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

Hello, everyone. I'm Andrew Fein. I'm one of the biotechnology analysts at H.C. Wainwright. It's my pleasure to introduce the next company presenting at the conference, which is Cortexyme. Presenting for the company will be its CEO and CFO, Casey Lynch and Chris Lowe, respectively. So with that, Casey, I wanted to just take a couple of minutes to introduce yourself, introduce the company. And then from there, we can go into specific questions.

Yes. Great to be here, Andrew. I'm Casey Lynch, Co-Founder and CEO. I'm an entrepreneur with a background in Alzheimer's research. I've been very focused on understanding a comprehensive hypothesis of Alzheimer's disease throughout my career. So I'm very excited to be reaching a pivotal moment in milestones for Cortexyme. We're a few months away from a pivotal readout in a Phase III study in mild-to-moderate Alzheimer's patients, leveraging a molecule with a novel mechanism of action that we believe is upstream of multiple aspects of pathology which we can get into today. We are a platform company. In addition, we have multiple programs, a really excellent drug development and discovery team. Everything we'll talk about today is the product of our own drug discovery work. We have an expertise in protease inhibitors in both neurodegenerative disease and in neuroscience. So we've recently announced progress in several other programs, including Parkinson's and COVID-19, coronavirus in general and some -- a new molecules entering the clinic just recently as well.

Great. And I'm Chris Lowe, COO and CFO of the company. I've been with Cortexyme a little over 3 years now. And for me, the reason I joined is the reason I'm still as fired up today about the future, and that's the elegance of the evidence. This team has a track record of generating and following evidence and doing so in both a clinically and financially efficient way, which to me has been unprecedented in my experience. So I still think our best days are ahead of us as we look to shift paradigms in a few different big markets, so very excited about the future.

Very exciting time, certainly with what lies ahead in the next few months actually. So with that, why don't we start with kind of a broad-based question about the antimicrobial hypothesis. And typically, it includes a lot of viruses and bacteria like herpes, H. Pylori. Maybe you can speak a couple of minutes on why P. gingivalis is unique?

Yes, definitely. When -- there's a lot of evidence that an infection is at work in Alzheimer's brain. There's various immune system pathways activated and dysregulated. There's a lot of the risk factors for Alzheimer's related to the immune system. So yes, the question becomes which pathogen or pathogens can it be? And so obviously, I've looked into this a lot, we've looked into this a lot. And why I feel so passionate about P. gingivalis as the culprit is because it meets Koch's postulates. So Koch's postulates are the criteria for showing that a pathogen is causing disease and not just present or correlated with disease. And this involves both human studies and animal causation studies. And these are not just studies from our lab, but labs around the world have shown not only the correlation in the human brain and in the epidemiology but also causation in multiple different animals, just infecting an animal in their mouth with P. gingivalis enables it to enter the brain, secrete these gingipains, which are proteases, the bacteria relies on for survival, it's intracellular. So these proteases are inside the cell. And downstream of that gingipain secretion is this slew of pathology that's very characteristic of Alzheimer's disease, including tau fragmentation and tau tangle formation, downstream of that, Abeta-42 production, which has been shown to be a potential antimicrobial response, microglial activation, complement cascade activation and disregulation. So these things that P. gingivalis does to the cell and in the tissues, including in the mouth, it creates a slowly progressive low-grade inflammation, degenerative disease in the mouth or periodontal disease or gum disease. It has a similar effect in the brain. So I think it's very elegant how P. gingivalis has been shown to explain all of this very unique pathology use in Alzheimer's.

Interesting. I guess also the Pg IgG biomarker data from the baseline study, we thought was a very exciting finding. So maybe you can speak a little bit about the implications in terms of the GAIN trial and also potentially on post-approval marketing for COR388?

Yes. This is a very exciting finding that expands on the evidence we already had of the central nervous infection, but this is a very standard way to look for a brain infection or a CNS infection. For example, there's a disorder called SSPE, which is caused by measles virus. And the way you diagnose that the measles virus is in the brain is with this type of antibody test in the cerebral spinal fluid. Similarly for neurological Lyme disease where PCR can be unreliable, this IgG type test can be very useful. And we use these time-tested methods to ensure that we do know that the antibodies are also in the periphery. This is a systemic infection. So we did the appropriate controls to look for correlations with albumin, for example, coming into the CSF. If this was just a simple permeability blood blame barrier defect that was causing the CSF antibodies are test controlled for that. So we think not only is this great evidence -- further evidence of the central nervous system infection, it's also great evidence that we're treating the appropriate people in the GAIN trial. We've enrolled the right people to be treated with atuzaginstat. And finally, as you implied, this could be down the road a potential diagnostic to confirm the infection in the brain or even more usefully because we do see this very high correlation to a simple symptomatic diagnosis. You could use it prodromally to identify people who need treatment even prior to some symptoms. And even you could use saliva test eventually even earlier to identify people who are infected and need to be treated.

Very interesting. Maybe you can spend some time too elaborating on the connection between ApoE4 in gingipains and why it's so crucial for the program?

Yes. So ApoE4, as you know, is the biggest genetic risk factor for Alzheimer's. People with ApoE4 have a much higher risk than people with an ApoE3 or E2 genotype. And this has always been a mystery to the field. People have been researching it for decades. Why would this gene confer a risk to some people? It's a cholesterol transport protein and more recently known to help control inflammation and be involved in synaptic maintenance. So it's an important protein for the brain's inflammation response and ability to stay well essentially. And what we found -- well, other people found that ApoE4 is fragmented in the brain of patients and especially people with E4, there's more fragments. And whenever we hear about fragmented proteins in the brain, we think the gingipains could really be responsible. There's a lot of fragmented proteins in the brain of Alzheimer's patients. So we looked and we found that, in fact, the gingipains can explain some of these fragments that have previously been unexplained, and they seem to prefer ApoE4 over ApoE3, and we published this, you can find it on our website. So they will chop up ApoE4, we think causing a loss of function in those people sooner than people with E3 or E2, which is more resistant to the gingipain cleavage. And so what we did in our human study, our first human study, we showed that treatment with atuzaginstat blocks the fragmentation of ApoE in these patients and actually reduced fragments coming into the CSF preserving human brain protein, which is, of course, a good thing for these subjects.

Interesting. We've spent a lot of time, and I think field has thinking about neuroinflammation, and there are now more and more companies defining themselves as looking at it exclusively. I guess what's your observation been relating to gingipains and downstream -- excuse me, microglial or neuroinflammatory markers?

Yes. So microglia markers TREM2 is kind of a hot topic these days. We know that TREM2 mutations again, make people at risk for Alzheimer's disease. These are loss of function mutations. TREM2 is a microglial receptor responsible for detecting infections and has been shown to mediate clearance of intracellular gram-negative bacteria just like P. gingivalis. So we think that this, again, is a really interesting connection. P. gingivalis actually downregulates TREM2 as part of its immune evasion strategy. So that kind of doubles down on the importance of having functional TREM2 because Pg is fighting it all the way. So yes, we think it's really important to get at this cause of disease, the central actor which is Pg rather than necessarily the risk factors, which are allowing it to thrive or the downstream pathology that's coming from the gingipain activity.

So at AAIC, you guys had the poster showing that P. gingivalis infected neuronal cultures. And in the CBN mouse model, there is an increase in pTau 217. So what's the significance of the finding concerning the GAIN trial?

Yes. So pTau 217 is a very interesting new marker discovered by Lilly scientists that people are looking into more and more. It showed very high specificity for Alzheimer's disease in plasma. Actually, it's also in the cerebrospinal fluid. And again, whenever there's a new marker pathology in Alzheimer's, we want to go look at P. gingivalis and see what's the relationship, is it caused by P. gingivalis as well. And what we found, as you said, is pTau 217 is induced after P. gingivalis infection. This is the same oral infection of mice, showing induction of pTau 217 in the brain of these mice. And atuzaginstat can block that and normalize that pTau 217 level. So of course, we're very interested in these markers in the GAIN trial, and we'll be looking at phospho-tau markers as well.

And I guess with all that is the backdrop. Looking ahead, if the REPAIR study is positive, maybe you can just spend some time on speaking a little bit about the developmental and commercial plans?

That would be great. Chris, can you talk about the REPAIR study and commercial plans?

Yes, absolutely. So as a reminder, remember, the repair study is a substudy of the GAIN trial, and that's where we have a subset of these patients that are being assessed for periodontal disease endpoints, very traditional endpoints right down the middle of the fairway. Now what we found thus far, and we've disclosed previously is that we found that even without having specific enrollment criteria in the GAIN study for periodontitis, over 90% of the folks in this study have moderate-to-severe periodontal disease. We've also shown and have published and reviewed previously that we've shown really good efficacy of atuzaginstat in what's really the gold standard of both mouse and dog models in periodontal disease. So we've now optimized this drug to penetrate the biofilm. And we think that's really important for bio -- excuse me, for periodontitis in particular because it gets the drug to where it needs to be and that's really critical. So out of REPAIR, out of this substudy, we're going to be able to better understand dosing strategy in this particular patient population. We're going to have a better feel for time line, i.e., how long do they have to be dosed, is there a dosing strategy involved and what the powering for an additional Phase III study would look like in this indication? Now realize that we've just recently announced bringing COR588 into the clinic. And that's our -- part of our product life cycle strategy is that this is a second-generation once-a-day gingipain inhibitor that we plan to bring into clinical studies, and we'll be bringing this forward into periodontitis specifically as we move forward. We know that periodontitis is, of course, a large market opportunity. We know that the current standard of root planning and scaling is not just inconvenient to the patient, but frankly, has very minimal and very short-term results. So we know this is a market that's very receptive to novel innovation or a therapeutic innovation as we're bringing along. We know this not just from our interactions and market research with physicians but also with payers. And so we know that the payers believe that there's a tremendous ROI opportunity again for an oral once-a-day therapeutic for this population. So obviously, it's going to be a very rich data set. We know that payers -- I should also add that the payers have also identified periodontitis as a very burdensome disease from a cost perspective because they know the gateway -- the mouth is, in essence, the gateway to other diseases like cardiovascular disease and diabetes. So good oral hygiene may be preventative or help them manage or minimize the burden of those diseases as well. So we're really excited to get this data set, bring it along and then from there, again, we don't think there's a lot of doubt in terms of what the end points -- what the primary endpoints look like in a larger Phase III study and that's something that we'll look to be doing and updating time lines on here shortly after the first of the year as well.

Great. Now that was super helpful. I guess from a safety and tolerability perspective, how -- what have conversations been like with the FDA? How should investors think about the partial hold? Any context you can give, I guess, would be useful.

Yes. We feel really good about the safety of this drug. As we've said, there have been no long-term effect -- adverse effects that we are aware of for any participants. We have a wide dose range in the study, 40 to 80 milligrams. So we feel like in the real-world setting, we'll have lots of ability to work within that range. FDA has been very collaborative with us. They clearly understand if you look at both their interactions with us and in the field in general, they clearly understand the unmet need in this space. So we feel very good about that. And we feel very good that atuzaginstat will deliver a better efficacy and a better safety profile for patients.

Great. I guess, Casey, you started speaking about -- or you started off speaking about the pipeline and the platform potential of the company as well. So maybe that's a good place to kind of come full circle and end with as well, which is, maybe you could speak a little bit about what comes next, the pipeline beyond simply the lead program?

Yes, absolutely. We're so excited about the GAIN trial we're reporting out in just a few short months, but we are continuing to work on additional clinical programs. We'll be talking more about those in the coming months in addition to the ones that we've already announced in periodontal disease, Parkinson's and COVID. We just have such a great team at this company. I know people have seen Leslie recently talk about the biomarkers in Alzheimer's disease. And our CMO, Mike, and my Co-Founder, Steve, it's just a wealth of talent and scientific innovation. So we feel great about the future and continuing to expand this pipeline.

And maybe I can tie it back to Chris, too, which is that you guys have been very efficient with your capital and your -- since your existence. Now your market cap has obviously grown aggressively as you grow closer to exciting data. How do you think about the capital needs of the company going forward, given the pipeline that exists beyond simply what most people focus on?

Yes, Andrew, I think Casey hit the nail on the head earlier. This data set is really one of the most watched and sought after sets of data around because it's not just about what it tells us about Alzheimer's, which is obviously critical, but it's what it tells us about this target, and it enables this target and this platform and the pipeline. And so with that in mind, I feel really good that we're -- the post data set, we're going to have really a full menu of options in terms of how the company develops its pipeline and how it's capitalized as well. So I feel really good that we're going to have a wide variety of options, and we'll certainly do what's best for shareholders, of course, along the way.

Great. Well, I think that was an excellent coverage of the company and what's on the near-term horizon. Thank you both very much. I think it's a super helpful conversation.

Thank you.

Thank you very much.