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

Hello, everyone. Welcome to Jefferies London Healthcare Conference 2025. My name is Roger Song, one of the senior analysts who covers mid-cap biotech in the U.S. It is my pleasure to have the fireside chat with our next company, Disc Medicine. Welcome, John.

Yes. Thanks. Great to be here.

Awesome. John I think we have a lot going on for the Disc, which is all towards the very good direction. Maybe you give us 1, 2 minutes overview of the company? what are the key program you are focusing? And then what's the underlying philosophy for the company, and then we can go into each individual programs.

Yes, that's great. Thank you. Yes, it's been a great year Disc. So we're a company focused on controlling red blood cell biology by controlling the metabolism of iron and heme, which are, of course, 2 of the critical building blocks for red blood cells. Our lead program called Bitopertin, is in-licensed from Roche, is a molecule that controls heme biosynthesis in red blood cells. And for using that molecule and studying it in patients with a rare disease called erythropoietic protoporphyria or EPP for short, as we call it. The claims data would tell us there's about 14,000 of these patients diagnosed in the U.S. We've completed a Phase II program. And the big news for this year is we were in an accelerated approval process with the FDA, and it got even more accelerated when we were awarded one of these Commissioner's National Priority Voucher. And so we're now in the middle of -- we submitted the NDA at the end of September. And if all goes well, it would be just a matter of a few months, like late this year or early next year for when we could potentially be approved and launching. So that's been the big news for the year. We also have a pipeline of 2 Phase II programs that focus on controlling iron metabolism. DISC-0974 is an antibody that we in-licensed preclinically from AbbVie. It's in a Phase II trial called the RALLY-MF trial for addressing anemia in myelofibrosis patients, a rare hem/onc indication. And that program has also gone really well. We reported data at ASH, American Society of Hematology in December last year with about 35 patients worth of data showing unprecedented positive response rates in treating this intractable anemia. And coming up at ASH this year, we expect to have about 40 to 50 patients' worth of data from our Phase II program now. So a lot of excitement around that. And then the third program is in Polycythemia vera, works by restricting iron, and that's just initiated its Phase II. So that's the quick rundown of the 3 clinical programs for the company.

Excellent. Okay. Maybe we can just go one by one in terms of the stage of development. For EPP program, Bito, you got a CNPV, which is one of the -- the first batch of the one of the [indiscernible] right, so first 9. So maybe just -- just out of the curiosity, how you got that? And what's the process look like? And then more important is, how do you think this voucher is going to change your time line and then likely success, if anything changed for the approval?

Right, right. I mean the truth is we don't know a lot about the process. We applied. It was a very succinct application. And it was only a couple of months later, we were notified that we've been awarded. I think we spent a year of meetings after our end of Phase II meeting. The FDA put us on an accelerated approval pathway. Then we had a whole series of additional meetings with the dermatology division, which is the review division for this disease. And I think there was a good interaction. They had good insight into the program and how it was progressing. I think that probably made a difference in our application for that voucher.

And how do you think about the time line and then the success?

So if you look casually at the website, the PR about how this program works, it will say a 1- to 2-month review period. If you look carefully, it will say 1 to 2 months from when the file is complete. And that language, I think the FDA is preserving their process of the submission of an NDA and their review of the quality of the NDA to ensure that the file is, in fact, complete. It has all the materials they need to conduct the review. And that's normally a 2-month process. And then that will be followed by this 1- to 2-month review system. So for us, we submitted our NDA at the very end of September just before the government shutdown. 2-month process would get you to the end of November. And then 1 to 2 months after that would be the intended action date for the FDA.

Got it. Okay. Great. And then that seems to accelerate a little bit about the potential launch as you initially planned. But how prepared is the DI team in terms of the prepare for the launch?

Yes. No, it's a great point. I mean I think we're originally planning the earliest under the accelerated path would have been June of next year. So we're pulling that in by about 6 months. And we have a great team, really seasoned group of executives who have launched drugs before. So everyone knows what they're doing. But that said, it was a longer process than we were anticipating, and now we're accelerating everything. And so we'll have many things in place. The logistic core of providing drug to patients, that will be all set up, no problem. Other aspects, though, will be not as optimal as they would have been on a traditional time line. So the sales force will likely get seeded and be able to go out into the field only after the likely launch date, but by a matter of weeks. We'll have fewer payer conversations, right? So some of the reimbursement pathways may be less established at the point of launch than they would have in a regular way situation. So there may be increased use of various free drug or starter programs relative to a regular way launch setting. But I think all in all, it's going to be great for patients. There'll be an earlier access point for this therapy that we think is going to be important. But -- and so -- and once we're a quarter or so into this, all the machinery will be in place and things should take off on a regular path.

Yes. Okay. Got it. The investor community, once you have a drug approval and then launch, everyone will be very focused on the initial launch trajectory. So how do you think about this population and how readily those are -- those patients can available for treatment? And then also just remind us how is the open-label extension or the compassionate use program working in this pop because this is a rare disease population that you seems to be knowing where those patients are and then how readily those patients can get on the drug once they get approval on the commercial side?

Yes. So big picture, we're very fortunate to have an ICD-10 code that was set up about 8 years ago. So we're able to use claims data to really map out the patients who've been diagnosed and use that claim. That identifies about 14,000 patients in the U.S. Now the nature of the disease is that there's not much to be done for it. So there's definitely a pattern of some patients who see a doctor, get their diagnosis and then probably disappear from the medical system. So a significant number of those may be somewhat challenging to activate and bring on to a new therapy. But we see about 6,000 patients in that claims data who are highly engaged. They're seeing their physicians. They're getting treatment, both coded for EPP, but also otherwise. For example, you'll see a number of patients who are getting care for an ongoing liver disease, which is a common -- a relatively common complication of the disease. So we see kind of a 6,000 engaged patient population. We've designed our sales force of about 24 to call on the doctors that see those 6,000 patients. And then in the very near-term stages of launch, we'll have patients who are rolling over from our clinical trials. So we have an ongoing long-term extension study, which will eventually probably capture about 150 patients there who will likely over the first year, mostly convert on to commercial product. And then at the top 15 or so centers where we're highly connected, those KOLs understand our mechanism and the important potential it has for the patients. They tend to be the top enrollers in our trials as well. And so there's a good number of patients there that we can launch against. And that's part of why I think the sales force timing isn't as critical as it might otherwise be because there's a decent number of patients who are already identified and interested in the therapy and requires a lot less activation to access those patients.

Yes, we want to set the right expectation, right? So it is a rare disease population. The approval seems a little bit earlier than we expected. You don't have the full commercial sales rep team, and field team are ready by the time of approval. On the other side, you just like you said, right, so you have open-label extension, 100, 150 patients already there and then they can convert to the commercial product and then you have the relationship with the top enroller. So how do you think about the launch, kind of initial launch kind of trajectory going to look like? And then if we're thinking about -- you mentioned this patient open-label patient, they can convert within a year. So how quickly they can convert just considering the reimbursement and then everything kind of in place?

Right, right. Yes. Well, so I mean, priority #1 is going to be providing access to the patients to what we think is going to be an important therapy. And we're going to make a significant corporate effort to have that happen regardless of how the reimbursement pathway has been hammered out yet. And then we'll allow over time to get those -- the prior auths resolved and get people who have commercial insurance onto a proper paying system. So the trial patients will, no doubt, convert to commercial product. I mean we will have to shut down the long-term extension study at some point. And that conversion should be pretty rapid. I mean it's not going to be -- it's not instant, right? It does take time. The physicians have to write the script. The patients have to go fill it and get on to product. So it's not an instant process, but it's a process that should play out over about a year.

Got it. And then you are also enrolling your confirmatory study for the -- for your -- for full approval. I think -- I believe you guided the enrollment should be complete within a year. So remind us how you're going to play this clinical trial participation and versus the commercial product participation.

Right. So we're running what we call the APOLLO trial right now. That's the confirmatory trial for U.S. purposes. It would be the registrational study for ex U.S. purposes. So European and Japanese markets are going to depend on that APOLLO readout. Like you said, we initiated enrollment back in May of this year. We expect that to wrap up about 150 patients total by May of next year is our guidance. And everything we've seen, there's a tremendous amount of enthusiasm. Enrollment has gone well. We expect to be able to hit that guidance. And those patients, probably about 100 will come from the U.S. Those are the first enrollers. Then the latter end of the study, the last 50 or so will enroll out of European sites, which is important because it's the first time actually we're able to treat patients in the European jurisdiction. So it's important for EMA regulatory purposes. And all of those patients will be eligible to roll on to the long-term extension study as well. So those 100 U.S. patients as they transition on to that long-term extension eventually will also then transition on to the commercial product.

Got it. Okay. All right. We've spent a fair amount of time on the EPP, the Bito, and then the potential launch. But also another major part of the value driver is coming from the anemia MF, particularly. So coming into the ASH in a couple of weeks, and then you will have a big presence there. So just give us some preview on what we're supposed to be seeing and then what will be your guidance on the expectation for investors?

Yes. So the big event at ASH for us this year is our myelofibrosis program. This is a rare disease marked by anemia that typically a diagnosis and persists and worsens throughout the course of the disease. There's actually no on-label therapy to manage anemia in these patients. I know the investor community has been conditioned to think about spleen size and symptoms because of the JAK inhibitors that has been a very successful class of drugs for treating these patients. But those JAK inhibitors typically don't manage the anemia in these patients. In fact, Jakafi, the leading therapy exacerbates anemia, makes it worse. And so our goal with this program was to use this iron mobilizing mechanism to make iron available to support erythropoiesis in these patients. It's well known from work at the Mayo Clinic that that's one of the driving mechanisms for the anemia. And it's been great data. So at ASH last year, we showed 35 patients worth of data at different -- a variety of different doses coming off a Phase Ib study with really great response rates. The FDA has suggested that we look at the patients in 3 categories: the non-transfused, the lightly transfused and the heavily transfused. And we've seen really leading response rates across all 3 of those categories. And so as we head into ASH, our, I guess, when people ask for guidance, we're running a Phase II trial called the RALLY-MF with 90 patients. We expect to have data from about half of those patients that are evaluable for our ASH presentation. And they will be sprinkled across all 3 categories. It roughly matches the epidemiology of the disease, meaning most of the patients are in the non-transfused category, then about 1/4 in the lightly transfused and a relatively small subset are in the most heavily transfused category. And I would say, based on past data, we have a lot of confidence that we're going to continue to see great data from the non-transfused and lightly transfused populations. And the heavily transfused, we really only had 5 patients worth of data, 40% response rate 2 out of 5 at ASH last year, which is great, but also such a sparse data set, we don't view it as having much in the way of predictive value for what we'll get this year. So that will be the set, and then we'll go on to complete that Phase II trial, have an end of Phase II meeting with the FDA, set up the pivotal trial. I think that's something the investor community is very interested in seeing what that final pivotal trial will look like because there hasn't been a kind of broad spectrum anemia therapy pivotal trial in myelofibrosis yet. We saw luspatercept focused on just the subset of most heavily transfused and on Jakafi patients, a very difficult-to-treat population. They -- that study read out earlier this year with a p-value of 0.067 so failed. And so I think that category of patients remains probably a little bit challenging for any therapy.

Got it. And then the study design is you can use on top of any JAK inhibitor plus, minus, and I understand different population. But just biologically, do you see the different expectation in terms of the hemoglobin increase or the transfusion independence? Do you see any different expectation in terms of you don't have any background therapy or different JAK inhibitor therapy? Any nuance there we should be aware of?

Yes. So the leading therapy for these patients is Jakafi, ruxolitinib. We showed in last year's data set in about 10 to 15 patients who were on background rux, a very good response rate with our drug. So no negative interaction between our therapy managing anemia and the underlying rux therapy. So that was incredibly important because a very significant number of these patients will be on rux. Rux actually exacerbates anemia. So having something to help patients stay at the optimal dose of rux is a very important medical objective of an anemia therapy. So continuing to see that kind of combination data with ruxolitinib in the Phase II trial will be very important. There's also a new entrant in the JAK inhibitor space, momelotinib, which has an element of addressing anemia, right? It also touches the hepcidin pathway, touching iron in the same way our drug does. So there was some expectation early on that, that might represent a competitive dynamic. But actually, our experience, and we talked about this early in the year, is that we've had tremendous enrollment in our study with patients who are on momelotinib where their anemia was not actually managed. And I think, our experience with those trial patients is to see momelotinib as more of an anemia sparing JAK inhibitor as opposed to really addressing the anemia. And so we're going to get a good look at the combination effect of our drug on top of momelotinib. And the objective, of course, is to see good data there. We think there's good evidence that our drug has a much more profound iron effect than that drug, which is, first and foremost, a JAK inhibitor and just kind of touches the iron pathway as a secondary effect. So if we're able to show that, then we'll be looking at a data set that demonstrates really the broad applicability of our drug, which has always been the basic thesis. The iron mechanism that we have is orthogonal to essentially every other mechanism that's used in these patients to manage other aspects of disease. There's no other approved therapy to manage the anemia. If we can just create a simple, safe, broad-spectrum anemia therapy that addresses -- that's useful in a simple way for all of these patients, then that's a U.S. market size of about 22,000 anemic myelofibrosis patients that could benefit from this drug, which is pretty substantial.

Yes, totally. Maybe just those subgroup maybe in -- will become too small to really tell the difference. But just directionally, let's say, 3 dose population without any JAK inhibitor on the background, so using 0974 and then with the Jakafi and then with momelotinib. But do you have a different expectation in terms of the hemoglobin increase or the transfusion independence, which one you're expecting to see even bigger effect size on top using the 0974?

Yes. We really haven't seen much difference. Again, last year's data in about 10 to 15 patients on ruxolitinib the data was basically equivalent to those who are not on ruxolitinib in terms of response rates using all the kind of most rigorous response rates in the field. So that appears -- I mean, that's great data. It appears to have no real interaction. And I guess, broadly speaking, we expect the same to be true of momelotinib. And actually, in the middle of the year, we did do a sort of preliminary assessment of that exact point and said, hey, preliminarily, it looks like it works about the same in combination with momelotinib. Now we'll be able to provide some actual quantitative data around that point.

I think that's a very critical point and particularly for the investors to really dive deep into the space because that's one of the CC says, okay, can you address this patient with momelotinib still having the anemia [indiscernible].

Exactly. Exactly.

You're hitting the similar pathway. Okay. Got it. And then in terms of the -- let's see, the next step into the pivotal. So this is the interim data, you say 40, 50 patients worth of the data, and then that's probably half of the patient. So next year, you're going to give us the full data? And then how the cadence between now and the FDA discussion also all the way to the pivotal design. How should we think about the full data, FDA discussion and then you're going to give us some pivotal pathway?

Right, right. Yes. I mean our basic expectation with a little bit of imprecision around the clinical trial speed. But basic expectation is that we'll finish the trial next year in time to also have an end of Phase II meeting with the FDA. And then once we've had that meeting, hopefully, that puts us in a position to really educate everyone about how the pivotal trial design is going to work. Our goal is typically in this field, myelofibrosis, the pivotal trials are around 300 patients. We plan to have a very broad enrollment criteria as we've done in the Phase II program. Essentially, it's an all-comers trial. If you're anemic and you have myelofibrosis, there's no reason why you can't come into our study. And we think that's going to be supportive of a pretty brisk enrollment in a pivotal setting. But the FDA does look at this as several different subsets of patients, and our goal would be to present a data set that allows us to coalesce all into one simple roughly 300-patient study. But that's where the dynamics of the data we have and those discussions with the regulators have to play out.

Excellent. Okay. Great. You mentioned earlier that luspatercept, the small portion of the anemia population, they still failed, right? So the Phase II that seems to drop out of the competition. I know they seem still guiding they will file anyway because of the sNDA. So we'll see how FDA is going to react to that. And then how do you think about the emerging competitive landscape? Incyte recently announced they have some early clinical program for the calreticulin, right? So there's a mutant. So they also try to address the myelofibrosis as a whole. So -- and then this modifying kind of a mechanism. How do you think about 0974 as anemia specific adjunct therapy for the MF treatment for the long term?

Yes, yes. I mean I think this is the natural progression of therapies in myelofibrosis. There are known driver mutations that drive proliferative activity in the bone marrow. It eventually progresses to fibrosis and splenomegaly, which ironically leads to cytopenias, right? So you have these driver mutations that are cancerous in nature, myeloproliferative, leading eventually to a disease course where you have marked cytopenias. And we've seen Jakafi was designed to target one of those driver mutations and actually, it exacerbates. While it's very good for the patients, it's a great drug. It exacerbates some of those cytopenias, notably red blood cell anemia. So now we have this new set of therapies targeting the calreticulin driver mutation. I think that's been pegged at being about 25% of patients who carry that mutation. So we're talking about a subset of patients where there may be some benefit here. And what the ultimate role of that drug or that mechanism in managing anemia remains to be seen. I think there are some reports in the ASH abstracts of improvements on hemoglobin in some of these patients, while those who are, for example, on Jakafi appear to show essentially no improvement in hemoglobin. I think it's early days, but the past indicator would be that targeting the driver mutations has good benefits for the patients, but typically doesn't necessarily address the cytopenic issue. So we think an anemia therapy for these patients is going to be something that's important for years to come still.

Excellent. Great. Okay. So last minute. What's the balance sheet look like? And then also any other [indiscernible], you mentioned the Polycythemia Vera, PV, that is also into the Phase II next year. So any other earlier pipeline you want to highlight?

Yes. I mean just a quick touch there. Our third program is designed to restrict iron to address the excess red blood cell production in Polycythemia vera, which is a mechanism that's been proven out to be efficacious in these patients, and we're really looking to provide a better patient experience with our product. That Phase II has already started. We expect to get data from that next year and may also be moving to a pivotal trial in, call it, 12 to 18 months or so. So super exciting, potentially 2 pivotal trials coming in the not-too-distant future in the hem/onc space. So yes, was that -- sorry, was there another question there?

Yes, the balance sheet.

The balance sheet, yes, yes, yes. So we have a busy pipeline, hopefully, revenue coming our way. We raised money recently. We now have a balance sheet with, I want to say, about $825 million. If you take no revenue into account, just burn, that would run us all the way until 2029 -- into 2029. And then if you add the revenue on top of that, which we'll eventually be able to forecast that and take account of that, puts us really in a great position to finance the whole pipeline that we're building out.

Excellent. Thank you, John.

Yes. Thank you, Roger.

Thank you, everyone.