Sareum Holdings plc (SAR) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. Welcome to the Sareum Holdings plc investor presentation. [Operator Instructions]. Before we begin, we would like to submit the following poll. And if you affect your kind attention, I'm sure the company will be most grateful. And I'd now like to hand over to Non-Executive Chairman, Dr. Stephen Parker. Good morning, sir.

Good morning, and good morning to everybody on the line. Great welcome to join us for this update as a result of results of the recent CTA submission plans our period ends at the end of June. Tim Mitchell, our CEO, will take you through the headlines. And then John Reader, our CSO, will talk in a little bit more depth about the science side. And then we will be able to take questions at the end of that. So if you already submitted questions, we will try and get through as many as we can. If you haven't, there is the opportunity to do so, although at short notice, we may have to hold questions on the day and submit them back as written answers via the website more or less at a later stage. So with that, I'll hand over to Mitchell.

Thank you, Steven. Yes, good morning, everybody. Thank you for joining our presentation today. As Stephen said, you may have noticed last week, we announced by RNS that we've submitted at the CTA respiratory clinical trials authorization application for our SDC-1801 autoimmune disease candidate. And really, the purpose of this meeting is to give a little bit more details around our program? And answer any questions you have. So as Stephen said, presenting today is myself, Tim Mitchell, Chief Executive and one of the co-founders and John Reader, Chief Scientific Officer; and the other Co-Founder of the company. For those of you who are new to the company, then I'll start with a quick overview. We're a clinical stage small molecule drug development company by developing next-generation kinase inhibitors. So kinases are a class of cellular machinery that regulate many biological processes. And we have a particular focus on autoimmune diseases and cancers. So we're led by a highly experienced team with particular expertise in kinase inhibition, decades of experience in general R&D and also in public company management. Our current drug development pipeline is focused on the JAK cell signaling family, and we'll talk in a bit more detail about that later. But it comprises 4 members, TYK2, JAK1, JAK2, JAK3 and they're all important in maintaining healthy immune systems. So our strategy is to develop these programs into the late preclinical or early clinical stages before we license or partner them with a pharmaceutical major -- and while we do that, we maintain a lean cost base. We had a small executive team, and we use trusted third-party providers to maximize our return on investment. So some of our recent highlights are shown here. As I said, well, the main focus is on SDC-1801. This is the TYK2/JAK1 inhibitor for autoimmune diseases. We have -- we've noted in the RNS that we've got a particular focus now on psoriasis, which is a skin disease. So the CTA application for a Phase I AB clinical trial, we submitted last week -- so the plan is to initiate clinical trials firstly, in healthy volunteers so that we can understand the dose levels and any safety issues with the compound and then in psoriasis patients. And we're looking to start this trial by the end of this year. So we'll look to dose up to 120 volunteers and patients in total, and we'll recruit these at a site in Manchester in England. Earlier in the year, we announced that the toxicology studies to start these trials have been completed. We were waiting on the drug products and the drug substance. So the drug stops inside that's the sort of the raw material 1801 material. That's now complete. The capsule formulation that the volunteers and patients will actually take that's also been completed, and it's currently undergoing quality control. So we're on track for this year-end start. And then just a couple of points on SDC-1802. So this is a separate molecule that also targets TYK2/JAK1. This is our cancer and cancer immunotherapy program. We're continuing to undertake our translational studies just to work out in which particular cancers we should best use this compound -- and then we also noted that the IP portfolio has been strengthened with the granting of a patent in the European Union. And then for the SRA737 Chk1 program. So this is a program that was licensed to Sierra Oncology. The news here is that Sierra have been acquired by GSK, and that was in April this year. So we're waiting to hear from GSK as to what their plans are for any future development of SRA737, and obviously, we'll update you as soon as we hear anything from them. And then also in the RNS of last week, we noted our year-end financial position. So it's a cash of GBP 4.3 million. Okay. So let's move on to our JAK program. So the TYK2/JAK1 programs, where we have our particular kinase inhibition expertise. And I'll hand over to John to take you through that.

Thank you, Tim. So Jack family, as Tim has alluded to, is very important in the signaling of key immunoregulatory cytokines, so hope to maintain this healthy balanced immune system. The 2 members of the family of particular interest to us, TYK2 and JAK1. They are involved in a signaling pathway this is frequently deregulated in multiple autoimmune diseases, one of which is psoriasis and will be the focus of our Phase Ib trial. Inhibition of both TYK2 and JAK1 has the potential to get superior efficacy compared with agents with just 1 of the 2 kinases. If you look at the cartoon, you'll see, for example, that interferon also the third cytokine from the left there users both TYK2 and JAK1. And by inhibiting both of those, we think we can have a really profound inhibition of that interferon alpha signaling pathway. TYK2 and JAK1 are all therefore, optimal targets for autoimmune diseases, targeting 2 other members of the JAK family, JAK2 and JAK3 has led to some unwanted side effects in patients. So from the beginning, we've been keen to avoid inhibition of those 2 kinases and SDC-1801 has the right balance and potency and sale activity unlike the JAK family that we are looking for. So the inhibition of these H2 kinases is of great interest in the industry and increasing interest. There's a lot of activity, a large amount of commercial focus on the JAK family as a whole and strong clinical validation from big players such as BMS and Pfizer for TYK2 selective and dual TYK2/JAK1 molecules in both psoriasis and psoriatic arthritis. There's a number of mid- and late-stage clinical trials of TYK2 and dual inhibitors from BMS. The Pfizer molecule, which has been picked up by a new company called Priovant. And they have trials ongoing in lupus ulcerative colitis, Crohn's disease, vitiligo and dermatomyositis, for range of dermal and other autoimmune and inflammatory diseases. Readouts are expected over the next 2 or 3 years. There's also scientific evidence for a role in the modulation of the severe inflammatory responses and respiratory symptoms arising from viral infections such as COVID-19. And 2 JAK family inhibitors are already approved for certain COVID-19 patients. And I mentioned the growing commercial focus. BMS are forecasting sales in excess of $4 billion of our TYK2 inhibitor deucravacitinib in 2029. So as you know, we are focused on selective and potent TYK2/JAK1 inhibitors. There are significant opportunities available to us in this area. Currently, no marketed products with selectivity for TYK2. So it's a recent target for therapeutic intervention. There are very few dual TYK2/JAK1 inhibitors in clinical trials. So we have a nicely differentiated product. And there are no selective TYK2 inhibitors in clinical trials for cancer, which gives us a first-in-class opportunity for SDC-1802. So both of our molecules SDC-1801 and SDC-1802 potent and selective inhibitors with both TYK2 and JAK1. They have a favorable selectivity profile against JAK2 and JAK3 in contrast with some of the early first generation JAK inhibitors such as tofacitinib and baricitinib. The molecules have the potential for once daily oral dosing in treatment. We should start it early on in the Phase Ia process for SDC-801. We'll get to see exactly how the pharmacokinetic profile of 1801 is looking, and that will inform us on the dosing schedule. And we also have a strong IP portfolio, protecting both candidates in all of the key territories and markets. So this slide gives a snapshot of our pipeline as it stands at the moment. You'll see our proprietary programs, SDC-801 and 1802. 1801 at the end of its preclinical phase. And hopefully, with a favorable response from NHRA, we'll be entering clinical Phase I before the end of this year. SDC-1802 is a little further behind, and we continue our translational studies. And then below, you'll see SRA737, now in the hands of GSK, but important to remember that it's completed 2 clinical Phase II studies in solid tumors as well as monotherapy and combination and showed a very good safety profile and some signs of efficacy, which we're hoping will encourage GSK to take this molecule further. In terms of our development time line internal focus, as mentioned, is on progressing STC 1801 into our first in human Phase I AP central trial, initial focus is on psoriasis. And the clinical studies will be conducted at a single specialist center in Manchester. We see in the time line, Q3 2022, we were able to file our CTA. And as Tim mentioned, we've completed the manufacture of the capsules for the clinical trial, and they're just going through their final QC process before they are released to the clinical unit. In Q4 2022, then the big objective is to initiate that Phase Ia clinical trial subject to approval from MHRA and the FX Committee. And then that trial is scheduled to go through 2023. We aim to complete the Phase Ia during 2023 and initiate the Phase Ib clinical trial in patients. And then we're hoping we'll have all of the data and the completion of that clinical trial, hopefully, early in 2024. That's very much subject to successful recruitment and progress on funding. Just briefly on SDC-1802 totaled in multiple cancers here. This demonstrated good efficacy in immunotherapy disease models against many cancers. The antitumor effects have been seen in models of, for example, kidney, colorectal, skin cancers and B cell lymphoma. We've got strong evidence at SDC-1802 acts through a novel immunotherapeutic mechanism. And again, we're dosing orally here, seeing positive results using SDC-1802 as a monotherapy and in combination with a number of chemotherapeutic agents. Our recent patent grants strengthened the IP portfolio in the major territories. And as we've mentioned, translational studies are ongoing and define the optimal transfer application. So there involve additional biomarker studies to better understand the mechanism of action, and that will help us to identify the ideal patient population for the Phase I study for the population with the best chance of responding by a molecule. And once we have this in place, we'll be completing our toxicology and manufacturing studies. And I think the experience we have in developing SDC-801 where we're greatly aid the development of 1802 have a very similar chemical structure, lot of the synthetic steps are identical. So we already have optimized process chemistry for those steps, I think we'll be able to move 1802 more rapidly through this toxicology and manufacturing studies in the future. And just a reminder of 737, where it stood before the GSK acquisition of Sierra, this is from 1 of the Sierra's presentations from March earlier this year. You can see lots of opportunities for SRA737, Sierra, we're talking about combinations with a BET inhibitor that in license called 505. Also opportunities for combinations with immuno-oncology agents and gemcitabine. So we're just waiting to hear what GSK will do about this. Obviously, as soon as we know something, we'll pass that on to our shareholders. But there's a 550,000 approximately -- $550,000 milestone payment to us upon the first patient dosed in the next clinical trial and still a total of nearly $80 million in total milestone payments. And additionally, there are royalties due if SRA737 gets on the market. So I'll hand back to Tim at this point to just conclude the presentation before we move on to the Q&A.

Thank you, John. Yes. So to remind everyone of the potential value inflection points, and we can look forward to over the next 3 months through this year. So we talked about a midyear date for the CTA submission. And as you have noticed, we did that in -- at the end of July. We've selected the initial indication for Phase Ib clinical trial, that's psoriasis. So the next event we're looking for is the approval of the CTA by MHRA. So that's Medicines and Healthcare Regulatory Authority. And I mean -- so that's slightly out of our control, but we are hoping that we'll have that in time for the start of the Phase Ia clinical trial by the end of this year. So we'll have the trial start to announce and then any updates on preclinical progress with SDC-1802. And then for JAK1, as John has alluded to then, we've seen that the acquisition offer has been approved by Sierra shareholders. We're now looking to see any news from SRA737. Obviously, we can't divulge anything that GSK hasn't put into the public domain. So we're waiting for public announcements on that. And then any milestone payments, should GSK choose to progress 737. We look forward to the milestone payments on the first patient state in any new clinical trials. So looking for plenty of important preclinical and clinical progress from the 3 programs here, so 1801, 1802 and 737. Okay. So that's the formal part of the presentation concluded. If I hand back to Mark from MEDiSTRAVA.

That's great, Tim. Tim, John, Stephen, thank you very much indeed for updating investors this morning. [Operator Instructions]. So as the company takes a few moments to prepare for the questions submitted today, I'd like to remind you that a recording of this presentation along with a couple of slides and the published Q&A can be accessed via your Investor Meet company dashboard. Jessica, if I may just hand back to you, as you can see, you've received a number of questions ahead of today's event along with the numbers throughout today's meeting, if I may. Just hand back to you to read out the questions for the team to respond to, and then I'll pick up from you at the end.

Thanks very much, Mark, and thanks, everyone, for joining for your interest today. So I'm going to read some of the questions which have been submitted and then I'll invite Tim and the team to respond. And just to say, well, try to ask as many questions as possible. But we'll appreciate there's a lot -- if we're not able to respond live, we'll do so after the meeting in written form so please bear with us on this. So question one. Question regarding SDC-1801 clinical trials, how long until the CTA is approved? And then beyond the approval, what's the lead times before the first patient is dosed. So Tim, if I could hand over to you on that, please.

Yes. Thanks, Jessica. Yes, so I think we've covered some of this in today's presentation then. So we're -- so say the CTA approval, we can't really give a firm date on because it's dependent on the MHRA. But based on previous experience, particularly with the consulting company we're using. We're expecting to get that approval in time for a clinical trial starts. So we'll put -- we're putting everything in place to start recruiting patients pretty much as soon as we've got that approval. And we're hoping that, that will all be done by the end of the year. In terms of how long the trial will take, again, that's slightly dependent on how quickly the Manchester unit can recruit patients. But as John noted, the Phase Ia part we're hoping to conclude during next year.

Thanks, Tim. Second question, excellent news on the CTA submission. For many years now, the company has been stating an objective to find licensing partners. Are you able to share the number of potential interested parties in the last 12 months who've shown an interest?

So can't really talk speculate on the number of interesting parties we're talking to, but we talk to potential partners all the time as part of our normal course of business. So we have an ongoing dialogue that continues with a number of interested parties. And I think that's really all I can say about it for now.

So the next question is about consolidation. When previously asked on the reasoning behind consolidation, the response was that as a higher consolidation price there would be more likelihood of institutional interest. How has the strategy played out since consolidation?

Shall I pick that one up? This is Stephen. The answer quite simply is that you don't flick a switch on the markets and everything immediately runs as you would like them to. Over time, I'm quite convinced that the decision to consolidate the shares will prove to be the right one. But of course, you have to remember that we're not isolated. We're part of the sector and we're part of the market. And as everybody knows, the last 12 months in this market and in this sector has been pretty down bloody. The -- interestingly, we're actually running about halfway down the scale of performance in the sector at the moment. So whilst clearly, I'd like it to be better, I'm conscious that it certainly could be worse.

Thanks, Stephen. The next is a question about 737 and we've had a number of questions on this topic, so I'll try and consolidate these as far as possible. And the question essentially is, has the Board requested any information from GSK on its intentions and obligations under the original Sierra agreement.

I'll pick this one up again. The Sareum Holdings plc does not have an agreement either with Sierra or now with GSK. The agreements for licensing the drug was done through Cancer Research. And we have an agreement with Cancer Research, which gives us the 37.5% economics of the agreement. So we are simply not in a position to -- or we have no status to go to GSK and ask these questions. Those questions have to come from the licensing partner, which is cancer research. We are in active conversations with cancer research to make sure that those -- that is happening. But we are simply not in a position to pick up the phone or any other means to GSK and ask those questions.

Thank you. So the next question is about what activities are being carried out prior to any response on the CTA from MHRA. Possibly, Tim, question for you.

John, do you want to pick that up?

Yes, Tim. Yes, I mean it's really a case of -- with respect to 1801, it's getting all of the final details in for the clinical plans with the unit in Manchester. So as part of the CTA application, we've drawn up the protocol that will be used in the clinical and very detailed document extends to over 100 pages. But once that's in place, you then have to break down every single activity within that clinical plan to make sure that the clinical unit know exactly what it is that we're asking them to do. So it's really -- that's the ongoing task there. We're going to make sure that all of our internal procedures are absolutely 100%. It's conceivable that MHRA will come and inspect us. And so obviously, we want to make sure that we're prepared for that event. And I think the other one is the -- finalizing the quality control checks on the capsules. That's ongoing ahead of schedule and looking good so far. But that needs to complete before the capitals are sent off of the clinical unit. So it's really -- and then 1802, we've talked about the ongoing translational study.

Thanks, John. So we have a few questions about cash and cash runway. What runway is the current approximately $4 million provide? And how is this expected to be used over the next 2 years? Is the first question. So I might ask Tim to take that one now.

Yes. Okay. Thanks, Jessica. Yes, so the main focus is still the clinical trials on SDC-1801. So as we said in the RNS, and as we've alluded to in today's presentation, then that we -- well, we're funded for the Phase Ia part, but we would require additional funding to complete the psoriasis Phase Ib trial. So yes -- so I think that's the answer there. And then I think there were some further questions about clinical development of 1802 and that would also take SDC-1802 to the clinic that would also require further funding.

And I think there was a further question on the current estimate of the cost of Phase Ib as well, Tim.

Yes, I think we will -- can we just make sure we got that 1 right and provide a written answer to that, if that's okay?

Of course. So the next question after the results from the CTA have been received, what are the intentions in relation to progressing the COVID potential of 1801. And what would be -- what are the steps being to progress this?

Okay. So the Phase Ia part of the trial will provide safety and dosing information that will be applicable for any trial. So the first part in healthy volunteers will look out for any safety issues. And we'll get a feel for how often we have to dose for and what those levels can be maintained at the various dosing schedules that would try. So that would be -- that information can be applied to any trials in any disease where 1801 is taken as an oral capsule, so including COVID-19. But I think -- so the -- we know that TYK2/JAK1 inhibition has demonstrated very good benefits in psoriasis and psoriatic arthritis. So we think there's a strong rationale for the initial focus on psoriasis there. And then once we have that data, we'll consider any other diseases, which may or may not include COVID.

Thanks, Tim. Next question is around impact of the current geopolitical and economic situation on Sareum.

I'll take this one. I suppose it's an operational one really isn't it? I mean nothing really -- we're just focused on our drug development. Most of our work with CROs, the clinical trial, as we said, will take place in the U.K. Much of our recent work on the drug substance and drug product has also been done in the U.K. So with shelter from currency issues, if any, yes, so nothing really that I can think of.