Rare Thyroid Therapeutics International AB (EGTX) Earnings Call Transcript & Summary

Good morning, everyone. I would like to welcome you to this introduction and presentation related to this morning's announcement on PledPharma's intended acquisition of Rare Thyroid Therapeutics or RTT. Joining forces with RTT, we have the ambition to create a new company focused on late-stage development on commercialization in the highly attractive orphan drug segment. Operator, next slide, please. In today's call, we can -- we will walk you through the rationale for and how to create this new interesting company and then go into a little more detail on the 2 late-stage drug assets, Emcitate and Aladote. That will be the backbone of the new company, including their commercial opportunities and path to market. We will end with a question-and-answer session. So we who present today are myself, Nicklas Westerholm, CEO of PledPharma since 2007 -- '17. After the reorganization, PledPharma has become a late-stage drug development company focusing on improving treatment of serious medical conditions with a great medical need where alternative treatments are lacking. The company has up until today 2 projects in late clinical phase. I've had the privilege to meet most of you before, but a short summary of myself. I'm a chemist by trade and spent 16 years within AstraZeneca before joining PledPharma in numerous different roles such as late-stage development, Investor Relations and commercial manufacturing. But I will hand over to my colleague, Peder Walgen, to introduce himself -- Walberg, I apologize.

Yes. Good morning. I'm Peder Walberg. I'm the Founder and CEO of Rare Thyroid Therapeutics. Quick background since I haven't met most of you. I'm a physician by training. I also have a degree in economics from Uppsala University. I spent a couple of years in the clinic doing primarily surgical specialties and then joined the Boston Consulting Group to work as a strategy consultant for a couple of years. Moved on to big pharma, spent some time at Novartis in the Nordic region, and then joined a company called Swedish Orphan prior to its acquisition by Biovitrum to form Sobi. So we -- I was part of growing Swedish Orphan from Nordic specialty pharma to something with a pan-European presence and also growing its portfolio quite substantially during the time. So following the acquisition by Biovitrum to form Sobi, I started a company called Medical Need, where we focused on distribution and marketing of orphan niche assets in the -- primarily in Northern European region. A few years into the time of Medical Need, we identified a compound called Decuprate, which was later the foundation for Wilson Therapeutics, where we had an exclusive license for Europe, which we later, together with HealthCap, divested to Wilson Therapeutics, which was, as you know, later divested to Alexion. Medical Need itself was divested to a company called Impilo 2 years ago. And at the time, we spun out Rare Thyroid Therapeutics containing the asset Emcitate, which we had already developed for a few years within the frame of Medical Need.

Thank you, Peder. Furthermore, we also have our Chairman of the Board, Håkan Åström, with us today; together with our Chief Medical Officer, Stefan Carlsson; and Vice President, Product Strategy and Development, Christian Sonesson. Next slide, please. So the purpose of this transaction and merger is to create a new exciting development company that focuses on orphan drugs, developing drugs for the treatment of rare diseases where there currently are no adequate treatment methods. Our focus will be on the projects in late clinical phase. The new company will plan to name change to Egetis Therapeutics. Egetis is Latin for rare or lack of. And we will have from the start 2 orphan drug products in late clinical phase: Aladote for the prevention of liver damage due to paracetamol poisoning; and Emcitate, which is being developed to treat patients with so-called MCT8 deficiency. MCT8 deficiency leads to low or no thyroid hormone levels in the brain, which, in turn, leads to severely affected neurocognitive development and disability. We will present these projects in a little more detail later on. We see the development of a drug in the orphan drug segment as very attractive. Let's note that the costs for taking an orphan drug through a Phase III program is, on average, about half of the development costs of a drug not aimed at rare diseases. Also, the success rate is higher, about 50% higher success rate from Phase III to approval in the orphan space compared to the nonorphan space. Again, we'll present a little more detail about the orphan drug segment later in this call. Furthermore, we also see great commercial potential in the multibillion-dollar class for our 2 drug assets. Our plan is to be able to launch in both U.S. and the EU within approximately 3 years with our own tight, focused marketing organization. There is also a great deal of common cutting-edge expertise at PledPharma and RTT in the clinical late phase drug development, including the orphan drug segment, but also now in the registration and launch of orphan drugs. That would be a great strength for the new company. Next slide, please. We see great benefits, complements and synergistic effects on many levels with merging PledPharma and RTT into a new development company that is focused on orphan drugs in late clinical phase. Both companies contribute with a lot of expertise and unique know-how, which we can use from day 1. We also see how Emcitate and RTT capabilities fits very well with the new long-term strategic plan for PledPharma focusing on the orphan drug segments. Together, we have a critical mass to improve operational efficiency when taking the 2 clinical projects further. The size of the companies, the geographical proximity and complementary functions enables for a fast and smooth integration to realize these synergies. And as I mentioned, in connection with the merger, the new company is also planning to change its name to Egetis Therapeutics. Next slide, please. So let's go a little more into the detail of the transaction itself. PledPharma will acquire all outstanding shares in RTT. The purchase price for the shares in RTT consists of a cash purchase price in the amount of SEK 60 million funded from own cash in hand, which will be paid on closing. It also contains a share purchase price consisting of approximately 64 million new shares in PledPharma, corresponding to approximately 41% of the total number of outstanding shares after our intended rights issue that was also communicated this morning. In addition -- apologize, the sellers of RTT are entitled to an earnout payment based on future net sales of Emcitate as well as an earnout which is payable in connection with the potential sale of a so-called US Rare Pediatric Disease Priority Review Voucher. The offer is conditional on PledPharma completes a fully guaranteed rights issue of approximately SEK 200 million. The funds will primarily be used for continued clinical development of Emcitate and Aladote after market approval in the main market, initial commercial preparations and to give the company financial flexibility to, among other things, continue to drive our project portfolio forward. The transaction is, of course, conditioned on that the extraordinary general meeting on the 28th of October approves the Board of Directors' resolution regarding the rights issue and the in-kind issue. The transaction is expected to be completed in early November. Next slide, please. Then taking a step back to consider the orphan space. The orphan drug segment is very attractive and interesting segment for small companies like ours, which, thanks to important efforts from leading regulatory authorities, has become increasingly attractive to companies working with research and development of drugs. Orphan drug status is given to products at a small -- with a small patient groups with a great medical need. The authorities are actively working to create benefits for these companies that choose to develop drugs for niche diseases. The incentives cover both development, registration and marketing opportunities and can include both the scope of the studies, lower cost, shorter lead times for registration and market exclusivity, as called out on the right-hand side of the slide. As mentioned earlier, this has led to a 50% higher success rate for drugs in the orphan development space. In addition, this is a segment where there are very few or no competitors, at the same time, relatively well-defined patient groups. The price of orphan drugs and the orphan drug segment is also very attractive compared to drugs that target a larger patient groups. Next slide, please. So let's turn our attention to our highly promising drug candidates in the newly created company. Combining 2 very promising drug candidates in 2 different orphan drug indications in one and the same company also create great opportunities for us. We'll soon go into more detail regarding both Emcitate and Aladote, but it's worthwhile highlighting some of the overall benefits of these very promising development projects. For both of these areas, there is a great medical need, and there is currently no treatment or no adequate treatment available. Both projects have so-called Orphan Drug Designation status or ODD in the U.S. Emcitate also have the same status in Europe, whereas for Aladote, an application is now planned after Brexit. Both projects have undergone successful clinical studies and are now on their way into registration-based Phase IIb/Phase III studies, which we hope to be able to start with Emcitate this year and the registration-based study for Aladote at the beginning of next year. Furthermore, none of the projects have any competitors in the clinical -- in clinical development, which gives us a very big competitive advantage. Next slide, please. So to sum up, the new company's project portfolio, which consists above all of 2 very promising clinical orphan drug candidates in the late phase, Emcitate and Aladote, both of whom are entering registration-based studies with potential market for these projects in the multibillion-dollar class. Furthermore, our position on PledOx hasn't changed. As we communicated earlier this year, we decided to prematurely stop the Phase III POLAR program, which is PledPharma's other major clinical project. We have now completed data collection during third quarter, and results are expected in the fourth quarter this year. The total Phase III data generated in the POLAR program enables a thorough evaluation of safety and efficacy as well as a benefit/risk assessment with PledOx. This evaluation will determine whether it's justified with additional activities to find a way forward for PledOx to treat nerve damage associated with chemotherapy through partnership. Next slide, please. If we then look ahead to the next -- into the next few years, we hope to pass several important milestones leading up to the potential launch of both Emcitate and Aladote in the U.S. and EU in 2023, 2024, including very important interim data for both projects in 2022. Of course, our focus right now is on the planned clinical trial, which we hope to begin later this year for Emcitate and early next year for Aladote, which we will return with more details about the start of these studies and design of the studies later on in the presentation. Next slide, please. So with that, I will now hand over to Peder just to go through the details of Emcitate and the clinical development program. Next slide, please.

Thank you. So first, I would like to introduce you to MCT8 deficiency, the condition which is a lead condition for Emcitate. MCT8 is a thyroid hormone transporter, which transports thyroid hormones across cellular membranes in the body. MCT8 deficiency is a genetic disorder resulting from mutations in the gene encoding MCT8, which is located on the X-chromosome. As a consequence, MCT8 deficiency affects almost exclusively male. The estimated prevalence of MCT8 deficiency is 1 in 70,000 males. The lack of a functioning thyroid hormone transporter results in a combination of too high and too low thyroid hormone levels in different tissues. In tissues which are dependent on MCT8 as the predominant transporter of thyroid hormone, we will see low or no thyroid hormone levels inside the cells. One such organ is the brain, where the MCT8 is the predominant and only thyroid hormone transporter on the blood-brain barrier and also into the neurons. The disruption of adequate thyroid hormone transport also distorts the body system for thyroid hormone level control. This means that disruption of the MCT8 function leads to very high levels of thyroid hormone in the blood. This will affect organs which are dependent on other transporters than MCT8, including the heart, liver and kidney. MCT8 deficiency is a very severe disorder, which normally presents already within the first few months of life. Predominant symptoms are muscle hypoplasia and hypotonia and severe neurocognitive disability. Most patients never develop the ability to sit or walk independently or even hold their head and remain dependent on caregivers throughout their entire life. At present, there is no therapy available to try and address the underlying thyroid hormone-trafficking defect, and standard approaches for thyroid hormone disorders are not effective or possible. As a result, there is a significant unmet medical need for patients with MCT8 deficiency, both from a humanitarian, health, economic and societal perspective. Next slide, please. So moving into the solution. If you can see on the left side, we have a description of a normal cell with a functioning MCT8 transporter and a dysfunctioning MCT8 transporter below. As you can see, in the normal cell, T3, which is a predominant thyroid hormone, will pass through MCT8 and into the cell and further on into the cellular nucleus, where it will exert its activity. In the defective situation, the T3 is not able to enter and will not be able to present its signal into the cells. Thyroid hormone is a system-wide regulator of metabolic activity in the body. And it's also very, very important for the development of certain tissues, including the central nervous system. Looking at the right side, our solution, Emcitate, contains a substance called tiratricol. Tiratricol is a thyroid hormone analog with high chemical and structural similarity to the endogenous T3 hormone. In fact, a small part of thyroid hormone in the human body is present in the form of tiratricol. But unlike T3, tiratricol can pass across cellular membranes without the functional MCT8 transporter. As such, it can enter into cells which are dependent on MCT8 and exert and restore the thyroid hormone signal inside those cells. Tiratricol has been approved on the French market for 40 years for a different indication. So we have a significant safety experience from the product. And at present, it is no longer available in France, and we are not aware of any product containing tiratricol approved anywhere in the world. Next slide, please. So a first study with tiratricol in MCT8 deficiency was published last year in The Lancet Diabetes & Endocrinology. The objective was to evaluate the efficacy and safety of oral administration of tiratricol in patients with MCT8 deficiency of all ages. So the objective was to evaluate if we were able to restore the thyroid hormone signal, both in cells which are low in thyroid hormone at the outset, such as neurons, but also the cells which are experiencing a too high thyroid hormone level, such as the heart, kidney and liver. The primary outcome was the change in T3 serum concentrations, and we also evaluated several other functional and clinical parameters to evaluate the thyroid hormone status in various tissues. A total of 46 patients were included in 9 different countries. This slide demonstrates the primary outcome of the TRIAC I trial. As you can see, the green dots represent the T3 values at inclusion and baseline. And as you can see, T3 levels are extremely high in almost all patients. The normal range is depicted by the green tone around 2 millimolar -- nanomolar per liter. The arrows represent the treatment effect. And as you can see, we are able to significantly lower the T3 values in all subjects and reaching the normal values in those subjects. The primary outcome was highly statistically significant with a p-value of 0.0001. Also on the secondary endpoints, you can see in the table below, we were able to demonstrate that this translated into a clinically relevant effect on the organs. So you can see that weight for age, heart rates and various measures of thyroid hormone function all moved in the right direction. So that we can -- this lowering of T3 translates into an improved thyroid hormone status in the body of these subjects. Moving to the next slide. This is showing a neurocognitive status of the patients in the first trial, and a few observations. First, as you can see, this GMFM score is -- represents -- 100% represents the ability of a normal 4-year-old child. So you -- the first reflection is that all these childs are very, very poor in their neurocognitive status. So they have a very low level of neurocognitive development. Also, as expected, given the notion that there is a window of opportunity wherein which you can affect the CNS, we can see that only the youngest subjects experienced a positive treatment effect on neurocognitive development. So patients below 4 years of age, we were able to demonstrate a positive impact on their neurocognitive development, whereas in the older patients, we did not see this effect. This was, as I said, expected. And it should be noted in this context that patients of all ages will experience the clinical benefits we saw on the previous slide, which relate to normalization of T3 levels and improvement in thyroid hormone status in various parts of the body. However, we want to look closer to the neurocognitive effects, and please move to the next slide. We are now just, as Nicklas mentioned, planning to start a Phase IIb/III early intervention trial, where we will look at improvement of neurocognitive development. So this will be an open-label, multi-center trial, which will be run in 10 centers in both North America and Europe. And the design has been anchored and discussed with both the EMA and the FDA. We will look at various measures of neurocognitive development, but, of course, also confirm the findings of the first trial when it comes to system-wide thyroid hormone improving effects. We aim to include 15 to 18 children below 2.5 years of age. So we've been through most of these, I guess, already, the time line. So looking for -- going forward, we aim to start the trial before the end of the year as Nicklas already mentioned. We aim to recruit and complete the recruitment within 2021. And then we have an interim analysis in 2022, which we hope will be the -- pave the way for regulatory approvals in both the EU and the U.S. The study as such is 24 months and will continue to run after the interim results are available. Thank you, and now I hand back to Nicklas.

Thank you. Next slide, please. So let's now look at the Aladote clinical development program and status of the same. Next slide, please. Aladote is intended as a treatment for patients who are taking a paracetamol overdose. If untreated, this could lead to liver failure requiring liver transplant or, in the worst case, death. Paracetamol overdose affects around 200,000 patients per year only in the U.S. and the U.K. alone. As an example, in the U.K. last year, 350 people or patients were listed on the liver transplant list, and 225 patients died due to paracetamol poisoning. That's where Aladote comes in. And Aladote developed as an add-on to the only available treatment today, acetylcystine or NAC. Next slide, please. If we look at the course of paracetamol poisoning, certain toxic byproducts are produced during the metabolism on paracetamol. If patients arrive early enough to the hospital, as you can see here on the left-hand side of the slide, the current treatment of NAC -- with NAC is effective in detoxifying these byproducts. However, for the patients arriving late to the hospital after paracetamol overdose, which are around 25% of all patients, NAC is less effective. This leads to mitochondrial dysfunction, loss of energy production and potentially, cell death and subsequent liver damage. For these patients, Aladote can prevent the mitochondrial dysfunction, restore energy production, which does prevent liver damage. Next slide, please. Taking a step back then and looking at the first clinical trial with Aladote. The Phase Ib/IIa study was completed with Aladote during and communicated last year, primarily focused on safe -- the safety and tolerability, but which also included several measures of efficacy. This study was an open-label, single-ascending dose study comparing 3 doses of Aladote with placebo as an add-on to NAC in total of 24 patients. The study showed that Aladote was safe and tolerable and may prevent liver damage. The results were presented at the annual Liver Meeting in 2019 and also published in Lancet's EBioMedicine during the summer 2019. Next slide, please. Looking more into the results in detail. As you can see on the left-hand side of the slide, Aladote appears safe and tolerable when it comes to signals of efficacy on the key parameter ALT, which is used in clinical practice for assessing liver injury. We can see consistent results that Aladote might prevent liver damage. Perhaps the most interesting results are in the right-hand figure, where 3 out of 8 or 50% of the patients treated with NAC alone required additional treatment and prolonged hospitalization, whereas that the number was reduced to only 11%, 2 out of 18, for the patients receiving Aladote as an add-on to NAC. Next slide, please. Furthermore, as you can see here on the slide, Aladote demonstrates consistent results of reduced liver injury as measured by a number of different exploratory biomarkers. Next slide, please. So the next step in the development is -- of Aladote is to conduct a pivotal Phase IIb/Phase III study. Currently, we are conducting regulatory interactions with the FDA, EMA and MHRA to finalize the study design. So far, we have had 2 out of these 3 interactions, and those have been supportive to our proposed study design. The study is targeting the increased patients arriving late to the hospital, where NAC alone is not sufficiently effective. In the first stage of the study, 2 treatment arms with different doses of Aladote will be compared to placebo. At an interim analysis, 1 dose will be selected to be used also in the second stage of the study, after which, the final analysis will be performed. In total, 225 patients are planned to be randomized. The primary endpoint is a composite endpoint of ALT and INR and is similar to the criteria for the continued treatment of NAC, i.e., similar to the variable where we saw a reduction from 50% to 11% by adding Aladote to NAC in the first clinical study with Aladote shown at the previous slides. Next slide, please. If we then take a look at the timelines, we have some exciting milestones coming up. We are finalizing this year the regulatory interactions to subsequently initiate the pivotal study at the beginning of next year. We will -- we are then planning for an interim analysis during 2022 for subsequent regulatory submissions in EU and U.S. and first approval and launch subsequent to that, of course, with the caveat of having positive data. Next slide, please. Let's now turn our attention to the commercial opportunity in the orphan space for our assets. Next slide, please. Developing drugs in the orphan segment provides a very attractive return on investment. As you can see here on the slide, the development times are shorter. The number of patients are fewer. Generally, only 20% of patients required compared to the overall numbers. The success rate from Phase III to approval is about 50% higher. And pricing of orphan drugs is around 5x higher than in general, which then ultimately translated into a very attractive return of investment. Next slide, please. So with Emcitate and Aladote, what impact can our drug assets have on alleviating the social burden, and those motivate the price. As you can see here on the right -- left-hand on the slide, for patients with MCT8 deficiency, they are requiring constant life-long supportive care. The costs associated to that is, of course, very high. The current data shows that it's around $138,000 per patient and year in the U.S. alone. Life expectancy is, of course, also shorter compared to general with around a median of 35 years. If we then turn our attention to Aladote on the right-hand side of the slide. As you can see here, the cost for society in the U.S. as called out is very high. The total cost in 2010 was around USD 1 billion to treat these patients. Subsequent to that, of course, there are very high costs associated to hospitalization and, of course, potential liver transplantation costs. Next slide, please. So how do we see the pricing landscape for orphan drugs and the implications for our 2 assets? When it comes to the pricing for orphan drugs, it is as mentioned before, generally substantially higher price compared to the average price of drugs. And the price is clearly related to the number of patients within the disease. Based on analogs and price -- initial pricing and reimbursement research, we see here that we can expect a price picture of around USD 200,000 per patient in U.S. for Emcitate. That might be somewhat viewed as conservative, but that's the assumption we have today. For Aladote, we could expect around $5,000 per patient in the U.S. That is based on our first pricing and reimbursement research. And we'll -- the price will be primarily driven by the reduction of hospital stay. So if the study shows that we have substantial reduction in that, the price picture could potentially be substantially higher than what's illustrated on the screen. Next slide, please. So to summarize the very interesting commercial opportunity for these 2 assets in the orphan drug space. We see for Emcitate, on the left-hand side on the slide, the target population of 10,000 to 15,000 patients in the western world, with a price assumption in the U.S. around $200,000 per patient. Obviously, that price is lower, 2/3 or 1/2 of that price could be assumed in Europe. We also see the cost of goods at low single-digit percentage. Depending on assumptions, of course, regarding uptake and penetration, that translates into a very attractive commercial opportunity. When it comes to Aladote, the target population in U.S. and EU5, as called out here on the right-hand side of the slide, it's around 135,000 patients, with a price assumption of $5,000 per patient per year in the U.S., again, here with low single-digit percentage. For those these -- both of these 2 assets and pending on assumptions regarding market uptake and penetration, there is certainly a huge commercial opportunity for both our assets with USD 1 billion market opportunity for Emcitate and about $0.5 billion market opportunity for Aladote. Next slide, please. An important new aspect of this new company is to establish our own small and niche commercial organization. I will here now actually hand over to Peder, who has experience in commercialization of assets in the orphan drug segment to elaborate further. Peder, please?

Thank you. So in our experience, we've built organizations for an efficient launch of orphan and niche assets in Europe before. And this differs quite a bit from broad pharma. It is very centralized, focused target groups. We are talking about highly specialized physicians normally based at university hospitals, very highly scientifically-driven sales approach. So what we have found is that it is actually possible to efficiently launch these kind of assets with a very limited number of in-house resources. So that's something we intend to do. And perhaps I should mention that in our previous experience, we've also worked with antidotes, which is also why we think this is a great fit. We see the antidote segment as being very attractive. It's highly centralized in poison control centers. It's very also top-down and protocol-driven and where we have good experiences of also launching products and managing them very cost efficiently. So we think that given our experience, we will be able to manage these 2 assets with a very neat organization of below 50 headcount, both in the EU and the U.S.

Thank you very much, Peder. And of course, the driver behind this is to make sure that we retain as large share of product revenues over time as possible within the company. Next slide, please. So yet again, next slide, please. So now we're coming in to summarizing the today's announcement. I am very excited to present today's announcement that PledPharma and RTT are joining forces where we create a company focused on late-stage development and commercialization of drugs in the highly attractive orphan space. The new company has 2 orphan assets with billion-dollar opportunities entering pivotal studies within short and several upcoming value-creating milestones in the next year. With that, I'll thank you all for your attention. And operator, please, let's move into Q&A.

[Operator Instructions] We have a question from the line of Ulrik Trattner from Carnegie.

I have a ton of questions, but I'll start off with a few for you, Nicklas, and then so some follow-up for you, Peder. So can we just please start off, I'm still trying to wrap my head around the rationale behind this. Is there anything -- scientific rationale combining these 2 assets in terms of experience in the development phase? And it actually -- it seems like the main rationale behind this transaction is combining expertise and experience. And then the follow-up would be, do you have any lockup, Peder, on your shares? Obviously, your expertise from both Sobi and Wilson is highly valuable for any company. But do you have any lockups? And then what will your role be in the new company?

Thank you very much, Ulrik. And I'll start with the first one around the rationale. And I think, of course, when it comes to scientific rationale, these 2 molecules are operating in 2 different disease areas. So from a purely scientific perspective, there is a difference. However, we see a great rationale from a strategic perspective. Now with the new strategic direction of PledPharma operating on focusing in the orphan drug segment, we, today in PledPharma, sit with a lot of experience in late-stage drug development across a number of different settings. That will now be complemented by Peder and his team from RTT, that has very good experience and proven track record in the orphan drug space, both in developing orphan drugs, but also commercializing orphan drugs. So that's one. If you add then on the synergistics -- I apologize for my poor English. The synergistic effects here, with critical mass being able to operate across the different functions, we will also realize synergistic effects from a financial perspective then. So hopefully that addressed your first question, Ulrik. And then I'll hand over to Peder around the lockup arrangement.

Thank you. Yes, obviously, we have a lockup undertaking. I'd just back up a few steps. I mean we remain -- me and the other shareholders of RTT remain highly dedicated to our projects. And we see this as a great opportunity to advance it even better and realize the full potential of the project going forward. And we will be committed also from an ownership perspective. And to answer your question very directly, we have a lockup for 100% of the shares for 12 months and 75% of the shares for 24 months. That goes for the 3 major shareholders of RTT, which represent slightly above 90% of the shares in RTT. As it comes to my role, I will assume, pending that I get elected obviously on AGM, but I assume a role in the Board of Egetis Therapeutics, as we plan to rename it. And I will also support Nicklas in a role as consultant to continue to drive the product -- project forward and also support with the merger between the 2 company.

Thank you, Peder. I think in essence,Ulrik, the long-term commitment, both from a shareholder perspective from Peder and his co-owners from RTT is there. We see that for a long period of time, and also being able to add access the capability and capacity from both Peder himself as operationally working in the company as a consultant, but also from the rest of his team members are utterly important for the new company and also, of course, for the development, future development of Emcitate.

Okay. That's great. So just one last question for Nicklas, and then a few questions for Peder once again. So this communication in regards to long-term strategy could be interpreted that you have less confidence in PledOx because the most reasonable way forward for this, as you pull the Phase III results from the 2 studies, would be to do another Phase III study. And that doesn't seem to align with the new company focus.

Yes. No, thank you for that question. And let me reiterate that, again, our position on PledOx hasn't changed. It's very important to recognize that we have completed the last subject, last visit during quarter 3 this year. We are now, together with the CRO, progressing source data verification and data management and up to database lock. We will have and announce the results from this Phase III program later on in quarter 4. And of course, the results then will further mold -- will determine if further development of PledOx is motivated. And we look at different ways on doing that, but mainly through strategic partnerships.

But just to clarify that, because as you mentioned, if it's motivated. So just assume that it is motivated to advance PledOx further, that would imply that another Phase III study would need to be initiated, right?

I think that's premature to speculate on. I think, of course, what will happen is if the results are positive, which we of course hope for, let's be clear on that, we will analyze the results and have -- first step will be an interaction with the regulatory authorities to determine the path forward from a development standpoint. It's fair to say that potentially, it's required for additional data being generated but prematurely to speculate on.

Okay. Great. So then moving over to you, Peder, and Emcitate, obviously an interesting asset. But could you elaborate a bit on the pricing? As we've seen in the Phase II trials, the ones published in The Lancet and the data you presented here today, the main -- it seems like the main label would be symptomatic improvement. But obviously, you have seen neurocognitive improvements as well in the trial. But I would assume that it would be quite a major pricing difference if you were able to show symptomatic improvement compared to showing neurocognitive improvements. Could you suggest your take on that?

Yes. So I mean just to be clear, I mean, our view on the Phase II data is that it's highly clinically relevant and significant. And that the patients are, I mean, really experiencing a beneficial effect from that. And while the neurocognitive aspects of the disease are important, I mean, it's not all about neurocognitive development either. I mean it's also about getting the central nervous system that you have to function as good as possible, which we are able to do in also the older subjects here. Did that answer your question or...

Yes. Yes, sure. But I would assume that it would be a pricing difference if there were to be a label including symptomatic improvement compared to cognitive -- neurocognitive improvements honestly.

We do not expect -- I mean we expect the label to be treatment of MCT8 deficiency. So MCT8 deficiency, it's not -- there are no patients with only one or the other. I mean we -- all patients have all symptoms. And we do not expect the label to be symptomatic treatment or the way you phrase it. We expect it to be treatment of MCT8 deficiency from birth and upwards.

Okay. Fair enough. And as you mentioned, this drug has been available in one market before and recently withdrawn. And I would assume that it would be France. And for that market, that were to be a generic drug to be available for those patients. And obviously, this has been withdrawn. But do you see any political difficulties and pricing that's way above a generic pricing going forward?

So first of all, I mean, we own and control the French product. So I think it's important. I may not have been clear on that before. So that product is no longer available. And in fact, Emcitate is an improved version of that product. So it's not an identical pharmaceutical either. It's a new, improved version of the old product. So it's important to understand that the French product was approved for 40, 50 years ago in a different indication, and it's been not used in the indication. It's been basically sitting on the French market without a lot of volume. And it's, importantly, not been reimbursed in the French reimbursement system, so it has not been scrutinized or prejudiced in terms of pricing from the French fair pricing agency. And we think that that's important in this perspective. So we have, obviously, a dialogue ongoing with the French agency as well. And they are supportive to -- and fully understand what we are doing and planning to do with the product. And we do not believe that this will be a price anchor in France or elsewhere.

Okay. Great. Then just one last question before I get back into the queue. Just the awareness of MCT8 deficiency, because it seems like a lot of the clinical studies that are being performed have recruited the majority of your patients on the Netherlands. So how difficult would it be to -- so one, how is the awareness of the disease today outside of the Netherlands among pediatric neurologists? And secondly, how difficult would it be to recruit patients in the forthcoming trials?

Yes. Good question. So I think the Netherland bias here, which you allude to, I mean, it's obviously because MCT8 was discovered in the Netherlands. And they are the leading academic center working with MCT8 deficiency and obviously, our partner in this project. So over time and then with the publication of The Lancet paper last year, what we have seen is that disease awareness is rapidly increasing, and we are seeing a very increased noise coming in regarding the interest from clinicians in various parts of the world. We do have a very well-established network of KOLs. We have, we think, the best centers. We have the Charité in Berlin. We have Cambridge. We have [ Beta ] in Milan. So we have a really strong setup for the centers in the upcoming trial. So when it comes to recruitment, we believe that -- we have said that we will be able to recruit the patients over a time period of 12 month. So we have obviously some patients already identified, which are waiting to be included in the trial. And secondly, as you will see, I mean, we are targeting 15 to 18 patients, and we have 10 centers lined up and ready to include. I mean that's obviously a very low number of patients per center. But that's just because we want to be sure to have everything ready. Once a patient emerges somewhere, we want to have somewhere for them to be included in rapidly and not have to start by opening up the center and lose time. Because we do think that timing is important here, and the earlier we will treat these patients, the better.

And just as given, it seems like there would be a dark pool of patients. It seems like this is a widely underdiagnosed disease. Or mainly, I would assume that it's largely untreated. Is there any good biomarkers that you could refer to in diagnosing this patient group?

Yes. Another good question. So I believe you're completely right. There is -- a very large portion of these patients do not have the proper diagnosis today. And that's something, obviously, we need to work with and are working with. The good news from that perspective is that diagnosing is actually straightforward once you consider the diagnosis. So the diagnosis can be straightforwardly made by looking at the thyroid hormone profile of the subject's peripheral blood. So basically, a T3 levels are sky-high in these patients, and its a measurement which is easily available in almost any lab. So it's not invasive. It's not something which is very expensive or technical. In fact, it's very cheap. So being able to screen for this disease among patients who are -- I mean, have a neurocognitive development, which is not really tracking along the normal development curves should be affordable and straightforward.

And the next question comes from the line of Dan Akschuti from Pareto Securities.

Nicklas and Peder, congratulations to this acquisition. Just make sure because my audio is a bit not working properly. Can you hear me?

We can hear you not that good actually. Apologize. So...

Okay. I'll try to speak a bit louder then. But just a few questions on Emcitate and maybe some specifics on the trial you're aiming at. So how many patients do you think you will have to include? You had 46 in the previous study. Now you're aiming for a younger patient group and being at around 50 or 100 or...

The number of patients for the trial?

Yes.

So we are targeting 15 to 18 patients.

15 to 18 patients. Okay. And considering the Phase II data that you have shown, you can see that there is a big difference if the baseline was at 10 nanomole per liter, or if it was around 3 to 4. So there's much less, let's say, improvement in percentage. And this is also the clinical relevance, they're much lower. So are you trying to screen for patients with higher levels? Do you consider putting this into the inclusion criteria of the clinical trial?

So I'm not sure I understand the question. Yes. So are you asking whether we see a better efficacy in the patients who start off with a high T3 levels to start with?

Yes. That's kind of the first part of my question. And the second part would be if you consider putting this into the inclusion criteria, to only select for those with levels around 8 to 10 nanomoles per liter.

So the goal of the trial was not percentage improvement. So what we want to achieve well is actually a normalization. So -- and if you look at Slide 16, so we want to bring all subjects into the green area rather than achieving as large a reduction as possible in percentage. So in fact, we do not see any correlation between efficacy, between the baseline T3 levels. Rather, we -- the goal is to normalize rather than see a decrease as much as possible.

Okay. And so regarding the clinics, that you just mentioned in the previous question that you have contacts in the Netherlands and Cambridge and so on. But you have 10 centers. Or are you considering to run it in the same amount of centers or probably a bit fewer for just 15 to 18 patients? Or what's your aim there?

So the 10 centers, they are for the planned trial. So they are for the early intervention trial, 10 centers. We have 2 centers in the U.S., and the rest are in the European Union. So that's for the upcoming trial.

Okay. And considering the history of the compound, have you any insights that could help you for Emcitate now for its indication considering it has been used for 40 years in France?

So I mean obviously, we have the strength to have quite substantially, in the perspective of this condition, safety experience, which is of course, something we feel very comfortable with. We also have now a quite substantial experience from the MCT8 segment. I mean both the patients who participated in the first trial, but also patients who are prescribed the product on a named patient basis in various parts of the world, which is then early access to the product before the regulatory approval.

Okay. And you have not seen any concerning safety signals so far?

No, we have not seen any concerning safety signals so far.

Okay. I think that's it for Emcitate for me. And regarding Aladote, with low and high dose, do you -- what is the high dose that you plan for the pivotal trial? Is it the 5 or 10 micromole and low is the 2 or 5?

Sorry, Dan. Could you repeat question? You were breaking up a bit.

On the dosing of Aladote in the pivotal trial, the high dose, do you consider using the 5 or 10 micromole per kilo?

The high dose will be 5 and low dose -- yes, yes.

And regarding PledOx, can we get a more specific time line when we could expect top line data?

I knew you're going to ask that question. You have to, I guess. No. As we said, it's not in our control. As you can imagine, of course, the source data verification, the data management and the cleaning is done by the CRO. We don't control those time lines. But I can't give you any more granularity than what we said before with regards to -- we will have the results available in quarter 4. Of course, the caveat here, as always, and why it might take a bit longer time than we predicted initially, is the COVID-19 situation. But again, we were comfortable to announce the results in quarter 4.

Yes. Congratulations again for this merger, and we'll keep in touch.

Thank you, Dan. Thank you.

The next question comes from the line of Niklas Elmhammer from Redeye.

I just have a follow-up on the previous questions. What kind of development have you done compared to the -- Emcitate compared to the previous compound tiratricol.

Yes. So the French product was approved, as I said, in the 1970s. And it has not seen -- it was not upgraded as you would normally do because it was not really used, as I said, low volumes. So basically, you can understand that the regulatory requirements for a pharmaceutical, from a CMC standpoint, manufacturing standpoint, the quality standpoint is vastly different now compared to the '70s. So what we have done is significant upgrade of the manufacturing process and also the product itself to meet current quality guidelines and standards.

And we have a follow-up question from the line of Ulrik Trattner from Carnegie.

I have a bunch of follow-up questions. And once again, a few of them directly to you, Nicklas, and a bunch of them directed to you, Peder. I can just start off with -- you seem very confident, Nicklas, in the development program for Aladote and starting the trial next year and an interim readout in 2022. Have you received feedback yet from FDA that actually gives you clarification? And if that is to be the way forward for Aladote?

So I think as I mentioned before, we are comfortable and confident in the design, in the design we proposed. And to take a step back, we had regulatory interactions with FDA and EMA quarter 4 last year where we looked at the overall strategy and development program for Aladote and the path to market. Subsequent to that, and as communicated during the spring, we were planning and are now in the process of having regulatory interactions with the EMA, with the FDA and with the U.K. MHRA. When it comes to study specific details for the upcoming pivotal trial, we have received feedback from 2 out of these 3 authorities so far, which are positive and supportive in the way forward. And we're expecting answers from the third regulatory authority within the coming couple of weeks or month.

Okay. That's great. And then just moving over to you, Peder, and sort of going back to the prevalence of MCT8 deficiency and current number of patients diagnosed. So what would be your best guess, sort of the portion of the current prevalent pool that is actually diagnosed?

I mean there is no systematic epidemiology here to fall back on. So I mean...

Just your best guess.

Yes. Yes. So the statement is that, I mean, we believe that, as you said earlier, a significant proportion of these patients are not diagnosed today. And significant, I mean, means it's probably more likely to be not diagnosed than be diagnosed.

And I think maybe I can build on that. And I also think Peder and the team has already started a very good job in interacting with key opinion leaders, with being present at scientific conference, they raise the awareness. And of course, ultimately, it's about driving that and, of course, making sure that you can get on to the national guidelines in order to be able to prescribe the product going forward. But I think it's premature to speculate on a specific number there, Ulrik.

Okay. So to just go forward, how many newly diagnosed newborns are there today in both Europe and the U.S.? Would it be fair to assume that there is somewhere between 50 and hundreds?

So I mean the epidemiological figure we have is 1 in 70,000 males. And I guess you -- I'm not 100% up-to-date on the number of births in Europe each year. But I guess we need to do the math there and...

And of course, again, just taking a step back, if there is some further work to be done and that's going to take place in parallel with the upcoming pivotal study, the TRIAC II, to further engage yet again with the key opinion leaders and trying to understand the epidemiology and the diagnosis, et cetera, in more essence.

And then I think something we are considering is obviously newborn screening, which is an important tool here. And today, these patients are not captured in the newborn screenings, which we do today. So in fact, they are screening for thyroid hormone disorders, other thyroid hormone disorders, but they are not screening for MCT8 deficiencies. So they use primarily T4 as a screener. And often, our patients are then missed. So what we want to implement going forward is that they also include T3 in the newborn screening of patients. And normally, I mean, from our experience, it's something we can start to work with once the product is approved. It's easy to come to the authorities and start discussing this. But it's very hard to include newborn screening before you have a treatment solution approved actually. So that's something we are, of course, looking very closely at going forward, but -- which is not in place yet.

Okay. And just on pricing, where do you expect this to be priced? Obviously, Peder, you have experience in commercializing these types of assets and orphan drugs before. Where do you believe this to be priced?

I think maybe I can start off with -- I looked at this from fresh eyes -- with fresh eyes. And I'll let Peder to build on it. But again, if you look at orphan drug pricing in general, it has a very strict correlation with the number of patients, as I'm sure you're very well familiar with. The pricing points we referred to in this previous presentation. $200,000 per patient might be actually seen as conservative. We're using that as our own assumptions today. But if you look at analogs to Emcitate in a very similar setting, you see price points up until USD 0.5 million per patient. But again, Peder, you might want to further elaborate if you have anything to add.

No, I think that's the case. And then, I mean, we -- there is normally a price differential between EU and U.S., but I'm sure you're all aware of that.

Great. Just -- so the last one is just a curiosity on my side. What's the origin of Emcitate? And how did it came to be under the control of RTT?

Yes. So as I mentioned, I think, in my introduction, I mean I have worked for a number of years now to try and identify interesting compounds where we see an accelerated and clever way forward to regulatory approvals. And I mentioned one such asset as the Wilson asset, which was identified in a similar fashion. And we -- I structurally try to review what's out there. And we started working on this, perhaps 4, 5 years ago, I identified this. And then we had to make sure we had all the agreements in place and including the license agreement with Erasmus Medical Center and also the acquisition of the French product. So that took another year, I guess. But since 2017, we've been working actively with this product, initially within the frames of Medical Need and then since May 2018, as an independent company, Rare Thyroid Therapeutics.

Thank you. As always, thank you.