SCYNEXIS, Inc. ($SCYX)

Greetings, and welcome to the SCYNEXIS 2026 Corporate Update Call. [Operator Instructions] It is now my pleasure to introduce your host, Thomas Johnson of LifeSci Advisors. Thank you. You may begin.

Thank you, operator. Before we begin, let me remind you that today's call will include forward-looking statements based on current expectations, including statements concerning the financial outlook for the future, leadership's expectations on our clinical results and future financial and operational performance as well as our business strategy. Because such statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Please refer to the filings with the Securities and Exchange Commission, including our most recent annual report on Form 10-K and quarterly report on Form 10-Q, including each case under the caption Risk Factors and other documents subsequently filed with and furnished to the Securities and Exchange Commission. All forward-looking statements speak only as of today, March 31, 2026. SCYNEXIS takes no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they were made. With that, I will turn the call over to Dr. David Angulo.

Good morning, everyone. Thank you, Thomas. I'm David Angulo, CEO of SCYNEXIS, and I'm very excited to be here today to provide you a corporate update regarding a recent completed transformative asset acquisition that has given us access to a very promising new agent in Autosomal Dominant Polycystic Kidney Disease, ADPKD, and a completed financing that will give us optimal flexibility to execute our strategy. During today's call, I will be outlining our new corporate strategy and our clinical development plans. Dr. Jeremy Duffield, nephrologists and physician scientists with significant expertise in kidney drug development, who is consulting for us, will be providing an overview of the ADPKD landscape, the scientific rationale for SCY-770 mechanism of action in this disease and will present some of the key supportive preclinical data. Rossana Ferrara-Pontoriero, our VP of Business Development, will highlight the reasons we are excited about the attractive commercial opportunity for this novel asset in our portfolio. And Ivor Macleod, our Chief Financial Officer, will talk about the financial outlook of the company supporting our new strategy. Let me share with you our new vision of the company. Over the past 10 years, SCYNEXIS has efficiently and successfully developed another class of antifungal agents, obtained regulatory approval and partner the first representative of this family of compounds and progress our second antifungal to Phase I stages of development. Over a year ago, we started a strategic review of potential assets to expand our pipeline, taking advantage of our core development capabilities to create shareholder value. We focused our search on drugs with severe and rare diseases with large unmet need and significant commercial potential. Through this search, we identify SCY-770, previously known as PXL-770, an innovative drug for Autosomal Dominant Polycystic Kidney Disease that checks all the boxes. It has a solid CMC package, robust preclinical data supporting efficacy and advanced clinical program supporting safety, a streamlined development path in an area of significant need and a strong commercial optionality. Upon the acquisition of this asset, we're going to be laser focused on expediting its clinical development, focusing on the execution of a Phase II study in ADPKD patients with an anticipated early efficacy readout in the second half of next year and a study completion in 2028. I will later review the Phase II study design, which provides further details about these development milestones. Our recently completed financing is expected to fund the operations of the company to mid-2029, with sufficient cash runway after completion of the Phase II study of SCY-770, giving us adequate flexibility to rapidly progress this development upon proof-of-concept readout. Our current antifungal portfolio has opportunities for nondilutive funding and has pick interest from potential business development partners. So we will complete the ongoing development activities, including a Phase I study with the intravenous formulation of SCY-247 with a focus on positioning this asset to unlock external funding or partner opportunities. Let me -- now let me tell you why -- a little bit more about why I'm so excited about this new journey. There are several reasons. SCY-770 role is significantly advanced in development, addressing a well-recognized unmet need with substantial commercial potential and a clear path to near-term proof-of-concept efficacy data. Its mechanism of action, an AMPK activator has the potential to provide clinical benefit not only in ADPKD, the lead indication, but in other indications as well. It has the potential to be a pipeline in the product. The commercial opportunity for this indication is significant. There is only one drug approved in ADPKD that despite significant tolerability limitation has reported sales of around $1.5 billion. There is also clear interest from big pharma and the investor community in therapies for this indication. which is reflected by recent significant transactions such as the acquisition of Regulus by Novartis, the financing of Renasant BIO and recently announced financing by PYC Therapeutics. SCY-770 has IP protection extending to 2042 and has orphan drug designation, allowing for extended market exclusivity. We are acquiring the assets, providing us with global rights and full control of development activities. The team has done a great job negotiating the acquisition with Poxel. And as you can see in the slide, that focus has been on limiting our cash outlay in the near term to ensure we efficiently deploy the resources to quickly advance the clinical development. Allow me to highlight some of the key attributes that make this asset very attractive. SCY-770 is a well-characterized direct AMPK activator. This novel mechanism of action is supported by a compelling mechanistic rationale in ADPKD and the preclinical pharmacology package provides a strong support for its potential clinical utility in this indication. Additionally, data from the Phase IIa study conducted in patients with nonalcoholic fatty liver disease provides supporting evidence for target engagement and PK/PD correlation. It has a favorable safety profile with more than 270 individuals exposed in multiple Phase I and a Phase II study and the preclinical program enables long-term use. The product is an oral tablet with solid manufacturing and stability package, and there are supplies already available to enable the initiation of the Phase II study that we're planning. The regulatory path and endpoints are well defined for this indication, and the FDA has endorsed a surrogate endpoint total kidney volume for accelerated approval. Now I would like to turn it over to Dr. Jeremy Duffield to discuss ADPKD and provide a scientific background for this transaction. Jeremy?

Thank you, David. Hello. My name is Jeremy Duffield. I'm a physician scientist and nephrologist, and I've been a public biotech executive for many years. I'd like to introduce ADPKD to you today. ADPKD is a large orphan genetic disorder that leads to progressive enlargement of cyst filled kidneys. The disease is caused by mutations in 1 of 2 genes, PKD1 or PKD2. Typically, patients start experiencing declining kidney function beginning in early adulthood with up to 50% of patients progressing to end-stage renal disease by age 60 years of age. The current treatment options are limited with no available therapies addressing the underlying cause of disease. I'd now like to talk to you about AMP kinase and its involvement in ADPKD. AMPK activated kinase is involved in multiple aspects of polycystic kidney disease. It's a master regulator of cellular energy that direct that directly influence the cyst formation and disease progression. The loss of polycystin 1 or polycystin 2 function is associated with reduced AMPK activity, which drives metabolic dysregulation that accelerates cyst growth, fluid secretion, inflammation and fibrosis. SCY-770 is a potent direct allosteric activator of AMPK. It acts on subunit B. Other paths to activate AMPK can include upstream -- can include upstream kinases that act on subunit A and also indirect activators that can increase AMP kinase indirectly, although these have been typically much less potent. There are 12 versions of the AMPK enzyme, and they are distributed throughout different organs. SCY-770 predominantly binds to the AMPK versions that are found in the kidney, providing potential advantages in terms of efficacy and safety. Activating AMPK with SCY-770 counteracts multiple mechanisms simultaneously, and these include the lowering of mTOR and the lowering of cyclic AMP signaling, both of which reduce epithelial cell proliferation and growth. The lowering of cyclic AMP signaling has been validated through the use of tolvaptan. So tolvaptan also acts on the cyclic AMP pathway. But in addition, activating AMP kinase lowers chloride channel secretion of fluids into the cyst, also slowing cyst growth, lowers aerobic glycolysis, which normalizes energy metabolism, also reducing cyst growth and lowers inflammatory pathways, therefore, lowering cyst inflammation and fibrosis. This multi-pathway impact makes AMP kinase one of the most attractive therapeutic targets in ADPKD with the ability to modulate the disease biology in multiple ways. Early clinical and preclinical evidence, including metformin studies have validated AMPK's relevance, although indirect activators have shown limited magnitude of effect, highlighting the need for a potent selective direct AMPK activator. SCY-770 is uniquely positioned to deliver meaningful clinical benefit by restoring AMPK activity and addressing multiple drivers of disease progression simultaneously. I'd now like to share some in vivo data, preclinical data. The effect of STY-770 was evaluated in several in vitro studies and in an ADPKD mouse model. This same mouse model has been used to evaluate other drugs in this disease. These mice have deletion of the PKD1 gene similar to the human disease, and they develop cysts. STY-770 administration confers a clear survival benefit in this stringent model with 90% of treated mice surviving at the point when 50% of untreated controls had died. Renal function was significantly improved with blood urea levels reduced toward wild-type levels, indicating better preservation of kidney function under treatment. SCY-770 markedly reduced kidney weight about 35%, reflecting meaningful suppression of cyst burden. These combined effects, improved survival, improved renal function and reduced cystic pathology provide strong translational support for 770's potential to slow or modify ADPK's progression in humans. I would now like to turn back -- turn the presentation back to David.

Thank you, Jeremy. The outline of key development activities to support approval for ADPKD is illustrated in this slide. While we are opening the IND for ADPKD, we will conduct one additional small Phase I study. It has 3 arms with approximately 24 participants to confirm food effect and exposures at a study state for selected doses. This is further supporting our dose selection for the Phase II study. Important to note that the planned Phase II study will allow us to have an early readout of efficacy after 16 weeks of therapy. More detailed anticipated time lines for this study are on the next slide. And only one Phase III study is required. The goal of an ADPKD therapy is to reduce the progression towards renal failure. And changes in total kidney volume that can be identified sooner than changes in renal function have shown to be an acceptable indicator of response. Hence, the 2 most relevant endpoints in this indication are the assessment of the renal function via Glomerular Filtration Rate, GFR, and the measurement of kidney volume, TKV illustrated in this slide. The FDA has endorsed TKV as surrogate endpoint suitable for requesting accelerated approval. And as you can see in the slide, we're planning to take advantage of that, by requesting initial accelerated approval followed by a subsequent full approval with GFR. And now turning into the design of the Phase II study. It will be conducted in ADPKD patients with risk of rapid progression of disease. This is typically defined as major categories one is [indiscernible]. It will measure kidney volume and renal function at several time points during the study as well as additional efficacy assessments to allow us to have a more comprehensive view of the potential magnitude of effect. Kidney volume, TKV in the slide is measured via imaging. And you can see on the right, an illustration of an MRI showing how this can almost entirely replace the normal kidney tissue. As you can imagine, the renal function is severely compromised in this case. We are planning to analyze the 16-week efficacy data as an early indicator of efficacy since previous studies in ADPKD have shown that 12 to 16 weeks of therapy are associated with measurable changes in kidney volume. [indiscernible] doses will be evaluated with a plan to roll all participants into dose after 16 weeks of therapy. The anticipated time lines are indicated in the right box of the slide with initiation by the end of this year, early efficacy readout by the second half of next year and completion of the study in 2028. Now let me invite Rossana to briefly elaborate on our view of the exciting commercial opportunity for this indication.

Thank you, David, and good morning, everyone. ADPKD is a large orphan indication with a prevalence of 140,000 cases in the U.S. It has a great unmet need and a very significant impact on the patient's lives. The disease is diagnosed at birth, However, most patients do not develop symptoms until later in life. Patients endure great clinical burden with the majority progressing to end-stage renal disease, requiring dialysis or a kidney transplant. The quality of life impact is substantial and patients experience physical limitations, reduced work productivity and also social challenges with the emotional impact of depression and anxiety driven by the worry of transferring the disease to their kids. On the economic side, the burden is just as significant. A study done in the U.S. estimated that ADPKD had an incremental annual cost to the health care system of $7 billion to $9. Importantly, this remains a highly underserved market with only one approved treatment, leaving a large patient population with no therapy and creating a clear opportunity for innovation. [ Jynarque ] is the only FDA-approved therapy for ADPKD. And despite a relatively low real-world uptake, it reached about 10% in achieved blockbuster status. On the left side of the slide, you can see the U.S. annual sales peaking at $1.5 billion in 2024. The small penetration of the product is due to significant limitation in both safety and tolerability. Regarding the safety concern, the product has a black box warning for hepatotoxicity as well as a [ burdensome ] [indiscernible] requirement. The treatment burden is very high. We heard from KOLs that approximately 25% of the patients that start taking the drug discontinue shortly after mostly due to polyuria, with patients producing 6 to 10 liters of urine per day. The patient impact and the unmet need are exactly why ADPKD represents such an important opportunity, both clinically and commercially. Given 2 ability to reach $1 billion sales despite very limited penetration, we believe that a product like SCY-770 that has already shown a better safety and tolerability profile and a potential effect in preclinical model has the potential to unlock a similar robust market opportunity. Let me now turn it over to Ivor for a discussion of our financials.

Thank you very much, Rossana. Good morning, everybody. I'm Ivor Macleod, the Chief Financial Officer of SCYNEXIS, and it is my pleasure to summarize our current financial position. The company is well positioned for the future development of [indiscernible] 70, adding the proceeds of our successful pipe financing to our cash balance on hand. As David mentioned, we extend our cash runway into mid-2029. This conservative forecast excludes the assumption of receipt of any milestones and royalties from GSK, where we stand to collect up to approximately $146 million in annual sales milestones plus royalties following the relaunch of BREXAFEMME. We will also continue to seek nondilutive financing to further support the ongoing development of SCY-247. With that, let me pass you back to David.

Thank you, Ivor. With this exciting acquisition, our new lead asset is SCY-770, and we will focus on progressing towards execution of the Phase II study in ADPKD. And there is potential for other indications, and we will evaluate the opportunity to explore them in the future. Regarding our antifungal portfolio, we anticipate completing the ongoing Phase I study with the intravenous formulation of SCY-247 later this year and seek partnering our nondilutive funding for continued development. Other [indiscernible] earlier in earlier stages of development will continue to be developed under an NIH funded program. In summary, we are building the A chapter of the company that combines all key elements to create value, innovative science with a new lead asset, SCY-770, a highly selective AMPK activator supported by encouraging data in ADPKD, a condition that has a very high unmet need and very significant commercial opportunity. There is a clear strategy and focused execution. We are going to quickly advance to Phase II and generate proof-of-concept data by second half of 2027. We are excited to embark in this new journey, and we're confident that as an experienced management team, we can deliver on this new asset. And now we can open the call for questions.

[Operator Instructions] Our first question comes from the line of Kemp Dolliver with Brookline Capital Markets.

So I'm going to ask 2 questions. Just first on the estimated prevalence data. How concrete is that data? It strikes me that it may be pretty solid given that these patients do have pretty long life expectancies and there seems to be a pretty clear diagnosis methodology. So can you speak to your confidence in that 140,000 patient number?

Certainly, Ken, thank you, and thanks for the question. I think that you're right, since this particular diagnosis, number one, it is a genetic condition and the majority of these patients already have been previously identified and are in an established databases because they are typically treated only in concentrated centers, let's say, in the United States. And so I would say that the number of patients is certainly a relatively solid number. Having said that, there is always the possibility that some patients in earlier stages of the disease that have, for any reason this mutation by the first time in the family or they have symptoms by the first time in the family, they have not been properly identified. But in general, the number seems to be a relatively solid number. I don't know, Rossana, since you also investigated as well regarding the epidemiology, if you'd like to comment as well in that regard.

Yes. Yes, happy to comment. Yes, I think the 140,000 diagnosed patients, right, for diagnosed patients is pretty solid. In the U.S., there is also the report of an addressable patient population that is larger, about 500,000 cases, both diagnosed and undiagnosed -- and then I know it has been growing mostly driven by early detection with imaging and genetic testing. But to the point that they've been made, there is strong evidence and those patients are low for the number of diagnosed patients.

Great. So my second question relates to patients that discontinue Jynarque, which is do they essentially go to a combination of treatments that just address the underlying symptoms? And in those cases, how long do those patients survive after discontinuation?

Yes. Thank you, Ken. Let me start there. Certainly, the tolvaptan treatment, so all these are disease-modifying therapies. And really the primary objective of disease-modifying therapies is try to delay the progression towards kidney failure that will require either kidney transplant or it will require dialysis. So really, the intention of these therapies, these therapies are not curative are really trying to slow the progression towards end-stage kidney failure. So patients that, for any reason, cannot tolerate tolvaptan and certainly, they are going to be in therapies trying to control their hypertension if they have hypertension, trying to control their symptoms like the kidney pain and pain, et cetera, they will have dietary support in regard to try to prevent the progression towards kidney failure, and they will eventually require kidney transplant or dialysis shorter than patients that are receiving some therapy. The primary reason for patients not tolerating tolvaptan, it is twofold. Number one, tolvaptan has been associated with liver injury. So patients have been -- they may have liver failure after really taking the drug. For that reason, it has a REMS program associated with its prescription. So this patient needs to be followed very closely for liver insufficiency. And because of the mechanism of action, it causes very significant polyuria. And when we're talking about significant polyuria, we're talking about 6 to 10 liters a day. So it means that patients really need to go and go urinating, I don't know, between 10 and 20 times a day. And that may be a heavy burden, particularly for people that are productive, working all day, et cetera. So that's some of the reasons why it is not so well tolerated. But I will welcome here Dr. Duffield's comment in regards to the alternative treatments or what typically patients that do not tolerate well to up that may be invited to do or asked to do in that regard.

Thank you, David. There are no other treatment options at the moment other than antihypertensives, which include ACE inhibitors and angiotensin receptor blocking agents. And so the patients would be maintained on those, and they would receive supportive care until the point they need to have dialysis. And at the moment, they would also see if they're candidates for kidney transplant. So that will be the current standard of care.

Our next question comes from the line of Vamil Divan with Guggenheim Partners.

Congratulations on the deal. So a couple for me as well. So one, I'm just curious, you mentioned this is sort of a new chapter for the company moving from the antifungal space over to rare renal. I'm just curious sort of as you did your strategic review and looked at the various options why rare renal and ADPKD specifically search to you is the right move for the company to make, given I'm sure other things that you're looking at as well. So that's one. And then my second question is just on the sort of competitive landscape. Obviously, there's one approved product. You mentioned the Regulus transaction, there seems to be quite a bit of activity in the ADPKD space over the last couple of years. So I'm just curious how you see the other sort of therapies in development as you sort of think about the space over the next several years, how it may evolve?

Thank you, Vamil. Thank you for the questions. Let me start addressing in regards to the identification of the asset and really the transition of the company into this new chapter, which is you're quoting it very nicely. That's the same way that we quoted it, a new chapter for the organization. When we started the search for a new product to bring into our portfolio, certainly, as I mentioned to you, we have been very successful in developing the antifungal products and many of them are -- the most relevant indications are orphan diseases, rare diseases. And we consider that we, as an organization, were very well suited for development of products that were in the rare space, in the orphan disease space, significant unmet medical need and really serious conditions. So that's sort of the search went on. So we went on searching products for severe rare conditions. To be entirely honest, were we specifically narrow and focus in kidney in our search, the answer is no. We were searching for opportunities, not necessarily only in kidney. But when we identified this opportunity, actually, we were -- obviously, we learned more about the significant unmet need, the significant potential of this mechanism of action in this condition and also the potential to expand into other conditions also in the rare space as well. We definitely consider that this was a perfect asset for us to really bring in, to really advance it rapidly advance it into development, has already basically the Phase I package is basically completed, enable us to start a Phase II study right away. And we consider was the right stage of development, right indication and clear opportunity for us as an organization to advance in development efficiently. So that's really what drove us to really acquire the asset and really focus our efforts in really advancing this particular asset into Phase II as quick as we can. So I think that -- did I address your first question in that regard. So we're very excited about really moving into this new area, into this new area of kidney in this particular case that within our core that it is rare and severe conditions. And addressing your second question, Vamil, regarding the landscape, yes, we are certainly -- it's an exciting area for sure. There is significant interest in many products under development trying to address this significant unmet medical need. And I'm going to invite Dr. Duffield as well to make an additional comment for other products in development. However, what we like about 770 is that it is a little bit agnostic about what type of mutation you have. It's a little bit agnostic regarding what is the type of -- if this is a misfolding mutation, if this is a truncated mutation, if this is a PC1, PC2 because it may work in all of them because the effect, it's a little bit downstream from the actual mutation of the gene and also other of the technologies are very exciting in regards to some of the mechanism of actions and that they may be limited to only certain subpopulations of patients suffering from this condition. And I think that it is extraordinarily welcome that there are many technologies trying to address this unmet need because there are many patients that have not been able to really properly be treated in this condition. Only about 10% of patients diagnosed with this condition are currently receiving an intervention like tolvaptan. So it means that there is a lot of opportunity to really continue expanding into patients that can benefit from a medication. And the fact that there are several on development is a testament of the desire to have new products available for this condition and the unmet need. And we like 770 because of that, that can really have a broad utility across many different types of patients suffering with ADPKD. Jeremy, would you like to add something?

I think you covered it very well. I will just reiterate that we do think 770 has the potential to be a once-daily pill for all ADPKD patients with a good safety profile. And so we think this could be highly attractive to patients. Other therapies that are in development seem to be more restricted to subpopulations of PKD. And so we think there's going to be plenty of opportunity for 770 in the future.

Okay. And then maybe just one more, if I could. As you move into Phase II here, just how you're thinking about with this mechanism sort of from a safety perspective, what's the right toxicity or safety issues are you most focused on? That would be helpful.

Sure. Thank you. So as you may know, AMPK as an enzyme, so it's an enzyme that is present in basically every single cell of your body. And activating of that particular enzyme has a specific different effects depending on which organ those applicated. The -- what we call it this very selective AMPK activator is because we didn't have the opportunity to show the data here, but it is in the public domain as well that we can share. It's the fact that 770 binds preferently in a very low concentrate -- is able to activate at very low concentrations, those AMPK versions that are more predominant in the kidney which then it really has the most potent activity towards those AMPK versions present there, which is where it's going to exert its maximum efficacy. It also binds to some of the AMPKs that are present in the liver at higher concentrations, but it's still meaningful concentrations. The effect that you can expect from an AMPK activator in the liver is to reduce the fat content on the liver, which may not be a bad thing there. And then it has the -- what has been other side effects that other AMPK activators that were developed years, years ago that we were activating heavily on the heart they were associated with some safety concerns in preclinical models for cardiac hypertrophy. This particular compound 770, the [indiscernible] binding to the heart activators is extraordinarily high, which we don't consider will be clinically meaningful. And our preclinical models have not shown in our clinical data today have not shown any risk of that. So from that regard, most of the adverse events during the Phase I and Phase II studies that have been reported have been related to GI tract, which has been mild and the majority of them and have been associated with a typical oral medication GI tract, some nausea, some diarrhea in a small proportion of patients. So that's really what we have observed to date, [indiscernible]. And certainly, as an AMPK activator, the important aspect here is the selectivity or at least the very low concentrations needed to be able to activate those in the kidney, AMPKs in the kidney with others in other parts of your body, they really require substantially higher concentrations to be activated. So far, the safety profile has been pretty good, and this is already more than 270 individuals already exposed, which is really providing us a good derisking of the product already.

We have reached the end of the question-and-answer session. Therefore, I would like to turn the floor back to CEO, David Angulo, for closing remarks.

Thank you very much for everyone attending the call, and this marks the start of an exciting new chapter for the organization, and we are confident that with our experienced management team and the organization with proven track record in drug development and regulatory approvals, we can drive this asset forward and deliver meaningful value. Thank you, everyone, for attending the call.

Thank you. This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.