanning. So in terms of what bitopertin does and why we think it's a great match as a potential therapy for this disease, this slide shows the heme biosynthetic pathway. It begins with glycine actually. Glycine is the first metabolite consumed in this chain of enzymatic reactions, each of the enzymatic steps as shown here. The last step is ferrochelatase and the metabolite I mentioned protoporphyrin IX is the last metabolite. So ferrochelatase takes protoporphyrin IX, charges it with iron, that gives rise to a mature heme molecule. And of course, in a newly forming red blood cell, this pathway is exceptionally active, right? A new red cell needs to be full of heme, which eventually becomes heme -- part of hemoglobin. And so these cells are consuming a tremendous amount of glycine in order to support this heme biosynthetic pathway. So in the disease EPP, you have a partial loss of function in that last enzymatic step, ferrochelatase. And the result is a buildup of protoporphyrin IX, which is shown here in purple dots inside the newly forming red cell. When this PPIX escapes into the body, that's when it causes all the damage, creates the photosensitivity and damages the liver. And the premise of bitopertin is this is a drug that actually was developed by Roche. It's been in over 4,000 patients, well established too in newly forming red cells, suppressed the uptake of glycine through a transporter called GlyT1. And the effect of that is to reduce the flux through this pathway and the setting of EPP to reduce the accumulation of PPIX in newly forming red cells. So this is the underlying cause of the disease, is this PPIX accumulation, and the purpose of this drug is to reduce that directed against the root cause. So we've done a variety of cellular and animal studies to prove this out preclinically. We've generated cellular models of EPP. Collaborators at Boston Children's Hospital have mouse models of the disease, a severe and mild model. And across the board, we see somewhere in the range of 45% to about 80% reduction in PPIX at relevant doses of the drug. And so this is very encouraging because actually decreases of greater than 30% in patients have been shown to lead to essentially complete disease resolution. So this target of greater than 30% reduction of PPIX is something we're meeting or beating preclinically. And if we're able to achieve it in our clinical trials would suggest we're on a path to significant disease modification. And I will mention this level of reduction in PPIX has also been shown to lead to resolution of liver problems in these mouse models. So with this confidence and with the 4,000 patient safety database from this drug that we in-licensed from Roche, we started 2 Phase II trials, one an open-label study called BEACON, the other a placebo-controlled trial called AURORA, essentially the same endpoints that we're measuring. Changes in PPIX are the primary. And then we're looking for changes in phototoxicity in these patients as the important clinical, and ultimately, the regulatory endpoint here. So data from the BEACON trial, first look that comes in 2 days at European Hematology Association, and then we project to have data from both trials available by the end of this year. And this is just the beginning for this program. So the control of heme biosynthesis has the potential to address a wide range of indications. We're starting by trying to control porphyrins, which are the most proximal to the glycine metabolism system, and hence, these porphyria indications that we're started with. But there are diseases of heme toxicity where excess accumulation of heme leads to disease, Diamond-Blackfan anemia is one that we've announced. We're working in collaboration with the NIH, on trial to start soon. And then diseases where globin itself becomes toxic or even an excess accumulation of red cells. And we're looking to expand the applications of bitopertin in coming years. All right. So that's the lead program. Now, I'll turn to the founding programs of the company all around iron metabolism. And interestingly, our ticker symbol is IRON and that is a reference to where we started as a company. So hepcidin is a hormone produced in the liver. This is a central regulator of iron in the body. When hepcidin levels are high, they restrict the release of iron into the bloodstream and therefore, iron is unavailable for newly forming red blood cells. Red blood cells consume a tremendous amount of iron in the body, roughly 70% of your iron is in your red cell compartment. So as soon as iron becomes restricted, red blood cell production becomes curtailed. This leads to an anemia. And hepcidin is increased by inflammatory diseases. So this leads to a kind of anemia commonly referred to as anemia of inflammation. There are also disorders where hepcidin is too low. Iron becomes overabundant. Red cell production can be excessive, and there are also iron toxicities that can set in. So we've built a portfolio to normalize hepcidin both in diseases of high hepcidin. So this is on the left-hand side, our drug called DISC-0974 that reduces hepcidin to address anemias of inflammatory disease. And then on the right-hand side, recently in-licensed a program called MWTX-0003. This is designed actually to increase hepcidin, which is a mechanism that has proven to have benefit in polycythemia vera. So first, turning to DISC-0974. This is, in our view, a best-in-class hepcidin inhibitor against a target called hemojuvelin or HGV. So the premise here is we reduce hepcidin, that central regulator, thereby increasing iron availability in the bloodstream and enabling red blood cell production in the setting of inflammation. And the reason we think this is a great target is because it is genetically validated. Hemojuvelin, shown as HGV on this slide, it's a co-receptor in the BMP signaling pathways. It has very selective expression in iron intensive tissues. And if you knock it out in a mouse, there is only one phenotype, which is reduction of hepcidin levels and increases in iron, which can over time lead to iron overload. And what really drew us is this same genetics plays out in humans. So there are humans who have loss of function in that HGV gene. Again, the phenotype is simple. You have a loss of hepcidin production and increased availability of iron in the body. So we're following basically the genetic path here. If we have an antibody that successfully downregulates hemojuvelin, the therapeutic effect should be very straightforward and very limited in what it does; simply reduce hepcidin, mobilize iron to allow red cell production in the setting of an inflammatory disease. And so we've done a healthy volunteer study. This was reported at medical conference last year. And as you can see, we used a series of very low doses. So 7 in the middle of the slide, ranging from a 7 milligram fixed dose, not mg per kg, up to a maximum of 56 mg. That's where we stopped because the iron mobilization was so profound. And you can see the 56-gig cohort you get dramatic decreases in hepcidin, shown in the pink line on the left-hand side, and that leads to the release of iron into the bloodstream, which is measured by something called transferrin saturation or TSAT, which is the axis on the right-hand panel. And so here, we have basically a tripling of the amount of iron available in the blood. So these are profound effects seen in the healthy volunteers and then unprecedented in this class of drugs, on the right-hand panel, you can see that versus placebo, this mobilization of iron led to actually a hemoglobin increase in these healthy volunteers. This is not expected because healthy volunteers typically have enough iron to enable red cell production at a normal level. But in our study, because we -- I guess, the mobilization was so profound, we were able to show the treatment group increasing hemoglobin by more than a gram per deciliter versus the placebo group. So highly active agent at the 56 mg fixed dose, so we're talking 0.8 mg per kg. The pharmacokinetics look appropriate for a once-monthly subcu presentation. So highly active. Normally, I pause there because normally, there's a safety slide. The safety was great. No adverse events above Grade 1, no pattern of events either. So we're now open and enrolling on 2 dose finding Phase Ib/II trials in different kinds of anemia of inflammation where iron restriction is known to drive at least part of the anemia. So on the left-hand side, anemia of myelofibrosis. This is a very severe precancerous type of hematologic disease, where it has a very powerful inflammatory component. And that component has now been shown in various ways to drive hepcidin levels and contribute to an iron restricted anemia in these patients. And then on the right-hand side, anemia of chronic kidney disease, a giant indication. People have been working on this forever. Obviously, EPO, ESAs and IV irons have their beginnings in this field. It has always been known that hepcidin is elevated in chronic kidney disease patients. It's actually a natural consequence of the disease because hepcidin is normally cleared through the kidney. So as the kidney fails, hepcidin becomes elevated and iron becomes restricted. So a very strong rationale for why our drug should work in both these indications. And this is just data showing that hepcidin is, in fact, profoundly elevated in both indications. Left-hand is a study from the Mayo Clinic showing elevation of 12x or more in myelofibrosis patients and the right-hand side is chronic patients showing 30x or 20x increases in hepcidin. So profound increase, here's a mouse model of chronic kidney disease anemia. Left-hand panel, our drug is dramatically decreasing hepcidin as expected. Middle panel, the red line, we're increasing serum iron, again, as expected. And the natural consequence of that is that if you follow the red line, we're basically able to sustain the red cell compartment in these animals, while as the kidneys are failing, in an untreated animal, you see a drop in hemoglobin levels on our drug. With that iron level sustained, the hemoglobin production is sustained as well, creating on-net almost a 2 gram per deciliter improvement over the untreated group. So the theory is all there. The preclinical data all work. We're in these 2 dose escalating trials. Each has a Phase Ib component where we're doing dose finding to look at the iron mobilization and hopefully see a hemoglobin benefit. And that data is projected to read out by the end of the year. Then we'll pick the dose and progress into in each case, an expansion trial over 2024. And this, again, is just the beginning. There are many, many indications that are known to be anemias of inflammation where hepcidin drives it. And so as we get POC from these indications, we'll expect expand. And so finally, our last program, essentially the opposite. This is called MWTX-003. Target is TMPRSS6. Here, we're trying to increase hepcidin, limit iron availability and actually reduce red blood cell production. So that has benefits in a host of indications, most prominently polycythemia vera. I think some very good science done in a company called Protagonist has shown that if you restrict iron in the setting of these polycythemia vera patients, you can restrict the excess red cells that are the main driver of that disease. So this, again, is a genetically validated target. It actually is a protease that degrades hemojuvelin. So we're really hitting the on and the off switch in these 2 programs. There are humans who have a loss of function of TMPRSS6. The phenotype is again very simple and circumscribed. You get elevated hepcidin. They end up with restricted iron and a kind of anemia that's called iron-refractory, iron-deficient anemia. So again, we can see in the genetics exactly what we want to do with our antibody, and there are no other sequelae that come from these mutations. So our anticipation is that safety should be good over the course of clinical trials. And so we have a little bit of preclinical data at this point. I should say the IND is cleared on this program. We expect to start a Phase I trial in the second half of the year. And we'll have that same kind of iron, hepcidin data, maybe even effects on red cells coming next year. But this is a nonhuman primate study. We can see profound reductions in serum iron with dosing of this drug. These levels are equivalent to or better than any other agent that's been used to try to restrict iron in this setting. A disease model of beta-thalassemia has been run. I will say beta-thalassemia has been a tough indication, just translated poorly for agents of this class. It's not where we intend to start clinically, but it is a useful proving ground to just show that the drug is doing what it's supposed to do in a mouse model. And so I don't have time to really go through it all, but basically, it's doing what it's supposed to do, increasing hepcidin, restricting serum iron and ultimately actually improving overall animal health in terms of red blood cells and spleen size, et cetera. So the preclinical package is done, the IND is cleared. We're going off into patients -- into a healthy volunteer, then followed by patient studies. Polycythemia vera, as I mentioned, is the most attractive initial indication, and we expect to be able to expand from there into a host of other indications. Hereditary hemochromatosis is one of interest, quite a large genetic disease caused by mutations in this exact pathway. So it's a hand-in-glove mechanistic fit for a drug like this and then other applications as well. So in conclusion, we think we've built a great company. We're on the cusp of a lot of clinical data. First comes in just 2 days in the porphyria indication. And then at the end of the year, we'll have placebo-controlled data in the placebo -- in the porphyria indication, and we'll have dose escalating data in the myelofibrosis anemia and chronic kidney disease anemia, all coming at end of year. And then through 2024, we'll be headed towards pivotal trials, expanded Phase II trials and then also data off that third program as well. And I should mention thanks to market support. We're well funded at this point, funding deep into 2025. And so I think we've laid a great foundation for the future. Thanks for your attention.

With a couple of minutes left. Does anyone have any questions.

[indiscernible]

Ask a question and run, yes.

So you mentioned that there is one product approved for EPP.

Correct.

I think it's going to senate. So how much is it being utilized since its approval in 2019? And what can you kind of give us some trailer -- of what do we expect in a couple of days -- at data?

Yes. So maybe I'll talk about our data rather than our competition. So as I mentioned, the mechanistic effect of our drug is to decrease the toxic metabolite called PPIX. If we can go over a 30% reduction, greater than 30% reduction, we expect that to have important effects on the disease. So that data in 2 days, first and foremost, we're going to show 5 to 10 patients' worth of data off our open-label trial, looking at the protoporphyrin IX levels, hoping to show greater than a 30% reduction. And then we have disclosed, we will be showing measures of phototoxicity. That's the ultimate clinical benefit of the drug. And so we'll be sharing some of that data as well. And I guess as a benchmark, the [indiscernible] program, which works by a totally different mechanism causing tanning of the skin. Various different metrics for how much it affects phototoxicity, but the key pivotal endpoint showed about a 50% improvement in light tolerance for the patients over a 6-month period. So that would be maybe a benchmark that we'd hope to meet or exceed.

[indiscernible]

So it's yearly sales, as I understand it, are in the ballpark of $70 million, still growing. It is surgically implanted. It's only available at certain centers. And we think that probably explains what appears to be a relatively modest market update for the drug. Thank you.