Jaguar Health, Inc. (JAGX) Earnings Call Transcript & Summary

Thank you for joining us. I am Jeff Cohen, I joined with my colleague Destiny Hance of Ladenburg Thalmann. Today, we're happy to have Lisa Conte with us. Lisa is CEO, President and Director of [ On Calendar ] of Jaguar Health. Lisa, thanks for the time. We really appreciate it. We're not going to dive as macro into the company, Jaguar, but today is really focused around CTD specifically the Phase 3 trial and patient experience. So Lisa, I'm going to turn it over to you.

Thanks. You just want to unmute, but you already have turned it over to me. So we're good. And thank you. Thank you for the time and the opportunity to fill people in on what we're so excited about, what we feel will be absolutely transformative for patients and for value recognition in this company right now in these really tough, tough biotech markets. We have completed enrollment in the study we call the OnTarget Study, which is for cancer therapy-related diarrhea and an extension of the label, seeking an extension of the label for Mytesi, crofelemer which is already approved, already on the market for HIV-related diarrhea which is a specialty market, a relatively small market, but -- and important for those patients and valuable because we already have a full supply chain in place for crofelemer, for Mytesi. We already have a product that's approved with chronic safety, a product that acts locally, so we have no requirement for additional drug-drug interaction studies. So put that aside, now let's talk about what does it take to get this label expanded, to get this benefit to patients who are on targeted therapies. It's -- to hit statistical significance on the primary endpoint in this OnTarget trial. Because we have the last patient enrolled and we did over-enroll by over 10% because when you stop enrollment, there is sort of a rolling factor to shut down some of the sites. We have the cascade of activities well defined and we expect to have that primary endpoint data out by the end of October which is nice timing, which gives us some good opportunity for presentations. For example, at San Antonio Breast Cancer Conference, ASCO next year, some other conferences. So what's the importance of this? Beyond supportive care and sometimes diarrhea is considered supportive care. We're also talking about an impact on the outcome of the treatment, the targeted therapy treatment for these patients. So coincidentally, just this morning, I was reading a paper recently published in the Journal of Clinical Medicine with a targeted therapy of Verzenio, which has a 92% rate of diarrhea and a 40% rate in clinical trials of patients who have to go off Verzenio or go to a reduced therapeutic dose. But when you look at the real-world impact, it's even worse than that. More patients are going off of really what is a life-saving therapy in both a metastatic or a curative situation that patients are staying on for months and years. And that is -- that's a focus of the health care community of the oncologists. Of course, there's cost associated with that as well. When you have diarrhea, there's also an impact on neutropenia, on pain, on hepatic toxicity. But what we're going to focus on today is just as important the patient voice, the patient experience, patient dignity, comfort and having a shared voice in choosing what therapy they're going to be on and what side effects they're going to live with for years and months in targeted therapy. So to put this into perspective of our Phase 3 clinical trial, it is a prophylactic study for patients with all solid tumors, on targeted therapy with or without cytotoxic chemotherapy, the only criteria for the targeted therapy are those that have more than 50% diarrhea. There's about 24 that are identified specifically in this clinical trial. So you're talking about CDK4/6 inhibitors, tyrosine kinase inhibitors, epidermal growth factor receptor antibody. So a lot of, lot of agents that are used to keep patients, again, metastatic in a chronic disease situation or a curative situation. I just came back from ASCO a couple of weeks ago, I don't know if you were there as well, but the theme this year was partnering with patients. And there was a patient platform, a patient area. And one of the great advocates there, Jill Feldman, in trying to relate what the experience is to those who are not experiencing cancer, who are not on lifelong therapy, she said, imagine a pebble in your shoe. You can live with the pebble in your shoe for maybe a day, maybe a week, but are you going to live with a pebble in your shoe for the rest of your life? And it's not just one pebble, multiple pebbles. The point being, what are considered tolerable toxicities is almost a dystopian characterization. They're intolerable toxicities. And it's not just diarrhea, it's nausea, it's fatigue. It's neutropenia. It's neuropathy, mental health. All those different aspects are all the different pebbles in the shoe. And what Jaguar is looking to do here with Mytesi and with this clinical trial, can we make cancer and cancer care suck a little bit less? Because it does suck. Can we take at least one of the pebbles out of that shoe? And taking that one pebble out, can we have a benefit on some of the other pebbles as well? It is particularly important in this era of targeted therapies and patient voice because patients are not patients, they are everyday people. They are parents, they've got responsibilities, they've got jobs, they're children, they're the sandwich generation. And in some cases they are the founder and the CEO. So I myself was diagnosed in October of last year, October of 2022, coincidentally. The day our paper -- Phase 2 paper was published for the HALT-D study, which was prophylaxis with Herceptin and PERJETA in HER2-positive patients. I was the poster child for the enrollment criteria for the paper that was published by [indiscernible]. I'm here through my chemo, my surgery, my radiation. I'm in on ongoing targeted therapy and I am cancer-free right now.

Is there anything that you had experienced with the drug [indiscernible]

I was -- I was prescribed prophylactically Mytesi. I did take it and I still do take it. I can't talk about my experience with Mytesi, of course, as we're in Phase 3 clinical trials and don't have that label currently. What I can talk about is another pebble. I did have another pebble. My pebble was mucositis, mouth sores that caused me to, a, go off my therapy for over a month, change my therapy, cost to the health care system, I had to go be infused and rehydrated many, many times in the hospital. And it's a -- there are many pebbles out there. I said we're not curing cancer but we sure can make it suck a lot less. And with that, I think that should be a good introduction to see some really forward-thinking oncologists who are very empathetic to the patient experience and you're going to hear from patients themselves, patient advocates and a patient, which is me. [Presentation]

Okay.

Thanks for sharing that, Lisa. Somewhat emotional. Thank you.

So I did want to open it up for some questions. I know I've got a few questions and Destiny is going to chime in with any from the audience. But can you talk about some of the impact and the thoughts on chronic [ retreating ] diarrhea? So it sounds like it's months that it would be helpful for or in some cases, for some women, could it be years? Is it really more of an acute setting would you describe it as or it's a chronic setting where it's months or quarters or years that diarrhea is really a factor and the medication is really playing up the diarrhea?

Your question is right on. We're in the midst of a paradigm shift because of these chronically used targeted therapies. So Again, in an acute situation, think of what Kelly said, I don't care if I turn purple, cut off my arm, I'll get through it. But if you're talking about as she was, quality of life, living not just surviving, that's the chronic situation. And the mechanism, as you know, the mechanism by which many of these targeted therapies work sort of elicit a secretory diarrhea. Crofelemer as an intestinal chloride channel modulator, normalizer. Our design is prophylactic, get it on board before you take these targeted therapies and stay on it throughout the months and years that you're on the target therapy, so you never have to deal with the diarrhea. And one of the reasons why I asked in interview with Sandy Swain about chemotherapy-induced nausea and vomiting, you heard her, it is aggressively treated prophylactically now. So get that off the table for interfering typically with cytotoxic chemotherapy. It's an analogous situation for crofelemer in our trial design for chronically used targeted therapies and that's the pebble in the shoe. Even grade 1 or grade 2, which you wouldn't think would be the end of the world if you're in chemotherapy for a short period of time, every single day and grade 2 is up to 7 watery stools a day. So think of it as a paradigm shift, chronic usage and onboard prophylactically is what we're looking to do with the design of the clinical trial.

Got it. It seemed like some of that was demonstrated in the Phase 2 whereby the second cycle had a more impactful effect, if you will. So -- well, we don't know the Phase 3 yet. But in theory, the crofelemer becomes more effective over longer time periods.

Again, very astute. That's -- the published data that we have in the current approved indication, HIV, what we saw is greater benefit as the drug is on for a longer period of time because while it is almost an acute insult each day, there is the chronic buildup, the enteropathy, the inflammation that comes not only from the treatments, but the disease itself, the cancer itself. And so having the drug on board for a longer period of time, certainly in the HIV setting, which is analogous with the inflammation, the drug got better over time. And you're right, we did see a greater benefit in the second cycle in the HALT-D trial, which was HER2-positive with Herceptin and PERJETA.

And the 3 newer inhibitors are showing 50% diarrhea and side effects, half plus or minus, generally speaking? Or more?

Well, in our clinical trials, the patient needs to have a solid tumor and they need to be on a targeted therapy that has at least 50% diarrhea in its label. Of course, we know what happens in the real world, which is worse than that. That's 24 targeted agents currently, which is -- how many targeted agents out there, like 50 or 60 or so new ones approved every single day, 24 at least have more than 50% diarrhea in their label and some of them have 100%. I mean it's really remarkable what these agents are doing in terms of the opportunity to extend life, make the disease a chronic disease. But again, as Kelly said, you're giving something that causes you to have to give something else that might cause you to have to give something else. What's wonderful about crofelemer is based on its mechanism of action in an active secretion mode, it modulates, it normalizes in an active secretion mode. But if you're perfectly normal and you take a bottle of crofelemer, nothing happens, not systemically absorbed. So you're giving something to directly address and prophylax the diarrhea but doesn't cause other problems itself like an opioid, it doesn't cause constipation, it doesn't cause the cycling between constipation and diarrhea, it doesn't cause the loopiness associated with constipation. And opioids have not been tested in cancer patients and are certainly not approved to be used on a chronic basis with these new paradigms of targeted therapies.

Okay. Got it. Lisa, I'm going to cut into some of the questions that I'm seeing from the audience. I'm just going to read, I see 3 so far. So the first one is what -- was there an extension on the OnTarget trial, right? I think it was slated for 256, one-on-one. Is there an extension [ to begin with ]

Maybe that's -- 256, you're exactly right, one-on-one, and it ended up being over-enrolled by 11% as we rolled out the closing of the site. It is an international trial, although it's for U.S. approval but international sites. And we have a number of patients in the past 9 months from Taiwan, Serbia, Argentina. I'm missing one of the country, but -- Georgia. So as you close them down, they had some patients that were already in screening.

Got it. Next question, why was there so little patient support for these patients for all of the side effects?

So that's interesting. The oncology field in general, our oncologists, the sick joke is cure the cancer, kill the patient, right? The treatments that have been out there, the chemotherapy are very toxic, very tough on patients. So we're in a relatively new era, let's say, 10, 15 years of these targeted therapies that are extending life. And then take in particular, the metastatic patient, take Kelly. God forbid 20 years ago, metastatic patients didn't last long enough to have a voice. Now these patients are living right with this chronic situation for 5, 10, 15, 20 years and not willing to have their quality of life compromised to the point that you live within chemotherapy. I would not be willing to live the way I did for 3 months in chemotherapy for the rest of my life. So that's why the voice is emerging now and they are being heard and they're going to continue to be heard more and more and more and we happen to be right here at this very important timing with Crofelemer.

Got it. Okay. The next question, I actually think I know the answer. Can you remind us about the HALT-D study that Dr. Swain was part of?

Can I say -- I'm sorry...

Can you remind us about the HALT-D study that Dr. Swain was part of?

The HALT-D study was an investigator-initiated trial. So we had nothing to do with that other than to supply the product. So Dr. Swain, this was done at Georgetown and it was HER2-positive, Herceptin and PERJETA. PERJETA has over 50% diarrhea typically utilized or maybe [ over ] utilized with Herceptin and prophylaxis with or without cytotoxic chemotherapy. The patients were -- it was not placebo-controlled. So the patients took crofelemer for 2 cycles and then the third cycle, the drug was removed. So there was a benefit that was seen, as Dr. Swain said, in the reduction of the diarrhea, more profoundly in the second cycle than in the first cycle. And there were patients who ended up having a rebound situation when the drug was removed in the third cycle. It's not the primary endpoint that we have in the Phase 3 clinical trial at the time that they were designing it. We weren't involved and there's a lot of different definitions of diarrhea. There was a collection of secondary endpoints, many of which hit statistical significance that map to our primary endpoint. And as our Chief Medical Officer said, if we had, had those results before we designed the OnTarget trial, which we didn't, but if we had, we would have designed it exactly the same way.

Got it. Okay. That's good to know. The next question is how else is Jaguar supporting patient advocacy? And I guess that ties in with some of the questions that I would have, if you could talk about the awareness or the messaging that's out there now. Obviously, it's still in the clinical settings.

Right, obviously. So we can't speak to results and we don't have those results at this time. Our formal SAB, Scientific Advisory Board includes patient advocates. So Kelly Shanahan as well as the wonderful Stacey Tinianov, I've got to work on this pronouncing her last name. They are formal scientific advocates and Stacey at this moment is at MASCC which is a supportive care of society conference that's in Japan. She is actually running a digital and online survey with many patient advocates in many different types of cancers, both Kelly and Stacey, I should say, are breast cancer survivors. And that is looking at all the pebbles in the shoe, all the different issues that patients are dealing with on a chronic basis, again, in this targeted chronic therapy situation, how they affect their lives, how those side effects affect each other. So as I said, for example, with diarrhea, is diarrhea affecting your fatigue, is it affecting your mood, same thing with neuropathy, neutropenia, et cetera. This is to just give us more information that is helpful to think about upon success of the trial, upon approval and expansion of the label of Mytesi, how do we get this product into the guidelines so that every time a targeted therapy with a risk of diarrhea is being diagnosed boom, aggressively your prophylaxing with Mytesi, just like Sandy said, aggressively they prophylax for chemotherapy-induced nausea and vomiting. So it's gathering the information and the awareness in the patient voice which can be elevated and plays a role in the full spectrum of drug development, from trial design to guidelines to regulatory, priorities and then ultimately, the awareness and the promotion. And I do want to say that our trial is -- the endpoint is based on patient voice. It's patient-reported outcomes which is very powerful and very powerful in the oncology division right now. And crofelemer is not in the oncology division. Crofelemer is in the GI division but the oncology reviewers come to all our regulatory meetings.

Good to know. One more. Thanks for sharing your cancer journey. When you had cell therapy for [ a bit ] due to side effects -- on therapy or had to pause therapy perhaps.

So I -- after my first chemotherapy, so chemo with targeted therapy, I developed grade 4 mucositis, talk about cancer therapy sucking, that sucked. It took me off therapy for 5 weeks. And then when I went back on, we had to change my therapy. We had to get carboplatin out of the mix there. Not a bad product to be taken out because it's actually in short supply right now in the United States. And then I did fine with the mucositis. I didn't have mucositis thereafter and was able to continue the -- ultimately, what turned out to be 3 to 4 months of chemotherapy and then it was followed by surgery and radiation and continued targeted therapy. So I continue on Herceptin and PERJETA for a year.

Got it. Okay. Interesting. When you think about patient advocacy and awareness, I know that specifically you're after HER2 at the moment. But have you heard [ inklings ] from other cancers, other types of patients, other conditions that are well matched up with HER2?

Well matched up with HER2 in terms of the side effects?

As far as diarrhea side effects, yes.

Yes. So Verzenio, for example, in the 3 different CDK4/6 inhibitors, again, Sandy mentioned in her video, that all have diarrhea, Verzenio is the worst with 92% in its label. That's actually for hormone receptor positive HER2 negative. And in our clinical trial, we have quite a number of breast cancer patients and more than 50% of those are on the CDK4/6. So they're not HER2-positive, they are HR-positive. Typically, the HER2-positive are from PERJETA. I have a theory. One of the theories is that why there were so many breast cancer patients. There's -- if you're going to -- for me, if I was going to get cancer, I was going to get breast cancer. Now I got one that has a good protocol and history in clinical efficacy behind it to end up what like the situation I'm in now, which I'm quite lucky to be cancer-free because there's such good regimens and protocols, patients weren't being enrolled in other clinical trials. And of course, you can't be in 2 different clinical trials. So they were available to be in the clinical trial with crofelemer. In some other countries outside of the United States, there aren't availability of these other clinical trials. And so we were able to expand dramatically the diversity of the type of solid tumor patients that were enrolled in the clinical trial. So we do have a nice diversity overall. We do have a lot of breast cancer and we do have slightly more in the hormone receptor-positive category.

Okay. So hypothesize with us with a positive outcome and DSPs being positive on the initial indication, when one would think that this could carry into plenty of other indications?

Yes. Let me make it clear. This is a basket trial. So this is not limited to breast cancer. So the trial design and with success, the approval will be for all solid tumors, prophylaxis, targeted therapy with or without cytotoxic chemotherapy. So that's the design of the trial. That's the target profile that we would be looking for, obviously, with the exact label. It is not limited to breast cancer. I mentioned San Antonio Breast Cancer Conference because that's one of the first conferences after we have the top line data. ASCO is not until the following summer, although there is an ASCO quality trial, I think, before the end of the year here. And one of the analogies that's important to chemotherapy-induced nausea and vomiting in addition to the huge patient impact. Yes, let's talk about all the stakeholders in the company, let's talk about the shareholders in the company with the devastating valuation that we have right now and the opportunity for this transformative event to recognize the value in the company. Chemotherapy-induced nausea and vomiting, as you probably know, is close to a $3 billion market and well over half of that market is generic. And those agents are typically taken just for the first 3 days in typical cytotoxic chemotherapy. So we're talking about something chronically with 1 million or so patients now who are on targeted therapies. You've got 8 million people in the United States, more than 8 million living with diarrhea. So blockbuster in terms of the change of paradigm, the quality of life, the benefits that we can show to patients and of course, the rewards that go to those who did risk-based funding of this clinical trial as well. And I do want to say this is all focused on the on-targeting cancer. But as a company, we have a second transformative event that I would hope that we could do a second webinar on at some point in the future, looking at intestinal failure from short bowel syndrome and congenital diarrheal disease. We expect to have proof-of-concept data just around the end of the year. And that's another area where the inspiration from the impact that you can make on these patients' lives, both on the health side, reducing their time on toxic parenteral nutrition, but on their quality of life, giving them a chance to have a form stool, giving them a chance to go off TPN for a night and be able to go to a movie, go to school, eat a meal, it's just remarkably rewarding and the benefits to all the stakeholders.

But it's still a little early to see the message permeate into all cancers yet. We're going to hang out and wait for some data. October, you said if I'm not mistaken.

End of October, we've said that publicly, last week in October.

We look forward to it. Destiny, I'm going to throw it back to you to ask you if there's any other questions that I missed.

I don't see any other questions in the queue at the moment.

Wonderful. So I think we'll caught up. Lisa, I'll throw it back to you to wrap it up with any kind of messaging or messages [ either than besides -- take 2 minutes ].

Thank you. Thanks for the opportunity to get all the messages out. And I did just want to say from my personal experience, we could not be more motivated at this company. We have a situation now where both the CEO, Chief Scientific Officer, both cancer-free, have both experienced this and the perspectives that you gain from a patient is so important, so different. Wish it hadn't been done, but it had been done, the commitment through every fiber of this company to be able to get these benefits to patients is absolutely -- there's just no way we're not going to do it. There's just no way we're not going to do it. We know how important it is to get this medicine to these patients and particularly in this situation. And as you saw from my video, you go in with the best attitude in the world but cancer and cancer treatment sucks. That's all there is to it, and we're hoping to make it suck a little bit less.

That's the take-home message, suck less.

Right. Suck less.

Okay. So Lisa, thank you. Thanks for joining us. Destiny, thank you, and I wish everyone a good day. Any follow on questions or concerns, feel free to reach out to us at Ladenburg or Lisa at Jaguar. Awesome.

Thank you.

Thanks very much, everyone. Have a good day.