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

All right. Good morning, everyone, and thanks for joining us at the Morgan Stanley Global Healthcare Conference. Mike Ulz one of the biotech analyst here. It's my pleasure to introduce the team from Dyne Therapeutics. To my immediate left, John Cox, President and CEO; and to his left is Erick Lucera, CFO. And just a reminder, the format for today is a fireside chat, but if anyone in the audience has a question, you can raise your hand and we'll try and get it addressed during our discussion. But before we get started, I just need to read a quick disclosure. For important disclosures, please see the Morgan Stanley Research disclosure website at www.morganstanley.com/researchdisclosures. And if you have any questions, please reach out to your Morgan Stanley sales representative. And with that, I'll hand it over to John to make some introductory comments before we jump in the Q&A.

Terrific. Thanks, Mike. Well, I'll just mention a little bit about where we are at time right now. It's an incredibly exciting time for us. This company, over the last couple of years has been preparing for the moment right in front of us, which is to launch a very important medicine in DMD and that's early next year, followed by DM1 the following year. So we've been building a -- I guess I'd describe it as a pure-play neuromuscular stand-alone, fully integrated biotech. Over the last 1.5 years, we have built out our leadership team and brought in people that I think -- other people that know how to build a company like this. They've been part of this type of company in the past, the company we're building for the future. We know how to allocate capital, and we know how to launch products, and we know how to commercialize. So we have -- and we came here really, and I came here because we want to launch 2 really important medicines and neuromuscular diseases where there really is nothing that is helping these patients. So it's an extraordinary time. We've got a PDUFA date in January, and we are working hard to be ready to launch our first product.

Yes. Great. Thanks for that introduction, I'm going to switch gears a little bit and start with DM1 because I think there's interest there for for obvious reasons. But let's start [indiscernible] DM1 -- maybe to just set the stage for the discussion, give us a brief background on that program and highlight some of the key findings so far from the ACHIEVE study.

DM1 is 1 of those diseases where there is really nothing for patients. And it affects tens of thousands of patients. There's probably 30-plus thousand individuals that suffer from that disease. It shortens their life by about 2 decades, and they struggle and they suffer. So our company had introduced Zbesibarsen clinically some time ago in a trial called Chief. And that trial, we presented data that had shown, first of all, that we were getting at the core fundamental biology of the disease, and that's incredibly important. This is what's known as a nuclear splyopathy disease. So it's in the nucleus. And we had designed our platform, the force platform to deliver broadly and deeply to tissue but we also had attached to that platform, an antisense oligonucleotide. And that antisense nucleotide gets to the nucleus. And so what we showed previously importantly, related to that was that we saw DMPK knockdown. That's of the mutant DMPK that's the source of this issue knockdown of DMPK we saw, as a result, splicing correction. And I don't think anybody else has been able to show that where the misplacing is corrected. And we showed that in a dose-dependent way. And then what we finally presented at the end of that multi-scan dose study, was that we were seeing functional improvement across multiple measures. And that functional improvement was represented by things like 5x Sittastand. It also was represented by hand myotonia with Bhat. And it was even -- we even had shown improvement on patient-reported outcomes known as MDI on subscale that are arguably related to the CNS. And that disease has a CNS issue that's very significant. Our targeting Modi, which targets TfR1 as an antibody fragment. And that fragment crosses the blood brain barrier, and it also gets broadly and deeply to muscle. And I think it's got a very unique and differentiated distribution that's allowing us to see that kind of improvement across multiple measures.

Very exciting data so far. And I guess the question on a lot of people's minds is just what's the read-through from Novartis' recent data. I know there weren't a lot of details there. So it's a little bit difficult to really understand what's happening, but maybe just share your thoughts on that and read through.

Yes. I mean that -- I think everybody knows, but that result indicated that they did not meet their primary endpoint on video and opening time. We were surprised by that because VHA tends to be an endpoint that moves very easily, and it moves early. That's what we've seen. So we were surprised by that. But I would still come back to what I mentioned before, biology really matters here. getting to the core pathobiology of the disease is key. And that particular medicine from Novartis uses an siRNA, which does not get to the nucleus. So I think we have to realize we have 2 very, very different molecules. So when we start talking about read-through, you need to start with even though we're both using TfR1 and going after the same disease, we have a completely different payload and our fab behaves very differently than the map that they use. So I would start there. Now when we looked at our data, we had gotten to in the multi-ascending dose study to fairly high doses. In fact, we are at a much higher dose of oligonucleotide. And than the other sponsor is using much higher. And the reason for that is that we found at a low dose, we would move that, but we weren't necessarily moving the other more clinically meaningful measures. And so we kept dose escalating to a much higher dose. And that dose escalation is largely possible because we use a fab. And with the fab, we do not get the dose-limiting toxicities of anemia that mAbs tend to see. So we could get to a higher dose, and we are well above where we think we need to be to move HOT and even to move measures potentially into the CNS.

Makes sense. Maybe just talk about your view towards the different endpoints like a hot versus a 5x Sitan and I know you've had a lot of discussions with the FDA as well on this, so maybe share that view as well.

So listen, we see VAT and we're using VHA as an intermediate clinical endpoint. So our clinical development plan has been different than others. We -- and I think we have a very robust and fulsome clinical development plan as it's laying out. We're first doing a salary approval, and we have a registrational expansion cohort and achieve with 71 patients, and we are using VHD as an early indicator, in other words, an intermediate clinical endpoint at 6 months. And our data previously is shown at 6 months, you move the hot meaningfully -- and at later time points and at 6 months and at later time points, it is indicative and predictive of improvement on other end points. we had in our conversations with the FDA and with clinicians, it's not such a clinically meaningful endpoint. It's just about being able to open your hand quicker or slower. There are other more clinically meaningful measures. And so in our Phase III, which is now enrolling, we're using what we think to be a very clinically meaningful endpoint of 5x to stand. We would not use VHA as a primary endpoint for Phase III. We've always said that. It's just not clinically meaningful enough. Something like 5x hit to stand, followed by other measures is meaningful. We can talk more about that.

I guess just given the data we've seen now from Novartis with VHA. Do you think that changes how the FDA views VAT is like an intermediate sort of endpoint? Are they less favorable there now, you think? Or Well, I would not -- listen, the FDA doesn't talk to us about other sponsors. But if in my own view, if anything, this makes the case that it's an appropriate -- it's appropriate as an intermediate clinical endpoint but not as a Phase II.

And so I think we feel good and confident about how we've done this, how we've organized the registration expansion cohort, how we have laid out the statistics around the end point -- and then again, we follow it up with a Phase III that will be very robust with a much more clinically meaningful endpoint. Understood. You're going to share some updated data from achieve a couple of medical meetings here. I think it's World Muscle and NEM later this month or next month. But just give us a sense of what to expect there and how to think about those updates? Yes. So we had -- we recently announced that we would introduce 12-month data at AANEM and also at World Muscle. And I'll tell you, Mike, the reason we organized this 12-month data. We went to some trouble to do that is we were anticipating that Novartis was going to be saying they hit on beyond and present, and then they would present other functional measures. And we want to give people a chance to compare our functional measures that really matter. We're going to go forward and present that. And that will be 25 patients -- we captured 25 patients from the ACHIEVE long-term extension study that had been on dose for at least 12 months. And we are also comparing that -- we'll be comparing that to baseline, and we'll be comparing that also to natural history, where we've done a propensity matching. And we'll be looking again at multiple measures. You'll recall that when we had presented before, we had shown at the registration expansion cohort of 6.8 mg per kg. -- that we had moved on QMT, VHA, QMG quantitative muscle testing, multiple time function tests and also on MDI and on the CNS subscales. But it was only 6 patients. And so people were a great data, but it's 6 patients. Well, we're going to be presenting now on 25 patients. Okay. Great. So we look forward to seeing that. And I guess maybe just to follow the conversation, you'll still have your achieve registrational cohort data 1Q and the primary endpoint there is VAT at 6 months. I guess what are your expectations for that data set? Well, that data set, we have guided to Q1 of next year. So that will be the registration expansion cohort. That will be the set of data that we intend to submit to the FDA as part of an accelerated approval package. And so what we would hope to see with that and expect to see with that is that we expect to see that HOT has responded appropriately, that it is an appropriate intermediate clinical endpoint. And then what we have to provide for accelerated approval is trends across other measures. And that data we showed from the MAD was very clear that there were trends 5x its time to walk around, et cetera. So that's what we would hope to see from that data set. And then we will rapidly put that together and submit it as an accelerated approval package. Makes sense. If we just go back to the confirmatory study, the Phase III Armonia study and -- maybe talk a little bit more about the choice of the endpoint there, the 5x sit to stand versus some other functional end points which you could have chosen? Mike, this disease, I think you're fully aware has a lot of heterogeneity to it. for some people, it's a balance issue. It's a strength issue for others, it can be general myotonia, GI issues for others as CNS. So identifying an endpoint, and there's no endpoint that's ever got a drug approved in the field. So establishing for the first time, a meaningful end point is something we put a tremendous amount of work into. And that is also going back to the natural history data, working with all the top KOLs and then looking at our own data. and -- and talking to the FDA. 5x sit to stand, I think, will become the kind of benchmark definitive primary endpoint in this field. It looks at -- when you have to stand up and get up and down from a share time -- that's telling you about strength, it's telling you about balance. -- is telling you about coordination. There are mental aspects to it. It tells you about fatigue. And and it's also about core truncal strength. And it relates to -- and it's been shown in other studies to be correlated with the likelihood of falls. Which is obviously a very big deal in terms of morbidity. So that endpoint is 1 that we feel very good about. We've looked at our study from the ACHIEVE study. we saw that we improved on 5xsitastan and what would be considered an MCID. And so we think we've got a really good endpoint, and we think we have, obviously, a very good shot at hitting that. Yes, for sure. can you characterize your just discussions with the FDA around that endpoint and kind of what their view was Well, we've provided the endpoint and the justification and the rationale. And so I think we're aligned with the FDA on what we're putting forward. Yes. Makes sense. And then just ammonia is ongoing.

Can you talk about just the pace of enrollment there versus your expectations? And are there ways to sort of accelerate that at all?

We're moving very quickly on ammonia. So ammonia is the Phase III confirmatory trial for the U.S., but it's also a trial that will enable us to go to Europe and Japan. So it's a global trial. It is essentially our global Phase III. And it is enrolling. We had announced that we had initiated it, enrollment is happening. -- enrollment, I think, is going quite well. there's a lot of interest in that study. There's always been interest because I think the field has understood that uniquely to our drug, we have the potential to get to the CNS -- and with the ability to get to the CMS, when 50% or more of the patients have CNS issues. -- doctors have been holding patients for this drug. And so we're not having any issues in terms of moving on enrollment in fact, just the opposite, and we're moving aggressively.

Great Okay. I guess any risk with the top line results about to enrollment in the study at all?

Well, risk to top line, like 5x I just mean ability to rule the study, maybe people are less -- they don't like VAT for some reason or there's a question. Oh, I think -- no, not at all. In fact, I think if with the recent news, even with the other drug, people will be encouraged to come to this trial. So we don't -- we see this as actively enrolling. In fact, at this point, I'll say, Mike, I think we're the only company with an active Phase III trial in DM1. -- that's both a registrational expansion cohort that's about to read out in Q1. And we're the only company with an active Phase III. So that puts us in a pretty good place, I think, in terms of market introduction.

Yes. Makes sense. Maybe we can shift gears now to Z Rosserson, that's your DMD program, exon 51, currently under priority review, PDUFA date, January, -- so maybe just highlight some of the the key learnings there, points of differentiation, et cetera. Well, sodersen is for DMD. And it is for those those individuals that are amenable to exon 51 skipping. That's the most prevalent category of mutations or subpopulation within DMD. What is special about our medicine is, again, the delivery. People have known for years that you can skip exon 51. The challenge has been getting enough of the oligonucleotide broadly and deeply to the tissue. And as a reminder for people with this disease, it's a devastating disease. There's drugs out there, but nothing is stopping the inevitable outcome and progression. And for these boys and is recessive xline mutation, so it's all boys -- by the time they're 6 or 7, they start struggling to get up off the floor. By the time they're 11, 12, 13, they're in a wheelchair by the time they're in their late 20s or 30s, their heart fails or the difamfalds. So getting distribution to all these different tissues, including the heart, the diaphragm and broadly, the muscle is key. And what we have done is take a look at 1 key measure, many measures. But functional measures, 1 being rise from floor velocity. And what we found in our study, which was a registration expansion cohort study is that we were improving on rise from floor velocity. In other words, they were getting faster. We saw improvement, in fact, on all key functional measures in DMD. That just isn't done or seen. Now that -- because of that, I think we're moving really well with the FDA. Everything is about getting this product launch. -- the community is engaged and excited for it. And we feel -- I mean, we feel a real responsibility to get this to patients as soon as we can. Can you maybe talk about the surrogate endpoint, which is dystrophin expression, what you've seen there and how it evolves longer term, which I thought was pretty pretty promising. Yes. Thanks for raising that. So generally, in this disease, people have looked at dystrophin levels in muscle biopsies as a biomarker -- and in exon 51 patients, it's likely the most difficult exon to skip. There's a little bit of natural skipping depending on the mutation. They're virtually at about 0.4%, 0.5% of normal dystrophin potato biopsy. So almost none. What we found was that when we adjusted for muscle content, at 6 months, we were at roughly 5%, 5.5% dystrophin. We took some biopsies even longer term for biopsies were voluntary biopsies that were not part of the original protocol. And we found that we had roughly tripled what you would see in terms of dystrophin levels. And all of that was consistent with what we were seeing longer term. So it's 6 months, just 6 months, you wouldn't have -- you would not have thought risen floor velocity would improve in 6 months. You wouldn't expect stride velocity 95th Sentot improve to 6 months. It's a disease that people would have expected since is fairly slowly progressing, you would see take time. In 6 months, we were seeing it even at those dystrophin levels, which means we're getting broad deep distribution through the tissue. But longer term, then we presented the last MDA, 18 and 24 months across these measures and you saw continued improvement, and we even saw a stabilization of cardiac function and of lung function, which was really important. And we were seeing that across boys that were ambulatory and also nonambulatory. So it really points to you are building dystrophin over time. And the important piece is nobody has ever really understood how much dystrophin do you need to start seeing functional improvement. And people would always ask us that. And we would say we're going to be the ones that just might have the answer. And now we've seen even a fairly low dystrophin levels, 4%, 5%, 6% at 6 months, you're actually seeing functional improvement. Not long a decline, but functional improvement from baseline. It's remarkable and we're excited about it, obviously. Yes. And maybe you can just put some of that data you've just shared into the context of the currently available therapy. -- in terms of the profile, like dosing, maybe touch on that as well? Well, the current therapy is EXONDYS, and that drug has been on the market for about 10 years. It was approved by accelerated approval. To date, it has not been able to show statistically that is having functional improvement. So -- and it's dosed on a weekly basis. And so there's a lot of, I think, disappointment in that treatment and basically the current state of treatments. And so we are roughly 10x in terms of dystrophin production compared to what they had shown.

And our dosing frequency is once a month. So it's an infusion once a month, much more convenient. It's really hard to -- it's hard to compare those drugs, honestly. And the reason is our oligonucleotide is attached to an antibody fragment that is delivering broadly and penetrating the tissue. Can you maybe share what you've heard from some physicians on the profile we have met with -- we've worked with a lot of the physicians that we've met with so many. Those who have used the drug in the clinical trials. They see this as a foundational therapy. -- the notion that they would keep somebody on 1 of the older therapies like EXONDYS, they're very clear. We're switching. And so I think the receptivity among the clinicians they're sitting up and they're positive about it, and they're very excited about it. And then you've got the patient Avis community as well, and they're fully aware and they're in tune and alert to it. So we're feeling very positive about successfully launching this drug next year.