Praxis Precision Medicines, Inc. (PRAX) Earnings Call Transcript & Summary

Okay. I think with the time started; we'll get on with today's session. So good afternoon, everybody, on today's second day of the Global Healthcare Barclays Conference. Charles Pitman-King. I work on the European Pharmaceuticals and Life Sciences team, covering mid-cap pharma and life sciences. And it is my pleasure to be joined today on stage by Praxis Precision Medicine CEO, Marcio De'Souza; and CFO, Tim Kelly. So, welcome, gentlemen.

Thank you so much.

So obviously, I don't cover Praxis, but I cover UCB and Lundbeck. I'm quite familiar with the kind of epilepsy space. I know that you guys have the EMBOLD trial relutrigine. I think I pronounced that correctly. Looking at the developmental epilepsies. Now, this is obviously an increasingly competitive space with Lundbeck acquiring Longboard, bexacaserin with Fintepla, obviously from UCB involved in Dravet and LGS. And obviously, now Biogen stokes, Zoranersen. So, given this increasingly competitive landscape, what is it that gives you confidence around your product? Around really providing a differentiated offering?

Yes, absolutely. Thanks for having us, and thanks for the question. I think it's quite important. I'll take a step back here and say that a few years ago, we not even know what GEs are, Mike, as an investment community. And now we are talking about how interesting, competitive. So, a huge advance there. And to be honest, that we can actually sit here and have a conversation about the impact of EMBOLD and hopefully others as well in this space. The fortunate part is that, right? We're bringing huge awareness to this, realizing how important it is to treat patients with those intractable conditions. The sad part is that we are doing a rinse and repeat, a lot of the names that you mentioned that, no fault of their own. It's going back to the same subset of patients. Like same indication where arguably, the unmet need is still pretty high, but astronomically smaller than the rest of the disease space, represent anywhere between 15%, 20% of the total space and the rest are still like suffering and really not being treated. The proposition for relutrigine through EMBOLD and through MRODs and other studies are going to have really some up and running is actually to have a more encompassing approach to disease in general. So, while I could and one would use the word competitive. I think what we are really doing is to bring in a lot of options for some of the subsets and the new options for the overall population with GE. So why relutrigine could do that and other, including many that you mentioned that could not, right? There are only a few fundamental mechanisms when we are actually addressing intractable seizures in patients with developmental an epileptic encephalopathies. And the most fundamental of them is modulation of sodium channels. It's known for decades that that's something quite interesting. What is not known for a very long time is how to do it, right? We had like a big sledge hammer before, and what we really need is like precision welding. And I think what we got is now precision welding with relutrigine, and we're very excited to move towards that. We tested the water last year on the first study. And what we've seen was not only incredibly nice reduction in seizures over 46% at 16 weeks, we've seen a nice progression, right, with about 30% early, 46%, 16 weeks, 77%, 9 months. But maybe the most important part of all of that was over 30% of the patients were seizure-free, and that has not been seen. And they were more alerts, more communication was better interaction with their parents. So, when you get that entire gamut of benefits these patients were having got us incredibly excited about expense. Fundamentally, you cannot have a seizure without hyperactivity driven by sodium channels. So, if we can just close that gap and regulate a little bit more, the leak, and no pun intended because one of the ways is through persistent currents, there is a leak current, we would be able to stop and really restore neurological activity for these patients that are neurotypical versus atypical here. So that is the proposition of that and why I more than welcome others in this space, because I think we're all helping patients at the end, and that's what all of them are really attempting to do.

Yes. And so, in terms of that, I think, quite clearly lays out the proposition of the product itself. In terms of what we're waiting for from the Phase III EMBOLD study, like what should we really be looking to interpret? And how is enrollment progressing for that second registrational cohort? Is that still on track for 1H '26?

Absolutely. So EMBOLD, the first cohort was way better than we expected. When you look into the lifelong of these patients, which is not very long, unfortunately, but to this point, very minimal effect, if any, with any drug. And at the stage they were, that we got them into the study, which was the most severe ever in any study. There was no hope to have much of a reduction in seizure let among the other benefits that I mentioned before. So, replication of these effects would be quite fantastic, not needed, but quite fantastic, and that will lead to a potential registration of the drug in the U.S. and elsewhere with that. Our current guidance is no later than first half of next year. The no later than comes from our confidence on the rate of enrollment right now. We expect to continue and it continues on the earlier part of the guidance. If it for any reason, we have a little bit of a setback as happens continuously is on the later. Instead of giving guidance, we just said no later than first half of next year, but very, very excited towards that because the unmet need here is huge. There's no competitors. There's no one else developing anything late stage. So, the ability to fundamentally change the life of these families is right in the corner.

Just to the point about no one else being late stage, maybe if you could just kind of highlight then the difference between relutrigine and bexacaserin. Obviously, Longboard have been talking about trying to pursue a broad DEE label. Fintepla hasn't been already on the market. It's just Dravet, just LGS looking to bring in CDK5. Like where are you positioning within that current setup?

Yes. So, when you're looking into what is being shown versus what is being said, not necessarily 100% match there, which I'm actually fine with. But what is actually clear is some of this mechanism, the serotonergic mechanism works really well in LGS and Dravet. And then there's a little question mark on what other DEEs really mean. So, at the moment, we actually see genotypical data from those patients. I'm going to start believing with all the respect that there were patients there that were not actually LGS misclassified until such day. I think we have to believe on the data set that has data that is ours, and it's only ours. And of course, that it's much easier to extrapolate from a true versus to a hope. Hope is wonderful, but I prefer data.

Makes perfect sense. So then moving on, NBIX had a Nav1.6 asset, which they discontinued. And so how confident are you in your asset given this apparent step back to the space? And is this coming down to a differentiation on the chemical motif or study design?

One of the most beautiful things in science, right, is that we can have a fundamentally different hypothesis on how to solve a problem, and a priority or even a posteriority that is no right or wrong. That was just the approach that were taken and the data that was extracted from that. And from the very beginning, the approach that was taken with 352 was that you can just completely block the Nav1.6 channel, actually interact in the channel. And with that, they're going to be control of seizures, like actually relatively sound at face value. Our approach with relutrigine is like you can never do that because there are fundamental physiological functions that go through those channels as much as pathological. Like no one is born with a channel that was there just to be abnormal to create seizures, right? So, we took different approaches. I think sometimes when you take a different approach, you are, at the end, not what you want. And what you're seeing of that mechanism that we are always a little bit concerned is that Nav1.6 is really, really important for many functions on neuronal function, including for propagation of the action potential. So, we always thought it was a really bad idea, to be perfectly honest, to take that approach. But as scientists, de facto at heart, we have to be open to be wrong. We took, again, a very different one, knowing full well that you can never completely block 1.6. It's been demonstrated again and again that will be toxic. We generated a fair bit of data showing that, that drug had no chance because of the mechanism. We have a completely different mechanism of action. The proof is on the fact that both of them were tested, and one of them worked, and it's relutrigine. So, I think we can use the data and the evidence and move on there as well.

Excellent. So maybe then moving to your kind of other developmental and epileptic encephalopathy products. You've got PRAX-222, which is elsunersen. I believe you've been in conversations with the FDA. What's the latest feedback from those meetings you've been having? What's the outlook there?

So, 222 or elsunersen is a gap antisense oligonucleotide right to reduce the expression of MAV1.2. So, patients with this condition are born with mutations that -- a majority of them are de novo. So, this is not like mostly a familiar condition where there is so much expression that they really have seizures all the time, significant developmental delay, and many other conditions associated with that. So, the idea was, can we reduce the expression and then restore better physiological function on those patients, we did a proof of concept in 4 patients, showed quite exquisite data at 1 milligram per month delivering critically. So very low dose, very effective. We sat down with the FDA. We talked to obviously a lot of experts in the field. And the feedback we got, which was quite positive is that our registrational package could be a 24-week study, once a month. I think we can all debate whether or not sham procedures are ethical or appropriate in this. But unfortunately, that's the tool we have right now. So, it's sham-controlled, and that would serve as a registration. We're about to start that study next quarter. We expect if we can count on the interest, we have today to be a relatively short enrollment period, so we could report results next year for that, and that should serve as registration.

Brilliant. And then I think one more is PRAX-020, which has recent -- I think we've just had progress on your partnership from UCB with like signed to buy into that asset. So, what's the latest on timing there? How is that partnership progressing? Given there's kind of no approved treatments for that KCNT1 epilepsy subset, how many patients might that reach?

On the broken record part of this chat, I'll keep saying how complex those diseases are, right? KCNT1, really nothing works for these kids. It's a 24/7 like support from their parents and caregivers, and really everything to attempt does not work. So, at the time, the company had a very nice proof of concept in animals. We really didn't have the capital to develop the drug. So, we thought a partner that cared about moving that forward was quite important. There were people who are quite interested on that, but I think no one at the moment cared as much. And for us, it's important to get the drug to patients. We had somewhat maybe unusual arrangement where we're looking for molecules when we were doing a lot of the biology, they were doing a little bit of the chemistry. We're working together. We beat the time line by over a year. And I think that is an incredible testament to both teams, right, working really to solve this problem. Late last year, they decided to exercise the license to take the program. And while I have some insight on how it's going, I think it's respectful to them that they would give the updates. I can say that both teams are incredibly excited to help these patients.

So maybe then just double-clicking on that kind of UCB relationship. Obviously, you have been working closely on this asset. UCB is the kind of leader within the epilepsy field for a number of years. It's also trying to continue to innovate itself whilst BIMZELX is what's taking most people did interest, but Fintepla is doing a great job there, Vimpat like BRVIA, whatever. How do you see UCB's partnership is critical for your future relevance from a commercial standpoint for your future products?

I think something that's quite validating for us, and maybe we don't get enough credit for that is the fact that we were a little bit of the underdog here, right? So, if you were bets on a dog that run a lot of races and one that never run a race to develop a drug for a condition general space, logic would tell you too bad on the first one. But really, this is our compounds, right? This is something that we got to the clinic. We're super, super excited to be there soon, which should actually show to many, not necessarily UCB on the value of having people that really understand this part of drug development and discovery as we do. They did an exquisite job throughout the years on moving drugs along, getting successful drugs to patients. I believe Keppra is still the most prescribed drug for epilepsy in the United States. So, kudos to them. I think they definitely know how to do their job. And we look forward to continued dialogues with them and with many others that are interested in epilepsy.

Do you have any -- I mean, pardon my ignorance, but I mean what are the relationships do you have with them? What are the kind of terms of the agreement that you've got for PRAX-020.

Yes. We philosophically are believers on very narrow agreements since we have a lot, and we believe there's a lot of value on the other things. So, the only rights they have right now are exclusive for KCNT1 to the point that if the molecule works for other indications, as one could argue it can work, they cannot even test for those indications. So, if there is an interest, we are reasonable people. We sit down; we have a conversation. But right now, it's a very strict and we'll keep everyone strict because we care about contracts.

Okay. And then maybe just you mentioned again the kind of KCNT1 is a relatively small subset of patients, very high unmet need. What sort of proportion of the epilepsy market does that account for in terms of those with unmet disease?

It is fairly small in numbers, in absolute numbers. But one thing I'm going to say, and it's an incredible job that Justin West, who is the President of the KCNT1 Foundation in the United States and then did on characterizing these patients. This is really a market that is completely ready. If we compare with other rare disease markets before, this is not small. This is not one that you compete with anyone, and this is one that patients like desperately needs. So, I would make the commercial case on the other side. Quite interesting market and exclusive. It might as well be something that the kind of the winner takes it all here. There are very few markets like that. And that's why advancing very quickly is so important, opens the door to a larger community in GE as well. Like there are many who needs treatment. We believe we're going to address virtually all of them with relutrigine, but there are certainly more that can be done and competition is a wonderful thing. It makes all of us better.

So maybe then just coming back to relutrigine, given you are moving into these later stages, what is your commercialization plan for this asset?

Yes. So, we have a 2-pronged approach for that right now. So, the first registrational studies EMBOLD reading out no later than early next year. That would be the first NDA. We are running a larger DE study, EMRAD, that would be likely an sNDA if everything goes well. We feel more than capable of commercializing ourselves. To give an order of magnitude here, we're talking about 200,000 patients in the United States alone that would be the 10. So, you can back calculate that and see how important of a market that would be. So, we feel incredibly confident, but also certain that others are going to be interested on that, and we're very open to any conversation.

Understood. I think there's kind of one more slightly earlier phase product to really touch on for this session is vormatrigine, your PRAX-628 focal epilepsy product. So, you've just had the Phase IIa results. And so, what is the update on that? How are you feeling about the product going forward?

Yes. vormatrigine or 628 is the kind of molecule that you would never imagine would actually be able to figure out, right? The holy grail in focal epilepsy and epilepsy in general is something that can stop seizures, but be safe and be convenient. And while there are early days, and I'm going to be cautiously optimistic here is delivering on everything so far, right? It's very active. It's very potent, a low dose, no DDI that is limiting. No food effect, once-a-day drug that if it pans out to be what we expect to in the 2 studies we're running right now, which I'm going to go into in a second, this is going to be by far the best drug ever developed in epilepsy. We have RADIANT coming up midyear. It's about 50 patients, primarily focus on seizures. What we're looking to achieve there is really clear reduction in seizures with a very clear safety profile that reinforce what's come next. What coming next is only a few months away by the end of the year with Power 1, your more traditional 12-weeks parallel group study. Of course, we're seeing something -- we expect to see something quite competitive there, which would drive not only on the seizure reduction number that everyone gets a little bit obsessed, maybe a little bit too obsessed. But in the #1 thing that makes patients only stay on drugs right now that is actually safety. So, you can get a combination of safety and response, which we expect to, of course, with the fact that we are talking about a drug that is incredibly easy to be given or taken by the patient would be fairly, fairly confident. In between, we'll start the second registrational study, Power 2, which would allow us, all things considered and going well to have the 2 registrational drug trials -- apologies next year, which would enable for an NDA. So that's the proposition there. There are other people in this game. There's a lot of respect for the others developing drugs. They are definitely doing God's work, and we look forward to compete with them and to show the profile of this drug.

Makes a lot of sense. I do want to leave a little bit of time to talk about kind of your U.S. tariff policy outlook. But maybe just one step back question, more kind of ethereal. Given you're focusing so much on the neurological space, is a very hard area to change the treatment paradigm, you've got some very exciting early-stage assets. What is it that you guys do at Praxis that gives you that level of confidence that you can achieve what others haven't?

Yes. Epilepsy is where we started, right? It's where our co-Founder, Steve Petrou, who is our CSO, spend most of his life and really trying to understand here. So, we're kind of back home. With epilepsy we feel very comfortable there. We don't sleep. That's one of the big things. We take this very seriously. We work incredibly hard. We're also a first principles company. So, I think we're looking to how these neurons work and how these channels work, and how we can help these patients really with the most solid scientific base, but on the other side, with the most urgent execution as well. I think that that's where the difference pans out. And I'll let Tim tell us about policy.

Yes. Well, I would just add on to that as well. I think we challenge ourselves with are there better endpoints that we can be using? Are there more innovative trial designs that we can be using, all of which is the purpose of trying to bring these medicines to patients sooner. Our company logo is dare for more, and it's really something that we all hold ourselves accountable to.

Yes. And so then just in the final minute of our chat today, could you just give me a little bit of an update on the kind of U.S. political and regulatory landscape that you see? Kind of what are you expecting in terms of any potential supply chain disruptions or how FDA communication has changed with you guys to date? And maybe just on the kind of NIH funding outlook, less problematic near-term, but maybe over time, that could have a bite.

I'll hit a couple of them quickly and leave room for Marcio. I think we're self-funded in terms of our research right now. We have regular interactions with the FDA, given the breadth of our portfolio. We have found that to continue to be in very good stead, and they continue to be a helpful partner for us through this. And in terms of supply chain, we have majority of it is in the U.S., but we also have vendors outside the U.S., continually looking at where we use second suppliers, if necessary, also ensuring we have rigorous contracts that don't disrupt any of our work as well, and we'll continue to keep an eye on it.

And then any final comments, Marcio?

No. So just very thankful for the invitation to be here, and I'm very excited for the many, many milestones we have coming up. So, thanks again.

Brilliant. Thank you very much. And that concludes our talk with Praxis. Thank you for coming, and I hope you have a good rest of your day.

Thank you.