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

Good afternoon, everyone. Welcome to Guggenheim Healthcare Innovation Conference. My name is Yatin Suneja, one of the biotech analysts here at Guggenheim. Our next presenting company is Disc Medicine. We have a few executives from the company here in the room, but I'm going to be chatting here with the Chief Executive Officer, John Quisel. John, why don't you make some opening comments. You and I were just discussing about CNPV, which is also congratulations on that. But just tell us the Disc story. Obviously, you have a few programs, but what are some of the key things that investors should be focusing on, and then we'll do a Q&A.

Yes. Great. Thanks. It's great to be here. So the company, yes, the big excitement at the moment is our lead program, Bitopertin in a disease called erythropoietic protoporphyria or EPP for short, was awarded one of the Commissioner's National Priority Vouchers. So that review time puts us projecting that we'll be able to get to approval, if all goes well, by the end of this year or early next year, which is an amazing place to be given that it was about 5.5, 6 years ago was our Series A. Actually, we were entirely preclinical, actually had not in-licensed Bitopertin as a program at that point in time. So yes, the history of the company, we were built at that time around looking at controlling iron and heme as fundamental building blocks for red blood cell biology, trying to control the metabolism of iron and heme as a way to manipulate a variety of disorders that arise in the red blood cell compartment. So we started off with heme/onc-type indications, myelofibrosis, polycythemia vera being in target, but all preclinical at that time. And then we became aware of this porphyria disease that arises in the red blood cells and the potential to use Bitopertin as a way of controlling heme biosynthesis to diminish the harmful metabolite that builds up in those patients and try to achieve a major clinical response through that mechanism. So that's how we built the company. We've been public now for -- since end of '22. So this is our third year of trading publicly under the ticker symbol IRON as you have up there.

Yes. Very good. So given the acceleration in time line for Bitopertin, like what -- number one, just are you seeking for a regular approval or this is an accelerated approval? And then I think you're running a confirmatory study, APOLLO study, right? What are the expectations? What do you have to produce there?

Yes. So we completed a Phase II program in about 100 people and had our end of Phase II meeting about a year ago now. At that time, the FDA aligned with a view of putting us on an accelerated approval pathway, which said they're going to use the toxic metabolite PPIX as the surrogate endpoint. And then we would run a confirmatory trial called the APOLLO trial, which we aligned on with the FDA and got that going. So it was in that context, progressing through about a year of meetings with the FDA around the CMC program, confirmatory trial design, the pre-NDA meeting, we submitted the NDA itself at the end of September, setting up a time line that would lead to NDA acceptance at the end of November. And in that context, the CNPV came in on top of that and really accelerated the projected review time.

Got it. So what preparation now you have to make given that there is a significant acceleration, right? How are you thinking about the sales force? Where are you on the CMC side, all that stuff?

Yes, exactly, exactly. So key pieces of infrastructure, having drug to launch with, right, the CMC. And we have a lot of commercial and clinical batches that are ready to go. The full validation that you typically do wouldn't wrap up until second quarter of next year. But I think there's room to have a discussion with the agency around using the batches that we have in hand, assuming an approval were to come sooner than that. So that drug supply foundational piece number one, having a distributor, having a specialty pharma, those things should all be set up on time, having reimbursement discussions, those are being significantly compressed and hiring that team is also compressed. So there may be longer prior auth type discussions that happen with the patients coming on with this kind of accelerated launch. And then the sales force itself, yes, that team will probably be seeded, but not yet fully trained and so not in the field at the time of launch, which is fine. I think that sets up kind of 2 phases to the launch here, one where it's kind of the early run, taking the material we have available, making it available. We'll work through the finding patients at key centers or clinical trial rollovers. And then we'll come out with kind of what I call the full launch where we have the sales force seeded and the full reimbursement system set up.

Got it. Got it. What will be the size of the sales force?

Yes. So we're -- actually, the job ads are up on our website right now, 24 reps is the team we're looking to see.

Okay. Okay. And then like, let's say, if the approval comes on time, it seems like would you be able to launch ASAP or you need, let's say, until the full validation happens in Q2 for you to launch?

So we expect the base plan is that we'll be able to launch as soon as the FDA gives the green light. But the outside possibility would be Q2 then.

Okay. Then in terms of the patient population, could you maybe help us understand what -- how many patients have been identified? Who are the easier patients to go and target initially?

Yes. So the genetics would say there'll be 20,000 people in the U.S. with the genotype. The claims data that we've looked at shows 14,000 people that have been diagnosed using the ICD-10 code for this disease. And of those, we see about 6,000 that we define as engaged patients, meaning they've had more recent EPP care, more frequent EPP care, et cetera. And the caregivers for those 6,000 patients, that's who we size the sales force again. So we designed the 24 reps to be able to call on the accounts that service those 6,000 highly engaged patients. Reaching the full 14,000 patients will be come through long-term sales rep engagement plus social media strategies, other more kind of broad outreach type approaches. So the launch is focused on those 6,000 engaged patients.

Yes. There is another drug or another device, right, that is approved for it. Can you maybe talk about how that has done? What are the issues with it and how Bitopertin is a little bit differentiated on that regard?

Sure. Yes. There's only one approved therapy for these patients. It's called Scenesse. It works by causing tanning. So providing a barrier against sunlight exposure, which I failed to mention the main consequence of this disease is extreme sun -- pain on exposure to sunlight. So Scenesse works by tanning. But the big impediment there with Scenesse is it requires a surgical implant. So a patient has to go into a surgery department, receive an implant under the skin and then they have to do that every 2 months to receive that drug. So probably because of that, it's not widely used. We estimate it's about 3% of patients access that therapy. So call it, 200 to 300 patients in any 1 year might receive that drug.

Got it. And what is -- do you remember the price for that?

Yes. So if you receive all 6 implants across the year, it would come out to about $300,000 on a year.

That is the pricing for that. Okay. So now for the 6,000 patients, all the 6,000 sort of identified patients that you are building the sales around, how should we think about the cadence of launch? Because some of these ultra-orphan drug launches can be sometimes very rapid or could be very slow. In what spectrum do you -- or this disease lie, the EPP?

Yes. Well, I mean, I think when we do our own projections, we're just using other parallel launches in the rare disease space. But I think the components that we see in the launch are patients that are already in our clinical trials, meaning rollover patients from the long-term extension, et cetera. And there, it's probably around -- expected to be 150 or so patients in the trials already. Then we see the top 15 or so centers, essentially our clinical trial sites. There's a substantial number of patients seen by those sites. That is a highly accessible group of patients. And then you get the remaining top centers that round out that 6,000 patient population.

Got it. Have you talked about the pricing?

No, we haven't. And obviously, we won't set a price until we understand what our label, what the whole package looks like. But like you said, if you look at precedents in the porphyria disease space, you have Scenesse priced at $300,000 a year in EPP. And in an adjacent porphyria called hepatic porphyria, Alnylam markets a product called GIVLAARI priced at $575,000 a year. So that gives you a sense of fairly standard rare disease pricing in these indications.

Okay. With regard to the -- actually, first on the label, how should we think about the label? Any particular consideration for the label that we need to focus on?

Yes. I think our preferred label will be a simple one indicated for treating EPP. I think areas where there may be discussion would be the age range. We'll be looking to get a label that goes all the way into the adolescent population. However, that is based on only 4 adolescent patients in our Phase II program. So I would say there's substantial reason for some risk around whether we'll be able to get adolescents onto this label. And then the other question would be, given that this is an approval premised on a surrogate endpoint of PPIX, whether the drug would be labeled for reducing PPIX or be labeled for just generally treating the disease.

Yes. Okay. Then with regard to the confirmatory APOLLO study, what is the -- what are the requirements? When will that study complete and time lines?

Yes. So we started enrolling roughly May of this year. We project about 1 year to enroll the study. It's 150 patients. And we're enrolling in U.S., Europe, Canada, and Australia. We expect about 100 of those patients to come from the U.S. The balance, mostly Europe with the sprinkling in the other territories. And we've projected about a year to enroll the study, 6 months on treatment. So last patient should be out kind of late next year with the data following a month or two after that. That's the basic attributes of the trial. The endpoint is co-primary PPIX reduction, which we've proven kind of inarguably in the Phase II program and then a measure of time and light at the end of the 6-month trial period.

Got it. Got it. Very good. All right. Moving on to the next asset, 974. Can you maybe describe the mechanism for us and the areas that you're going with?

Yes, sure. So it's a monoclonal antibody against a genetically defined target called hemojuvelin, which is a core regulator of iron in the body, right? So they're actually humans who have loss of function mutations in hemojuvelin. And the phenotype is a kind of fluid iron availability in the blood, which in a normal person is not particularly helpful for anything. But in many kinds of anemia, actually, the anemia is caused by restriction of the iron inside the body. So by targeting hemojuvelin, we expect to and have shown now in the clinic that we release that restricted iron situation and release iron from internal stores into the blood where it can be used by the bone marrow to produce new red blood cells. And I think axiomatic that iron is one of the key building blocks of red blood cells. So that's the way it works. It's a monoclonal antibody delivered once every 4 weeks, 50-milligram fixed dose. We did a healthy volunteer study where we showed very nice pharmacokinetics, pharmacodynamics, suppressing the target called hepcidin, mobilizing iron in the blood. And actually, even the healthy volunteers saw an improved hemoglobin profile. The target is overall anemia of inflammation. It's a set of anemias driven by inflammatory disease, which is what causes the trapping of iron inside the body. Our lead indication is myelofibrosis, which is a very severe hem/onc kind of anemia marked by very high degree of inflammation. And as a result, there was a hypothesis, I think, first generated at the Mayo Clinic that this inflammation may be leading to iron-restricted red blood cell production and that by releasing that, you may have a productive effect. There's actually no therapy approved to treat anemia in myelofibrosis patients. And if we're successful with this program, and the data have been very good so far, we'd be the first and really only drug approved for these patients.

I think -- so you've done a Phase Ib, right, where you had shown some data also in patients that were on JAK. So can you just reveal those data for us? What exactly you are able to achieve in those patients?

Yes, sure. So we presented Phase Ib data about 35 patients across a variety of different dose levels. That was at ASH last year in December. And we saw very good response rates across the board. So the FDA advised us to look at the patients in 3 groups, those who are not transfused at all, and this is looking at the 12 weeks pre-dosing. Those who are receiving 1 to 2 units of transfusion. So that's the low transfusion burden group and then those with 3-plus units transfused, and that would be the high transfusion burden group. And across all those groups, we showed a very good response rate, about 50% in the non-transfused patients, about 80% in the low transfusion burden group and about 40% in the high transfusion burden group. All of those being well above the target you'd want to see in order to feel that you have an effective therapy in a program that can progress into a pivotal trial. So what we're doing now is looking in a 90-patient group of study called the RALLY-MF trial, where we've chosen a single dose now, the 50-milligram dose, which appeared to be the best kind of the lowest high efficacy group. And so we'll be reading out an interim look at that at ASH this year. So coming in about a month now, a few weeks.

Yes. So what would be -- so in the RALLY-MF study, are you enrolling patients in all those 3 subtypes?