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

Great. Well, thank you again for joining us this afternoon at the JMP Securities Life Science Conference. Excited to have Cortexyme join us next and the company's CEO, Casey Lynch. Casey, welcome, really appreciate you being here. Obviously, a really exciting year for Cortexyme with the Phase III -- Phase II/III GAIN study. It's still on track to read out in 4Q. Also, obviously, as Tom talked about in the Alzheimer's world and how that recent FDA decision could impact you, you guys and everybody else, and would love to get your thoughts there. But maybe let's just start off with a high-level overview. If you could just give us a quick 30-second overview of Cortexyme and the work you're doing in the Alzheimer's space.

Yes, absolutely. We have a new approach to Alzheimer's, which we believe is upstream of not only the amyloid plaques and the tau tangles, but most importantly, the neurodegeneration, the inflammation, the microglial activation, which we'll talk more about over the next half hour. But it's very exciting. As you alluded to, we'll be reporting data from a large pivotal study in Q4. So right around the corner, this 643-subject study designed with the typical regulatory end points of cognition and function, and we also have some additional indications and molecules in the pipeline, which also happy to get into.

Great. So maybe we start with the most topical news, the approval by FDA of ADUHELM last week. I think the really interesting piece there was, like you said, your Phase III trial is focused on the traditional approval end points of cognition and function. FDA has taken the move here to approve a drug based on a certain biomarker. You've also looked at all of those traditional biomarkers that the FDA is now saying are likely to be predictive of cognitive benefit. So I'd just love to get your thoughts on how you think this decision by FDA could impact you guys or the field in general as you think about developing new drugs for Alzheimer's disease.

Regulatory flexibility is unequivocally good for us and for Alzheimer's drug development in general. The reaction over the last week, though, has really reinforced the need -- the traditional need to demonstrate a clear and meaningful disease-modifying benefit to patients. So our goal definitely has not changed. This trial is 90% powered to show a 50% slowing on disease. And demonstrating statistical significance in the first study of a new mechanism, we think, is going to be really powerful and could really change this whole conversation very soon. So I don't think suddenly, lots of failed drugs are going to start being approved based on surrogate end points. But again, regulatory flexibility is good, and we're going to continue to shoot for the goal we've always been shooting for, which is a clear slowing of disease and a clear benefit to patients.

Right. So as you said, you have a very novel mechanism here. Could you maybe just walk us through the scientific foundation of the company, some of the seminal work that went into why you chose the target you did and pursued the development program that you have?

Definitely. Cortexyme was founded based on the seminal discovery of my cofounder, Steve Dominy, who is at UCSF, and he discovered the bacteria called Porphyromonas gingivalis in the brain of Alzheimer's patients. And he went looking for this bacteria, which is typically associated with periodontal disease, which is a chronic age-related degenerative disease in the mouth, based on a whole slew of epidemiology showing that periodontal disease is a risk factor for Alzheimer's. So people with periodontal disease early in life are much more likely to get Alzheimer's later. And the characteristics of this particular bacteria, when you study the biology, look very similar to Alzheimer's disease, the effects that this bacteria has on cells, the low-grade chronic inflammation, lysosomal dysfunction, the complement cascade dysregulation. So it was very logical to think this bacteria could be traveling to the brain. We know it goes to a lot of other organs. It does not stay in the mouth and creating this chronic disease in the brain. My background is in Alzheimer's research originally. And I was noticing, as others in the field have noticed, all of these emerging research showing the importance of inflammation, kind of this expanded pathology. It's not just plaques in the brain. There's microglial activation and neuroinflammation. And all these signs of immune system activation in addition to all the genetic risk factors that have been emerging also seem to be related to the immune system. Why would mutations in TREM2 or TLR4 put you at risk for Alzheimer's? It was logical to think you might be less able to defend against an infection. So I was -- when Steve and I -- when Steve showed me this data, it was a really exciting discovery that the bacteria was in the brain and could be causing disease. And then the next really important step was to meet what's called Koch's postulates, which demonstrate that an infection is causing disease and not just associated with disease. And that's now been demonstrated by multiple labs around the world, showing -- you just infect mice or rats or other animals in their mouth with this bacteria, and it gets into their brain and triggers the characteristic pathology of Alzheimer's disease, which is really has been unprecedented in the field. It's been very difficult to experimentally replicate Alzheimer's disease in animal models, which is part of the reason we've had so much trouble screening drugs and translating animal studies into human studies. So this ability to cause Alzheimer's, including plaques, tau tangles, hyperphosphorylated tau, microglial activation and neurodegeneration in the hippocampus, we think really gave us, for the first time, a nice translatable model to screen drugs that we could move into human studies.

So just 1 more question here. So when you look at the data from humans or in preclinical models, is -- are you thinking about subpopulations that may be more susceptible to the infection? Or are there -- what proportion of Alzheimer's patients do you think actually this could be a key driver of the pathology?

When we started the company, we didn't know the answer to that question. Even 1/3 -- if 1/3 of Alzheimer's disease was associated with this infection, that would be a massive market, and we would really identify those patients who can identify this infection through a variety of biomarkers. But what we found and the real conclusive study that we did and published in Science Advances with the University of Auckland brain bank showed that 95% of Alzheimer's patients, people who died with Alzheimer's disease, 95% of these subjects were positive for markers of P. gingivalis in their brain, multiple markers, which we think really made this study quite conclusive. So based on that, and also people who had pathology but weren't symptomatic yet, which is really important to show when you're wondering whether an infection is causing disease, you need to show that the infection is happening prior to pathology and prior to symptoms. And this study really supported all of those conclusions and the conclusion that this is likely to be responsible for most, if not all, of Alzheimer's disease based on typical cognitive criteria.

So you've built a library of compounds to target this bacteria. Can you just speak a little bit more to the mechanism of how exactly this molecule targets the bacteria and why, let's say, traditional antibiotics or other approaches to targeting a bacteria might not be or are not as successful?

This is a very elusive bacteria that's been studied extensively in the dental field. Periodontal disease itself is a large unmet medical need. 65 million Americans have periodontal disease, which is -- eventually makes people's teeth fall out. So it is something that people would really like to treat and has been studied extensively. You can't just throw broad-spectrum antibiotics at periodontal disease and expect to cure the disease or 65 million people would not have it. It's gram-negative, it's intracellular and it's inside biofilms. And finally, it becomes resistant to broad spectrum antibiotics quite easily. We've showed that in our own studies head-to-head with our treatment, which does not induce the same response. So all of those things make it both a persistent and resistant pathogen to typical treatment paradigms. So we decided to take a different approach called virulence factor inhibition. We're very fortunate, in this case, this bacteria is asaccharolytic. Saccharolytic bacteria rely on sugar for their metabolism and survival. This bacteria relies on proteins for its survival. And in order to chop up host proteins, human proteins for its food source, it secretes proteases called gingipains. And these gingipains have numerous effects. Number one, they keep the bacteria alive by chopping up the host proteins. Number two, they dysregulate the immune system, which makes it harder for the immune system to clear the bacteria. And number three, they cause toxicity to host cells. So they are chopping up proteins like tau, like ApoE, like other microskeletal proteins that eventually cause the cell to collapse and die. So our drug targets these gingipains. And by blocking these proteases, we have these multitude of effects, which drives down the bacterial load and keeps the bacteria in check as well as blocking all of these toxicity and inflammation. And in our animal models, we can actually see a reversal of inflammation in the brain, a reduction in abeta 42 production. And in our human studies, we showed a reduction in fragmentation of brain proteins like ApoE.

And maybe -- so like we've said, you're now in that pivotal study. Can you just review for us in a little bit more detail those initial clinical data that you saw in Alzheimer's patients that support the preclinical data that you could reverse the pathology by targeting gingipain?

Right. We did a small Phase Ib study to look at 50 milligrams in Alzheimer's patients to ensure we had -- this was an exposure that was predicted by all of our animal studies, mouse and aged dog studies, to have efficacy in target engagement. So we looked at a number of markers, including both biomarkers and cognition readouts. And what we saw was a reduction, a significant reduction in an inflammatory marker called RANTES. RANTES is known to be induced by P. gingivalis in the serum. And it's also higher in the microvessels of Alzheimer's patients, also correlates to disease severity, by the way, in Parkinson's disease. And we could show, after just 28 days of treatment, that we're reducing this inflammatory marker. Also to show brain target engagement, we looked at ApoE fragments. We published a nice manuscript in Cell Press Sneak Peek just a couple of weeks ago. It's under review, but they post the papers under Sneak Peek describing in detail how this gingipain hypothesis relates to genetic risk factors for Alzheimer's, namely ApoE4 versus ApoE3. And we think this really explains, for the first time, why people with ApoE4 at more risk for disease onset and progression. So we know that these gingipains are chopping up ApoE4. And when we treat with atuzaginstat in this human study, we can reduce the fragmentation of that protein, reduce fragments of brain proteins that are coming into the cerebrospinal fluid. We also showed -- yes, we looked at a couple -- I just mentioned that cognitive readouts and saw a trend benefit on both MMSE and Cambridge Cognition readout, a computerized cognitive test, and finally hit significance of a bend trend -- actually, actual benefit from baseline and versus placebo and the Winterlight speech-based assessment of cognition.

Okay. So then you're now well underway or almost to the end of the GAIN study, which is your first pivotal study. The study relatively straightforward and is comparing placebo to atuzaginstat. Can you maybe just review from us some of the details of the trial design as well as the baseline characteristics that you published so far from the study?

Yes. So we have a very nice typical regulatory design that was box checked with the FDA as part of the Type C meeting. So we have a co-primary end points of ADAS-Cog which -- for cognition and ADCS-ADL for function. We have CDR-SB included as well as a secondary end point, which is a little better for prodromal populations for mild to moderate ADAS-Cog is preferred. And we have a variety of biomarkers. In particular, I think MRI readouts of hippocampal volume preservation can be very interesting and helpful readouts to support disease modification that were preserved -- potentially preserving hippocampal volume. And then interestingly, we also have a sub-study looking at periodontal disease before and after treatment, and that's about 233 subjects are in that study.

I definitely want to come back to that sub-study in a couple of minutes. But then just one thing that has -- so you did do an interim analysis at the end of last year, which you look at futility. The drug -- the trial was not stopped at that point. So can you just remind us of the scenarios from that interim on what we should take away from if that study wasn't stopped early back last year?

Yes, definitely. We had the interim analysis in December, and we passed utility, which is great. And the other really important takeaway, the main motivation for that interim analysis was to look at a potential sample size adjustment. And I think that was especially important during COVID. As I said, we plan the study to be 90% powered for a 50% slowing. But if COVID was increasing dropouts or increasing standard deviations in an unexpected way, that interim look would have given us that information, and we would have been able to power up the study. So we've actually had an incredible dedication from both the participants and the investigators throughout the pandemic. Haven't seen a lot of dropouts or issues related to COVID. We enrolled very rapidly within 18 months. So we even overenrolled based on the interest in the study and potentially hedge against any effects of the pandemic. But that interim really reinforced that we have the powering we need to see a benefit if it's there.

Okay. Just one more thing on the GAIN trial. The FDA put in place a partial clinical hold based on a focus around some liver adverse events. Let me, I guess, ask you from both sides. So the FDA was not so concerned that it told you to stop the study or to change the protocol in any way, but it rose to a level where they did in place the partial hold and stopped the extension portion of the study. So can you give us any more color about what the FDA's focus is on here, how significant an issue you think this might be? Or is there any way to mitigate any potential safety signal post approval, either through patient selection or other strategies?

Yes. So there's a number of ways we're looking at this. The first is, of course, monitoring. And as you said, we have very good monitoring protocols in place. This has affected a very small number of people. And as we announced, any events have been reversible and without long-term effects for the participants. So we don't have effects like ARIA. We don't have brain swelling and edema -- bleeding, which really need to be monitored by MRI, so in the meantime, monitoring by -- with blood work is very feasible. That said, we think this is really going to be manageable in a real-world setting. We have a large dose range within the study. Once we unblind the data, we'll understand a lot more about that. We also think that titration, we're investigating -- continuing to investigate the mechanism, but we do think titration, just like a lot of drugs need to do, will really reduce the risk of this. And finally, as part of our investigation and the mechanism, one of our leading hypotheses is that people who have a higher infection with P. gingivalis, and again, we know P. gingivalis can go to different organs, including the liver, seem to be at a higher risk of these players. And this has been seen with hepatitis B treatments before that during clearance of a pathogen from the liver, you can have these kinds of flares. So again, we need to really look more in detail once the data is unblinded to understand all the possible reasons. But we think we can work with both titration and patient selection perhaps together to really manage this.

Okay. Great. We talked about the periodontal stuff study briefly. Can you just maybe go into a couple of more details? It's not an indication, I think, most of investors pay a lot of time focused on. So what are the end points? How validated are they -- the end points here? And then from a medical need perspective, you mentioned 65 million people in the U.S., that's a big number. What's your view on the commercial opportunity here just for periodontal disease?

Yes. It's quite a big market. We've done both physician and payer surveys, and we believe it's north of $2 billion a year annual market opportunity. These people are currently being treated under dental insurance with scaling and root planing -- recurrent scaling and root planning. So every quarter, they need to come back and have this painful and usually out-of-pocket procedure. And it's not getting rid of the bacteria that says -- keeps coming back. So having an option for a twice-a-day pill that's covered through traditional medical insurance really expands the possibility of treating people. And the payers are really actually understand the link between oral health and systemic disease, including Alzheimer's. So they -- we're very open to covering at very good levels, not just to treat the oral disease, but because in their databases, they can see people who treat their oral disease are less costly related to cardiovascular disease, related to diabetes and other systemic inflammatory conditions.

Okay. I think there's a little bit of a segue here to the follow-on compounds that you have and other indications. But just I guess from the periodontal disease perspective, in a scenario where you've got a positive GAIN study for Alzheimer's disease the primary focus and a positive sub-study, how do you strategically separate those 2 indications with this asset?

We have a second gingipain inhibitor called 588, which is starting Phase I clinical studies very soon in Q3. And our plan currently is to move that asset forward in periodontal disease and move 388 forward in Alzheimer's disease so that we can separate the markets.

Okay. And then just following on from that, then 388, you also are looking at now other indications starting off with Parkinson's disease patients. Can you speak a little bit to the mechanistic rationale there and then the work that you're starting to do in Parkinson's?

Yes. The rationale around Parkinson's disease really built externally. There was more and more independent publications supporting a role of P. gingivalis in Parkinson's disease. And I'll just mention a couple. There was a mouse study in LRRK2 mutant mouse. This is a risk factor for Parkinson's where they did the P. gingivalis infection and showed that the Parkinson's pathology, as you see in Parkinson's disease, started in the guts, the alpha-synuclein overproduction and spread to the motor areas of the brain in this mouse and caused neurodegeneration in the basal ganglia in the motor areas. So this really links back to original work by the famous pathologist Brock, who showed that in Parkinson's disease, the pathology spreads from the gut where we know you're swallowing the P. gingivalis, we know it colonizes the gut and can spread from there, perhaps in those patients who have various risk factors related to that versus Alzheimer's disease where the bacteria may be leveraging perhaps the olfactory nerve, which is one of the earliest places impacted in Alzheimer's disease, a sense of smell.

Great. Last question for me. Just it seems obvious that a safe and effective Alzheimer's drug will not struggle commercially. How do you think about building a commercial infrastructure? Are you focused on finding a partner at some point? How do you think about bringing the drug to market?

Well, we're in a really great position with a small molecule. This is a brain penetrant twice-a-day pill. So we have a lot of flexibility not just based on general practitioner market. We don't need IV infusion centers. But also, we don't need to be linked to PET imaging for amyloid and MRI monitoring. So all of those things make it really easy to distribute through various models and a lot of flexibility around pricing as well.

Fantastic. Well, look, we're really anticipating excitedly the results later this year. So thank you, Casey. Really appreciate you being with us this afternoon, and we look forward to speaking again soon.

Absolutely. Thanks so much, Jason.

Thanks, Casey.