Dyne Therapeutics, Inc. (DYN) Earnings Call Transcript & Summary

Welcome, everyone, to the 44th Annual JPMorgan Healthcare Conference. My name is Tess Romero, and I'm one of the senior biotech analysts here at JPMorgan. Our next presenting company is Dyne Therapeutics, and presenting on behalf of the company, we have President and CEO, John Cox. John, over to you.

Thank you, Tess. We'll be making some forward-looking comments. We move the slides forward. I must say, I think there are very few biotech companies that can say they have 2 transformative late-stage assets, both in areas of significant unmet need, DMD in our case and DM1, that have near-term value drivers such as submitting our first BLA in 2026, completing our second registrational trial in 2026, launching our first commercial product in Q1 of 2027 and launching another product 1 year later. I think we can make an argument that we possess today the best-in-class platform for delivering genetic medicines to the tissues that matter in neuromuscular diseases. I'm going to show you data that I think supports that statement. We have a balance sheet with a cash position of over $1 billion. And I'll remind you that we wholly own our assets. 2025 was the year that we clinically validated our platform in humans for neuromuscular diseases. 2026 will be the year we transform the company to become a fully integrated commercial biotech company. And I think we are now positioned to create value for our shareholders, not just for the near term but for the long term. Now one of the great challenges in biotech has been the delivery of sufficient quantities of genetic medicines to muscle and to the CNS. The genetic sequences have been known. The issue has been delivery. Dyne was founded on a belief that you could take an antibody fragment, just a fragment of an antibody, target it to the transferrin receptor, a receptor that transports iron into cells, and use that Fab as a delivery vehicle to muscle, to CNS because that transferrin receptor which normally transports iron is found on all of those tissues. It was founded on that belief. But a little bit more than that. So people had used monoclonal antibodies to target that same receptor, but it tends to bind that receptor for an extended period of time and disrupt the iron transport for a period of time, which causes anemia and limits the kind of dose that you can get to. So if you want to get sufficient doses of genetic medicines, our scientists have designed this type of Fab, which you see in the red and the blue, with a linker, both of which the Fab and linker are the platform. And below that, we have a payload. We can use any number of payloads, siRNA, ASOs, PMOs, even enzymes, to deliver those payloads with the same platform to a multitude of tissues, including CNS, cardiac, skeletal, diaphragm, the tissues that absolutely matter. And last year, I believe, at the end of the year, in particular, we validated this platform as a delivery vehicle for -- in neuromuscular diseases for 2 different diseases and with 2 different genetic payloads. Here, I just briefly want to highlight the distribution feature. We've shown this data in the past, but it is nonhuman primate data. And what you see here is oligonucleotide delivered with the FORCE platform to the diaphragm and the heart versus PMO oligonucleotide delivered without the FORCE platform. In the blue is obviously with the FORCE platform. Tremendous amounts of PMO delivered to these tissues. We've taken it further to show that kind of distribution profile into the CNS. And unlike intrathecal delivery using the 400 miles of vasculature in the brain and the transferrin receptor, we're able to deliver ASOs as you can see, profoundly deeply and broadly to the brain. It is about -- what makes this platform so special is the depth and distribution that it achieves across tissues. We believe that what we showed in December was validating the platform in humans with our first medicine called Z-Rostudirsen. We had this foundational belief as a company, maybe a second foundational belief was that if you achieve the broad and deep distribution, you just might see, for the first time, functional improvement in some of the toughest neuromuscular diseases. And that is what we have seen with Z-Rostudirsen. It is validating of our platform. And frankly, we think is validating for every program in our pipeline. And I think it represents a new reality for DMD. And I think it's our historic time for neuromuscular diseases. And we're going to talk more about that data. Let me touch on the pipeline. What is common about everything in this pipeline is that in order for you to address these diseases, you need broad, deep distribution. Our platform is designed to do that. And we think the data we show with Z-Rostudirsen applies now to DM1. It is a read-through. That is our second program. But it even is maybe even a more meaningful read through into the other exons that are in the pipeline. We think the probability of success has been improved across everything in the pipeline because every program is using the exact same platform. You can see the other exons for DMD. Those are drug candidates that we have in place. It's the same platform, the same Fab, the same linker, the same manufacturing process, we're just changing the nucleotides. And what's important with adding those exons, we have a chance to create a franchise. And that franchise essentially triples the size of the market for DMD. Beyond that, the next program that we intend to have in the clinic is FSHD, and beyond that, Pompe disease. Now let me spend a little bit more time specifically on DMD. And I want to talk about this disease. It's a devastating disease. I hope everybody knows about the disease Duchenne muscular dystrophy. Today's therapies, at best, offer a slowing of progression. And I -- and mostly, they fail to statistically demonstrate that. More practically in the disease, you're talking about muscle deterioration, but even to get more pragmatic about it, for these families and for these boys, what you see is by the time they're 6, 7, 8 years old, they are struggling or can no longer get up off the floor. By the time they receive -- get to 12, 13, 14, now they're in a wheelchair. And ultimately, what affects their life at the end, by the time they're in their late 20s or 30s, is the cardiac or the diaphragm failure. You have to get to all of these different tissues. There is no therapy that is meeting the needs of these patients today. Exon 51 is one type of mutation that's most prevalent. It is the most prevalent in the DMD population. It also could arguably be called the toughest where you have very difficult time with exon skipping. That's why we took it up. We think it is the right challenge for our FORCE platform, and I want to show you data related to that. We conducted a trial that we call the DELIVER trial. In that DELIVER trial, it consisted of a multi-ascending dose portion. We completed that and ultimately selected the 20 mg per kg dose to move forward with a registrational expansion cohort. It's a design for accelerated approval, followed by a confirmatory trial. The confirmatory trial will start in Q2 of this year, and the registrational expansion cohort has been completed. And so we are targeting Q2 of this year to file or to submit the data that I will be showing you shortly. The bar for accelerated approval is dystrophin. That is the surrogate marker. That is what everybody has always used. I'll be brief on this because it's very straightforward. What we showed is a sevenfold increase from baseline. Whether you measure it muscle adjusted or not muscle adjusted, content adjusted, it doesn't matter. We have, far and away, hit the bar. And if you question that, just look at the p-value of 0.0001. The dystrophin levels at just 6 months are roughly 10x of the standard of care in the market today. But what really matters to the patients is function. And I really believe this is maybe the first time in this field that in DMD, that people can move beyond talking about a surrogate marker and dystrophin and start talking about efficacy. It's a big moment in time. Here are some functional measures, Time To Rise Velocity compared to placebo. Placebo declines, as you would expect. These patients are getting up off the floor faster. You don't see that in DMD. The same is true for the 10-Meter Walk/Run. If you take it further with ambulatory measures, NSAA, or Stride Velocity, in both cases, you see an improvement for those patients that are on drug. You don't see that in this disease. We see placebo decline in NSAA. I'll point out that placebo did not decline in Stride Velocity. We think that is biased by a single patient where we had an absolute remarkable increase in a particular placebo patient. Regardless, you see a Stride Velocity improvement. And I should have pointed out on the previous slide that we actually had p-values of less than 0.05. The study is designed for accelerated approval. We just -- it wasn't designed for statistical significance, and yet that's what you saw. And we were even meeting the MCID on one of those measures and approaching it on another. None of that would have been expected. And then there's a couple of measures that relate not just to ambulatory, but nonambulatory patients. Performance of upper limb function, you see an improvement against baseline as well. And very importantly, lung capacity is measured by Forced Vital Capacity. That is a measure that is extremely important, particularly as boys move into the wheelchair. Maintaining lung capacity and failure of pulmonary is often what leads to morbidity. To see a stabilization of lung capacity is profound. You see the decline with placebo, but a stabilization. So all of those functional measures have moved. And I just -- I really want to pause on this slide for just a moment because I don't think anybody has presented a table ever in DMD like this. We put on the left side the breadth of endpoints that were just covered in our top line data. All of these are critical measures for these patients. The breadth of the population, both ambulatory and nonambulatory that were covered; the breadth of muscle systems that have been included or captured by these endpoints. At 6 months, we saw functional improvement versus placebo in every single one of those measures. And it was durable. At 24 months, we had functional improvement versus baseline in every single measure. People use the phrase unprecedented or transformational in our field all the time. This is unprecedented. I don't know what other people mean by it, but this is unprecedented, and I believe it will be transformational for this community. The safety profile we should cover for accelerated approval, you need to show a favorable safety profile. I think we've done that. You can see that we've had 113 patient years of exposure; most related TEAs were mild or moderate; patients have been exposed up to 32 -- or 36 months; and well over 1,000 doses administered. So safety profile, we consider quite favorable. I'll leave this with you in terms of having a compelling profile for accelerated approval. We think it meets the bar. We look forward to getting it in front of the FDA. And when you have time, take a look at the quote at the bottom. This is representative of how the physicians and the community are feeling about this important medicine. So that leads us to we think we have a product here, and we believe we do, and we're preparing to commercialize and launch this product. We'll submit in Q2. We intend to launch in the first quarter of 2027. We've built a management team. And when introducing a rare medicine, I've done it a few times, virtually everybody on our team has done it, you typically run into certain challenges from commercialization. One is identification of patients. It's a rare disease. Another is there's very little advocacy or it's in its infancy. There's limited treatment centers for the disease, and the reimbursement pathways are not established. You have to do all of that. Let's look at this disease and how we've characterized it. 1,600 patients with exon 51 skippable, minimal DMD, the patients are known. We can even categorize these patients. There is an active and educated patient community and a strong advocacy organization in place. Every single patient has an advocate. It's called a parent. And they want the best possible drug for their patients, for their boys. 80% of the DMD patients are at the top 100 centers. And then finally, the reimbursement pathway, it is known, and the pricing has been established at roughly $1 million a patient a year. You just don't come into commercial markets with that kind of opportunity typically in rare diseases. And then I think that puts us in a position to create a capital-efficient commercial infrastructure designed to deliver this transformative therapy. We can build that. In 2025, we built a management team to do it. They know how to do it. We've got Johanna Friedl-Naderer here, who's our Chief Commercial Officer. She's done it many times in her career. And beyond that, a medical team, including Doug, who have done it as well. The initial field team members are in place. The CMC is in place, manufacturing is in place. We have the supply chain experience and expertise, and that is in place. And we are preparing for our first launch. We have all the ingredients, I believe, for a successful launch in 2027. And I'll just quickly point out that the other exons, as I mentioned before, we have those as drug candidates. We're not stopping with exon 51. Our intent is to move those forward and create a franchise, and in so doing, we essentially triple the market size in DMD. Now I think this leads to another slide that I really would love for you to hang on to. This slide is really meant to -- it's really meant for those interested in a not only near but long-term sustained value creation with DMD. These are the reasons to believe we can do that. You can see the attractive market characteristics. I just covered it. We are positioned wholly owned assets, best -- this is a best-in-class profile. We have a capital-efficient model. We've derisked the expansion opportunities, and we have the team in place to launch this product in early in Q1 of 2027, okay? Now let me move on briefly to the second program because we're not stopping with DMD. DM1 is right behind that. And we think that, that is also being clinically validated, but let me talk a little bit about the disease. It is a much larger market than DMD. There are no approved therapies whatsoever. It's caused by a mutation in the DMPK gene that leads to misplacing of RNA in the nucleus of cells. It's a nuclear spliceopathy, and that's important to remember that, and I'll explain why. The result of all this misplacing is broad, clinical manifestations that include muscle weakness, myotonia, GI, cardiac, pulmonary issues and very importantly, CNS issues. Often, that is the biggest issue for these patients. We selected an antisense oligonucleotide as the payload for Z-Basivarsen because of its ability to get to the nucleus. So to address the broad manifestations of DM1, one must deliver broadly to muscle and to the CNS and to the nucleus in the cells of those tissues. The FORCE platform with the ASO payload has been intentionally engineered to address the core pathobiology of DM1. Our trial, the ACHIEVE study, I'll touch on that briefly. Like DELIVER, the ACHIEVE study was designed for accelerated approval. We started with a multi-ascending dose study to select the optimal dose. We dose escalated, saw proof of concept, not just in muscle, but in CNS at the 6.8 mg per kg dose. We selected it. Doug made that decision. And we initiated a registrational cohort that is in process of 60 patients. The primary endpoint is an intermediate clinical endpoint. We call video hand opening time, which represents myotonia, as well as -- and it also represents kind of early clinical benefit, which should be manifested in trends and other functional measures. And we're on track to complete enrollment of that study in Q2, early Q2 of 2026. Here's a little bit of the data. DMPK knocked down 33%. This is at the 6.8 mg per kg, and splicing correction of 25%. I don't think you're going to see that data with other medicines out there. We are getting to the nucleus. This is addressing the core pathobiology, and that's the molecular evidence that we're doing that. In terms of vHOT, that is an early marker. And you see at 3 months, we show improvement or a reduction in the time in video hand opening time. It increases further at 6 months and is sustained out to 12 months in our study so far. But more important than that are the key critical functional measures. And this is what we highlight here. 5x sit to stand is an excellent time function test. It takes in the truncal strength, core strength, leg strength, et cetera. It is an important measure, and you see 5x sit to stand functional improvement relative to placebo and relative to baseline; 10-Meter Walk/Run the same story. Quantitative muscle testing, which is a strength test, has really got people's attention because what you saw there is that at 6 months, we increased strength across upper and lower measures of the body by 10%. That is an unbelievable number. And then it increased to 20% at 12 months. And then MDI is a patient-reported outcome, a total measure of kind of quality of life, but it also really has a set of -- a subset of measures that touch on CNS. It is the first place that we start to see some indications of CNS impact, and that's highlighted here. MDI subscales, you can read the measurements. These are the types of CNS-related impacts that frankly affect their lives tremendously. At 6.8 mg and only when we were able to get to that dose did we see that kind of improvement across these measures. Now with 6 patients, what we want to see is do we see that in the registrational cohort and in the multi-ascending dose, long-term extension study. That's the data that doctors are really intrigued by, and I don't think anybody has ever presented data like that related to CNS improvement for these patients. And then finally, I'll just touch on the safety as well. And with this study, we also saw a very favorable safety profile. The over 1,000 doses, 93 patient years. And no -- most TEAs were mild or moderate of intensity. So safety profile being a favorable one for this disease as well. Not surprising as we're using the same platform. Now let me just touch a little bit on kind of a final couple of points. You can see the kinds of events in front of us. When I look at 2025, I see 2025 as the year that we validated our platform with absolutely unprecedented clinical data in 2 different diseases. In 2026, we will transform from an early biotech company to a late-stage, fully integrated commercial company. In 2027, we intend to transform the DMD market. And in 2028, we intend to do the same thing for DM1. We're determined to make a difference for these patients. And we're intent on creating long-term, sustained value for our shareholders. Thank you very much.

John, do you want to introduce your team members?

I do. Our Chief Medical Officer, Dr. Doug Kerr; and our Chief Financial Officer, Erick Lucera, are here with me today.

Great. Great. Well, thank you so much for the presentation. So we're going to dive into about -- let's see how much time I have -- about 15 minutes of Q&A. So just to kind of talk a little bit big picture here to start. You talked a little bit about the strategic direction of the company, John. Is it fair to say that DM1 and DMD are equal priorities for Dyne? Has DMD kind of risen a little bit higher up in the priority list in terms of where you're going to really invest your capital? How should we be thinking about that?

Well, I think they're both absolutely high priority. And it's not either-or at all. I think you know, Tess, investors have been very focused on DM1 because of the market size and the unmet need there and there's nothing. We're very excited about DM1. And we just -- we've laid out the time line. DMD is the most near term. It's the most proximal in terms of commercial opportunity. And the unmet need there is so severe and I discussed it. So fortunately for us, we've -- with Erick and under his kind of leadership with finance and kind of capital raising and capital allocation, we have positioned ourselves to be able to fund both. So we're not going to do anything that's not a priority, both are our priority, and we're going to get them both done.

Okay. And can you talk a little bit about the manufacturing capabilities that you have at the company? And how this might need to evolve to support a commercial launch? And how should we be thinking about gross margins and overall spend there?

Yes. Let me start, and I'll turn it over a little bit on the margins to Erick. But -- so we have had a manufacturing supply chain in place. We have -- and it has been operating well. It's a global supply chain. That supply chain is something that we have been validating, and we've also been scaling. And we'll continue to scale up as the products are being introduced, and as you see the volume start to increase. It's all being done per plan. The CMC aspects of the business have been laid out with a program and a plan and an intent to have those prepared for the filing, and they're all on schedule to do that. Process validations, analytical method qualifications, all of that activity is in process or in place and ready and on time. As far as margins?

Yes. Thanks, John. We believe that at Dyne, we will have a very competitive gross margin profile, similar to what you see for other rare disease antibody companies. We have a great team in place that is working on continually finding ways to find efficiencies. And the other thing, most of our platform has the same Fab and same linker. So we're going to have a lot of ways to leverage the spending that we have on manufacturing across the pipeline over the years.

Okay. And you showed us the registrational expansion cohort data that you collected for Z-Rostudirsen in December. Has the pre-BLA meeting been planned with the FDA? And can you just remind us specifically when did the FDA sign off on dystrophin as a potential surrogate biomarker for AA of this product? And how much safety follow-up will you have to support the BLA?

Well, let me start that as well. I'll make a general statement about regulatory interactions. We generally -- we don't get into the kind of the play-by-play of the interactions, but I will tell you that we have had breakthrough designation. That opens up routine dialogue with the FDA. We've had breakthrough for both programs for DMD is what you're talking about. All of the usual activities are either done or active or in process, including pre-BLA and so on in various meetings. So everything is kind of on track for what we want to do regulatory-wise. The view on accelerated approval, we have had -- we've had kind of consistent feedback with the FDA that accelerated approval is open. I know other sponsors have reported the same. So that's been -- and you can also see what we just described in terms of meeting the bar and accelerated approval. So we feel good about that as well. And then as far as kind of the safety piece, I'll let Doug kind of speak to that.

I mean only to say that we've had an ongoing dialogue. Our breakthrough designation was in August of this year. So I mean people have talked about kind of changes at the FDA. Our dialogue with them has been very consistent, same people at the review level, at the division level. There has been no change in the messaging. And we've received very good and consistent feedback in terms of what is the bar for accelerated approval, but also do we have sufficient safety. We feel very confident about all of that as we go forward towards our submission.

Okay. So how should we be thinking about the confirmatory Phase III study here and what that might look like and anticipated development time lines?

Well, so I think for both programs, we have a chance to set kind of field-defining Phase IIIs. And that really is about attention to endpoints. In DMD, nobody has met a functional endpoint for DMD, particularly not for exon 51. And we'll be defining -- and we have functional endpoints that we can select from. And it's going to be Doug making those decisions. And we will be walking people through what that protocol looks like soon because we're going to introduce that in Q2. And DM1 is a similar story. I do not see for DM1 a Phase III that uses hand myotonia as the primary endpoint. We think it's great as an intermediate clinical endpoint for accelerated approval. We need something much more clinically meaningful. And I think we can choose from things like time function tests, 5x sit to stand and other measures, which will be Doug's -- which Doug is working through as we speak, and he'll be presenting that kind of data as well.

Okay. Okay. We'll get there in a moment here. But I just wanted to cover a couple of other topics on DMD. Is there a priority here for Dyne to move other exon skippers into the clinic relative to, say, I don't know, your efforts in FSHD. Like how does building like a pipeline in DMD really stack up from a priority list standpoint?

Well, FSHD, we expect that to be the next program in the clinic. I'll be clear about that. I think that is a really important opportunity in a very large market. The other exons, I highlighted them a couple of times in the presentation because we know they're important to the community. We think they've been enormously derisked with what we just presented on exon 51. So they are a priority. Now the key with that is for us is we very much want to take advantage of the kind of platform designation as a way of streamlining the development of those programs. Step one is to get the first program approved. And then you can move forward with requests of a platform designation. So it's not either-or, but I do think FSHD will be the first, and we'll be pursuing the exons thereafter.

Okay. And turning to Z-Basivarsen and DM1, we saw the timing of the registrational expansion cohort data slip. Why has it slipped? What has really been the underlying driver of that? And can you just remind us, do you require there to be biopsies in the study? And is that slowing down your enrollment?

Okay. So the primary issue that we had described some time ago around a delay with that had been capacity. It was not an issue of patient demand. It was not an issue of taking biopsies. We do take biopsies because we think the splicing information as a marker of addressing that nuclear pathobiology, very important, and we want that data. But that's not the hindrance. It was capacity. We had roughly 9 sites that were in Europe, ex U.S., mostly in Europe, that we had used to enroll the multi-ascending dose cohort. We moved into using those same sites, and we started finding that we were running into capacity. Capacity, meaning they needed additional staff or space. And we should have caught that earlier, but we didn't. And when we realized that, we started adding additional sites. We have increased the number of sites now to 16 sites. We've added sites in the United States, additional sites in Europe. So we think we've addressed that capacity problem. And as a result, we have a time line of which we have guided to of early Q2 to complete enrollment of the 60 patients.

Okay. Okay. And how much of the REC is enrolled at this point?

Well, we're not -- we haven't been giving kind of patient enrollment kind of updates. We'll tell you that we're enrolling. We've added the capacity, and we see a line of sight -- a clear line of sight to early Q2 for the 60.

Okay. And what has the back and forth been like with the FDA since you submitted the revised protocol with vHOT as the primary endpoint?

Doug, you want to jump in?

Yes. I mean, people will remember that we had explored CASI as splicing index as the basis for accelerated approval. The FDA was very keen on that because it reflects this foundational pathobiology because we know DM1 is a spliceopathy and no single clinical measure can capture the totality of that disease, whereas correction of splicing could. It's still very valuable. But the FDA could not get their heads around this as a precedent setting surrogate endpoint for accelerated approval. So we had this ongoing dialogue back and forth with them. It was a very good dialogue. We ultimately made a switch where we proposed and had this discussion, which was a very good discussion about vHOT myotonia as an intermediate clinical endpoint. And so we're very confident about that. We feel very good about that switch. We know it was a change to the community because we had been talking about splicing, but it could have taken us much longer to continue to fight that based on CASI. So we made the switch. It's our obligation to get this to patients as quickly as possible. It's very clear to us that vHOT can be that surrogate endpoint for accelerated approval in that it is a prognostic. It is -- it heralds improvement in other, more meaningful clinical measures. So we're very pleased about that. We're very pleased about the design. The execution is going well, and we'll read those data out in Q1 of '27.

Okay. And maybe we can talk a little bit about what you're working through and trying to optimize the confirmatory trial design. To me, it seems like you've been kind of thinking about this for some time. But like what are you still kind of wrestling with at this point? And when do you plan to provide more color around that?

Well, maybe let me just jump in for a moment, but we're not wrestling with it. We have data that we have presented across multiple measures, and it's been a matter of deciding on the -- on which functional measures would be primary or which one. We know what we want to do. We're going to initiate that trial this quarter. So -- and that's been the plan. So we'll put that in front of people when we're ready. But it's not that we're stuck on something. In fact, we are like excited about it because I think we will have a field-defining kind of endpoint and a field-defining study. And that study, by the way, the way Doug has been laying this out, is that we're also going to have a chance to be really diving into some of the CNS aspects of this disease.

And what has the specific feedback been from regulators on the design and the tenor been on those discussions? Like what are they really hoping -- how are they kind of helping you decide on the most appropriate design?

Well, I think the message -- and Doug, you can jump in, but I think the message has been there has never been a drug approved in DM1. And the heterogeneity of the disease makes it difficult to pick a single endpoint that addresses all of these features. The FDA has been pretty clear. They want a clinical endpoint that is clinically meaningful. And by that, meaning it's meaningful to patients that you can have an MCID, that you can talk -- that it affects patient-reported outcomes and is absolutely clinically meaningful. vHOT doesn't clearly fall into that category. And so the direction has been provide us with an endpoint that is meaningful and will tell us that you're improving the quality of life of these patients. We're pretty confident we got it.

We do. And I mean, I feel really good about these trials. We're going to come out with them publicly. We've had very good discussions. The breakthrough designation in the U.S. has been very helpful bidirectional discussions that have been very positive, very engaged. It also has been with Europe, and it also has been in Asia. So that's part of why we have aligned because we want an aligned Phase III protocol. We're ready to go, and we'll come out with it very soon. 43 seconds.

I don't know how much I can accomplish in 43 seconds. Okay. I think this might be a good spot to leave this conversation. Thanks so much to the entire Dyne team for being here. We really appreciate it. And thanks for all the listeners for hanging in and joining us.

Thank you.