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

All right. I guess we can get started. My name is Peyton Bohnsack. I'm the Vice President here on the biotech equity research team at TD Cowen. We're pleased to have here Erick Lucera, the CFO from Dyne, and we're looking forward to hearing all the exciting progress you guys have made.

Great. Thank you very much. We'll be making some forward-looking statements. So with that, here is the disclaimer. My name is Erick Lucera. I'm the CFO of Dyne Therapeutics, and I'm very excited to be here. I've been a client of Cowen's for almost 30 years now, 15 on the buy side and 15 as a CFO. I've been at Dyne for almost a year. And if you asked me, well, why did I come here? One is obviously to prepare for the commercial launch, and having been through a couple of other commercial launches, it's one of the best experiences you can have in your career. But also as a former investor, I still think like an investor, and when I saw the Dyne opportunity, I thought it was one of the most compelling opportunities I'd ever seen in those 30 years. So with that, I'm going to tell you the story as we see it here at Dyne. We think we have a real unique opportunity to build an incredible and unique company really based on what we call the FORCE platform. There are not a lot of companies that I've seen in 30 years of biotech that have such a compelling platform, and we'll get into that through the course of this presentation. We think we have a company that can build a really long 10-year-plus run in rare disease and muscle based on the 8 programs that we have in our pipeline. One of the things that makes this such a unique platform is the commercial leverage that we're going to get from going to just muscle centers, seeing the same docs for all of our products. The fact that this platform, the FORCE platform is based on largely the same antibody fabs, largely the same linkers, very similar chemistry, so there's a lot of CMC and inventory leverage that this platform gives us. If you were to think about 2025, it was really the year that we clinically validated our platform within -- with data within 2 programs, DMD and DM1. 2026 is going to be a great year for Dyne as we transition to a commercial company preparing for our launch of the DMD asset in the first quarter of next year. The next year, in 2028, we hope to be launching our second product in DM1. And then followed that with several other programs within FSHD, DMD and Pompe, which we think can extend the growth profile of the company in a very derisked way for a very long time. So we're very excited about the pipeline that we have based on this platform. So what exactly is the FORCE platform? I think for those of you that have been in biotech as long as I have, the challenge in biotech has always been delivery of sufficient quantities of genetic medicine. Dyne was founded on the belief that a fab could do that without disrupting what we call the iron homeostasis and without causing anemia. And we can get these fabs to multiple tissues. And in rare diseases that affect the muscles, getting this broad and deep distribution to multiple tissues is what allows us to show the functional benefit and to do so without anemia. And as I mentioned, in 2025, we did this in 2 disease states, DMD and DM1. So just real quickly, some of the preclinical data that we've shown many years ago shows the delivery of the oligonucleotide to multiple tissues that enable this functional benefit. You see the FORCE platform delivery versus a naked PMO, and you see significant differences in the ability for us to get to the diaphragm, to get to the heart and then get into the CNS areas in the cortex, the deep brain and the cerebellum. And we believe this penetration into the CNS tissue is what allows us to show some of the functional benefit that we're getting. And this makes the FORCE platform really unique in the biotech and so special and something that, again, that we validated in hundreds of patients in humans. So the data that we've shown to date, and we'll get into it in a second, shows this broad distribution leading to functional improvement, validating our pipeline, not just in the 2 products that we've shown, but in all the others because they're all based on the same platform. All right. So now let's get into some of the data here. All right. The first program that we're going to discuss is our DMD program, called Z-Rostudirsen for exon 51 skipping DMD patients. This is a devastating disease that despite some approved therapies, really has significant unmet need. Today's therapies that are on the market merely slow progression at best. At 6- to 7-year old, a lot of these kids that have this can't get off the floor. By 12 to 14, they're in a wheelchair. One of the largest causes of eventual morbidity and mortality then is what happens in the cardiac and in the diaphragm, the failure that will emerge in the 20s. And we've demonstrated that today already, and you'll see even more of that next week at the MDA conference. In terms of what we're going after, exon 51 is one of many of these exons that's out there. It is the most prevalent mutation, and it's the toughest to skip. So that's why we went after it. We've never been afraid of a challenge. So we went after the hardest one and the biggest one. The first trial that we designed was called the DELIVER trial. It was a multiple ascending dose trial where we centered on our 20 mg dose. We're using this for accelerated approval, and then we'll be doing a confirmatory trial. This is set to be filed in the second quarter. We'll be filing our BLA and beginning the Phase III at the same time. For the REC, dystrophin has been a surrogate marker for us, and we showed some data in December that I think was really quite compelling. We showed a sevenfold increase from baseline, very statistically significant, as we say, 0.00001 p-value. And then we showed a 10x difference from the current standard of care. Again, this is just dystrophin. But I think what made our data set really compelling was not just the change in dystrophin from baseline or versus standard of care, but the functional data that we showed along the way. We had 6 functional endpoints that we showed data on in December. And as we were leading up in this trial, we said the goal is to show statistical significance in dystrophin and trends in the functional data point. And what we ended up showing actually was 2 of these 6 endpoints. The all 6 showed a positive trend, 2 of them were even statistically significant, even though we didn't power the trial to show stat sig. The first set of data that I'm going to show you here is Time to Rise Velocity and the 10-Meter Walk/Run test. And as you can see here, there's a significant improvement in Time to Rise Velocity versus placebo. You can see the placebo also dropping as expected while the patients on drug continue to show improvement. On the right-hand side of this, you'll see patients measured at 10-Meter Walk. And again, you'll see an increase in the drug arm versus a decline in the placebo. Again, this is data that no one has ever shown before with respect to functional improvement. The next 2 graphs we're going to show are relative to ambulation. The North Star Ambulatory Assessment again shows an improvement with Z-Ros and a decline in the placebo. And then finally, on the right, SV95C shows another [indiscernible] of the drug versus the placebo. And in this case, the placebo did improve, but was biased by one patient. Otherwise, we'd have expected a decline. Finally, the last set of data that we'll discuss is the PUL, Performance of Upper Limb, which again showed an improvement versus placebo. And finally, the Forced Vital Capacity. If there was one data set that I'm most excited about, it's the performance of FVC because this is really where the heart and the lung starts to impact the patients towards the end of their disease. And the fact that we've been able to stabilize this versus placebo is really profound. So to recap the data on the simple chart here, this is really something that we're very proud of. We've got 6 measures here where we show improvement versus placebo at 6 months and the durability of this out to 24 months versus baseline. Again, we've got tissue penetration throughout the body. You've got 6 measures that measure multiple different arms, legs, organs, et cetera, and they're all showing improvement at 6 and 24 months. So this is really something that is truly unprecedented, and we do think will be transformative for patients. When this data was released, our team was just inundated with messages from the field, from the patients, from the physicians. They've never seen anything like this. So we're really excited about this. Finally, what about safety? Our safety continues to be very strong. Again, we're taking this for accelerated approval. In addition to the trends -- in addition to the stat sig dystrophin, the trends and function, we also need to show a favorable safety profile. And you see that here. The TEAs that we've seen have been mild to moderate, and we've got 1,400 doses that have been administered. In some patients, we've got safety out to 36 months. So very compelling. And then finally, as we mentioned, we're pursuing accelerated approval, BLA to go in this quarter. What do we need? We think this will be a best-in-class drug. We think that we've shown a very robust and stat sig improvement in dystrophin, a very favorable safety profile, functional improvement across all 6 endpoints, favorable dosing. And as I said, we're on track to file in the second quarter. We're also on track to start a confirmatory Phase III. As you guys know, for accelerated approval, you have to do a confirmatory Phase III. That's all on track to start this quarter. And we think that getting this will be a major catalyst for this drug. So in terms of the commercial opportunity, this is one of the best markets that you could hope to go into. The patients are identified. In fact, the advocacy is very strong. There's nothing more -- there's no patient advocacy group better than a DMD mom. We know where these patients are. The advocacy is strong. The advocacy groups are very strong. It's also a concentrated market. You can see here in the middle of the trial, we've got 80% of the patients are at about 100 different centers in the U.S. So that means we can have a very capital-efficient sales force. We're not going to need hundreds or thousands of people. We're not doing Super Bowl ads or anything like that. It's a very focused rare disease specialty pharma kind of sales force. Reimbursement is also very well known. So again, another check in terms of what would be a great market to launch into. It's a great market when you have a very motivated patient population defined, you know where they are, reimbursement is in place. And we have a great team that is ready to launch this. I can say from my standpoint, being in biotech, we've got people throughout our organization who have done this before. And they've done it before at the same levels, right? A lot of times you see people at small companies, they get promoted into new titles. They have new responsibilities. We have an organization of folks that has all done this with the same title before. And this is why we're able to take on so many different drugs at the same time is that we have people that know what they're doing. The team that we have from a commercial standpoint is led by Johanna Friedl-Naderer, who's been doing rare disease her whole career. She launched SPINRAZA at Biogen and has surrounded herself with a team of folks that have very specific rare disease launch, very specific commercial experience. They've been involved in SPINRAZA and other rare diseases. They know the physicians and they know how we get the reimbursement. They know how we get the patients on drugs. The way we're now talking about DMD is a franchise. You may have seen on Monday, we announced that we're going to pursue 4 more exons beyond exon 51. So we truly view the DMD portion of the Dyne story as a franchise, not just exon 51, but 4 others. The movement into these 4 others will allow us to triple the total addressable market. There's about 1,600 patients with exon 51. With the other 4 exons, again, we're tripling that into the 4,000 to 5,000. Again, established reimbursement. The other thing about this is, from a product standpoint, it's the same fab, it's the same linker. The PMO chemistry is the same. The reimbursement is in place. It's the same doctors, the same centers, the diagnosis is the same. So getting from exon 51 to these other 4 products is a very high probability of success. So we think this is much different than a traditional sort of preclinical program, and that we've really substantially derisked these other 4 exons, these other 4 programs with what we've done to date. So how do we create shareholder value in DMD? Again, this is one of the most attractive markets that I've seen in 30 years. It is a significant unmet need. The population is identified. They're motivated. Reimbursement is in place. It's a concentrated population, which leads to capital efficiency for the commercial organization. Our assets are wholly owned. We think they have best-in-class profiles. And we think given the data that we've reduced -- or produced to date that it's all derisked. All right. So let's move to the next asset. So beyond DMD, we have DM1, myotonic dystrophy, another large market opportunity. In this case, this is complete white space. There's really no treatments available. It is a similar size as the whole DMD franchise. So another very large untapped opportunity for us and something, again, with no approved therapies. DM1 is caused by DMPK mutations leading to missplicing of the RNA, then creating muscle weakness, myotonia and then there's CNS manifestations. And we believe where we're differentiated versus other potential products is with respect to CNS. The ACHIEVE trial that we've been running has been designed for accelerated approval. We ran a MAD trial and then selected our dose going forward for the registrational cohort of 60 patients, which we're in the process of enrolling. We just released earnings on Monday, as some of you know, and we're still on track to wrap this enrollment up in the second quarter of this year. The primary endpoint is vHOT, video hand opening time. And we think that this is going to be a great endpoint for us. So what did we have in the -- what data did we show in the MAD? We showed impact of changing DMPK, which is the foundational pathobiology and a reduction in that and a correlation of improvement in splicing. So you can see how strongly we did relative to placebo on Slide 25. Slide 26. We showed robust improvement in vHOT, as I mentioned, at 6 months and again at 12 months. And vHOT is what we call an intermediate clinical endpoint for accelerated approval. It is very predictive of downstream functional improvement, and we've shown that to date. So beyond vHOT, here on Slide 27, we show broad functional improvement, again, at 6 months and continued out at 12 months in areas of muscle strength, MDI, patient outcomes, et cetera. And each one of these, you can see an improvement versus placebo. Finally, as I mentioned, the CNS component of this is very important. Here's a slide here that shows CNS-related MDI subscales. So again, in terms of sleep, fatigue, communication, behavior, pain, et cetera, we're all showing, again, sustained improvement in these CNS endpoints. And these are really important for driving the symptoms that the patients have. Our drug was designed to get to the CNS and designed to show these things. So we're not surprised to see them. And we believe when we're in the market that these will be a significant differentiator for us. Nobody else has shown these kind of CNS improvements. And then again, like DMD, we have a very large safety database on DM1. We continue to show a very strong safety profile. We've had 1,000 doses on 93 patient years and no serious TEAs. So again, another very favorable safety profile. And again, this just shows the benefit of our platform. Okay. So then just sort of hitting on some of the points that we mentioned before. In 2025, we validated our platform with clinical data in 2 diseases in human beings. This year, we're transitioning to a commercial company for the launch of DMD in 2027, and hopefully, the launch of DM1 in 2028. Beyond that, FSHD will be the next product that we put in the clinic. And then beyond that, we've got the 4 other exons and Pompe disease. So a total of 8 products, all wholly owned, all based on the same platform, all of which has been derisked. And just wrapping up here on the pipeline here. Again, this just shows how things are going to play out over the next couple of years. The team is very excited, and I'm very excited to be here at Dyne so that's it.