Neumora Therapeutics, Inc. (NMRA) Earnings Call Transcript & Summary

I'm Brian Abrahams, senior biotech analyst at RBC Capital Markets. Our next featured company is Neumora, featuring their CFO, Josh Pinto, and their CSO, Nick Brandon. Thank you, guys, so much for being here.

Great. Yes. Brian, really appreciate being here.

So maybe to kick things off. I know we're not too far away from the readout -- first Phase III readout from your pivotal study in major depressive disorder. So maybe you could talk a little bit about just how the Phase III KOASTAL studies for navacaprant in MDD are going? How's the enrollment been? Are these studies on track? Any surprises or anything different based on your -- versus your expectations that you're seeing?

Yes. No, absolutely, Brian. I think the studies are going as planned. As we put out last week, there are -- we expect data for KOASTAL-1 in the fourth quarter of this year. So the studies are ongoing. We're not going to provide enrollment updates or any of the other metrics, but the studies are, from our perspective, going very well.

Good. Great. So I think one of the questions we get a lot about just MDD studies in general is the risk of placebo effect. And I know you guys have implemented a lot of different design elements and techniques across the KOASTAL studies to really minimize this and ensure replicability from Phase II to Phase III. Can you talk a little bit more about these? And what specifically you guys have put into place and how that's been going in kind of real-world implementation?

Yes. So I think as we think about it, there's 2 elements. So there's the design and then there's the execution. So from a design perspective, we feel like we've implemented the right metrics. So as everyone is well aware, the biggest response in our Phase II was in the moderate-to-severe population that is the population we're studying in Phase III. We've changed the primary endpoint from the HAMD-17 to the MADRS. We think the MADRS is more appropriate to capture the benefits of this pharmacology. And the primary endpoint is 6 weeks, and we think that, that will mitigate some of the placebo response. In terms of the execution side of things, there are a number of elements. First and foremost is selecting the right sites. Our Phase II had about 40 sites. Our Phase IIIs will have about 50 sites. So we were leveraging the best sites from the Phase II into the Phase III. We have central raters that are confirming the baseline MADRS scores to ensure that we have the right patient population. And there are a number of other metrics that we are implementing to ensure that the execution is on track. We're looking at blinded metrics and a number of other measures. So we feel like the changes from Phase II to Phase III really helped to mitigate the placebo response.

Great.

And nothing to add.

Okay. We often get asked how your drug differs from J&J's core antagonist, aticaprant, which is also in Phase III with data presumably reading out by year-end. Can you give us a sense of what you view as the key differences between the 2 drugs in terms of selectivity, kappa receptor occupancy for navacaprant versus aticaprant? And where do you see this providing the potentially the biggest advantages? And certainly, 2 drugs in the same class in MDD can coexist. But just curious where you might see potential distinction or similarities?

Yes. Brian, I'll take that one. I mean with navacaprant, I go back to the original discovery of it, and that was worked at Scripps. And it was all around trying to get as selective a compound as possible to really selectivity for kappa over mu and other opioid receptors. So we're around -- in one particular assay, we're about 300-fold selective over mu compared to aticaprant and other molecules, sort of which we believe are around 30. And I think it's that selectivity which really does drive our differentiation. And then I'll fast forward to the safety data we have so far with navacaprant, if you look our Phase II study, as we know as we've released, it's exquisitely selected with very few issues. And I think that's because of our ability to push up the dose to get to an occupancy of around 90% of steady state. And we've shown that with a PET occupancy study. We feel with the other KORAs because of the reduced selectivity, they start bouncing into, in particular, mu antagonism, and that does start to drive some of the side effects. Recently published aticaprant study, you do see some diarrhea, some pruritis and -- but with the pruritus mechanism is TBD, you can really see they're starting to [ hit if ] you compare to what we saw in Phase IIa where we really saw very rarely no pruritus. [indiscernible]

Okay. I wanted to drill down on that point a little bit more. I guess, like how much do we know about the toxicities associated with antagonizing other opioid receptors? And I guess, like how much do we know about antagonizing mu being linked to GI side effects and possibly pruritus versus just perhaps differences in receptor occupancy or bioavailability or biodistribution as being [indiscernible]?

I certainly think the GI effects are thought to be [ mu ] mediated.

Yes.

On the pruritus, you can go into the literature, there are some -- there's some very elegant papers now and reviews talking about the roles of mu or kappa. I really don't think it's clear. For us, we feel it could be a combination of both. We did see in our Phase I studies a small incidence of pruritus at high doses in the SAD study. So clearly, whether that's kappa or we're bringing in a little bit of mu at those much higher exposures is unclear. So it's still TBD, I think.

Yes. But I think at the end of the day, the pharmacology debate is all around selectivity, and we feel like you've got the most selective molecule by far.

Yes, I think it's really a 10 -- again, yes, assay to assay, but in our hand, a 10-fold difference, so.

Okay. In the Phase II study, which had supported moving into Phase III, you guys have seen the best effects in the moderate-to-severe population. Can you remind us why you think that was? And why these drugs don't work as well in a more mild population? Is it because just the moderate-to-severe patients tend to be more responsive to pharmacological intervention in general? Or is it because there's maybe less dynamic range to show an effect in a milder population? Or is it a combination or both or something else?

Well, I think part of it, Brian, is it's clear with the FDA's 2018 guidance document on MDD clinical trials that they've even established that mild patients tend to have a higher placebo response. They just want to get better. And so as we look at it, the moderate-to-severe population is the right population to look at in pivotal studies. It's consistent with what other sponsors have done. And so that's one of the key reasons that we're moving it forward.

Okay. It's certainly the more traditional path, so it would make sense. Josh, you alluded at the beginning to the use of MADRS as the endpoint versus HAMD in Phase II. Can you maybe elaborate a little bit more on just the decision to move to MADRS? How it might impact your ability to show a treatment effect and maybe even an expanded treatment effects and how it impacted your powering assumptions?

Yes. No, absolutely. So both the HAMD-17 and the MADRS are scales accepted by the FDA for registration on MDD studies. The HAMD-17 is a score that's based on somatic symptoms as well [Technical Difficulty].

Yes, we're good.

All right. Perfect. So HAMD-17 is a scale that has a number of symptomatic domains, including core depressive symptoms as well as a number of somatic measures. We moved to the MADRS because we feel it captures the pharmacology better. It consists of 10 items. Half of them are really based on the core depressive symptoms. The other half based on anhedonia, and given what we showed on SHAPS, we feel that, that is a much better scale for us. And if we had frankly kicked off the Phase II, that isn't the scale we probably would have be used. So we feel like the MADRS is a much better scale to capture the core pharmacology. We've seen with J&J's Phase II data that they were able to represent a very robust treatment effect in that scale.

Good. Short of going through all the details on the statistical analysis plan. But I am curious to know some of the strategies that are going to be used to analyze the data here, particularly accounting for discontinuations, statistical methods that might be employed for imputation of loss of data for any dropouts. And maybe how that compares in Phase III to what you've deployed in Phase II?

Yes. So I think, Brian, the key thing is Phase 2 was run during the pandemic. So there was obviously a number of patients that were lost for discontinuation or lost to default. I think what we're seeing so far through Phase III is we're quite pleased with what we're seeing on a discontinuation and/or rollover basis to the long-term extension study. In terms of the statistical analysis plan, we're not going to comment right now because we're still working on what is the final approach. But as you think about what the psychiatry division of the FDA has accepted, they have accepted a wide range of MMRM, LOCF and other measures as we thought about it. So as we lock the database and think about the statistical analysis plan, we will come up with more detail.

But you're happy with what you're seeing in terms of the dropout rate so far, it sounds like?

Yes. Yes. As most sponsors would say, we are very happy with what we're seeing today.

Good. Can you talk about the disclosure plan for the Phase III? What level of detail would we -- should we be looking for in the top line press release? Is this something that will be press released and also presented around a medical meeting? Or how should we look for the disclosure later this year?

Yes. So part of it is, Brian, is an emerging growth biotech. We're obviously -- this is a material event, and you will disclose it as we see fit. But I would expect that we will disclose key efficacy and/or safety data once we have it in hand internally. And we're actually quite excited to put that out later this year.

Good. What do you think the FDA's bar will be for approval? How many studies do you think will need to hit?

So if you think about it, it's obviously 2 studies. We're running 3. Statistical significance will be the key bar. I don't think they're looking for an effect size. I think what they will be looking for is statistical significance and a clear demonstration that navacaprant is superior to placebo.

Yes. And then monotherapy [indiscernible].

Yes. Which, as we know, the monotherapy commercial setting is much larger than the adjunctive setting.

Yes.

Can you maybe elaborate a little bit more on that in terms of, I guess, how you see the competitive landscape evolving with -- you're looking at monotherapy, J&J is looking at adjunctives. How do you envision physicians -- assuming both are successful, how do you envision positioning where will -- how will physicians potentially choose amongst different agents and how often are these used -- would you expect these to be used as monotherapy versus adjunctive? How specific do you think the labels will be?

So I think one thing is clear. 75% of scripts are used in the monotherapy setting. So monotherapy is by far the largest commercial opportunity. I think J&J came out this week and said they plan to run monotherapy studies for aticaprant post approval. So I think that, once again, validates the fact that monotherapy is the largest commercial setting. And so as we think about how this will be used, we view it as novel mechanism. We haven't seen a novel mechanism in MDD in about 30 years. Very simple dosing paradigm once daily. Efficacy across both depressed mood and anhedonia, which we haven't seen before with existing agents. And a safety and tolerability profile that is fairly unprecedented, we didn't see any rates of AEs over 5% in our Phase 2, higher discontinuations [indiscernible]. So just with this patient population, the AE profile can really drive patients seeking treatment.

After KOASTAL-1 reads out, the first of the studies, might there be opportunities to make any adjustments to KOASTAL-2 and 3 in terms of endpoints or size or anything else, at least that's something you would consider or be willing to do based on the KOASTAL-1 readout?

Yes, there's absolutely potential. We're not going to disclose the exact plans, but KOASTAL-1 will read out in the fourth quarter of this year, KOASTAL-2 and 3 in the first half of 2025. And so as most sponsors would do, if we do see something that would require adjustment, we'll absolutely [ bake in ] flexibility to do that [indiscernible].

I think this week, you guys announced that you're moving into -- you announced a little bit more about the movement into bipolar depression. Can you elaborate a little bit more around that? Maybe just talk about the mechanistic rationale for studying a core antagonist in bipolar? And maybe just talk a bit about how you arrived on the trial design.

Yes. No, sure, I'll start on that. Yes, no, so really excited to issue that press release this week. So taking navacaprant into a second indication. And I think our core rationale is really based on the impact of navacaprant on depressed mood and anhedonia in our Phase IIa combined with what we've seen with aticaprant in the FASTMAS study on SHAPS. And obviously, the [indiscernible] Phase II data. And as we think about bipolar depression, depressed mood, and I think a greater appreciation of anhedonia in that disorder. So that's really the core. And there's some -- I think in terms of the sort of underlying pathophysiology of anadenia in bipolar depression, again, we really see KORA mechanism having that potential to hit that. Again, as we see what's our primary will be, will be MADRS again. And as we know, that scale, as Josh has said, is sensitive to the KORA mechanism. So again, we feel really great about getting this study going. Josh, anything more?

No. I think Nick hit the key points. But part of it is, we understand that within MDD, 70% of patients have pronounced anhedonia, which is clearly a symptom that navacaprant and the core antagonists move. Within bipolar depression, if you look at some of the literature from Roger McIntyre or other KOLs, that is just as pronounced. And MADRS is the FDA accepted endpoint for both of those. Half of the questions on the MADRS are based on anhedonia. And so we think that this pharmacology can move the symptomology in both of the disorders.

Great. Maybe shifting gears to your M4 PAM program. I know you had a recent setback with the lead program. Can you talk a little bit more about, I guess, where you stand with regards to that drug, 266, where some of the backups are and kind of the latest status?

Yes. So I think, Brian, given that we're in ongoing discussions with the FDA on path forward 266, we can't say a lot more than what we put in the press release. But I think given the great work that Nick and team have done, we feel really good about where we are with the backup programs and we'll be back out in front of the investment community with path forward and/or where we are with the backup compounds quite soon.

Okay. And can you maybe just talk -- recognize you sort of can't go into sort of the path forward for 266 while you're involved in regulatory discussions. But maybe, I guess from an analysis standpoint, now that you've had a little bit more time to kind of sit with the preclinical data. Can you give us any more color on this rabbit tox, I guess, whether selection of the species may have augmented any toxicity, given that you didn't see anything in the Phase I? And I guess was this -- I guess, anything more you can say about some of the studies? Is this something that was replicated in other species or might this be isolated to rabbits?

Yes, sure. Brian, I mean, as Josh said, we can't say too much at the moment just because of where we are [ with the ] dialogue with the agency. But just to say, we filed our IND and we're able to go into a Phase I study based on a very sort of classic tox safety package in two species. So I think that -- the rabbit study was not part of that, so that is distinct. But I know, as Josh said as well, we'll hopefully be coming back to talk to everyone really soon with the progress on our 266. But also, we've always said this, [ based on ] just around one compound in the franchise, we've worked very closely with our partners at Vanderbilt to identify, characterize, bringing forward a number of structurally distinct, potent, very selective M4 PAMs to give us some real optionality. So it's always part of our strategy as in all of our key programs.

Can you talk more about, I guess, where the backup, the next generation programs are status-wise and how different or similar they are?

Yes. We're not giving specific guidance right now in terms of where the backups are. But I think, Brian, as we've talked to you in a number of investors and publicly about the backup strategy and follow-on strategy was always something we're very, very focused on. And so we will come with an update quite soon.

Yes. And I know you guys have always talked about a suite of assets through the Vanderbilt collaboration. So good. We're looking forward to that. Maybe just lastly, I know there's so much else to cover in the pipeline, but just in the last few minutes, can you give us your thoughts on, I guess, the NLRP3 drug that you have in development for Parkinson's, I guess what you're -- how you're thinking about that mechanism? And then I guess, any thoughts on potentially exploring that in other indications like weight loss?

Sure. Yes. No, again, really excited about NLRP3, one of the key assets in our preclinical portfolio, homegrown program, which we started when we know in the early days of the company. Again, we really do think NLRP3 is this sort of key regulator of the innate immune system, has a role in Parkinson's but potentially other neurodegenerative disorders. Looking at the area right now, it's exploding, particularly the number of other sponsors moving forward in Parkinson's disease. So yes, that's where we're focused and we really built our rationale. Again, a lot -- the field has seen a recent publication of work from another sponsor in looking at obesity. So again, as always, being diligent as we are, we considered that. And as we go forward, we'll certainly consider other options. But you may have also seen, we went into a sort of funding arrangement with U.K. Parkinson's organization, Parkinson's Virtual Biotech, which they announced recently. So we're very much focused on Parkinson's disease and really trying to have impact in that disease area.

Yes. I think one of the other things, too, is we feel like we have best-in-class pharmacology and we're just going to keep progressing that.

No, exactly. Again, when we started that program, we knew the limitations of the molecules at the time or we're just very much focused on delivering a highly centrally penetrant selective NLRP3 inhibitors. And it's always -- the field is exploding. So there's a lot of learnings happening right now. So we're excited to be in amongst it.

Good. Maybe just in the last minute or 2, there's obviously a lot else in the pipeline that you guys don't talk about as much or maybe don't get asked about as much. What would you highlight as being sort of the next thing that you guys are most excited about that we should be paying attention to?

Yes. So obviously, it's very clear that we're running the Phase III studies for navacaprant in MDD, the KOASTAL program, we just initiated the bipolar depression study for that. I think there's a range of other indications we could go with navacaprant. I think one of the underappreciated assets is 511, the V1a receptor antagonist. We communicated a couple of weeks ago when we put in our first quarter earnings announcement that we will be initiating a study in Alzheimer's disease agitation with that program this quarter. And so I think we remain quite excited that is a population that needs new novel medicines. If you look at what is approved today, those are not purpose fit for the elderly agitated population. We think this pharmacology can really work there. And so Brian, as you're thinking about what is something we don't talk about or underappreciate, I really think it is 511, and it is close to going into a proof-of-concept signal-seeking study.

Good. We'll certainly keep an eye on that. And very much looking forward to the near-term data readout by the end of this year for navacaprant. So Josh, Nick, thank you guys so much. Really appreciate the update.