Seaport Therapeutics, Inc. (SPTX) Earnings Call Transcript & Summary

The post keynote session, the first one of the afternoon, day 1 of Citi's Biotech Back-to-School Summit. I'm Yigal Nochomovitz. I cover the next company we're going to speak with, Seaport Therapeutics. We have with us Lauren White, who's the CFO; and Michael Chen, the CSO of the company. So welcome, both of you. Great to be covering you since the IPO earlier this year. So I guess it's a new company, newly public company in neuroscience, obviously. But it would be great if you -- Michael, maybe just introduce the sort of premise of the company in terms of what the core technology is, why it's different, where it came from. And then we'll talk about all of the various ways you're flexing it to do different things in neuroscience.

Yes, maybe I'll kick us off, Yigal.

Okay. Go ahead.

Thanks so much for having us, and a warm welcome to those in the room.

And I just also should mention my colleague, Geoff Meacham is here as well. He co-covers the Seaport with me.

Great. So again, warm welcome to everybody in the room, and thanks again for having us at the conference. We are going to be making some forward-looking statements based on our expectations and would encourage if anyone has questions, can follow up with our SEC filings. So Seaport is a neuropsych company. We've got a clinically validated platform and a robust pipeline of 3 programs. Our lead program, GlyphAllo is currently in Phase IIb with the potential to be registration enabling. And this morning, we actually shared some interesting driving study data that Michael will touch on in a few minutes. Our second program, GlyphAgo is -- we currently -- we recently shared key Phase I proof-of-concept data, and our third program is in preclinical development. All of our programs are based off of clinically validated mechanisms that were held back by some sort of an issue that we're able to address with our Glyph platform. Glyph is a lymphatic targeting prodrug platform that's able to overcome limitations such as poor oral bioavailability, liver-related AEs and other side effects. And the great thing is every time we Glyph molecule, we create new IP. We've got a seasoned leadership team with a track record of success, both in delivering new medicines to patients and in delivering successful business outcomes. And as Yigal mentioned, we recently completed our IPO. So we brought in ample capital to help us deliver on our key upcoming clinical milestones. If we just take a step back and we look at the overall landscape, there's over 1 billion people living with mental illness. We at Seaport are focused on those struggling with depression and anxiety. Each of those impact over 300 million people. They can be very disabling. They're comorbid at times. And so it's clear that we definitely need better medicines in this space. And when you look at the landscape of existing medicines out there, they're deemed commercial successes, billions of dollars of peak sales, millions of people helped by them, but they all have some similar limitations. They have modest efficacy. They don't work for 1 out of 3 patients. They can take weeks to stop working, and they have side effects that are unfavorable, such as sexual dysfunction, weight gain and other items like that. And so we believe we're uniquely positioned across those parameters with the programs that we're bringing forward. You're probably aware that our CEO, Daphne Zohar, and our Board Chair, Steve Paul, founded and led Karuna, and we're taking a similar approach at Seaport as was taken at Karuna. So at Karuna, they knew that xanomeline worked, but it was sitting on a shelf due to GI tolerability issues. And so the team was able to overcome them and create KarXT now called Cobenfy. And so as mentioned, we're taking a similar approach to that and that we're targeting drugs that have clinical efficacy, but were held back by some sort of an issue that we're able to address with our Glyph platform. And then we're also really focused on executing trials with a seasoned leadership team. So looking ahead, I know Yigal you asked about kind of the next 12 to 18 months. We've got a really exciting horizon in front of us. We'll be sharing top line data of our BUOY-1 trial in GlyphAllo in the first half of '27. And then looking ahead to our second program, GlyphAgo, we've got our Phase IIa data that will read out in early '28 and our Phase IIb data that would read out in the end of '28. So a really exciting path ahead.

Okay. Very, very comprehensive overview. Maybe we could just spend a few minutes just in a little bit of detail on exactly what Glyph does because you're leveraging a novel pathway that really hasn't been leveraged before in the pharmaceutical space as far as I know.

That's right, Yigal. So everything Seaport is doing is based on the Glyph technology, the Glyph platform which is really based on how the body absorbs dietary fat. So I know you all came from lunch, maybe had some fat during lunch. That is actually absorbed differently than many small molecules are absorbed. Typically, small molecules will transit through the portal vein into the liver and the liver can exert what's called first-pass metabolism. And that can mean that the amount of drug actually circulating into the body or the brain can be extremely diminished relative to what was actually taken as a dose. So things like low oral bioavailability or even variable pharmacokinetics can result from that first-pass metabolism and that can limit drugs, including otherwise potent CNS drugs. Now it can also stress out the liver to the extent that you can see liver enzyme elevations or hepatotoxicity. In contrast, dietary fats are absorbed through the lymphatic system of the gut. And what's important about that is it doesn't see the liver on its way into circulation. And so when we Glyph a molecule, we clock it so that it looks to the body like a dietary fat and then is absorbed like a dietary fat in that it doesn't see the liver on its way into circulation. But then what we release at the end of the day is a moiety, an API that is based on clinical validation, but we've been able to overcome limitations like low oral bioavailability and variable PK. We're able to address issues with safety and tolerability, including liver-related issues, and we create a new molecule with new composition of matter IP.

Okay. So that brings us to GlyphAllo. You mentioned some of the data. We'll get into that in a second, the driving data. But before we get to that, just sort of explain, so allopregnanolone, it's, as you pointed out, a validated molecule, but just remind us, it's got some liabilities. The Glyphing erases those essentially. So talk to us about that. And then you're starting with MDD. So kind of go through the rationale of why GlyphAllo for MDD is the right pairing.

Yes, absolutely. So with GlyphAllo, we're taking a mechanism, allopregnanolone that, as you mentioned, has been validated. In fact, allopregnanolone, although it's a neurosteroid that we make in our brain, is also the basis of an approved drug. Now, that was a 60-hour intravenous infusion of allopregnanolone, but it worked. It worked in a form of depression called postpartum depression. It was rapidly acting as an antidepressant and also had anxiolytic and sleep-promoting activity. So all signs that this mechanism, allopregnanolone, which has a GABA positive allosteric modulation mechanism, is efficacious in depression. Now, the limitation, of course, is that it was a 60-hour intravenous infusion. And that was driven by the fact that allopregnanolone has high first-pass metabolism, low oral bioavailability and just could not be taken as an oral therapy. Now with GlyphAllo we apply the Glyph technology, and we've shown in Phase I studies that we're able to reach clinically relevant exposures, but now with once-daily oral dosing, which really enables to take something that was, again, only an IV infusion and get it out of the clinic into outpatient therapy. We also showed in Phase I that we not only had drugs circulating in the body, but actually pharmacodynamic activity, that is allopregnanolone that results in brain activity changes. And in a Phase IIa study, we showed in a clinically validated model of anxiety that GlyphAllo was able to blunt the salivary cortisol stress response in healthy volunteers, something that the only other neuropsych drug that's done that is alprazolam or Xanax. So on the basis of all that data, the PK, the pharmacodynamics, the safety profile, we took GlyphAllo into a Phase IIb study that is ongoing called BUOY-1 in depression. And we started with depression really because of the weight of clinical evidence of allopregnanolone in depression, suggesting that it has activity in depression. And so now the question is, with outpatient dosing of GlyphAllo, can we see that activity.

Okay. So then the data this morning, let's get to that. It was important data, and albeit in healthy volunteers, but it was still important data. So what were the key takeaways there? It's a driving study, which you don't typically see in biotech too often. But in this case, it was important to frame the risk relative to some precedents.

Yes, absolutely. And some of the precedents in this space are oral synthetic analogs of allopregnanolone. One comes to mind, zuranolone. And zuranolone, which is approved in postpartum depression and has been shown to be efficacious in trials of depression, actually approved outside of the U.S. in depression. Zuranolone works, but has a black box warning for driving impairment and a 12-hour driving restriction, so 12 hours post dose. And like allopregnanolone, zuranolone is a GABA positive allosteric modulator. Now what we did was run a Phase I driving impairment study using driving simulators. And this is a validated method using a validated study design in which you can detect next-day driving impairment. And the goal was to, earlier than one would anticipate, given where we are in development, start to understand the potential differentiation of GlyphAllo when it comes precisely to this driving impairment issue. So what we did was we ran a study in healthy volunteers that was a 3-way crossover, which is very typical of the design. So essentially, this is a design where you have active drug, GlyphAllo at the doses that we're using in our Phase IIb study that's ongoing, and compared it to placebo and to an active positive control called zopiclone. And the primary endpoint, SDLP, really is a measure of lane swerving. So you don't want to separate from placebo in this study. You want to look like placebo when it comes to next day driving simulated lane swerving. And that's exactly what we found. So for our primary endpoint, on day 5 after repeat dosing of GlyphAllo up to the doses 375 milligrams that we are using in BUOY-1, or our Phase IIb study in MDD, we saw no statistically significant difference from placebo. That is, no driving impairment next day. Similarly, in our key secondary endpoint, after a single 250-milligram dose of GlyphAllo, we did not observe any next-day driving impairment. However, zopiclone, the positive control, did statistically separate from placebo, showing that it's working as intended as a positive control. The overall experiment has assay sensitivity. And interestingly, zopiclone also statistically significantly separates from GlyphAllo. So overall, our is that based on the study as designed, GlyphAllo doesn't have any next-day driving impairment in terms of that morning impairment. And when you compare it to the profile of something like zuranolone, we feel that these data, along with our Phase I data and our Phase IIa data with GlyphAllo really add to the overall profile that's starting to build around GlyphAllo.

Michael, just maybe a broader question on the Glyph platform. I know as you go from Phase I/II to pivotal studies, your exposure is going to increase dramatically, the number of investments and the number of patients. Talk about the regulatory kind of buy-in. Is there any extra hurdle that you have to do? Is there any body of work that you have to sort of finish before you -- as you move to more pivotal studies?

And so what we've guided on is that the current study in MDD with GlyphAllo, BUOY-1, is a potential registration-enabling study. And we feel it's that way because of the size of the study, the adequate and well-controlled nature of the study. So it's a randomized, double-blind, placebo-controlled study in patients with MDD using GlyphAllo. So it really looks like a pivotal style study. Now there's always an open question of how many pivotal studies do you need, given the regulatory statements that have been made from FDA around the interest in expediting single trial types of approvals. However, traditionally, in neuropsych, you need 2 studies, 2 positive studies. So we're not necessarily banking that BUOY-1 is going to be the only study in MDD for GlyphAllo. And we're anticipating that we may need additional studies to fill out the rest of that registrational package. But we do feel that BUOY-1 will be an important part of the registrational package.

Okay. And you mentioned the salivary cortisol related to the anxious distress component of MDD. So maybe talk a bit about sort of Geoff's question in terms of looking to the future in the commercial setting, MDD, anxious distress, the overlap there, how are you going to position this molecule commercially, assuming you can get efficacy in those groups?

Yes. So as Lauren highlighted, MDD, generalized anxiety disorder, depression, anxiety, highly comorbid. And in fact, if you look at major depression, there's a major specifier in major depression called anxious distress that is present in more than half of patients with depression. You're talking 60% plus of patients who have anxious distress. Now, this is actually in the diagnostic workup for depression. It's in the DSM-5 as a major specifier, just like postpartum depression is a specifier of depression. And when you think about patients with anxious distress, these patients will often have elevated levels of anxiety, stress and other symptoms. So allopregnanolone as an IV infusion had shown not only the antidepressant activity, but also anxiolytic activity, sleep-promoting activity. So our hypothesis is that with GlyphAllo, given that we retain the pharmacology of allopregnanolone, that we can see a benefit in all-comers, major depression, but we may see even more benefit in the subgroup with anxious distress. And again, this is not based on a cutoff on a scale. This is based on simply how we diagnose depression in the first case. So really, that provides a couple of options in development. So we could see efficacy in all-comers MDD, and I think that would be terrific, and that would give us a really broad development path. We could also see extremely good efficacy above and beyond with those patients with anxious distress. And again, major subset of depression, patients that don't respond well to SSRIs. And frankly, there are no drugs that are specifically targeted or labeled toward that anxious distress subgroup. So it provides a lot of flexibilities as we think about next steps for development.

Well, what type of effect size, or what kind of boost in effect size would you want to see in the anxious distress over the overall MDD to sort of claim meaningful differentiation there?

Yes, I think it's a wonderful point because we have to emphasize that the overall study is really powered to observe differences between drug and placebo in all-comers MDD. So we didn't necessarily power it to find a statistically significant difference between the subgroups. And what increasingly companies are doing is looking first at the all-comers population, and then doing a prespecified but qualitative analysis to really look at the differential in effect if there is one. I'll also mention that beyond the pure effect size, we'll also be looking at the other potential benefits of GlyphAllo. I mentioned that allopregnanolone as an IV infusion was rapidly acting. And so there are very few antidepressants that act quickly. SSRIs take weeks to start working. So GlyphAllo beyond the overall effect on depression, could also have rapidly acting activity. We'll also be looking at its potential anxiolytic effect, its sleep-promoting effect. So really the totality of data and the totality of potential clinical benefit.

Okay. Before we move to GlyphAgo, I wanted to get your thoughts on some of the competitive data in the space, Definium's Phase III data. How do you think about that in terms of resetting or changing the efficacy benchmarks? Hope to get your input there.

I think in general, what you've seen from that class, the overall space, is a real difference between things that have potential for unblinding, functional unblinding, for things that have intensive patient intervention. And at the end of the day, whether the effect size reflects the unblinding, the trip, something else, I think that what regulators are going to focus on is demonstrating, in a robust study, statistical separation between drug and placebo. And so when looking at a treatment that has to be administered 8 hours with supervision, et cetera, there's always going to be a different way of looking at that data compared to something that's a more conventional outpatient therapy. So I don't think it necessarily resets the bar in this space, but it provides additional options for patients, which given the unmet need and the scale of the diseases that we're talking about, I think more options are great.

Okay. That all makes sense. All right. So let's shift over to GlyphAgo. So tell us, this one, you're focused on GAD or generalized anxiety disorder. So I would love to understand the drivers for this program being focused on GAD and also agomelatine. Again, it is approved. I don't believe it's approved here, but it's approved in certain other territories. And so you're leveraging a known molecule. Well, but it has some drawbacks. And you mentioned at a high level what those are, but maybe we can drill down now and talk about that.

So agomelatine absolutely is validated. It is approved for not only major depression, but also generalized anxiety disorder. You asked sort of starting with GAD. And part of that is going back to our strategy on really starting where there's clinical evidence. And the clinical evidence for agomelatine in generalized anxiety disorder is quite robust. So there have been 4 placebo-controlled studies of agomelatine. And in all 4 studies, agomelatine statistically significantly separates from placebo, pretty good batting average. So it's approved for GAD. From a tolerability perspective, the mechanism of action as a melatonin agonist and serotonin 2C antagonist means you don't have the SSRI baggage. So you don't have weight gain, sexual dysfunction, sleep difficulty. In fact, agomelatine helps patients sleep. But that drawback that you were referring to is that it's a little bit rough on the liver. So due to its high first-pass metabolism, some small proportion of patients can have elevations in liver enzymes. And what this does is necessitate liver function testing, blood tests. And so for example, in the label in Europe, blood tests at baseline, 3 weeks, 6 weeks, 12 weeks. Every time you increase the dose, it's a lot of tests and has really held back agomelatine. And frankly, it's also been held back by the lack of composition of matter IP. Now what does Glyph do? As we reviewed, Glyph allows us to bypass the liver, bypass that first pass effect. And so in some ways, it's almost like a perfect application of Glyph agomelatine. And so we created GlyphAgo to address these shortcomings to reach the same exposures that we know work in GAD, but reduce the amount of drug the liver sees. And in order to do that, we need to increase the bioavailability of GlyphAgo compared to agomelatine. And we had a bar going into initial clinical studies where we wanted to see about a twofold increase in bioavailability, which we projected would reduce or eliminate that risk of liver enzyme elevations, which has held back agomelatine. And we announced earlier this year data from our Phase I study, where we saw a nearly sevenfold increase in bioavailability, about 6.8 fold. But perhaps even more striking was a tenfold reduction in PK variability. So agomelatine, due to that first pass, has highly variable PK. From patient to patient, you might get different exposures. But we saw a tenfold reduction in that variability with GlyphAgo, again, due to that bypass of the first pass effect. We also start skirting the impact of drug-drug interactions on PK. So really a lot of positive benefits to Glyphing agomelatine. And so those Phase I data confirmed not only the PK profile that we were looking for, but a great safety profile. That is GlyphAgo was generally well tolerated, no serious or severe AEs, no liver AEs. So from there, we're launching 2 Phase II studies with GlyphAgo. The first is a Phase IIa proof of pharmacology study that will be really focused on sleep. I mentioned agomelatine has this sleep benefit. GlyphAgo, we believe, will retain the pharmacology. We will have that same sleep benefit. And sleep is a really core symptom for GAD and beyond, for MDD, et cetera. And so we're going to be testing that explicitly in this study where we're going to be looking at patients with GAD who will have sleep dysfunction. I think insomnia, things like that. In parallel, we'll be spinning up a Phase IIb, potentially registration-enabling study of GlyphAgo in patients with GAD. And the idea there is we know agomelatine works. It's approved for GAD. We have GlyphAgo, which has an improved PK profile, and we're going to be launching a potential registration-enabling study for GAD as a first indication.

And so the reason it was never approved in the United States is you mentioned the lack of IP. You mentioned the intensive liver monitoring. It just wasn't a commercially interesting thing to do in the United States, I gather. But of course, with Glyphing, you get around a lot of that.