Silence Therapeutics plc (SLN) Earnings Call Transcript & Summary

All right. Good afternoon, everyone, and thanks for joining us at the Morgan Stanley Global Healthcare Conference. I'm Mike Ulz, one of the biotech analysts here. It's my pleasure to introduce the team from Silence Therapeutics, including Craig Tooman, CEO; and Steven Romano, Head of R&D. But before we get started, I just need to read a quick disclaimer. For important disclosures, please see the Morgan Stanley research disclosure website at www.morganstanley.com/researchdisclosures. And if you have any questions, please reach out to your Morgan Stanley sales representative. And with that, Craig and Steven, thanks for sharing your time with us today. And maybe I'll hand it over to you, Craig, just to make some introductory comments for people that might not be familiar with your story.

Thank you. Thank you for having us. So Silence has been involved in siRNA technology in the platform for over 2 decades. And so a great intellectual property estate over that time period. Reverse merger with a German company, our labs are in Berlin and the U.K. And we've recently opened a U.S. office, so a very global footprint. And we really, really like the applicability of this technology. It's obviously very safe and durable and the efficacy that we've seen in a variety of our studies is really outstanding. We'll talk more about that, I'm sure, today. Broad appeal because we've seen in our 3 clinical programs already areas such as large cardiovascular areas in Lp(a) and also smaller areas like PV, polycythemia vera, which we'll talk about and areas in between. So we have a partnership with AstraZeneca, a multi-target deal with them. And it allows us this technology platform to explore both for ourselves and with partners. So we think it has a lot of flexibility and a lot of opportunity for growth.

Yes. Great. And -- you touched on the platform a little bit, but maybe we can expand on that, your mRNAi GOLD platform and just some of the advantages of that approach relative to sort of traditional small molecules or antibodies.

Yes. What's really great about this technology platform is some of the efficacy, safety, as we've talked about, durability really has all of those -- but it's also reversible. So unlike gene editing and other technologies, you can just stop taking the treatment, of course, and you don't have any further effect. So we really like that. Also, it's endogenous. So unlike some of the other compounds that we see utilizing some of the competitive arenas, this is something that's naturally occurring hormones. So we feel like it's something that we can explore a little bit more in terms of dosing that way. So really has all the flexibility, as I mentioned before, on exploration, the things we think we can do. And Steve, you've had a great opportunity to look across the portfolio with that technology.

Yes. And maybe just to say a little bit more about the technology. So you mentioned messenger. This is siRNA. So these are small interfering RNAs, which is a little different. We target messenger RNA and quiet messenger RNA or silenced messenger RNA. So they're not producing the disease-associated proteins that we're targeting for the conditions that we're interested in. But our technology is very robust. So we're able to choose sequences that are very specific for the protein blocking that we want to do. They're very potent and they're durable, and that's been translated into the clinic in both elevated Lp(a) patients that we're targeting, so the silencing of Lp(a) as well as PV.

Great. And with your sort of comments about translating into the clinic, let's sort of dig into some of that a little bit, and let's start with [Glycerin]. It's in development for polycythemia vera or PV for short. Maybe you can just give us a brief background on the disease first and where the unmet need is.

So very exciting arena PV, rare blood cancer. And so really, what this is associated with is overproduction of RBC's red blood cells. And so unmet medical need, almost 80% of those polled who are patients today do not have great hematocrit control. So obviously, once you look at that hematocrit level, you have a good sense of where that patient stands. And we'll talk more about that in terms of the clinical study. So what this exhibits is kind of a thickening of blood with the RBC overproduction, and that leads to clotting in cardiovascular effects. So what we're really looking to do is limit that RBC production. And it's very effective in the Phase I trial that we've seen.

Can you maybe talk about the patient numbers out there and sort of what that looks like?

So the patient number is 150,000 in the U.S., 3.5 million worldwide, undertreated and underserved. So we really gonna like the technology and what we're able to do here.

Yes. And what's sort of the -- how are these patients currently managed? Is there anything that you can do for them?

So they're actually managed with phlebotomy, multiple phlebotomies, blood draws and cytoreductive agents currently. And there are a few other technologies on the horizon. We're very, very pleased to be first-in-class in the siRNA arena here. So it is something that we've seen in our Phase I open-label study, 21 patients when we have patients who come in who are well controlled at that 45% level. They've actually stayed controlled during our clinical trial without phlebotomy. So it really is almost 100% efficacy within that group that's well controlled coming in. And for those that actually come in at higher levels, we've seen them move to the mean. So really incredible opportunity that we've seen with that Phase I trial. Of course, we're in Phase II now, and we're hoping to replicate that.

Can you talk a little bit about the mechanism of action and how you're sort of...

Yes, sure. So the mechanism of action is it's blocking TMPRSS6. So TMPRSS6 is a negative regulator of the production of hepcidin. So these patients generally have low hepcidin levels. Hecidin, what we're doing by blocking TMPRSS6 is taking the break off the production of hepcidin by hepatocytes. You increase hepcidin and that causes a restriction of iron to the bone marrow. So with an overproduction of erythropoiesis or red blood cell production, it needs iron to churn out the RBC. So you're really blocking or preventing iron to getting to the bone marrow. And so that helps reduce hematocrit in hemoglobin. And obviously, that has a benefit to the patients. because we know keeping hematocritin levels below 45 is a safe range, if you will. Elevated levels of hematocritin above 45 are associated with cardiovascular outcomes. So that's essentially how it works. But we're seeing elevations of hepcidin very early on in the intervention and those elevations of hepcidin persist within physiological range, but they are elevated enough that they are associated with a reduction, as I mentioned, of red blood cell production based on the restriction of iron and bone marrow.

Yes. And you talked a little bit about the effects and the profound effects, particularly in those patients, less than 45. Any other sort of data points that you can talk about from the Phase I study that are important either on efficacy and then maybe also safety as well and what you're seeing there?

Sure. So first of all, we see obviously a reduction in hemoglobin and hematocrit. So that's exactly what you'd like to see. And we saw that, as Craig mentioned, across a range of patients that we included in the study. In the Phase I study, it's an exploratory study. So we didn't restrict the inclusion criteria. So we allowed patients to come in whether they were well controlled, meaning their hematocrit was below 45 or whether they had hematocrit levels much higher. And across the board, we saw reductions of hematocrit. We saw elevations of hepcidin, as I mentioned, and that's really the mechanism. So that gave us proof of mechanism and confidence in moving forward into Phase II. And then we saw, obviously, the fact that you didn't need to have phlebotomies during the treatment period for those well-controlled patients and a significantly reduction in need for phlebotomies in the higher hematocrit patients. But we also saw, for instance, ferritin levels increase. So ferritin levels suggest that these patients are typically iron deficient because so much of the iron is being taken up by the bone marrow. But we saw ferritin increase, which means the iron storage in the body is improving. And so that could potentially have an impact on their deficient status.

And you mentioned you're sort of in your Phase II study in enrolling patients. Maybe talk about the design there and any key differences between what you've done in Phase I?

Yes. So the key difference is in Phase I, as I mentioned, we're exploring a broad population. But in Phase II, what we did is we restricted enrollment to patients who are well controlled. because here, we're looking at the effect of transitioning people to the product in a blended fashion. So we have placebo and then 2 intervals, same dose, but 2 intervals, Q6 weeks and Q12 weeks of the drug. So rather than have everybody come in with hematocrit levels across the board, you bring everybody in who is well controlled and what your study attempts to demonstrate is that you can maintain the control but with the reduction or alleviation of the need for phlebotomies. So we're looking to enroll over 40 patients in that study. We're enrolling very, very nicely. And we're very excited about completing enrollment by year-end. It's a 36-week study. So that will put us in having data in the second half of next year.

I think we really benefited by having the open-label Phase I. You actually could see every patient coming into the trial, and it was extremely consistent and allowed us to really set up for a great Phase II.

Very promising results. And I guess when you think about -- when we see the Phase II data, I guess, what's a reasonable expectation? You had I think 0 phlebotomies in this patient group. Is that reasonable? Or just kind of what's -- or what's the bar how to think about that?

Well, we're certainly confident in the mechanism. So as I mentioned, in that small Phase I, the well-controlled population, which was about half of the 21 patients, obviously did not require phlebotomies. And many of them did not require phlebotomies for even months following because the design of the study allowed patients to get 4 doses at 2 6-week intervals, and then we follow them for an additional 16 weeks. So we got a sense of the durability of the effect. So that was very, very robust.

Got you. Can you talk about just dosing? I think you're testing maybe less frequent dosing or something.

Maybe 6 weeks [indiscernible] 12 weeks. We chose 1 dose from our Phase I study. We haven't divulged that dose, but we looked at 3 mg per kg, 6 mg per kg and 9 mg per kg. So one of those doses is drug into the Phase II, but we're evaluating 2 intervals.

Got you. And you said enrollment is on track. Going very well.

As we said, by year-end, we want to fully enroll, and that looks very good.

Anything else in any other data points in the Phase II? Obviously, safety and sort of phlebotomies are important. Anything else?

Yes. I think we're going to look very closely at symptomatic improvement as well because these patients, not only are they burdened by the phlebotomies, but phlebotomies can actually contribute to some of the symptoms that are part and parcel of the underlying condition. So for instance, iron deficient status that is associated with the condition, you have fatigue, you can have brain fog in patient's complaining of concentration problems as well as other symptoms, splenomegaly, which can be uncomfortable, you have abdominal pain, pruritus, et cetera. So we also want to look at the reduction of those symptoms, not just the ability to maintain hematocrit below 45 in a durable and confident manner and reduce the dependency on phlebotomies, but also symptom improvement. And we know that's going to be critical because not only -- you want to show that you can keep patients under control, but you also want to show that the patients are benefiting with regard to symptom burden.

And I guess once you share the data, like next steps for the program?

We would go to an end of Phase II meeting with the agency and then hopefully design what we think is the most efficient or agreed to the most efficient completion of the program.

And what's kind of the standard endpoint for these studies? Is it sort of defined? Or is there opportunity to add things?

Well, I mean, if you look at the precedent set by rusfertide, which is one of the compounds also targeting hepcidin, but it's a mimetic so they're getting sort of synthetically available hormone. It's to reduce hematocrit and maintain hematocrit below 45 while removing the need for phlebotomy. So it's a combination of those 2 outcome measures. And symptom management, as I said, is also important, but probably not the primary outcome. And the agency, that's generally been the precedent set with the agency.

It's pretty amazing how many phlebotomies these patients actually have. You're 3 in the last 6 months or 5 in the last year prior to coming into our trials, a minimum. But actually, if you look at the clustering that can occur and you see this in some of our data, it is pretty amazing how many phlebotomies they actually have.

Yes. Very dramatic, the difference -- you mentioned rusfertide, sort of one of the competitors. Maybe just talk about any differentiation that you're seeing from your program versus theirs or how to think about that?

Well, again, we're in early development, so we have to be careful about that. But obviously, they have shown a nice effect size, and we obviously would like to also demonstrate that. We've clearly demonstrated in our Phase I, but we have to do it in a placebo-controlled randomized trial, which we're doing right now in Phase II. Now the difference is, again, there is an exogenously administered hormone. And so they have to be given, obviously, more frequently. They're given subcutaneously on a weekly basis. We, as I mentioned, in Phase I looked at Q6, and we're hoping to extend that potentially to Q12. So that will be sort of key differentiating factors.

Okay. Great. Maybe we can shift to zerlasiran. And maybe just talk about the status of that program and maybe touch on some of the prior data you've shared there.

So very proud of the team that we've actually made this program Phase III ready, including the manufacturing arena CMC, which is not easy to do sometimes. So this is in a very nice position now being Phase III ready. We have mentioned that due to the size of the required study of the CVOT that we would be seeking to partner for that Lp(a). We'll come back to that disease area. And we have been in dialogues and continue to have interest in the Lp(a) program. But given the level of investment, $300 million plus in that trial, we've decided to seek partners first. Lp(a), very exciting arena. As you know, no specific treatment approved today to treat Lp(a). It's becoming more widely known here in the last few years, affects up to 20% of the world's population. So huge, and it's the world's population, not just the U.S. And so very, very pleased to have an asset kind of ready during those partnership dialogues.

Yes. And maybe you could touch on some of the data you've generated and why -- what's sort of what's promising there?

Yes. No, it's very compelling. So we have a very robust effect on lowering Lp(a). In our Phase I study, we did a single ascending dose as well as multiple dose saw at the peak reductions were in the -- well over 90%, upwards of 95%, 98%, 99%. So very robust silencing of Lp(a) with significant drops, both absolute value-wise and percent-wise. We also demonstrated durability of the drug after both single injections and multiple. In the multiple phase, we looked at Q4 and Q8 lower doses on the Q4 weekly dose and saw persistence of the effect out to almost 210 days. So very robust effects -- 150 days, excuse me, on the Phase I. In the Phase II, we went out to 210 days and saw also a persistence of the effect. So our summary -- our takeaways from the Phase II is we have a very robust compound, potent and durable that we have a competitive profile. It would be at most given on a quarterly basis, could be given on a less frequent basis and reach sort of potency greater than the top reductions over 90%, which is exactly what we were aiming for.

Yes. We do know investors are looking at the HORIZON trial, which for the first time has been moved into 2026 for that readout. For the first time, we'll show that pharmacotherapy can lead to reduction in cardiovascular events. So we're well aware of that and continue those dialogues. How validated is lowering Lp(a) to sort of reduce BV events? I know that's sort of -- that will be the first outcome study we've seen, I guess.

Proven our study. Yes, I mean the epidemiology, the GWAS studies, the Mendelian analyses, the population data that continues to be analyzed, everything points to an independent contribution to risk associated with elevated Lp(a) levels. And in fact, what we thought 5 or 6 years ago was required with regards to the level of reduction is probably half of what we've got of that now. So we really see that elevated levels, but at much lower than we might have anticipated can really move the needle with regards to reduction in risk. So there's a lot of confidence in the field. I think people are feeling very good about the design of the current ongoing trials, and they're well powered to see a minimum reduction, probably with a 15% to 20% risk reduction. And so I think people are feeling very comfortable. All the data points to sort of confidence in the outcome. But until you see the first data set readout, it's...

What's -- you said 15% to 20%. Is that kind of considered like the meaningful bar? Or is that...

I think that generally considered a clinically meaningful effect in reduction of risk is in that 15% to 20% range. And the trials are probably conservatively powered for that. That doesn't mean you might not see even a more robust effect, but that's, generally speaking, sort of a conservative estimate.

And maybe just talk about the patient population with Lp(a) and kind of what those treatment options are today, if any?

20% of the world's population. It is huge, right? And the epidemiology is actually very similar to the statin market for cholesterol. So many, many companies doing considerable revenue basis in this area. So we're hoping to find a third party to work with as a partner and move the study forward.

Yes. And maybe just put your data into context. There's a couple of other competitors out there. I know very different studies and it's hard to compare, but just generally.

Well, I mean, just the sRNAs are very effective, very potent, robust and durable. So clearly, we feel we -- as I mentioned earlier, we have a very competitive profile. As you know, the first study out is an antisense oligonucleotide, and there is -- they're potent as well in the 70% to 80% suppression. The sRNAs, as I mentioned, though, can get -- extend the potency beyond 90%. Whether that is a meaningful difference, we'll have to see in the studies. But the bottom line is we feel very confident about how our profile stacks up to the other agents. The Amgen compound is an sRNA like ours. Lilly has an sRNA, Lilly also has an oral compound. So it's generally a relatively busy field. But as Craig said, this is a huge market, 20% of the population. has elevations of Lp(a) that are considered meaningful as far as contribution to risk. So it's a large pie.

And it is genetic. So it's not something you can alter with diet and exercise, right? It is something you're largely born with and can alter very little.

You got to ask about current treatments, and there really are none that are specific. So the PCSK9s have shown a modest effect, maybe 20%, 25%. Niacin an old drug, but very tough to tolerate, probably in that range as well, maybe a little more. But the bottom line is to really reduce the risk of elevated Lp(a), you really have to have a specific and potent intervention. And that's what this new group of products, including ours, are likely to be able to accomplish.

Got you. Maybe we can shift now. You have a collaboration with AstraZeneca. So maybe just remind us where that -- where you're focused with that and sort of the structure of that collaboration.

So it's a multi-target deal, and we actually are in Phase I moving hopefully into Phase II on that program, supporting that program. But the way it works, multi-program, we have up to 10 targets we can identify and work together with AstraZeneca on. And really, what we do is we identify areas that we would like to pursue and vice versa. And then once we decide on that program, we largely assist on the preclinical work. And then once it goes over to AstraZeneca, they conduct the clinical work. So it is undisclosed program currently. And I wish we could tell you more because I'd love to have analysts model it, but we're very -- we're looking forward to this and continued programs with AstraZeneca over time.

Targets undisclosed, but is there a general like area of focus...

Cardio, metabolic, respiratory, renal. Those are the general areas. It is a broad area, as you can imagine.

Can't figure it out [indiscernible].

Yes. Sorry, you're going to have to ask them.

Okay. Great. And maybe just you also recently were talking about sort of prioritizing some extrahepatic targets. Maybe just talk a little bit about that, what you saw and what drove that sort of decision.

Yes. So obviously, there's interest in targeting conditions where proteins are produced in other parts of the body are largely associated with disease-associated proteins outside of the liver that you can target in the liver. So we are very interested in that. A lot of companies are already kind of moving in that space. So we've done -- we're looking at a number of different cell types and tissue types outside of the liver. We've generated preclinical data and are just getting some compelling preclinical data. So we're not yet at the point that we're going to divulge that, but the good news is that our technology, which we have, the sequences, the link the current constructs and chemical modifications clearly can apply to other cells of tissue. So it's now more about identifying the right ligands to get into those particular cells and then get show a benefit in active activity in the cell.

Got you. And as you push maybe some of these programs forward, is this something you would continue to push forward on your own? Or do you pull a partner in? Or just how are you thinking about that?

Thinking is both. We do have parties come to us and want to explore that area, and we'd also like to look at it for our own portfolio.

Got you. And I guess, earlier this year, you sort of announced the sort of prioritization on some of your programs. Maybe talk a little bit about that and your current cash position and kind of what the runway looks like.

So yes, it makes sense, I think, for us to look at things that are kind of rightsized on our chassis. So certainly, the PV program is one of those in rare disease that we prioritize because whether we do that ourselves or do it with a partner, it's something that resource-wise fits on our biotech model a little bit better. In terms of our cash, we have $114 million at the end of Q2 in June, and that gets us into 2028. So that gets us comfortably behind the answer in 2026 on the PV Phase II. So we're pleased about that. We're managing it very well.

Yes. Okay. Great. Maybe we could jump into a couple of macro questions, topical questions we've been asking sort of all our companies at the conference, and there's 3, and I'll just start at the top. And I guess with just China's rise in biotech innovation, how are you thinking about your competitive position here? And will this influence your R&D or BD strategy going forward?

Certainly, we will have an impact longer term, and we've seen it a little bit more in the earlier stages of development and not as much now in the later stage for us, but in the earlier stages. So yes, something definitely to consider. I remember back in the '80s and ' 90s when Japan was first coming on, wasn't well known. A lot of the Japanese companies, it's amazing how far they've come now, and they're name brands now in the Japanese companies. So I'm sure the Chinese companies will come along and have a seat at the table at some point. So yes, definitely, I think something to consider.

Makes sense. Second question, just how are you currently leveraging artificial intelligence or thinking about AI's future disruption potential sort of in the field?

Yes. Well, there's no question, actually, we're already applying AI and machine learning to a lot of the activities that guide our development discovery and development activities. So for instance, when we think about the sequences that we choose, that's driven by a fair amount of machine learning to identify the most potent sequences for our siRNAs. We also can apply that to evaluating off-target pharmacology. So that allows us to really expand our understanding and view of potential off-target because obviously, you want to have a specific compound as possible and minimize any off-target pharmacology. Additionally, with our chemistries and chemistry is a big part of our IP and how we modify our compounds to ensure that they're stable and durable. If you make any changes or you attempt to optimize your platform, AI messenger -- excuse me, AI and machine learning can also apply to getting a better understanding of the predictive effects of any chemistry modifications to make sure that they're safe and you can feel confident moving forward, even though, obviously, we do a lot of in vitro work before you move into in vivo and obviously into demand. Also just identifying new opportunities. So when you have to digest very large data sets to get an idea or insight into the underlying biology to identify some of the genetic mechanisms associated with particular diseases and the ability to target those proteins, that is clearly facilitated by machine learning, both data that we train on, but also data sets that we can bring in externally. And even in clinical trials, I mean, you can look at opportunities to identify patients that are more likely to respond to your drug by looking and then therefore, sort of incorporating that into your trial design. So you have more efficient trial designs with greater confidence in the outcomes by analyzing large clinical data sets. And that is obviously, again, facilitated by machine learning and AI. So we're already there, and it's just going to become a more important part of how efficient your discovery and development efforts are.

Makes sense. And then maybe third macro question. Just what has been most impactful for you from the regulatory side? Would it be more FDA changes? Would it be MFN, I guess, probably not or maybe tariffs, maybe...

So certainly, as those have impacted larger pharmas, the ecosystem with partners and potential partners, you see the impact of that potentially. For us, on a daily basis, FDA would be one that we've seen a little bit more -- but I think it's a period of time, hopefully, where that kind of corrects itself. MFN it's, I think, TBD, if you will. Certainly a lot going on there, and it's interesting to see the back and forth a little bit that's occurring on MFN, but less of a direct impact for us.

Yes. Makes sense.

But I'd also say there's a lot of changes at the FDA as well. And it's hard to predict how many will be helpful and not. But hopefully, some changes could make it -- I don't want to say easier, but allow for options around managing or targeting certain conditions that might otherwise be a hurdle from a clinical standpoint or from a development sort of simplifying some of the complexities associated with some of the trials. They've already announced some sort of flexibility around some rare conditions, which is very important, particularly for us in sort of the genetic side of medicine and drug discovery. So I think there are opportunities for benefits there. But it's just not predictable.

It does impact your planning, you can imagine, CMOs, et cetera. plan.

And how -- have you had interactions since the recent changes? And have there been any issues or not.

No. I mean, well, obviously, we're always communicating with the agencies about our programs. A lot of those are written communications, but nothing that has changed the trajectory or the decisions we made with any of our programs. But in time, we'll see how that changes.

And the Phase II...

I think all of us would welcome a greater flexibility. So hopefully, there will be an opportunity to have more efficient trial designs and programs and get the drugs to the market faster.

Yes. Sounds good. And maybe just last question. We talked a lot about these things, but maybe just from today, take us forward kind of what are the next kind of key focus areas for you over the next sort of year, 1.5 years?

Polycythemia Vera trial for sure. That's going to be a major focus for us, getting it fully enrolled by year-end and then getting that data out in 2026. So that is going to be our key. And then we'll continue the dialogues in Lp(a). I mean those are our 2 lead programs, of course. And AstraZeneca, again, to the extent that program moves forward, we'll be letting the market know because 3 programs in the clinic for a company, our size is pretty incredible. And then beyond that, we'll look certainly at the pipeline and see what we can do while we're trying to be very cost conscious.

Yes. Okay. Great. Why don't we end it there, appreciate your time. Appreciate it.

Thanks for having us.