PYC Therapeutics Limited (PYC) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. A very warm -- literally, a very warm welcome to the 2023 Annual General Meeting of PYC Therapeutics Limited. My name is Alan Tribe. I'm the Chairman of the company. And here with me today, I've got, on the extreme left over there, are Rohan Hockings, the CEO; and Andrew here, Andrew Taylor, who is the CFO and Joint Company Secretary; Kevin Hart, who is the other Joint Company Secretary, are all here. Our co-directors from the United States send their apologies. Today is Thanksgiving in the United States or at least Thursday is. And that's -- and so that's the most holiest of days, I think, over there. And so they're engaged in Thanksgiving-type pursuits. So they send their apologies. There is a quorum present, and therefore, I can declare the meeting open. The format for today's meeting will be, firstly, my Chairman's address, and that will be followed by the formal business of the meeting. And then after that, we will hear from Rohan with an update of the company's progress and future outlook. A copy of the notice convening the meeting has previously been made available to all shareholders. And that sets out in detail the nature and purpose of the resolutions to be considered here today. I propose to take that notice as read. All in favor or happy with that? Thank you. Okay. First, the Chairman's address. In the annual report which was released just a few weeks ago, I foreshadowed that important results from the company's fourth drug program were imminent. Those drugs were announced last week, and they relate to a program to discover a treatment for polycystic kidney disease, which we refer to as PKD. PKD is the most prevalent inherited kidney disease and affects one in every 1,000 people worldwide. So there are more than 5 million people that have this disease. With high rates of morbidity, it is a major area of unmet patient need. Half of all PKD patients require a kidney transplant by the age of 60 due to end-stage renal failure with dialysis being another treatment option. Currently, there are no drugs available that address the underlying cause of the disease. PKD is shaping up to be the most valuable asset in the company's drug development pipeline. The company already has one drug in human trials for the treatment of the blinding eye disease RP11, and 2 more drugs are scheduled to begin trials in 2024, one being PKD. Each program is being rapidly advanced to provide relief for patients as soon as possible. Following the successful completion of clinical trials, those drugs will enter the market and provide treatment for diseases where currently none are available. On current projections, PYC should have its first drug in the market in 2027. Importantly, this will mean that the company will derive revenue and potential returns for shareholders. And activities have now transitioned from high-risk research into trials and development of drugs, which should provide a sound commercial base for the company to underpin its future. It is indeed an exciting time to be part of the PYC journey as a future patient, a shareholder and/or a team member. Okay. That's the end of the Chairman's address. I'll move forward with some formalities now addressing proxies. The company has received valid proxies from 104 shareholders holding a total of 786 million-odd shares, representing 21.1% of the issued capital of the company. After each resolution is displayed on the screen, I will invite questions from the floor. I'll be limiting questions to the motion being considered. An opportunity will be provided for shareholders to ask questions on the resolutions. I would ask you to state your name for the record when you address the meeting. In my capacity as Chairman, all resolutions today will be decided by a poll rather than by a show of hands and a vote. So accordingly, the resolutions will be for discussion purposes only. The poll will be taken once we've been through all of the resolutions. Ballot papers were given to eligible shareholders at the time of registration, and I will ask you to complete these. The poll will be taken results of which will be announced to the ASX later today. I will further explain the procedure for the poll at the time. Note that each shareholder at the meeting can only vote with his or her personal shareholding. Only proxies lodged with the company up to 48 hours before the meeting can be counted in the vote. Right. We'll now proceed with the business of the meeting. So first of all, the annual report. The first item on the agenda is the consideration of the financial statements, the directors' statement and report and the auditor's report for the financial year ended 30th of June 2023. All of which have been made available to shareholders in accordance with the requirements of the Corporations Act. The company's auditors, PricewaterhouseCoopers, are represented here today by Adam Thompson, in accordance with the requirements of the Corporations Act, and he is available to address any questions or comments from shareholders on this agenda item. So are there any questions or comments in relation to the annual report and financial statements? Very well. There's no requirement for a vote on this item so we'll move on to the next item, which is resolution 1, the remuneration report. The next item relates to adopting the remuneration report. Further details, including key management personnel, which include directors, voting prohibitions and the voting of undirected proxies, are included in the notice of the Annual General Meeting dated 12th October 2023. The remuneration report is set out in the annual report. In accordance with the legislation, the vote on the resolution is advisory only, and does not bind the directors of the company. However, the Board will take the outcome of the vote into consideration when reviewing remuneration practices and policies of the company. And we'll all be aware of the ramifications of adverse votes in the remuneration reports. I now refer shareholders to the screen displaying the resolution in full and the valid proxy results. And you can see there that the large proportion of proxies in favor of the resolution. So I now formally move that the resolution 1 be put to the meeting in the form set out in the notice of the meeting. Very well. Is there any discussion on the resolution? Okay. Well, as I say, this will be determined by poll towards the end of the meeting. So we'll move on to resolution #2, which is the reelection of one of our U.S. directors, Dr. Mike Rosenblatt. Mike is, by way of background, a former Chief Scientific Officer of Merck in U.S.A. He is a very distinguished scientist and well known throughout the pharma community in the United States, and we are indeed fortunate to have him on the Board of our company. He makes a major contribution due to his experience, his connections and his big pharma experience to date. So he is indeed a valued member of our Board. And I'm now -- we got the resolution up here again. And I now formally move the motion -- the resolution to be put to the meeting in the form set out of the meeting. So is there any discussion? Very well. So that will be put to the poll later as well. Resolution #3, approval of the long-term incentive plan. The resolution is there. Thank you, Andrew. I formally move that resolution 3 be put to the meeting in the form set out in the notice. Is there any discussion on this resolution? No? Thank you very much. Once again, we'll get a chance to cast a vote through the poll later. Resolution 4, reinsertion of proportional takeover provisions. The resolution again is on the screen with the valid proxy results. I now formally move that resolution 4 be put to the meeting in the form set out in the notice. Are there any questions on this resolution? Very well. Thank you. Okay. So it's now time to take the polls for resolutions 1 to 4, and the representative from the share registry will act as the returning officer. Recent changes to the Corporations Act have changed the law in relation to the obligations of proxies to vote where a poll is called on any resolution. If the proxy is the Chair of the meeting at which the resolution is voted on, the proxy must vote on a poll and must vote as directed. If a proxy is not the Chair of the meeting, the proxy need not vote on the poll. But if the proxy does so, the proxy must vote as directed. Are you still with me? Good. If you are a proxy holder with open votes, you may vote as you wish. You've been handed a ballot paper for the poll on registration this morning. The resolution upon which the poll is being taken is to be set out on the ballot paper by you. That is resolutions 1 to 4. You should record your vote by placing a cross in the either for or against boxes on that paper. You should also print on the ballot paper your name if you're a shareholder or the name of the shareholder whose proxy representative or attorney you are. If you hold multiple proxies, please state this, and we will complete the information from the proxies. Okay. So on to then completing the poll. So just moving to that, please. Thank you. This is the collection process. Is there anybody else who can help? Have all those ballot forms now been collected? Very good. Okay. It appears that the process then is complete. And as I said earlier, the results of the polls will be announced to the ASX later. Well, that concludes the last item on the agenda and the formal part of the meeting. I now open the meeting to all members to ask any questions. Does any member have any questions? Bearing in mind that Rohan's presentation is coming next, and there will be further opportunity for questions during and after that. So are there any questions from shareholders? Thank you very much. Well, ladies and gentlemen, that concludes the business of the meeting. Thank you all for your attendance here today. We really appreciate that. I formally declare the meeting closed. Now we come to the best part, which is Rohan's presentation. Thank you very much.

You're building a weight of expectation for me there. Hold on. Hello, everyone, and welcome to PYC's AGM for 2023. Before we begin, I'd firstly like to just say a big thank you to the Board and particularly to Alan. It's possibly not seen by all shareholders, but Alan's role is akin to that of an Executive Chairman through his generosity of both his time and the depth of thought. So a big thank you to Alan. I very much hope that your time for the company is rewarded as we move through a very exciting 24 months coming. And also, we have several members of the company staff here today who have just put in a monumental effort throughout the course of the year. Again, the demands of this job are unlike many others. And I'd like to say a big thank you, [ Paula, Carol, LeAnn, Andrew ] here as well. To our staff, it's been an exceptional year for PYCs. By far and away, the best year in our history, and it's in no small part due to the contributions of our staff members. We are quite a lean and efficient management team. We also have our general counsel, auditors and representatives of the share registry upon whom we rely very heavily as well to keep the company moving. So a big thank you to all of those. Today's presentation is going to be quite informal and somewhat brief. [ Twiggy ] would be happy with me if he were a shareholder. What I'd like to do is to give you all an opportunity to understand a little bit more about the high-level conceptual integration of what it is that PYC does as a company, where we're heading as an organization. And in particular, to complement the 2 more technical deep dives that we've had very recently on the advancements in two of our important programs: one in autosomal dominant optic atrophy, the second program in our pipeline; and the second in autosomal-dominant polycystic kidney disease. So we've dealt with the technical and I'd like to today walk through, in quite an informal and casual manner, the more conceptual and commercial elements of what we do. And in particular, to give you a view as to what to expect over the coming 24 months because we are, as I said, entering a very exciting window for the company. For anyone who's not familiar with PYC, by way of very brief introduction, we are a clinical-stage drug discovery and development company. We are focused on the creation of first-in-class RNA drugs for patients who have genetic diseases, and who either have no treatment options available to them or who have inadequate treatment options available to them. We have a multi-asset pipeline. Each program targets a very large market between $1 billion and $10 billion per annum. There is a very good presentation that has recently been released on YouTube. It's the year-end review from Atlas Venture. It's a highlight of the biotech industry. I'd encourage you all to watch it. Very good section on the internal rate of return of drugs segmented by the size of the target market that they're pursuing. And a very clear take-home message in that context that drugs targeting the blockbuster segment. So drugs that are set to generate annual recurring revenues of $1 billion per annum or more are those that are most attractive from an IRR by a step change in relation to those targeting smaller markets. So PYC is positioned very nicely in that context. We are developing the class of drug with the highest probability of success in clinical studies. If there's one thing that you need to understand about PYC, it's that we operate at the intersection of the modality with the highest probability of success in the clinic being facilitated delivery of RNA and the target with the highest probability of success in clinical development being monogenic or genetically validated targets. There is one problem going on in one cell, and we know exactly what we need to do to fix it. And that correlates or translates to a 5x to 8x higher propensity for success once we move assets into clinical development. Some quite extraordinary numbers coming out in the field. I think everyone had understood previously that we were more likely to succeed in this context, but the thoughts were around 2x to 3x the benchmark of the 10% success rate. Very recently, the evolution in thinking is that it's more like 5x to 8x. So a very, very significant contribution. There is nothing that we can do as an organization that is more profound on the potential of returns for investors in this organization as well as, importantly, the impact for patients as we move these drugs into clinical development than the validation of the target. Does this target do what we think it's going to do? If we modulate it in the manner of the drug that we are administering to this patient, can we expect to see rescue of that disease phenotype? We're going to talk very closely around the multiple major near-term catalysts that we have. We've hit the point. And again, I'm going to borrow from Bruce Booth's presentation, the Atlas Venture. We're turning the cards now. That is the phase that the organization has got to. Throughout the course of the next 24 months, we are going to be taking 4 first-in-class drugs with disease-modifying potential through Phase I, Phase II and Phase III clinical trials. The rubber meets the road in this window. We've hit the most exciting part of a long journey. I had a look back in preparing the presentation today at last year's AGM presentation and the 3 horizons that we set out for shareholders, and I'm delighted to see that we're very much on track to deliver on the promise there. So I thought I'd bring it up and highlight that fact. We would have talked about something else had we not been on the pathway to get there. But we are very clearly aligned to -- something has gone wrong with the formatting there. But we are halfway through -- more than halfway through, in fact, this third phase that we set up in the evolution of the company since Alan and I became involved back in 2018. So in the early days, we were looking at taking a platform technology and working out what we were going to do with it. What do we make of the asset that we've got, how are we going to translate that into value creation and patient impact. In the mid phase for the 2021, 2022 period, we were very much focused on building the capability to translate a molecule into a drug. So the pathway through which we satisfy a regulator that we have got a molecule that is safe and has a prospect of achieving the objective in the clinical trial such that it is capable of being administered to a human. Throughout the course of the last 12 months and what we're going to be focused on through the course of the next 12 months is the translation of multiple assets into clinical development. We are really privileged here. We have a differentiated delivery technology that solves the fundamental challenge for precision medicines in the precision medicine area. If you can do something that nobody else can do, you should apply it in the context in which nobody else is pursuing their objectives and ensure that you are going to have an impact in the lives of patients who otherwise would not have treatment options. So we have this platform technology, we have thought very carefully about where we want to apply it, and we're going to talk through the 4 pillars of PYC's strategy very shortly as well. Now is the time to start seeing the outcome of each of those drugs as we look at whether or not we can establish: first, human safety; and secondly, human efficacy on our path to market. If we expand these horizons to #4 and #5 on the right-hand side of the screen, you get to, in 2025 and 2026, that turning of the cards. We're going to see whether or not we can achieve the impact that we set out to achieve. And it's convenient to call it 2025, 2026. It really starts in 2024. And in fact, now, as we are moving through the single ascending dose study in the RP11 clinical trial, we have a safety review committee meeting scheduled for the 15th of December to move to the high-dose cohort there. That is getting very close to establishing what we call an inferred safety readout. So there is no data available, but you will know from the role of the safety review committee that we would not be able to escalate the dosing in that context in the absence of having seen a clean safety profile in those patients at the mid and the low dose. So keep an eye out for that one. The reason that this is important. I think traditionally, investors think of the fundamental risk in drug development that's sitting in Phase II. If you look at the latest statistics that have come out from [ ICEA ], the highest failure rates are, in fact, in Phase I at the minute. Even higher failure rate in Phase I studies than there is in Phase II, and a 70% chance of conversion from Phase III to market. So that's higher again. Sorry. I don't need to move off that page just yet. So Wave 4, turning up the cards. Wave 5, 2027, 2028, as Alan alluded to in the Chairman's address. It's preparation for a market launch and revenue generation. The reward for the enormous effort that has been put in by the staff members to get us to this point is a phenomenal and organizational-wide change that is going to be coming. The supporting infrastructure, the capabilities, the knowledge required to take 4 drugs with disease-modifying potential through registrational studies and into a market launch is going to be quite extraordinary. So you're going to see your organization change very fundamentally over the coming window. Fortunately, as I mentioned to staff in my Thanksgiving message this morning, changes are constant in life sciences, in particular, at the biotech end of the spectrum. So everyone is quite comfortable with it. It's an opportunity for us to embrace. Very, very exciting time as we are translating this impact into what we all set out to do, which is to change the lives of millions of patients and possibly tens of millions of patients globally with the addition of the polycystic kidney disease drug to our pipeline. So it's against that backdrop and in particular, I am going to borrow again from the Atlas Venture presentation. These are the 3 features of PYC's pipeline and what differentiates our drug. I want to put those in the context to the left of the dotted line of what we call R&D productivity, which has 3 dimensions: risk, time and cost. And I'll relate that back to the strategic decisions that PYC has made. But also to start talking about the right-hand side of the equation, which is the commercial lens. Why are these assets so differentiated in the commercial context? The competitive differentiation of what PYC does extends beyond the technical realm into the commercial realm as well. If you watch the Atlas Venture presentation, you'll see a very high premium place not just on drugs that target blockbuster markets but in particular, drugs that are first in class as well. You know, and I hope that you are familiar with, we've put out a lot of commentary very recently on the necessity of targeting the underlying cause of human biology in the drugs that are moving forward. Not only does it give you the propensity for greater success in clinical development, but from a patient perspective, if you are addressing that one thing that is going wrong, you hold the potential for not just arresting that disease from progressing, but in the context of our third and fourth assets in our pipeline, there's evidence that, in fact, you can reverse that disease phenotype. These are really, really high-impact medicines for patients. So we're very excited in that context as well. If you think about the relationship between that R&D productivity, risk, time and cost and the decisions that underpin PYC's strategy, we are a company that rests our strategy on 4 pillars. We pursue monogenic, intracellular, haploinsufficiencies, validated in patient-derived models. It's a lot to get your head around, but we'll go through it step by step. On the monogenic side, I'm hoping that's clear for you. We are going after single gene diseases, and we are addressing the risk paradigm here, 5x to 8x more likely to succeed in clinical development. That is really quite clear. That is the most fundamental decision that we can make with respect to patient impact and generating commercial returns for shareholders. Intracellular. We're going after problems that are occurring inside cells because we have a unique delivery technology that can get our drug to where it needs to be on the inside of cells. We can do things that others can't. So we are going after diseases where we are going to need to deliver our drug inside every single cell in the tissue that is affected by this disease in order to fully rescue that disease phenotype. Haploinsufficiency describes a situation where you have a mutation in one copy of a gene in which you have 2 copies. And the loss of 50% of the protein that is expressed because one of the genes is not producing protein is going to drive a disease process because there is not enough of that protein present. The very, very interesting thing about haploinsufficiencies is that not only does 2 little protein manifest in the disease, but also so does too much protein. So we are trying to turn a gene expression profile up, but we're trying to do it in a very subtle manner. And this is an application of the RNA technology that is unmatched by any other. Only RNA therapies can increase gene expression but to do it in a manner that leaves ultimate control over protein expression under the regulation of the cell itself. So you get those suppression or the inhibition of the expression as you start moving into what we call the supraphysiologic range or above the level of protein that is required for the cell. So we've got to make a very subtle change in a lot of cells. That's the objective of PYC. And if you think about on the right-hand side, the fourth pillar, validated in patient-derived models, I can't say this any better than the article that we have referred you to in the form of Roche's investment in a 200-person institute to create these humanized models. We need to know what is going to happen in the clinic before we start the clinical trial. It's a unique insight. If I can take a patient and take a skin sample from that patient and turn it backwards into a stem cell and then turn it forwards into every single cell type that exists in the target tissue of the target of interest for us, so in the first instance at retina in a dish, I've got the genetic mutation within that retina in a dish model. And I can see the disease manifesting when we look at these cells under the microscope, which means I get a really good proxy for my human genetic medicine. I can literally see whether our drug is effective in the retina in a dish that comes from the patient who is going to be in our clinical trial. You will not get a better insight than that in terms of what is likely to happen in clinical development. What that does is we take the starting point of the monogenic target, the 5x to 8x increased success, and we amplify it further through taking risks that would have been borne in the Phase II clinical trial into the preclinical setting. It's quite an extraordinary thing to do. You've seen very recently, we didn't even need to go to the bother of generating the pluripotent stem cell before we created the organ in a dish in the kidney program because we took the tissue sample directly out of patients who were donating those organs at the time of kidney transplant. An incredibly powerful model when you know what your drug is going to do in a 3-dimensional model of the target organ of interest. Really, your only question left at that point in time is to work out, can you get enough of the drug to recapitulate that effect inside the human at a safe and well-tolerated dose when you move into human studies. You can see why the pharma industry is so interested in transacting around these medicines in the preclinical and the Phase I/II stage. It's because of that enhanced conviction that you get that you're going to move towards a market entry. So if you think then about those 3 paradigms and PYC's differentiation on risk, we are much, much higher propensity for success than the industry standard 10% because of the target, the modality and the validation in the patient-derived model. From a time perspective, we are much faster because these patients don't have a standard of care. So there is no need for us to compare our therapy to a standard of care in a Phase III clinical trial. It's a genuine unmet need. So we have the propensity to launch the commercial product after a Phase II registrational study. Meaning that we can conduct a Phase III study after we have launched the product in market and are generating revenue. That's quite extraordinary in that context as well. And from a cost perspective, we have an incredibly capital-efficient company. We are running the company at about 1/4 of the cost of a single asset peer in the rare disease space in the U.S. If you couple that with what's happening in the commercial landscape on the right-hand side, where you have 2/3 of new drugs launched this year being launched by biotech, not big pharma, small companies are doing the innovation and 55% of those approvals in the context of rare disease, hopefully, you are starting to understand how the technical differentiation is complemented by commercial differentiation, and we set ourselves on a really unique path. You'll go a long way before you find a biotechnology company that offers the scope for patient impact and commercial return that PYC Therapeutics does. You are now in the window when you are going to find out, is this going to work? A very, very exciting time for all of us. So we're going to narrow our vision now to look in more detail at that coming 24 months. But before we do that, I'll just stop and see whether or not there are any questions from the floor. I'd love you to come on the journey with us as we go through this. It is a lot to take in, but you can't appreciate the full beauty of it unless you start to grapple with some of the complexities of the industry. And I think when you do, it's actually a very, very simple story, PYC, because the hardest part in a diligence for investment in life sciences company is to understand the competitive landscape. We don't really have to do that here because there aren't many competitors or any competitors in some of the indications that we're going after. So if you can follow through and understand the link between all of these different concepts that are floating around, you can start to draw a very, very tight circle by joining those dots.

Any questions from anyone? Yes, we've got a couple. I might -- yes, I've got it on.

Therapies?

Yes, you can is the answer to that. But what you'll find is you need for the cargo to be very similar to the cargo that we were using when we generated the data pack to show that we could do this. Because we've had the conversation previously, you need a different delivery vehicle dependent on what the cargo is. You can deliver a pizza on a scooter, but for a bale of hay, you need a tractor. And it's very similar in biology as well. So it's nowhere near -- yes is the answer, but it's nowhere near as generically applicable as you think. It would have been -- if somebody is working with a naked morpholino antisense oligo, very definitely, we can deliver it. If they are interested in a target tissue that we're interested in, they will then buy into the data that we've generated in the nonhuman primate. If you have a morpholino directed towards a different target tissue, and we've had some of these conversations lately, you really want to see the best model of what we call biodistribution and where that drug is going to go in the body in a nonhuman primate before you fully appreciate the benefits of what we've got -- for precisely the reason that we're excited about our technology and the target tissues that we've chosen, right? It makes sense. We know that the single dimension that has the greatest impact on success of the clinic for RNA drugs is target tissue concentration. So you can understand why they want to know how much of the drug is getting to the specified target organ before they wholeheartedly embrace the delivery technology. So in theory, it's got very broad application, but you see in practice, it's actually very limited application unless you're working with exactly the same chemistry of cargo that we are working with. Where we are doing a lot of thinking is there are -- there's another form of delivery technology mediated by a peptide, a chaperone molecule, that has got far greater applicability. And that is in the form of a receptor-binding domain or a ligand that engages with a particular receptor on the surface of a cell. There, you've actually got the scope to move to a lot more different cargoes because the cell is actively taking them up. Whereas with the cell-penetrating peptide, what's happening is it's delivering directly across the cell membrane to all cells that it's coming into contact with. Different profiles between cells, but it's a functional, not a specific delivery profile. Long-winded answer, but hopefully, I think what the investors grapple with, well, why haven't you done a deal, right? Why haven't you licensed the lazy asset on the balance sheet, the delivery technology? It's because there are not many people working with naked oligos these days and specifically of the morpholino class because if you're going to hang your hat on a naked oligo, you should be working with the 2 prime MOE, the negatively charged backbone chemistry that most of the field have moved to because it's more potent than the naked morpholino. And the naked morpholino struggle, as you saw it in the Sarepta approval for EXONDYS 51, yes, it works, but it doesn't work really well because it's stuck outside the cell. So the fields move to the negatively charged chemistry. If you join a positively charged cell-penetrating peptide to a negatively charged RNA drug, they'll bind to one another and neutralize the effect of both house and molecule, and we don't want that.

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They are -- the question related to whether or not the drugs in the pipeline are different or whether or not they are similar. And I think the question is directed towards whether we have correlated or uncorrelated risk in relation to the outcomes that we're generating. The answer is uncorrelated risk. So they are -- the top 2 drugs in blinding eye disease are sufficiently similar obviously, in the form of the modality that if we can establish safety in RP11, there will be read through to the ADOA program. Very differently. But not so much from an efficacy standpoint because you have a different delivery technology, you have a different cell type effected, you have a different mechanism of action of the oligo, direct versus indirect. And the combination of those features means that if the RP11 asset were to fail, that does not mean that the ADOA asset is going to fail. You've got a really nice portfolio effect through the pipeline in that context. We know already that the modality, as a whole, is validated because Sarepta have clinically validated in the context of Duchenne muscular dystrophy. We know that it performs a whole lot better than the naked RNA drug. So there's a lot of conviction for potential partners, the industry as a whole, having seen the drug administered frequently to children. It's got a very nice safety profile, and we can see the efficacy profile relative to the naked RNA drug. Hopefully, you follow that answer.

Mine is not so complicated, I don't think. In the polycystic kidney disease, to get the results from that, are much -- the question is, are they much simpler than the pigmentosa? As in basically, you take urine samples and scans as opposed to waiting for a long time. The other question was that I noticed that Pfizer and others have been seeking people -- actually looking for solutions to polycystic kidney disease. And where does that place you in all of that?

Yes. So I take it that the first question is directed towards the clinical end points rather than the nonclinical setting?

Yes.

Yes. And I think that's entirely right. Yes. So there's 2 features to that. As you've suggested in the polycystic kidney disease in the Phase I trial, we have what we call a biomarker. So a marker of disease progression that is not necessarily correlated to the functional changes in the organ that we're looking for. So you can look and see it very easily, but it doesn't convince the regulator that you're definitively going to make a change in that indication, and that's very handy. We can't do that in the eye because there's no fluid that is secreted by the eye that we can capture easily. We can't take a -- we can't do what they do in the Duchenne muscular dystrophy trials, take a punch biopsy of the muscle and see whether the drug is present there, which supported the recent Sarepta approval. There's no way we can grab part of the back of the eye and see very easily, is the drug doing what it's intended to do. So we've got to wait for what they call functional changes in the patient's vision before we can have very high conviction that we're going to see an outcome. And we have to wait a long time for those because it's a slowly progressive disease. So you're quite right. In the kidney, it's different. We've got this biomarker. The actual protein that is missing, the 50% level protein that we're trying to replace, is excreted in the urine after its effect has been achieved inside the cells. This is really handy, right? So we can take a urine sample from the patient. We can measure whether or not we're seeing that 50% expression come back up towards the wild type, the unaffected individual expression. Use the conviction of that, that we've replaced the missing protein in the target organ, and then kick off the potentially registrational Phase II study. The FDA have come out and said, here, we're not going to take the biomarker, but we will take what they call a surrogate endpoint. We will take height-adjusted total kidney volume. We'll allow you to do imaging of the kidney and see whether or not the kidney is reverting towards a normal size or at least slowing the trajectory of growth of that kidney as a registrational endpoint. As long as you do a confirmatory study after you launch the product in market that looks to the eGFR, the glomerular filtration rate, which is the functional endpoint that is tied to a definitive improvement in those patients. So it's a lot easier from that perspective. It's also easier if this theory holds true, what we've seen in the nonclinical setting, the animal models of ADPKD. You're not just stopping the disease from progressing, you're actually reversing the disease itself. Now if that holds true, you're going to get a very rapid segregation between the untreated and the treated patients, whereas you've got to wait a lot longer for it in the context of a slowly progressive disease that is being arrested but not reversed. So you're quite right. What you're going to see is ADPKD is going to overtake ADOA, and it's going to come very close to overtaking RP11 as well. So Alan mentioned beforehand, it's not just the RP11 asset that's set to file a new drug application in 2027, but also the ADPKD asset. And we set out the time lines for that in the most recent webinar presentation. Do you want to just pass the microphone down? There's another question.

[indiscernible]

The Pfizer question. Yes, so we haven't had a lot of time to engage in the BD discussions around this asset. The data is pretty hot off the press, right? It's been available for the past week. But very, very definitely, I mean, for the reasons that we spoke about before, a first-in-class drug with disease-modifying potential in an indication where you can reverse the phenotype that affects tens of millions of people worldwide but still attracts orphan drug pricing, I'm pretty sure you're going to get a big response to that. And there were some very interesting people appearing on our webinar a fortnight ago without us having conducted any outreach at this point in time. We are turning heads in that program. But give it time, that is a massive asset and the type of transaction that you're talking about. We may well be better off holding on to that getting the urinary biomarker readout possibly, getting the functional readout in the Phase II. We are extremely excited about that asset, and we are going to be very careful in its distribution.

Just breaking down the story of the cost per milestone in the lead up to pre-IND, would the PKD cost per milestone be comparable to ADOA and RP11? And what kind of ratio is that against industry for U.S.?

Yes. I think the cost allocation in terms of the developmental stages, it obviously gets more expensive, the later stage that the assets get. So I'm just going to put it in context of the total journey. To submit an IND, there are estimates in the U.S. that you're looking about $100 million to take a new molecular entity from scratch to an IND submission. That's the kind of top-down number. We're a lot more capital efficient than our peers in the U.S. We get it done a lot cheaper. We're looking at about a $25 million cost. A bit more for ADPKD because it's systemically administered. Making the drug, it has to be done at a much bigger scale than the eye drug. So that's the translational journey that we're about to go on. But to get to this point, I mean, we've been working on this for 2, 3 years now, but the actual cost of what we've done would run into the single-digit millions of dollars. It's not expensive to get those readouts, which is the other super attractive thing about these genetic medicines. You get to the point where you've got severe conviction, you get a really nice 80-20 risk curve, but it happens very early for a relative dearth of disposition of funding in support of it. You can do a lot here, right, if you can answer those 2 fundamental questions. It's -- if you think about that asset and why we're so excited about it, right, we -- you're about to find out in the nonhuman primate. You already know from a mouse that whether the drug when it is administered in the vein gets to the kidney in high concentration. If it gets to the kidney in high concentration, as we have a high index of suspicion that it will, based on what we've seen in the mice and what others have seen with this modality in nonhuman primates, we know that it will enter the target cell, the renal tubular cells. We know it will do it with a very even distribution throughout the kidney. We'll reach the medulla where other technologies cannot. And we know that it will engage with the PKD1 transcript and do it very specifically because we've designed and engineered this drug not to have off-target binding effects but just to do that one thing. We know it will stabilize that transcript. We know it will [ engender ] an upregulation of the PC1 protein. We know that it will mediate -- if you skip down, okay, what happens from the monogenic cause, the black box to the actual functional readout, we know it's going to inhibit cyst propagation in those patients. That is a very, very exciting starting point to take the drug into a human and see whether or not you can arrest one of the world's most prevalent monogenic diseases with a huge impact on the quality of life of these patients. As Alan mentioned before, the mobility, let alone the mortality implications of that disease, are extremely high. One, there's one behind you as well.

Excuse me, Rohan. But on the PKD, I understand some research that was done by some partners. I'm talking about other companies with drugs under development, and it's this Regulus Therapeutics. They've gone through a Phase Ib trial for their PKD drug. Is that similar to yours? Is it slightly different? Is yours in competition with them to sort of get into market?

Yes. It is similar, and we will be in competition with Regulus Therapeutics in the lead up to market. The way that the 2 drugs works is -- it's a very interesting asset. There's potential disease modification in the Regulus approach as well. So Regulus is a -- it's a nucleic acid technology. So it's the same as our RNA therapy on the back end, but it's a much shorter nucleic acid technology. So it's 9 letters in a row rather than 25 letters in a row for ours. What Regulus have been able to demonstrate is that they -- when their drug gets into the cell -- and it gets in quite well because it's quite small, it doesn't need as much effort, the question that Matt asked earlier around facilitated delivery. It's not binding to the same target that we're going after. It's going to bind to a target called microRNA 17, MiR-17 inside the cell, which is interesting because MiR-17 is responsible for regulating the expression of PKD1. So they're knocking down this thing or they're inhibiting this thing, I should say, with a view to doing what we want to do, which is to enhance the PKD1 RNA expression to make more PC1 protein. So they're one step upstream in the cascade compared to where we want to be. The issue that they've got and why so much skepticism, if you look at where their market cap came from, the billions of dollars down to the tens of millions of dollars, Wall Street is saying no, because no microRNA targeting drug has ever been approved. A lot of skepticism around that side of things. The reason for that is the microRNA does regulate PKD1 expression, that's the thing they want it to do, but it does 200 other things inside the cell as well, including regulating some very important oncogenes. So you need to be extremely careful in the way you're going about that. But the tremendously exciting thing, and here's a bit of a hack, they have been able to demonstrate, at least in the early part of that Phase I study, that when they administer the drug, they see an increase in urinary PC1, the biomarker that we're speaking about before. Now with the similarity of the mechanism of action and knowing that PYC's drug candidate goes downstream of MiR-17, just to the target that we want to modulate, stabilizes it and makes more protein from it. It's all mediated through this gene where we're having RF2 can we borrow from their clinical readouts and start to get an understanding that perhaps, in fact, what they have done in the context of PC1 upregulation bodes very well for PYC. Yes. We'll be keenly anticipating the dose escalation and the results from those patients. If you can see PC1 going up and up and up, that is a very, very good thing for PYC Therapeutics. Where we will be differentiated, and we must understand why we're doing something different from the rest of the field is fourfold. Biodistribution potency, specificity and the implications for toxicity, and the extra renal manifestations of the disease. We never adopt a single point of differentiation from our competitors. We always stack them so that you end up with a vastly different profile across all of them. From a biodistribution front, we reach the renal medulla, okay? There are some sensitive parts of the kidney, the distal convoluted tubules and the collecting ducts, where you do get cyst formation and it causes kidney damage very early. We have a lovely biodistribution profile there. We have more than 10x as much drug accumulating in the kidney. So we're getting a much more even profile in that context. It's far more potent because of the delivery technology and the affinity of the binds to the target transcript. It's much more specific for the reasons we just discussed. We're not up here. We're just down here. The disease is caused by one thing. We're going after that one thing, not 200 things. And then in relation to the extra renal manifestations, it's called polycystic kidney disease, but there is a secondary impact in organs outside of the kidney as a consequence of PKD1 haploinsufficiency. And what it appears is that there's some loss of the structural strength of the extracellular matrix, the stuff that holds cells together. So patients get a weakening of the blood vessel walls and they suffer from cerebral aneurysms, they get a weakening of the connective tissue that assists the function of the heart valve. So you get what they call mitral valve prolapse or the valves going past proper closing. They get weakening of the abdominal wall and abdominal wall hernias. We're very, very hopeful, and they also get liver cyst as well, but the intravenous route of administration and the exposure to those organs will actually, when we get to the later-stage clinical studies, see an improvement on the extra renal manifestations of this indication as well. Okay. So another one. Yes. Well, I see you haven't been dissuaded from not understanding the answer to the first one. So I applaud your persistence.

A more commercial question. So as you enter the deal-sort-of-making window, how are you going to balance the need for presumably more capital and more shared value [ conversions ] actually sort of doing a deal which might see some early-stage milestone up [indiscernible]?

Yes. Yes. I think it's a really good question and one that we're spending a lot of time talking about our Board. You are quite right. And I think the impact of the question is amplified through the point that we made earlier. Because of the risk profile of these assets and the attractiveness of the downstream commercials, they transact for what we would consider extraordinary sums of money. So you've seen equivalent transaction actually at the preclinical phase. You saw Vertex acquire, for $250 million, the Entrada asset for myotonic dystrophy, a third-in-class RNA drug, before it had entered clinical development, maybe 2 years out of clinical development. You've seen Acadia pay $60 million for the Stoke Therapeutic's SYNGAP1 asset. That's years out of the clinic with $1 billion in milestones and a double-digit sales royalty. We've seen GSK acquire from Wave Life Sciences assets for USD 170 million. These are all U.S. dollars upfront as well. So they're incredibly valuable, very early. So there's a huge temptation to out-license one of these assets, take onboard the upfront and to get the benefit of the validation in the Australian market. And we're going to have a big focus on that going forward as well. Particularly, remember though, we continue to build value as we take these assets forward. If you are derisking by getting through a Phase I study where Phase I is the key risk in the value chain from that point, all you're doing is increasing the expected valuation of that asset and you'll strengthen the negotiating discussion. Now if you look across to where our enterprise valuation is today, it's a no-brainer. You do a transaction, you do an out-licensing deal. But we would like not to be dependent on doing an out-licensing deal. So we have engaged very heavily in helping -- trying to help the market understand the value of what we're doing because if you want the top back 36 months and albeit full market, right, a company that had reached this stage had a valuation of $5 billion. Now sentiment has changed in the industry, but I'd suggest to you that if it costs USD 100 million to put one drug into a clinical trial in the U.S., we are doing pretty well from an efficiency -- capital efficiency perspective. You cannot replace PYC for our current enterprise valuation. So if you look at the sunk cost of having got to this point, if you look at our peer valuations, we're very attractively valued, but critically in the context of the downturn in the industry, and I'd encourage you again to listen to the Atlas Venture presentation, it'll give you a sense of just how grim things have been in tech. If you look at the intrinsic valuation or the market-back perspective of the valuation, you're coming to a very, very different number. A very different number in relation to where we are today. So we are running both in parallel. And remember, we have got other assets in this company as well. We've got a platform technology that we don't talk about very much anymore. There are other opportunities for us to enter into commercial transactions to give the market an understanding of where we're going and how we see things evolving. We just want to be, as I mentioned before, in relation to the kidney transaction, very thoughtful about which assets, at what stage, on what terms, to which partner. We want the partner to bring something other than just money. They need to have the capability of taking the asset to market very efficiently because everyone will be transfixed by the upfront initially, but it's really the milestones and the royalties that dictate the core valuation there. You don't want them to change the R&D productivity paradigm that we've got going here. Time, cost, we want to get there. We don't worry so much about cost because it's usually a sales royalty, but the time side of things is very important. Okay. So if we drop our vision -- and I've been a bit conservative here intentionally. It was really nice to have delivered on the forecast that we gave last year and to be smack bang on target for 3 first-in-class drugs into the clinic before the end of next year. We've been a little bit conservative here. So hopefully, what we're going to see is some of these milestones move from the right-hand side of the page to the left. But you can see just the headline message here, 6 human data readouts in the next 36 months of an uncorrelated portfolio of 4 first-in-class drugs with disease-modifying potential. This is a really exciting time for shareholders in PYC. It's going to come thick and fast. It's going to come very soon. High-dose patients in RP11, we are hoping to complete before the end of this year. If not, it will be January. We may add a very high-dose cohort, 75 micrograms of that drug, but you'll get the inferred safety for that very quickly. We will move that through to a multi-asset -- sorry, a multiple dose study, multiple ascending dose study in the first half of next year. That will be a short sharp study to give us an insight on the optimal dosing and the optimal dose interval. And we'll be moving through to a Phase III registrational study probably towards the end of next year, if not in it, preparing for it. That asset is moving, and it's moving fast. We're trying to get ahead of the fact that it's going to take us a bit longer to see the efficacy signal there. We are trying to discriminate between patients and identify those who are the fast progressors moving on the dimensions that are easiest to measure within a narrow space of time so we can move that asset to market very quickly. In ADOA, we've got our program leadership here. We are very advanced there. We are looking at a TGA pathway to further accelerate the timelines that we've previously publicized. So an Australian Phase I clinical study moving to the U.S. in Phase II. We are looking to dose humans in that indication in the first half of next year as well. One thing that I don't think people have fully appreciated and is an exciting snippet for those who've managed to attend, and I see some faces who have been here for years and years and years, which is very nice. After you've completed a Phase I study of an asset that has applicability in multiple different indications, you can move directly into a Phase II study in those other indications that you're interested in, in the event that it's the same dose via the same route of administration. So we have a lot of interest now from clinicians who have got patients who have got bioenergetic diseases of retinal ganglion cells in other indications who would like to apply this technology in the context of their patient populations. Leber hereditary optic neuropathy, acute ischemic optic neuritis, potentially glaucoma, there are other indications that we can pursue here, and you can have a pipeline in the program, expand out very quickly to multiple Phase II studies running concurrently with a single asset. So lots of excitement there. I think we've been over the excitement around the polycystic kidney disease program, so we won't reiterate that. And let's not forget the Phelan-McDermid syndrome program. We had a terrific conversation with Mount Sinai in New York and the clinicians there talking about why an RNA drug is the right drug for these patients. This is the drug that can change the lives of children who are unable to communicate with their parents. Very, very severe phenotype for Phelan-McDermid syndrome. And not only that, but the patients actually regress through their teenage years, which is very difficult for the parents to see. Developmental milestones and capabilities that, that child has learned are lost throughout that window. So it's not just the heartbreak of the neurodevelopmental disorder, but it's watching your child and your child's background regress through the 10- to 20-year time frame and then actually continue to get worse in the third decade of life. What we have seen in the brains of patients with Alzheimer's disease is a deficiency of SHANK3. So these patients are actually getting a neurodegenerative disorder at the back end of that disease course to compound what's happening in the neurodevelopmental disorder at the front end. It could be a really, really impactful drug if we can get that one right. And that's not to mention what we've got in the discovery program. So we continue to work at the earlier stages. I'm not sure that we can get as differentiated strategy and position ourselves for Wave 2 in the same way that we have in Wave 1. All of the focus is going to be on the Wave 1 now anyway, but it's a very, very exciting time in biotech, biopharma generally. And I think we have earned the right now to show what we can do in indications 5, 6, 7 and 8, outside of where some of our existing drugs can be applied. That's really it. So it's just a look back up to where we've got to. You can see the extent of the progress that's being made, and I've updated these bars for this presentation with respect to where we expect to be in 12 months' time. So you can hold me to this as well. But at next year's AGM, you should have one asset that's either in or preparing for a Phase III clinical study. You should have another asset that's drawing to the close of a Phase I study with the potential to be registered after a Phase II and also the ability to expand across multiple different indications directly into a Phase II study. You should have a third asset targeting a greater-than-USD 10-billion-per-annum market with an extraordinary potential to change the lives of patients that is just about to progress into human studies with a rapid path to market, a Phase I with a biomarker, a Phase II with a surrogate endpoint for a potential market entry in 2027. We've got a fourth asset that the clinicians in the U.S. are extremely excited about. They will scale up behind this drug. We have literally had the conversation with one additional piece of data that they want to see. Can you do what you've done in the reporter cell in a human neuron? That readout is coming soon as well, early parts of next year. So as soon as we validated that drug in the context of a human neuron, we're moving that asset forward into clinical development as well. It's not too far behind the others. The reason that, that one has slowed down a little bit is because we want to enroll children in the clinical study. And if you're going to have children in your clinical study, you've got some additional obligations with respect to the nonhuman primate or the monkey GLP tox studies. You need to have juvenile NHPs in those studies as well. It's longer. It's going to take a bit more effort to get that one through, but it's going to be a very exciting program, and that one moves through to clinical development as well. Questions? Stunned into silence. Oh, no, we've got one. Can we just grab the microphone back?

I always look at these and say, do you have enough funds taking into account R&D refunds to go the distance to get it there. I know it's a tough one, and I know it's not an easy answer. But shareholders, you want and I want to know, it's not -- I would definitely. I think with all -- based on what you said, I'd happily go for a capital raising. I'm not saying you're going to do one, I'm not saying you should do one, but there will be one. But is there enough confidence with the Board to know you've got the ability financially to go the distance [indiscernible]?

Yes, I don't think we're in any doubt that these assets are going to be funded. I just think you look at the profile of the drugs we've got, and I don't think we've got any reservations there at all. I think it comes back to the question that was asked earlier around we've got some time to go. Again, look at the Atlas Venture presentation. We came from the greatest bull market in history. We've gone into one of the worst bear markets in history, right? So there's some reversion to the mean to be done. If the tide starts rising and we start getting a better reflection of the valuation of these asset, that's going to help a lot. We've got a lot of stuff in our control. You're going to find out next month or at least the studies are going to start next month with respect to the biodistribution in the nonhuman primates in the polycystic kidney disease program, which is effectively the last hurdle that we've got to get through before you know that you're going to have an asset moving through the GLP tox studies into humans. We've got a preparation for a Phase II study to kick off. You've got safety readouts coming in humans. You've got a second asset that's going into clinical development. We're not in the realms of thinking through, yet we're going to show you a whole lot more in terms of what we can do and what we are as a company. I think at the minute, the only way -- I mean we have a lot of discussions internally about the valuation. We don't want to enable [ guys ] in that respect. I've largely accepted that the market will do what the market will do. But I think the market is looking at us saying, okay, you've got one asset in the clinic and a bunch of other stuff. And the way that we look at it internally is that we've got 4 first-in-class drugs with disease-modifying potential that are moving through every phase of clinical study in the next 24 months, coupled with 6 human readouts. And there's a big asymmetry between those 2 right now. And we're just -- we're fighting against that. It's very interesting. The conversations with the U.S. investors, the U.S. bankers, they're starting to see it. The questions are, is the data real? The problem we've got at the minute is there are still 200 life sciences companies with negative enterprise valuation listed on the NASDAQ. They've got more cash than their market cap. And so stuff is cheap. You can build the best house in the world, but if your neighbor's house is going cheap, it doesn't help you. Now that cannot persist if you read the market commentary. It's getting to the point where we're going to deprive future generations of important drugs if the current malaise in the industry continues for too long. It's been going for near enough to 3 years already. So we're going to wait. We're going to deliver on our milestones. We have got the conviction that we've got a dual track path to go down. We're going to continue to explore the BD discussions, and we're going to show you our shareholders exactly what we are as a company the way we see ourselves, not the way the market is currently seeing ourselves, before we even contemplate where's the next round of finance coming from. We are funded well enough to deliver. There's a lot of stuff going on in the company right now. You're going to see a lot more before we have to come back to that route if we don't get the BD transaction away.

Just how is the market going to appreciate the elegant in the design? I mean and as well as overcoming complexities that -- I mean, it's not easy to get intracellular, and the biomarkers that you're aiming for are top quartile, and the biodistribution is, I guess, noncomparable to industry. How is the market going to understand the complexity of the design and the elegance of how you put the chemistry in to engineer a lead that can actually go all the way and [ interval ] and biodistribute, as the way you say it. How can market understand?

Yes, I'm going to beat it into them one by one. I'm going on the road next week for an institutional roadshow that people are starting to appreciate the story here. We're going to get better at communicating it ourselves. I mean, we're giving you the numbers in real time. There's a lot going on. We're trying to communicate as effectively as possible. But the point you're making, 750,000 nanograms per gram in renal tissue, 65 micromolar concentration in that organ where we should be -- we should be at 1 micromolar, 2 micromolar. We're going to have to wind that right back, right? You look at the NHP results for companies that are going after muscle disease with facilitated delivery of RNA drug, they're somewhere between 100 and 1,000 milligrams per gram of drug on the most important dimension. And then you've got the elegance of the specificity of the targeting approach. It's -- okay, we're harnessing that delivery advantage to do something that no one else has been able to do. We're not going after with a short nucleotide segment, it's a long one. So you get much more specificity of effect in that context as well. We've got the quant readout. It's a single gene disease. We know we can modulate it. We've got the functional readouts. We go right down to the bottom of the disease cascade. So we're just going to keep telling people and telling people and telling people, and in the context of a rising tide, a better understanding, it's -- everything is going in our favor right now, possibly accepting our ability to communicate. But I'm getting better. I'm trying really hard.

Just [indiscernible] taken 4 drugs to market. That culture and the imprint of diligence to every -- maybe intron and exon, every consideration at the ground level, is that culture preserved in the team? And I mean, yes, that's my...

I have a few things there. That's a complex one. So when we say those drugs for DMD were taken to market, they were, but they were taken to market in the U.S. There was a licensing agreement that took them as a raw molecule. And the work to get it through translational development, clinical development was done by Sarepta Therapeutics. So I'm not sure there was much culture there. That's the culture of Sarepta Therapeutics. That's quite different. What I would say about the organizational culture at PYC is we're in a very happy place as well. If you've got a team of people who are driven by patient impact, looking at that and what's been achieved and what's about to come, there's a ton of excitement in relation to where we're at as an organization. We have got a terrific U.S. office. We're calm as a company for the first time in a while. We've got -- it's a bit like having galloping room as a racehorse, right? We buy ourselves stable. We're about to let down and go. So yes, it feels really nice in the company right now. There's a lot of momentum behind us. It's almost overcoming the external malaise, right? And just looking -- there's a good report out by Stifel this week. Try and get a hold of it. The reasons from a macro perspective why biotech is a good place to invest right now. And so if you couple the tailwind of the macro environment with a highly refined strategy from 5 years ago that's now delivering the data that we need at the point where you're going to get the readouts in human that dictate market entry or not, it's a good time. Yes, it's a good time. It's busy. Really, really busy. It's not easy. It's -- to do this from Perth. You're in the wrong time zone for a lot of the conversations that are occurring. We expect a lot of our employees, but you have to, to be globally competitive and to actually undertake the translation on the clinical side in-house, not to license too early. You have to be prepared to do the hard yards, and we are. Any others? No? Very good. 66-minute AGM. Very good. Thanks very much, everyone, for coming. We very much look forward to sharing with you the progress that we make as things unfold. Hopefully, you've got the sense that it's a very exciting time. Thanks to all those online as well. We will close the meeting.