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

Good morning, everyone. I'm Andrew Fein. I'm one of the biotechnology research analyst at H.C. Wainwright. It's my pleasure this morning to host a HCW @ Home event, even though many of you probably are not at home, with Quince Therapeutics. Here from the company are its CEO and Chief Medical Officer, Dirk Thye; and Brendan Hannah, its Chief Operating Officer and Chief Business Officer. So thank you both very much for being here this morning. We appreciate it. And maybe with that, the best place to kind of kick off is for people less familiar with the story, maybe you can give an overview and kind of speak to your focus on rare diseases, and then we'll go from there.

Sure. Thanks, Andrew. This is Dirk Thye here. I'm the CEO and the Chief Medical Officer, and the name of the company is Quince Therapeutics. We have a drug device combination, which is a platform technology. It's a machine, a tabletop machine that takes blood a small volume of blood from a patient, 50 mills, so about the amount of double espresso. You take that amount of blood in a syringe, you hook it up to the machine and you process the blood to encapsulate a molecule inside of the patients on red blood cells. So it takes a small volume of autologous blood and you're capable of putting a drug, a small molecule, a large molecule or even a protein inside of the patient's red blood cells. And then a couple of hours later, for the blood has been processed, you reinfuse that back into the patient. And depending on what that molecule is, it may have a variety of benefits. In the case of our lead compound, it's dexamethasone. It's actually a prodrug of dexamethasone, dexamethasone sodium phosphate. And the advantage of putting dexamethasone into a patient's red blood cells and giving it back to them is it facilitates what we believe is an efficacious dose. We're in Phase III right now to prove that. But it facilitates giving steroids chronically without any toxicity which, of course, is -- would be a huge medical advancement. And we already actually have quite a bit of safety data to support its safe use over many years. This technology has been in development now for about 20 years, about $100 million of venture capital money has gone into it. We acquired the innovators of this technology 3 years ago, a company out of Italy called EryDel. We've been working on it over the past 3 years and advancing it now into Phase III. There are -- going back to the Phase II studies, the original Phase II studies in our lead indication, which we'll talk more about, it's called ataxia telangiectasia. There have now been 3 children receiving it monthly for 13 years, and they have no evidence of adrenal suppression and they have no chronic steroid toxicities. And then going back to the previous pivotal trial that EryDel ran, there are about 70 patients that have been receiving it now for over 3 years on a monthly basis. it's a monthly dosing. And they also don't have any adrenal suppression or any chronic toxicity issues related to steroids. So we have a lot of evidence that this is method of giving steroids chronically without any toxicity. And the task now is to prove in Phase II that it's efficacious for this initial indication of ataxia telangiectasia, and if that's true, then thereafter, we'll be able to chase many, many different applications, both within rare disease and outside of rare disease.

Maybe given the seemingly broad-based applicability of the technology, maybe you can speak a little bit about the process by which you chose your initial indication? And why it's a natural spot in which to deploy the assets?

Yes. I think that's definitely worth discussing. We get that question why AT? Most people have never heard of AT. And as I just said, there are many, many diseases that could benefit from chronic steroids without toxicities. And some of it is -- some of the decision is a logical intellectual exercise and some is just serendipity, but I mentioned that this company, EryDel, had been working on this technology for 20 years, and they did pilot studies in a variety of diseases. They studied cystic fibrosis. They studied inflammatory bowel disease, both ulcerative colitis and Crohn's disease. And they also looked at rare disease like AT. The data in ulcerative colitis is actually pretty impressive, extremely impressive, but they pivoted to rare disease about over 10 years ago. And the reasons were that were primarily regulatory and commercial, as everyone knows, it's a lot cheaper and easier and faster to get an approval in an indication, a rare disease indication with nothing approved that is to go into something like ulcerative colitis that is a more complicated landscape of approved therapies where there's still a medical need, but the clinical trials would be bigger, longer, more complicated, more expensive. I think EryDel rightly believed that going into a disease like ataxia telangiectasia, where there's a big medical need, small population, but a big medical need when nothing approved allows one to do a placebo-controlled trial. And in the event that you have some good efficacy, a rapid pathway toward approval. And they, EryDel, previously performed the largest ever clinical trial in that indication, ataxia telangiectasia and had very compelling data in a subset of populations that would -- if you go back and look at who should be studied in the ataxia telangiectasia disease indication, within that group of patients, they had very, very compelling data. So after we acquired them, it was the obvious choice to continue for a next indication, but it also places the drug squarely within rare disease, which is a good thing. And within rare disease, we've looked at 70 different diseases that we could pursue, and we've got a list of about a dozen that we would want to pursue after this first indication. For example, Duchenne muscular dystrophy, almost every child with Duchenne is on steroids. And the over many years, there's been a big effort to find new types of steroids that don't have the same toxicities and there have been a couple of new steroids introduced, deflazacort and vamorolone, that have a slightly different AE profile, but steroid toxicity is still a huge problem in that population. And so there's another obvious place to go with this drug. And then there are, like I said, they're other indications in rare disease that we would like to pursue. So AT, which I can explain in more detail during the course of our conversation is the fastest least expensive way to get a foothold within rare disease and it's a placebo-controlled trial in an indication with nothing approved. So it's a really good place to start. And then we can -- if successful, we can move on thereafter.

And then just so everyone is clear, the technology is steroid agnostic, right? You can put you can use any steroid theoretically in the technology to encapsulate it in the patients on red blood cell?

Yes, we've started with dexamethasone because there's that long history of use in those other indications with dexamethasone, and I'll have to describe why putting it in a red blood cell matters. But because dexamethasone now -- it's actually dexamethasone sodium phosphate, it's a prodrug formulation of dexamethasone that has been approved. It's a generic drug. Because we're using that for rare disease, the commercial approach of course for rare disease is different than for non-rare disease. So for non-rare disease, we'll be initiating soon development program for betamethasone. And betamethasone and dexamethasone sharing a lot of pharmacological properties. They have some slight differences, but they're very similar. But betamethasone can be pursued for non-rare disease things that would be more appropriate, for example, for a Medicare population like rheumatoid arthritis or like the ulcerative colitis indications I mentioned earlier.

And so what -- maybe it's worth before we get into AT a bit, just explain to folks what happens on the intellectual property front. How does IP play into use of these generic drugs in your technology? And what happens with IP issuance? And how does that get impacted?

Right. It's not IP around dexamethasone sodium phosphate itself, which I mentioned is generic and will be pursue the approval will be pursued through a 505(b)(2) pathway, but I'll hand it over to Brendan to discuss the IP portfolio and how that protects both the machine and the process.

So we have IP around the machine, the process of encapsulating different drugs inside the patients on red blood cells and then the treatment of AT. But in addition to that, we also have orphan drug designation and to come up with your own generic, you'd have to come up with your own machine, your own kit, likely run the full battery of safety and efficacy studies. So it's a huge barrier for any merit company to come out with a generic version of it.

That's very helpful. And maybe just as a follow-up, just the regulatory process post the Phase III data. What is the regulatory process look like?

It's an NDA. It's a 505(b)(2) approach. It's regulated through CDER,CDER, the DN1 division of neurology. And although they run the review process, they get consultations from both the Biologics division, CBR and the Device division.

Okay. Got it. But CDER captains the process?

Yes, CDER DN1.

Very helpful background. Okay. Perfect. So maybe with that as the backdrop, you can spend a few minutes speaking more specifically about AT because as you mentioned, it's not an indication that there's a tremendous amount of familiarity with. So maybe you can speak to the unmet need, the prognosis of the patient journey and kind of give people some sort of background on patient numbers and all that kind of stuff?

Sure. Well, it's a terrible disease. I've been in our discussions with investors, I've been a little bit surprised with the lack of familiarity in AT because the epidemiology is very similar to Friedreich's ataxia, about 5,000 children in the United States and another 5,000 in the major markets in Europe with this disease. So in terms of pricing -- in terms of just market size, epidemiology and pricing, it's very similar to Friedreich, which a lot of people know about. But I think many people don't know about ataxia-telangiectasia because there hasn't been really any significant drug development other than EryDel's previous attempt, there hasn't been much research in ataxia-telangiectasia. But there's a really large medical need. These kids are very, very ill. They're born more or less normal. It's an autosomal recessive genetic disease. So you inherit 1 allele from each parent or in some cases, you could inherit 1 allele and then have a spontaneous mutation and the other allele. Vast majority of cases are inherited. And at a young age, there's apparently nothing wrong. But then when the child starts to go and develop around the age of 18 months to 3 years or so, the parents will notice some oddities in development and some movement problems. And usually, it gets -- it's a very hard diagnosis to make. Usually, the diagnosis is made somewhere between the ages of 2 and 4 years of age. And at that point, the primary symptom is that the children start deteriorating neurologically. So their development slows, their growth slows and their movement improvement doesn't progress like a normal child. And from the age of around 2 to 4 from diagnosis until the age of 10 or 12, they have rapid neurological degeneration. And they usually end up in a wheelchair by the age of 10 or 12. They also develop speech difficulties during that time due to the neurological problems. And then as they grow older, they also have problems with immunosuppression, so they get repeated infections and then they develop cancers and their lifespan is typically into their mid-20s. There is a slight spectrum of severity of disease, but the classic disease fits what I just described. So there's nothing approved for no disease-modifying therapies. These children just get supportive care. They get physical therapy, occupational therapy, psychological family support, they get treated for infections and possibly treated for cancers. But yes, they typically die in their 20s. So it's a very, very terrible disease. And so the ability to treat them with steroids could potentially be disease-modifying to the extent that it would delay the progression of the disease, hopefully, by a number of years, thus delaying the delaying the degeneration that leads to being in a wheelchair and possibly even helping with infections and cancers over a period of time. The best way to think about AT is that the ATM gene is a gene that sits really high in the biological cascade of events. So it's involved with cellular proliferation and maturation and it has a really important role in DNA double-stranded repair. So the easiest way to remember why these kids get problems is that if you interfere with double-stranded DNA repair, you're likely to have problems and cell populations that divide really rapidly or can't repair themselves. So neurons don't divide rapidly. They rarely divide it all. And so if you have a cellular dysfunction and a neuron, it's very hard to replace it. So that's why they get neurological damage. And then their immune system cells, there's high turnover in those cells. So those cells die off really, really quickly. And then of course, without double-stranded DNA repair, you're prone to developing cancers as well. So that's why they have those 3 main areas of pathology.

Very helpful. So in the context of the current standard of care, where does steroids fit in? What's kind of the ideal time to start them? And what limitations do physicians encounter where your use of your technology might offer a key advantage?

Yes. I mentioned there's nothing approved, and there's also no real standard of care, except for supportive care and steroids are not typically used off-label for this disease either. And the reason is because they're toxic and their toxicities exacerbate some of the problems with the disease like immunosuppression. But the whole rationale behind why this might work if you had a safe steroid, why am I work in this indication comes from initially a case report about 12 or 15 years ago, there was a case report of a child with an asthma exacerbation who was treated with a course of short-term course of steroids. And it was reported that their neurological dysfunction rapidly improve during the time they were being treated with corticosteroids. So that led a few different groups to do some studies in this indication, small pilot studies, academic studies in small numbers of patients around 6 to 10 patients and they were using low-dose steroid regimens in an effort to avoid the toxicities and see if they could generate some efficacy in these populations. And there were some signals of efficacy. But in all cases, and I think there were 3 main studies, and they tried different regimens and they try different approaches to avoid toxicities like 1 day on, 1 day off, 2 weeks on, 2 weeks off. But in all cases, they did see a little bit of efficacy, but in all cases, they had toxicity issues. And the toxicities are a big problem because you don't want osteoporosis in this population that's already going to be wheelchair-bound. You don't want immunosuppression because they already have problems with infections. So it was never adopted as a standard of care. However, if you could have the benefit, the anti-inflammatory and the other biological benefits of steroids related to the pathophysiology without the toxicity, then it could be a huge advantage. And so that's where it doesn't make sense to use dexamethasone alone. But if you can encapsulate it in the red blood cells and eliminate the toxicities, then it does make sense.

Great. And maybe before we move on, you can just go back for a moment. and speak to the learnings from the work that EryDel did in terms of how you factor that into your trial design and how your current trial design reads out -- excuse me, differs relative to what EryDel had done?

Okay. Yes. I think it will be helpful to show a slide here on the slide. So yes. I was able to share it, but I'm not able to manipulate -- here you ago, okay. Okay. Let me show you -- can you see this?

Perfectly.

Okay. This is a graph demonstrating neurological function over time using a scale that measures different neurological functions to scoring system. So basically, the line going down means you're getting worse, and this is following a group of patients longitudinally over time. So you can see that from the time of diagnosis when you're on the order of 2 to 4 years old until you're 10 or 12 years old, you're going to deteriorate really rapidly. And then thereafter, your neurological dysfunction is going to plateau partially because you're already in a wheelchair, but also just then you've lost so much neurological function that the tests that you run to measure neurological dysfunction, they rely on gait and lower limb function and a lot of some upper limb things and some vocal and ocular things. But by the time you're at above 10 or 12 years of age, the neurological dysfunction really slows down. So if you were to design a study looking at neurological dysfunction over a short period of time, 6 months, which is what EryDel did, if you're selecting a population for a study, you would obviously want to select this patient population in the green bar that's deteriorating really rapidly because that's going to be the population in which you have the most sensitive effect. What EryDel did was they studied children 6 years of age and older, and they didn't limit they didn't limit the number of older children that could be enrolled. So what happened, I think they wanted a broad label and because these studies are hard to enroll, they wanted to facilitate enrollment. And I believe they were confident about the effects of their drug and children of all ages. So what happened in their study is they ended up enrolling half of the children who are younger in the 6- to 9-year old age group and half of the children were 10 years of age and older. So the younger population that you would expect to do very well actually did extremely well. In the FDA-specified end point, which is the one on the right here called the RmICARS. It's a neurological scoring system that I can describe in more detail if you want. But that's the one that's specified by the FDA as their desired primary endpoint, and it's the one that is specified in our special protocol assessment with the FDA for our ongoing Phase III trial. If you look at that younger age group with that endpoint, they did great, highly statistically significant. If you look at the 10-year and older population with that same endpoint, you saw very, very minimal difference, as you would expect. So if you were to design a de novo, like I said, you're going to want to target these patients. So that's what we're doing. We saw those results and it was a prespecified subgroup for the EryDel studies, that 6- to 9-year old population. So we took that population, and we're repeating a Phase III study just in that group of patients with a single dose of encapsulated dexamethasone sodium phosphate versus placebo over a 6-month period.

And just remind people of the timing?

Enrollment has completed. We enrolled 83 patients. And I should also mention the FDA asked to include at least 20 patients over the age of 10 years, but they're not included in the primary analysis population for the reasons I mentioned, and that's agreed to under the SPA. The purpose for including patients over the age of 10 is to collect safety information, we do have efficacy, but it won't be statistically powered to look at differences there so that you don't have an age restricted label. So there are, I think, 22 such patients, 10 years of age or older included in the study for a total of 105 patients. And we will get top line data in the middle of Q1. So in February of 2026, we'll have top line data.

Okay. Great. So maybe now we can move on a bit to the platform. If the Phase III data are positive, maybe you can speak to read through. I mean, to what extent should people think about probabilities of success if you're successful in this clinical study to additional use of other corticosteroids in your technology, whether it be for DMD or other indications that you might pursue down the road, to what extent does come a derisking event for the platform?

Yes, it's a good question. I think the derisking is all about efficacy, do we have the right dose to prove that it can be efficacious in a disease where it might benefit a patient population? Because the dosing due to just the pharmacokinetics and pharmacodynamics of delivering it through red blood cell, it dramatically changes the biodistribution, the pharmacokinetics, the pharmacodynamics. So you can't think of this as a one-to-one dosing equivalent. Dexamethasone is dosed typically at about 6 milligrams per day. And so over the course of 30 days, you'll have 180 milligrams. With ours, over the course of 30 days, you'll have about 1/10 of that. 1.4 milligrams on average over the course of 30 days because it's a once monthly dosing regimen where the drug is very slowly released out of the blood cell as the cells are circulating. So and that's sometimes hard for traditional pharmacologists to get their head around because the PK/PD relationships are so much different for this. So that raises questions about, well, is that the right dose? You have such a low dose? Is it going to be effective because we know that low doses give an IV, given that low are not going to be effective? So that's the real question that's being answered here because as I mentioned at the beginning of our discussion, I believe I already have enough data to convince pretty much any regulator anywhere on planet Earth that this is safe I mean we set 3 kids have been taking it for 13 years monthly with no steroid toxicities, and we've got that group of 70 that have been taking it for over 3 years. So it's definitely a safe way to give steroids. If we show that it's also an efficacious dose, then that opens up a ton of other indications, beginning with DMD because that will be one of the first questions people or physicians that treat DMD and their families will ask is, well, how do we know this is going to work. We already know steroids work, but yes, we have toxicities, but we know how to dose them? So if we demonstrate an AT that, yes, this has important biological effects that can help with neurological pathology that will be very convincing. And in addition to that safety data, we haven't published it yet because we haven't finished our analysis, but we do have quantitative RNA expression profiles from that previous Phase III study that demonstrate that we have, at trough levels, at 1 month after a dose on months 1, 2 and 6 at trough. We have significant biological effects as measured by gene transcription. It's quantitative RNA. So that's another supportive data point, extremely supportive data point to show that even with these lower doses, 30 days after a dose, you are still affecting gene expression in a very significant manner. -- through a variety of pathways, upregulation and down regulation of genes involved with neurological transmission, mitochondrial function and inflammation pathways.

Are there learnings from the previous early-stage investigator-led studies in different indications comparable to the learnings you described in AT where you know you can use the previously generated information to figure out perhaps the ideal segment of a patient population to pursue or how to think about disease severity when enrolling the clinical study or aside from DMD, are there natural spots you can foresee taking the asset to going forward?

Yes. But every disease is different. So you have to -- every disease has a little bit of a complicated -- AT is the least complicated because there's nothing approved and you could do a placebo-controlled trial. But for example, in DMD, there are several steroids that are used and approved and a lot of kids are on, and you can't do a non-inferiority study because that would be huge and take forever and be extremely expensive. So every disease is a little different. So you have to analyze where is the medical need within the patient population with that specific disease. What is the competitive landscape? How can you design a study that's at least feasible from a timing and financial viewpoint. So it's hard to make generalizations about all the diseases as a group. But I guess, one thing that is tangentially related to what you said about, is there anything in the body of evidence that EryDel previously generated that can help guide us on what to study, there is -- while you're asking that question, I was thinking about the previous data in ulcerative colitis because that was extremely informative. So what they did was they did a pilot study where they took patients with ulcerative colitis or Crohn's, and the patients were steroid-dependent. So they were in remission but steroid-dependent and they had a history of steroid dependence. And then they randomized this group of patients -- I think it was on the order of 30 patients or so. They randomized into 2 groups, one that would stay on their steroid regimen, or one that would get converted over to encapsulate dexamethasone. And then what they did in both groups is they tapered the conventional steroid regimen. So the control group would get tapered to basically placebo. They get tapered off steroids. And then the active group would get tapered off, but they're still getting encapsulated at approximately 1/10 of the dose. And in that study, over time, they had the control group that ended up basically they were steroid-dependent and their steroids are tapered, they had an 80% recurrence rate. And in the encapsulated group, they had a 20% recurrence rate. So that demonstrates that the encapsulated dose was able to maintain remission in these patients. Furthermore, these patients all had preexisting steroid toxicities and the steroid toxicities resolved in the group converted over to encapsulated. So that's extremely strong supportive evidence of the fact that these lower doses when encapsulated into red blood cells do have an efficacious effect in diseases where anti-inflammatory properties are important and it's also extremely compelling evidence regarding the safety profile. So that helps guide us with respect to your question about what do you know from that? I mean it helps guide us at least in ulcerative colitis or Crohn's disease on which types of patients might benefit, how we might design a study I'm not sure you could pull off that tapering to placebo arm these days, but that was done quite a while ago. But it also tells us about dose and the different components that we might be able to measure over time and the relative time course of effect for those variables.

Very interesting. I guess is there something in the pharmacokinetic or pharmacodynamic work that you've done, which sheds light on the right equation to think about in the context of dosing? Or how do you approach it when thinking about new indications?

Yes. Let me show you something really important because it's a little bit complicated for -- it's complicated to just explain this for the first time because like I said, people think they think about dexamethasone on a milligram per milligram basis, but these are completely different ways of delivering the drug to the tissues where it's having an effect. So you can't just think about, oh, is it this many milligrams per kilogram given over this period of time because they're totally different. So this is just a graphic of how it works. You take the blood, you run it through the machine. This is what the machine looks like sits on a table top. You take the blood of 50 mills, not very much blood, 1% of your circulating blood volume. You hook it up to the machine over 90 minutes, it uses a series of hypotonic solutions to condition the wells to make them porous incubate them with the dexamethasone somodium phosphate and then hypertonic solutions and excipients shrink the cells back down and the dexamethasone sodium phosphate gets trapped inside of the cells. It doesn't quickly leak out of the cells because the phosphate group is ionized so I can't diffuse across the lipid by layer. But then what happens intracellularly is intracellular phosphatases will cleave that phosphate group, and it renders dexamethasone nonpolar -- and so dexamethasone, the nonpolar native dexamethasone will diffuse through the lipid bilayer as the red blood cells are traversing throughout the body. And those red blood sets are going to spend more time in tissues with large capillary beds like the lungs or the brain or the spleen, and there's also going to be cellular turnover in the spleen. So you're going to have dexamethasone being in golf directly by macrophages. So there are a lot of complicated and hard to study variables related to biodistribution and immunology. But simply from a PK perspective, it takes the PK curve over 1 month that looks like this. This is a standard dexamethasone dosing 6 milligrams per day, and you give it once a day, over 30 days, the PK curve looks like this. Even if you're dosing the lowest effective dose of dexamethasone, you are going to continually exceed these toxicity thresholds I mentioned the list of toxicities for corticosteroids. They're up here. You get hyperglycemia that leads the diabetes and immunosuppression. But the most sensitive parameter is adrenal suppression and even at low doses, you're going to get adrenal suppression after a week or 2 of steroids. And those are the big problems that people have who need to take steroids over time. So this is what it looks like if it's an efficacious dose of steroids and note the Cmax here because it's important. We take that PK curve and we change it to look like this over 1 month. So it's a once monthly dosing of the encapsulated drug. The important features that are required for efficacy for corticosteroids are an initial Cmax, a Cmax of about 100 nanograms or per mill or more is important to create near saturation in different tissue beds of the corticosteroid receptors, and that's demonstrated most clearly in studies in ARDS from COVID. So with conventional steroids, you can get that Cmax, no problem. You just have to keep dosing it. With our dosing, you're going to get that Cmax of above 100, but then what you need is receptor occupation over time. With conventional steroids, you get receptor occupation over time by giving it frequently. And that's true, by the way, of alternative formulations, pegylated or liposomal or IM, IV, subcu. You have to give them frequently in order to get the persistent receptor occupation. But here, you have this long tail of drug exposure as the red blood cells are circulating throughout the body. And that's what gives you, we believe the persistent receptor occupation that will lead to efficacy. Now the proof will be in our Phase III AT results. These things are very hard to study nonclinically for a variety of reasons. But the proof of weather this PK curve actually leads to efficacy will be this Phase III results in February of next year.

I think that was very helpful. Maybe given the time remaining, we can shift a little bit to the AIDE technology platform. And maybe you can just explain people what it is and given an old view and how it works and how it's better than conventional therapies?

The AIDE platform?

Yes.

Okay. Well, yes, that was basically what I was just showing there.

Yes. I guess maybe you could speak about how it I guess you touched upon it but I think the question comes up about how does it compare to liposomal or pegylated steroid delivery?

Okay. Yes. I think my best answer for that without getting more complicated is what I just said. So what we call AIDE is just the process of encapsulating drug inside of a red blood cell. It's Autologous Intracellular Drug Encapsulation. We call it AIDE. But it's essentially what I was just describing on the slide about what this machine does. So this is the machine. It sits in the clinic or in the lab or on a tabletop or on a cart wherever the clinic wants it to. It's not hooked up to the patient, you just take the blood from the patient and you connect the syringe of blood to this machine. It's fully automated software-driven process. You can see the touch screen here. You hook up the bags of fluid in the tubes and you push start. In over 90 minutes, it will encapsulate a molecule doesn't have to be dexamethasone sodium phosphate. It will encapsulate a molecule inside of the red blood cells. So depending on -- you're going to have different effects depending on what you encapsulate dexamethasone or betamethasone, phosphate will have the advantages that I demonstrated with those PK curves where you have kind of your initial Cmax, and then you have this long, slow tail, and that will provide benefits for steroid delivery. But you could, for example, put an enzyme inside of a red blood cell. So enzyme replacement therapies have issues with enzyme degradation or immunogenicity when they are injected. -- you could put an enzyme replacement therapy inside of a red blood cell. In that case, it would be a totally different approach because the enzyme would just stay within the red blood cell and you'd have to get the substrate to get inside the red blood cell to be metabolized. So that's the exact opposite of what we're talking about. We're talking about taking a drug and having it leak out you could also take a therapy and put it in the red blood cell and have the substrate brought in for metabolism. So depending on the disease that you're approaching, there are different methods you could use to provide advantages. I think for us, dexamethasone, betamethasone. Those 2 things are alone are enough to keep me busy for the rest of my life. We could study 100 different indications and we can study rare disease with dexamethasone and non-rare disease with betamethasone. For other applications such as enzyme therapies or other drugs, you could put chemotherapeutics in there. you could do a lot of different things. We would approach those via partnerships just because it would be impractical for us to try and do everything. But that would be the idea with the technology platform. Hopefully, if we show that it works, it will open the eyes of potential partners to start thinking about what other applications they might be able to pursue with it and so that we could enter into research partnerships with them.

And Andrew, going back to your point about technologies to extend the half-life of steroids like pegylation or liposomal dexamethasone, we have seen some of those compounds taken into the clinic, and it does significantly extend the half-life, but it appears that they're still having the same steroid-related AEs. So by encapsulating it inside of patients on red blood cells, it seems like it changes the PK enough to have to be fundamentally different where you're not seeing the steroid related AEs from it.

Got it. Can you speak a little bit about the, either of you, the machine itself and maybe learnings from the European experience in terms of machine placement, how do you decide which clinics have the machine? Is it something someone buys? How does all that work logistically?

Go ahead, Brendan.

Yes. So the plan is to provide the machines for free to the site. And we have a partnership with Option Care. That's the biggest outpatient infusion network in the U.S. They have about 180 sites. And they'll handle the administration, the pharmacy, the 3PL distribution patient hub. So it makes it much easier for a small company to launch a product on their own and use essentially a single contracted entity as opposed to going out to 50 different centers of excellence. So the machines are pretty cheap, and we think at peak will need about 50 sites in the U.S. to cover at least 80% of the AT patients within a 90-minute drive of each site. But using Option Care makes it much easier for the patients as opposed to going into a big academic center where you're parking a half mile away, going up and down stairs, elevators, and a lot of these patients are not highly mobile, they can just pull out right at the site, get their blood drawn within 15 minutes and be out within a couple of hours. So the patient experience is going to be much better. And then the reimbursement pathway is, well, since we'll be providing the machines for free, what we will be charging for is the monthly administration kit. So that's going to include the drug, the process solutions, the tubing, everything you need for each infusion and the direct cost tickets on that are incredibly low. And then that's going to be reimbursed under the medical benefit like a standard on monthly infusion.

All right. Very helpful. Maybe you can kind of speak about kind of maybe the open-label data you guys have seen so far and what can signal about the durability of effect?

Okay. That's a good question. So there was an original Phase II study performed in a relatively small number of patients. I think there were 20 patients or so, and that was 13 years ago. And as I mentioned, several of those have continued under a compassionate use program in Europe. And then there was the original study that EryDel performed that we previously talked about, and we have 65 or 70 still ongoing in that open-label extension several years later. And then our current trial also allows for open-label extension following the end of the 6-month treatment period for up to 2 years. And so far, 100% of the patients that have completed the 6-month treatment period have elected to go into the open-label extension. So I guess just based on the number of patients and families that decide to continue therapy in an open-label manner, I guess that's anecdotal information that they believe they're getting something beneficial out of it because we're still in the research phase. So it's not always convenient for these patients to get to the clinic. A lot of them actually have to take a flight for significant distances to get treated every month. So it is for them, quite a commitment. But despite that, they've continued. From a purely scientific perspective, it's really hard to justify definitive conclusions about efficacy in the open label. So it's open label, it's noncontrolled, there's no placebo group. Historical comparisons with natural history studies are fraught with all kinds of scientific confounders. So I don't think you can make definitive -- basically, there's no good natural history data set for this disease. So even making such comparisons would be difficult. And if we tried would be highly criticized I'm sure by the scientific community. So I don't think you can make definitive conclusions with respect to efficacy, but you can for safety because safety is very clear. There are physiological parameters that we measure over time. Lots of blood tests. We look at weight, height growth curves. Even growth curves are hard to compare to natural history data sets. But overall, it's clear that there are no safety liabilities over many years when this is given monthly. So I think that data set is going to be highly supportive for our NDA. On efficacy, I think it's a much stronger argument for in a double-blinded placebo-controlled setting. So I think that's what's going to drive the efficacy conclusions.

And we have heart, too, from some of the PIs and the open-label extension of when patients drop off drug just because it was too much flying every month for the child that they had a pretty rapid decline as well, like maybe on placebo.

Very interesting. I guess with the caveat that ultimately, it will be driven by what you show from an efficacy perspective, just broadly, how are you thinking about pricing the AT indication right now?

Yes. So from a pricing perspective, we're still doing payer research at this point. But based upon initial care research in the U.S. and recently launched rare disease drugs. It seems like the $600,000 to $700,000 per year range is kind of standardized now for a severe rare disease like this and similar epidemiology.

That's helpful. And then on the strategic partnership you mentioned that you guys signed with Option Care. Did they assist in the marketing at all or it's simply the deal simply focuses on having the machine at their infusion sites?

Yes. So they're purely administration and 3PL and pharmacy. And so the marketing would be coming from us. We think with having option care, we can have a very capital-efficient commercial organization likely maybe at peak, 10 reps and 5 MSLs should be able to cover the vast majority of the U.S. So it's something that a smaller company launching their first product, that could be bite-sized for them and actually feasible.

I mean, given the proximity of the data release, right, next February, how do you think about kind of the right time to start laying the groundwork from a commercialization perspective?

So we have been doing some of the groundwork of patient sizing working with Option Care, building out the plans for T minus 24 to launch. But I think the big inflection point is going to be Phase III data. And from that point, we're going to go full speed all the way through launch.

I'll quickly post data release, do you think you can give folks clarity on the regulatory process and the expected timing there in and all that sort there?

Well, drug device combinations are definitely more complicated and harder and have longer time lines to NDA than molecule drugs, average for small molecules is around 6 months, and the average for drug device combinations is about 10 months. But we have a couple of advantages in our favor that could shorten those time lines. One is that the device itself, a lot of work has gone into it over that 20-year period, it's actually already CE marked in Europe. So the device is approved in Europe as a demonstration that it does reliably and reproducibly what it's supposed to do, which is encapsulate molecules. But it's not approved for use with the drug in Europe, of course. So the regulatory pathway in Europe is a little bit different for that reason. In the U.S., it's regulated as a drug device combination. But the fact that it's 505(b)(2) simplifies the drug product, which is dexamethasone sodium phosphate the drug product aspect of the NDA is more straightforward, and we've already completed our 3 validation batches for the manufacturing of that. So CMC, which is typically rate limiting for NDAs. And if something goes wrong in CMC, it takes a long time and a lot of money to fix it. So that is quite derisked in our case and will allow us to expedite our filing. And then I mentioned the machine work that we're already writing up the aspects of the NDA with respect to that. So it's going to be -- and because it's 505(b)2, there's no significant nonclinical portion of the NDA. So all of those things make it a little bit easier for us. I mean we'll be shooting to beat that 10-month time line. I anticipate it will be somewhere on the order of 7 to 9 months, hopefully. And we should be able to guide people with more clarity, I would say, by the middle of next year, middle of 2026. So data will become come in mid-Q1. And then by midyear, we should have a clear idea on the specific timing of the NDA.

Great. Well, I guess, we're almost out of time. So maybe I'll leave it to you to offer any final thoughts sort of touch upon something that maybe have not touched upon.

Well, I appreciate the opportunity to try and get this in front of a broader audience. We bought this company 3 years ago, and Brendan discovered the opportunity. And when he showed it to me, it is a little complicated at the machine and the device, but the ability to give steroids in an efficacious manner without toxicity is would be huge I mean not just for rare disease, but imagine all the non-rare diseases in all the different populations and how it would radically transform your ability to treat many, many different diseases. And I don't -- I think that's been underappreciated. When we talk to investors a lot of times we focus on AT because that's the near-term opportunity. And people try and compare this to regular steroids as well and this is a fundamental transformation if we show that it's efficacious in AT, it's a fundamental transformation of how one could use steroids in many, many different areas. So to me, having worked drug development, biotechnology for many years, it's the biggest opportunity I've ever worked on. It's groundbreaking and trying to get people to think of it in that way, as has been surprisingly difficult. So hopefully, this discussion opens people's minds a little bit to think about this differently, but I'm really excited about the future. And I think our chances of success in AT are very, very high. The average Phase III study might have a 65%, 67% chance of success. I put ours at over 85%, and I base that on all the variables we discussed previously with respect to the previous Phase III trial that was done and the data in the subpopulation that we're studying right now. So I think we're in great shape, and we're not too far away from the answer. So in February, we'll find out.

Great. Well, very exciting. We're on the precipice of a potential transformation, I suppose. So thank you. Thank you very much for speaking with us this morning. We appreciate it. Both of you.

Okay. Bye now.

Bye.