Quince Therapeutics, Inc. (QNCX) Earnings Call Transcript & Summary

Okay. Good afternoon, everyone.

Good afternoon.

Sorry about the delay. We have the management team of Cortexyme with us this afternoon. We're very pleased to have them with us. We have Casey Lynch, CEO; we have Chris Lowe, the CFO; and we have Mike Detke, the CMO, with us this afternoon. So thank you very much for joining us. Let's turn the call over to Chris Lowe.

Great. Good afternoon, everybody. I am Chris Lowe, Chief Operating Officer and Chief Financial Officer at Cortexyme. If you're new to Cortexyme, I think you will appreciate the elegance of our evidence to date. Our proprietary library of small molecules target a pathogen, which we believe is upstream of other targets within many areas of CNS. We absolutely believe this is the game changer patients have been waiting for. I'm very excited to share our progress with you today. Now I will be making some forward-looking statements, of course, today. Moving on to Slide 3. Cortexyme has 2 significant data readouts in 2021. First, top line data from the GAIN trial, a pivotal study in mild to moderate Alzheimer's patients is expected in Q4 of this year. Second, in addition, we have our Phase II periodontitis study, a 233 subject study, which we also expect to read out in Q4 of this year. Both Alzheimer's and periodontitis represent large market opportunities for Cortexyme, and frankly, our strategy is to shift the treatment paradigm in both of these markets. We are extremely well funded to execute on all of these milestones with just over $184 million in cash as of the end of the year, which gives us runway well into 2023. Moving on to the next slide, examining the broader pipeline. In addition to the data readouts in 2021 utilizing COR388, we also expect to introduce COR588 into the clinic this -- later this year. And our arginine gingipain inhibitor program is expected to finalize Canada selection later this year as well. We believe our pipeline is diverse, growing and well founded upon causation evidence in all of these therapeutic areas. Now our core research is based upon the seminal discovery of P. gingivalis and its secreted toxic virulence factor proteases called gingipains. We have found these gingipains to be in over 90% of the brains of Alzheimer's patients. Let me repeat that for a second. We have identified a bacterium in the brain that does not belong there, and we have a small molecule which effectively targets this bacteria. It's also important to note that this bacteria is known to cause periodontitis, a progressive degenerative disease in the mouth. We believe gingipains represent an upstream target to reduce bacterial toxicity and the levels -- and levels in the brain and thereby improve patient outcomes. Now our lead drug candidate, COR388, or atuzaginstat, is an orally administered brain-penetrating small molecule gingipain inhibitor. Our growing evidence to date, including clinical and nonclinical experience, demonstrates the P. gingivalis infection causes Alzheimer's pathology, including chronic low-grade inflammation and neurodegeneration. And that our gingipain inhibitor successfully stops this infection. This growing foundation of evidence has been replicated and published on by many other labs worldwide. Now on the next slide, one of the first pieces of evidence conducted by the company was a brain bank study conducted in collaboration with the University of Auckland. In this study, we proved the hypothesis of the presence of P. gingivalis in the brain. In the chart on the left, the gingipain load is demonstrated to be higher in Alzheimer's brains. In the chart on the right, we correlated one of the most common markers of neuropathology, tau, with gingipain load. The results are quite compelling. Now the next slide, this study shows that an oral Pg infection resulted in all the characteristic pathology of Alzheimer's, including abeta plaques and inflammation. These results in a wild-type mouse study are unprecedented in Alzheimer's research. We and others have now replicated similar results, which demonstrate Pg causation and thereby have laid the groundwork for our overall clinical development program. On Slide 9, I'd like to just share a quick overview of what we believe is a very elegant molecule. COR388 is a potent small molecule and is a very selective virulence factor inhibitor. It's orally available and has a very robust patent estate providing comp of matter protection through at least 2037. On Slide 10, we've learned a lot about COR388 in our early clinical studies. First, COR388 was very well tolerated in Alzheimer's patients. Second, we were also able to establish a wide dosing range, which covered the therapeutic exposures demonstrated in our previous animal studies. On Slide 11, you'll see that in our Phase Ib study, we also examined specific endpoints to inform the mechanism of action and target engagement. The chart on the left shows the rapid impact of COR388 on RANTES, a validated marker of inflammation from infection. The chart on the right shows successful target engagement in the brain. These results clearly added another piece of foundational evidence to our overall development plan. On the next slide, we -- in addition, in our early clinical studies, we examined some exploratory cognitive measures. We saw a trend to improvement across multiple measures of cognition, including significant benefit on measures of speech and communication. If you block gingipains, we absolutely believe cognition has the potential to stabilize. This was another critical piece of evidence in our mission to be a game changer for Alzheimer's patients. Slide 13. On our early clinical experience, it was certainly informative of the current study, the GAIN trial. The GAIN trial is a very well-designed Phase III study with standard regulatory endpoints and broad dose ranging. The study is fully enrolled in Q4 last year at 643 patients. Overall enrollment took about 18 months to enroll. Now knowing the challenges that we all went through in 2020, the support, the dedication of patients, caregivers, clinicians absolutely inspires myself and the entire team. I am very proud to tell you on behalf of our team that the time line remains on schedule, and we expect to see top line data in Q4 of this year. Now while GAIN itself remains blinded, of course, we have been able to examine some key baseline characteristics of our patients. In this chart, you'll find that the subjects in the GAIN trial analyzed to date have a P. gingivalis-specific antibody at baseline indicative of a systemic infection. We feel confident we're getting the right patients at the right time for this study. On the next slide, in addition, we also -- when we examined the periodontitis status of participants in the periodontal study, we find that greater than 90% have moderate to severe periodontal disease at baseline. This again is supportive of our hypothesis for Alzheimer's, but also periodontal disease, which I will speak to next. Now moving ahead to Slide 17. It's well established that P. gingivalis is a keystone bacteria causing periodontitis. Our periodontal program is focused on a fully enrolled Phase II study with 233 subjects. The study has standard regulatory endpoints. And based upon our research with payers and physicians, we believe this is a multibillion-dollar market opportunity with a significant unmet medical need in the U.S. alone. This Phase II study is also on track to read out in Q4 of this year. On Slide 18, in addition to the Q4 data readout scheduled for later this year, let me just quickly review one of the key components of our early research in periodontal disease. Specifically, that in a naturally occurring periodontal disease dog model, COR388 demonstrates the ability to significantly improve pocket depth over the current standard of care. Pocket depth is the approvable endpoint, and the aged dog model is the gold standard in this therapeutic area. Now to fully address the periodontal market, we are advancing COR588 into the clinic later this year. COR588 is a small molecule with high potency. It's highly selective, orally available and offers a novel structure. The comp of matter patent is currently pending. The elegance of our overall evidence between P. gingivalis and Alzheimer's and periodontal disease is compelling in my book. But our foundational research has also created other opportunities as well, notably in Parkinson's, which I will review next. Now evidence continues to emerge in the industry that P. gingivalis also can infiltrate motor areas of the brain, resulting in Parkinson's disease. Like Alzheimer's, Parkinson's is characterized by spreading pathology and inflammation that can be triggered by P. gingivalis. We have recently been looking -- excuse me, we've recently been working with the Parkinson's study group to design the proof of efficacy in this indication, and we look forward to leveraging their expertise as we move forward. Examining milestones in the near future for Cortexyme, there's little doubt that 2021 is filled with Cortexyme news events and a continued expansion of the evidence space. As a reminder, we will see top line data in Alzheimer's and periodontitis later this year, and we expect to have new data presented at AAIC this year and CTAD, both of which occur later this year. I will close by simply saying, to be a part of this team at Cortexyme over the last few years is just absolutely a humbling experience. As the son of 2 victims of Alzheimer's, to witness the continued generation of evidence that we believe will shift the treatment paradigm is absolutely inspiring. I believe atuzaginstat is the game changer for the millions suffering daily. And in my mind, there's no doubt that our best days are ahead of us. Join me on this journey while we stop Alzheimer's in its tracks. Thank you very much.

Thank you for that, Chris.

So we have a couple of questions on the line, and I'll use those to go right into Q&A. The first writer asks, how does your drug compare to Biogen's aducanumab and what makes yours superior?

Well, it's a good question, and we certainly think there's a few different buckets of differentiation. First off is the target itself. We absolutely believe our target is upstream of what we believe are immune responses or plaque. And we think that our causation evidence and our clinical evidence to date has shown that we are upstream of many of these other targets. Number two, practically in terms of the drug, we're an oral small molecule. So what that means is a couple of different things. Number one, it means for this patient population, we're just simply a pill. Trying to be a caregiver for these patients and bring them in for an infusion or a shot of any kind is challenging to say the least. And then third is, because we are a small molecule, we are going to have, I think, advantages in terms of the ROI that we offer to the system. Meaning we will likely be more favorable in terms of overall cost to the system, the simplicity that we offer on administration of being an oral versus other -- I'll say, other approaches, which require a higher level of monitoring. And thereby, I think we will have a much higher -- again, a much higher ROI from the payer's perspective and government agencies.

We have another question regarding the Phase II periodontal and data readout. Is the drug sufficient in Alzheimer's disease patients who tend to have core dental care? It seems to me that if trying to test COR388 efficacy in gum disease, Alzheimer's patients make a weak group of test subjects due to their poor teeth brushing and flossing, et cetera.

Well, it's a good question, for sure. And I think, again, what we're looking at, first and foremost, is the existence of the bacteria. We know that this bacterium exists in both sets of patients. In terms of -- I think where the question is going relative to measuring pocket depth, you could argue that it creates a nice high bar for us in terms of a challenging patient population because of their -- perhaps they're not brushing and flossing on a daily basis. I think we feel very confident based upon, most notably, the aged dog model and its predictive nature in this particular therapeutic area, that we have a very significant improvement over the current standard of care, which is typically about 1 millimeter in depth, a 1 millimeter improvement in pocket depth. And often, the lasting effect of that treatment is 2 to 3 months or so. And so we feel good that we will be so significant even in a more challenging population. And then look, with periodontitis, we will do another study, what we would expect would be a confirmatory Phase III study there. And we will have probably, I'll say, a broader population in terms of beyond Alzheimer's patients, for sure, to make sure that we get the full benefit.

Okay. That was helpful. I guess as a follow-up question regarding the initiation of the Parkinson's disease Phase II given the clinical hold on OLE, will the FDA approve a Parkinson's disease trial? Or do you need to resolve the liver issue with the FDA first?

Yes. It's a good question. I think for Parkinson's, we're going down a standard pre-IND path, which we -- again, has been moving along at a very normal pace. In parallel, as we've spoken about publicly before, we are working to remove the partial clinical hold on the OLE. So those are 2 separate things. That being said, just a quick reminder that relative to the OLE hold, we saw it was a very small subset of patients that were affected. The impact on these patients was reversible without any long-term effects. And so we feel very good that we actually have an understanding of the mechanism as to what may be happening in the subset of patients. And we also have some ideas around dosing strategy, which was already in the works as part of the natural product life cycle development of the asset. I mentioned both in the GAIN as well as previously, we had a wide dose-ranging capability. And that's exactly -- the benefit of that is, in the real-world setting, it gives the physician the capability to titrate, to just start at a lower moderate dose to do a variety of things for that individual patient. So we feel really good that as a result of all of those things, we'll be okay to find a good path forward and be able to test out this hypothesis on Parkinson's patients.

Let's see. We've got another couple of questions. First is multiple pathogens have been found in Alzheimer's disease brains, HSV, pneumonia, et cetera. What do you feel is the most compelling that Pg is the causative pathogen?

Yes. I mean, look, first off, I would go back to our Co-Founder, Dr. Steve Dominy, whose expertise was in HIV-related dementia, spent many years looking at alternative viral causes. For us, one of the biggest pieces of evidence is the wild-type mouse study. When we contrast that, going back a little bit to the earlier question about comparing to Biogen's drug, the industry has struggled for years looking at mouse studies, which, in essence, were Frankenstein mice that over-expressed abeta and then surprised when those results did not translate into human pathology of the disease. And the beauty of this wild-type mouse study is -- the elegance of it is just simply that it represents and it translates into the human pathology of Alzheimer's disease without any biological intervention other than delivering the infection, delivering the Pg. So we really -- we look at that as truly one of the seminal events in this discovery. And then certainly, as you go through drug development, you get comfortable as you dose it into humans and you see the tolerability and other activities. But looking at the history of the company, it's hard not to focus in on the unprecedented wild-type mouse model and, frankly, since then, the replication by 5 or 6 independent labs around the world.

Very helpful. I guess the last question, I think I know the answer to this, but on a scale of 1 to 10, how excited are you about the results glean from the open-label extension data, 1 being not excited, 2 being absolutely ecstatic?

Well, the results of the open-label extension, look, there's 2 reasons in my view, 2 business reasons that you gain from open label. One is you do get additional safety exposures. And then second, it does help provide a long-term path to patients that are on placebo. So I do lament a little bit that there's a group of patients who will not get long-term access, so folks that are on placebo in the current GAIN study, that at the moment, there is not a study for them to roll into. Now I think we'll rectify that in the near term. And I feel sorry for them because I think we're getting a benefit to patients. So in that regard, what we have from the open-label extension study, it served its purpose. I probably -- am I overly excited, I probably would put it at a 3 or a 4 in terms of it served its purpose. But the data set as compared to the imminent game data set is much smaller and is much more shorter term in nature in terms of exposure. And so it's hard to put it anywhere close to the excitement that I feel towards the overall GAIN data set.

Very good. I think that's it for the questions. I just want to, once again, thank you for joining us this afternoon. Thank you for the presentation. Sorry about the technical difficulties earlier. But we really do appreciate you joining us this afternoon.

Thanks so much. It was our pleasure.

Thanks.