Stoke Therapeutics, Inc. (STOK) Earnings Call Transcript & Summary

Hey, good afternoon, everyone. My name is Jess Fye. I'm a senior biotech analyst at JPMorgan, and we're continuing the 40th Healthcare Conference today with Stoke. I'm joined by the company's CEO, Ed Kaye, who's going to give a presentation, and then we're going to have a Q&A session after that. If you want to ask a question during the Q&A session, just hit the blue button on your screen. That will send me the questions, and I can ask management those questions for you. So with that, let me turn it over to Ed.

Good morning, everyone, and Jess, thank you for the introduction and allowing us to speak today. So I'm Edward Kaye, CEO of Stoke Therapeutics. And I will say that I will be making some forward-looking statements. So please refer to our SEC documents for full disclosure. So on Page 3, I tried to really describe what Stoke Therapeutics is. And simply put, it's an RNA company that is focused on making RNA medicines that upregulate protein expression. And what we're focusing on right now is our lead clinical program for Dravet syndrome, and this is for STK-001. And what we're trying to do is make the first potential disease-modifying approach for this genetic epilepsy. Our next program is for autosomal dominant optic atrophy, and this program also is a severe genetic cause of blindness. And what we're trying to do is upregulate the missing protein for that disease. And we're continuing to expand our pipeline, both by internal discoveries and as you'll hear later and what many of you saw this morning, our collaboration with our new partner, Acadia Pharmaceutical. So going on to Slide 4. Our RNA approach is really called TANGO, and that really is targeting pre-messenger RNA splicing with the purpose to restore the target protein in the gene to back to normal levels. It is a disease-modifying approach. And what we aim to address is really the underlying genetic cause of a disease. It has a broad therapeutic potential, and we have identified approximately 1,200 monogenetic disease genes and have an additional 6,500 targets that have a TANGO signature. We are a clinical stage company, and we have an emerging pipeline. We have 2 Phase 1/2a studies with our lead drug, STK-001 for Dravet syndrome. And we are in preclinical development for our second drug, STK-002 for autosomal dominant optic atrophy. And going to Slide 5. TANGO represents targeted augmentation of nuclear gene output. What we are attempting to do is to really restore protein levels but we're doing it in a slightly different way. We're targeting the functional and normal copy of a gene. Now this has several advantages, especially over some of the therapies, such as gene therapy. We can selectively boost expression only in those tissues and cells that normally express the protein. So the concern for off-target toxicity is lessened. Also, unlike many other exon-skipping therapies, we use 1 drug for the disease that can be caused by many different mutations that result in the loss of function. And we are not limited to the size of the gene because we're just simply bringing in [indiscernible] ASO. And so we can address any size gene, small or large targets. Going on to Slide 6, to try to explain what TANGO does, we have 2 cartoon figures. On the left is an example of just a normal copy of the gene. And I think it's important to remember that these TANGO signatures are in all of us. So these are naturally current signatures. And what occurs is a, in this case, an NMD exon gets stuck on the pre-messenger RNA. And because it stays on that NND exon, that mRNA is degraded and never becomes a protein. So we don't reach the full potential of the amount of protein that could be expressed from this gene. But on the right, what you can see when we add an ASO to this wild copy of the gene, we are forcing now and splicing out that NMD Exxon. That enables us to increase the amount of full-length messenger RNA and thereby increase the protein. And what we're trying to do in all of our diseases, especially for the haploinsufficient diseases is to take a 50% level of protein and try to get it as close to 100% as we can. Going to Slide 7. Last year, 2021 was a year of execution for us. So we were able to initiate our open-label extension study for Dravet syndrome. We also initiated our multiple ascending dose study in the U.S., and that's the MONARCH study, and that was for again Dravet. In the third quarter, we reported our preliminary safety, PK and CSF data for the single ascending dose portion of MONARCH. And we opened up our U.K. study, which is the ADMIRAL study that was a multiple ascending dose study that complements what's being done in the U.S. We've also initiated our autosomal dominant optic atrophy natural history data collection. And finally, we identified our lead clinical candidate for the treatment of ADOA. Going on to Slide 8. So for those of you not familiar with Dravet syndrome, it is a very severe progressive genetic epilepsy. It occurs at a frequency of about 1 out of 16,000 and it is caused primarily by a haploinsufficiency of the SCN1A gene, which expresses the NaV1.1 protein. So this disease is caused by a 50% reduction in the NaV1.1 protein, which is an essential protein for the sodium channel. This is a severe disease, not only because 90% of these patients have uncontrolled seizures despite being on numerous antiepileptics, but also 20% of children and adolescent with Dravet syndrome never survive to adulthood, mostly because of sudden unexpected death related to epilepsy. Going on to the next slide on Slide 9, one of the challenges of this disease, which makes it so severe is that it's not simply epilepsy. There are many other comorbidities that are not associated with epilepsy that are very significant. There is a progressive intellectual decline and developmental delay that occurs. There's problems with speech and language. There's significant problems with sleep and also a mood disorder. And these non- seizure comorbidities are not being addressed by the current therapies. And our hope with our genetic therapy that we are approaching is to really to try to take care of the seizures and also address some of these other comorbidities associated with Dravet syndrome. And going to Slide 10. What we can see is one of the ways that we try to understand how to measure these comorbidities is we began an observational study called the BUTTERFLY study. The purpose of this study was really to can we use the normal neurocognitive scales that are used for pediatrics in the Dravet population. And what we found is that it was possible to use these scales and that they were reliable and reproducible. And this is an example on the right of Vineland Adaptive Behavior Score. And what we showed in this natural history study looking at this composite of the adaptive behavior composite is that beginning around 2 years of age, these children have a progressive decline in their intellectual abilities that continues through adolescence. So we could monitor and actually measure what that decline was going to be. And so we will use these particular test for our Phase III studies to not only measure the seizure activity, but to measure some of these other comorbidities. Going on to Slide 11. What got us excited about Dravet syndrome in using this approach was really some of the early animal data, which you have seen before. And this is an example of a Dravet mouse model, which restates the human disease quite well. It's a very severe heterozygous model. In that red line, what you see in the Kaplan-Meier curve is that about 80% of these mice will die typically starting within weeks of life. And what you can see with the orange line, which is the mouse model that was treated with STK-001, we saw a near normal survival that approached the wild type and the control levels. So again, a dramatic improvement in survival with a single injection of STK-001. So what we learned and we'll see this on Slide 12 is that there was a number of things that really supported our advancing this into the clinic. We saw that a single dose of our drug restored NaV 1.1 to near normal levels for greater than 3 months in the Dravet mice model. We also -- in addition to reducing mortality, we saw a very significant drop in the seizure frequency in these mice. And when we looked at nonhuman primate studies, we saw a broad distribution -- biodistribution of our ASO throughout the brain. And it could increase NaV 1.1 levels from 2 to 3x above normal. Most importantly, it was well tolerated. We did this in single and multiple dose toxicology studies in the nonhuman primate. So taking this into the clinic, what we are currently now on Slide 13, we are in 2 Phase 1/2a trials, 2 trials are MONARCH, which is in the U.S. and ADMIRAL that is in the U.K. These differ slightly. One, we evaluated up to 45 milligrams in the U.S. but had the ability to go up to 70 milligrams in animal study in the U.K. The MONARCH is a SAD followed by a MAD study, whereas the ADMIRAL study is a MAD study. And the primary endpoints are similar as safety and tolerability for both, and we are characterizing the pharmacokinetics and the cerebrospinal fluid drug exposure. An important secondary endpoint is that really the change in seizure frequency and the overall clinical status and quality of life. Now going to some of the studies that we reported recently last month in the American Epilepsy Society on Slide 14, our -- again, our primary endpoint was really to look at the safety and PK in these patients. We didn't expect much from low single dose injections in the patient population, but what we were able to record in this study is, in fact, we did see and we saw 100% of the patients in the ages from 2 to 12 showed a reduction in seizures and overall, 70% of the patients had a reduction in seizures. We did see that the greatest reduction was in the cohort from 2 to 12 years of age. This was somewhat expected on talking to our clinical advisers in that the longer the disease progression, very likely the longer it would take to reverse. And I think an important aspect of this approach is this is not simply an anticonvulsant that's trying to treat the symptoms. What we're trying to do is upregulate the Nav1.1 protein. And what is required is we really need to rewire the brain, the synaptic connections. And presumably patients who have a disease for a longer period of time, it will take a longer period to reconnect some of those synaptic connections. What we also saw, moving to Slide 15, is that the greatest response was between Day 29 and Day 84, where we saw overall with all the cohorts between a 17% to 37% reduction. And again, the first month of treatment to Day 29, we didn't see as dramatic reduction, and we believe that this is very likely related to the mechanism of action. We know that it takes several weeks to get the NaV1.1 protein back up to near normal levels. And so you would expect that any response would have to be somewhat delayed, and this was confirmed in the clinical study. Going to Slide 16. Another important lesson from this study was to understand the pharmacokinetics. And what we found was that this was a very well-behaved molecule that correlated quite well with the PK model from animals. And we had looked certainly at rodents and nonhuman primates. And I think the take-home message for this is that what we found is that the -- we could predict what the brain levels would be in humans based on the CSF and the serum levels. And our prediction for humans is that 3 doses of 30 milligrams given monthly should get greater than 95% of the patients into a pharmacologically active range. And this was based on the animal models that we have seen. So our expectation is that we should begin to see some change in clinical activity when patients are at this pharmacologically active dose. Now going to Slide 17, just to summarize this Phase 1/2 MONARCH data, the interim data, single doses up to 30 milligrams and 20-milligram doses up to 3x were well tolerated, and we did not see any safety concerns related to the drug. The plasma CSF data from the study correlated well with our PK model, and it appears likely to predict what the STK-001 brain levels will be in patients. We did see a trend towards seizure reduction in Dravet patients who were treated. And we expect that 3 monthly doses at 30 milligrams should predict that greater than 95% of the patients will have an active dose. We will plan in having the 30-milligram data reported in the second half of this year. Now going to Slide 18. Our next program is autosomal dominant optic atrophy, and this is a severe progressive optic nerve disorder. It has a frequency of about 1 out of 30,000 patients, which is very likely underdiagnosed. And we know that the majority of cases are caused by a mutation in the haploinsufficiency in the OPA1 gene. And this results in a deficiency of the OPA1 protein. Right now, this is an important disease because up to 50% of the patients are declared as legally blind. And we know that it begins -- typically, 80% of the patients will begin to have symptoms in the first decade of life, and it continues to be progressive. So going to describe, on Slide 19, what the clinical syndrome of ADOA is, it really is, again, the most common inherited optic nerve disorder, and it affects both central vision and also reduced color vision. And in this example on the left is a healthy eye. But on the right, it's a simulation of what happens to patients with an optic neuropathy, and they have a very severe central scotoma. So the most sensitive part of your vision is obscured in addition to the peripheral vision. And this is diagnosed when the pediatrician or the ophthalmologist looks at the back of the eye. And what they see, instead of the normal yellow color, you see on the right in the ADOA patient really this [indiscernible] optic nerve and then this defect can be confirmed by genetic testing and it shows the defect in the OPA1 gene. And going to the next slide on Slide 20, what happens when the OPA1 gene is deficient, is that the retinal ganglion cells, which are the origin of the optic nerve will gradually die. And what's interesting in this disease is that all of the cells in the body are with these patients are 50% deficient in the OPA 1 gene, but only the retinal ganglion cells for the most part are affected. And the reason for this is these cells have the highest energy metabolism requirement in the body. And when they do not have the OPA1 gene, this interferes with the structure of the mitochondria. It is necessary for cristae formation and also interferes with mitochondrial bioenergetics. So the structure and the function of mitochondria and eventually what happens is they -- cells run out of energy and will die. And what we're hoping to do is to restore this balance by getting back that OPA1 protein back to near normal levels. So going and describing what we've been able to do on Slide 21, we were able to demonstrate that in patient cells that were deficient in OPA1, these were from patients. We showed on the left, an increase in the OPA1 protein. And more importantly, we show not only an increase in the protein, but we saw really an increase in the ATP-linked respiration. And we suggested that we could restore the function but not only of the protein, but really what the protein does within these cells. So looking at the summary of our key preclinical data, we can see an increase in the OPA1 protein and ATP-linked respiration in the ADOA patient cells. We showed that there was a dose-dependent increase in the protein expression in the rabbit retina and very importantly, in this very sensitive animal model following the single intravitreal injection. We did not see any significant safety concerns in these animals. So again, this program is progressing into the clinic. We have identified our lead candidate. We're in the process of IND and CTA-enabling toxicology studies, which we hope to be completed by the end of this year. We are very pleased to announce this morning a very significant collaboration for us with Acadia Pharmaceutical, and it really is to pursue RNA-based treatments for severe and rare genetic neurodevelopment disorders. We've identified 3 targets that we are working with Acadia. One is in -- Acadia has received a worldwide license for Rett syndrome, MECP2, which they have a great deal of experience in and also undisclosed neurodevelopment target. And we have a 50-50 co-development and co-commercialization for SYNGAP1. In return, Stoke receives a $60 million upfront payment and also potential milestones up to over $900 million in addition to future royalties. Just to describe Rett syndrome, again, this is a severe neurodevelopment disorder that has an incidence of about 1 in 10,000 to 15,000 girls. There are also males that may have this disease that could be amenable to our approach. And it is caused by a deficiency of the MECP2 gene. What we're focused on is approximately 1/3 or 33% of the patients that have a hypomorphic mutation that we can upregulate in the MECP2 gene. And what -- our purpose is to use our ASO approach to increase protein production in these patients and restore some of the function of the mitochondria. Again, it's a severe disease, typically has this rapidly progressive period of decline, starts somewhere between 16 to 18 months. In addition to epilepsy, which is significant, there's many other features and autistic features and there's loss of purposeful hand movements and there's many involuntary movements. So again, a very severe disorder, and we are working with Acadia because of their vast experience in this disease and learning from them. The next indication is for SynGAP-1 syndrome, which is, again, a severe intellectual disability and the developmental and epileptic encephalopathy. The epileptic encephalopathy occurs at a distance of about 1 to 2 out of 100,000. However, what's been reported in all cases, intellectual disability, SynGAP-1 has been found in 1% to 2% of that population. And again, it's caused by haploinsufficiency of the SynGAP-1 gene that results in a 50% reduction in the SynGAP protein. In addition to preponderance of generalized epilepsy that occurs, 100% of these patients have intellectual and developmental delays and about half of them will have behavioral or autistic-like features with this disease. And this is just to represent our pipeline. We continue with our internal programs with Dravet and ADOA, and now we have 3 additional programs working with our partner from Acadia Pharmaceutical. And our strategy for 2022 is we really are focusing on advancing our Dravet syndrome program, the STK-001. We are looking for additional data on the 30-milligram MAD patients anticipated in the second half of this year, and then we will be also dosing at higher doses above 30 milligrams, both at MONARCH and ADMIRAL. We continue to advance our ADOA program with our candidate STK-002. We will be conducting our preclinical toxicology studies. This will be beginning this year. We are also enrolling in prospective ADOA natural history study, and we will be presenting further preclinical data this year at scientific venues and we continue to expand our pipeline and this is both internally and obviously, we plan to execute on the collaboration with Acadia. We are fortunate to have a little over $220 million in cash and cash equivalents. And with the $60 million upfront from Acadia, this allows us to really fund operations until the second half of 2024. So with this, I will end my presentation, and we will turn over to Q&A. Thank you very much.

Great. So thanks, Ed, for that presentation. And just as a reminder, for those of you watching, you can use the blue ask a question button to send any questions for the management team as well. Maybe to start out on STK-001. What's your latest thinking on the potential therapeutic window? And is it your expectation that the 30-milligram MAD dose could drive optimal exposure? And assuming you want to ultimately achieve infrequent dosing, what higher dose might that exposure map to?

Well, maybe I can start, Barry, our Chief Medical Officer Barry Ticho has been focused on this. I think the 30 milligrams is what we expect to be able to get into a therapeutic dose. The purpose of the study really is to try to find the maximum tolerated dose. And I think you're bringing up a very important point. We're not only interested in simply getting to a therapeutic level, but we'd like to also have as infrequent dosing schedule as possible and that may require using higher doses. And as you saw from the presentation, we have the ability to dose up to 70 milligrams in the U.K. And 1 reason for that is to say, can we get long-term exposure and also for ease of administration for patients. So that's kind of what we're thinking, but I'll refer to Barry.

Yes, I'll just add to that. We have done quite a bit of modeling based on our preclinical results that included results with a mouse model for Dravet syndrome. And using that, we were able to determine what clinical dose would be needed to ensure that all patients were -- had levels of STK-001 in the brain that were pharmacologically optimal. And that's how we got to the 30-milligram multiple dose arm. So 3 doses of 30 milligrams we project will allow for all patients to have the level of STK-001 in the brain that will allow for a twofold increase of Nav 1.1, which is the sodium channel subunit that is deficient in these patients.

I think you're on mute, Jess.

Thank you. First time today. Thinking about the BUTTERFLY study, can you talk about how that could inform patterns of cognition and other non-seizure comorbidities in Dravet? And have you or do you plan to incorporate some of those learnings as you continue to advance STK-001? And if so, how?

I'll take that. So thanks for the question, Jess. So the BUTTERFLY study, just to refresh everyone's memory, is the study of patients 2 to 18 years of age who have mutation in the SCN1A gene and have ongoing seizures. And this is the largest and longest prospective study of non-seizure comorbidities in patients with Dravet syndrome. And as you mentioned, we are looking at some measures of cognition. These -- what we have seen so far is that we've identified several assessments, including something called the Bayley scale as well as the Vineland scale, which seemed to be appropriate for assessing some of these cognitive functions in patients with AAA syndrome. And what we have shown is that with these 2 scales, we can demonstrate that patients with Dravet syndrome are severely affected in terms of the cognitive function, and they function far below the level of their age of matched peers. And so what we have been able to do now is using these assessments and showing that they are appropriate, we've been able to include these in our open-label extension study, which we're calling, in this case, the 1 in the U.S. is called Swallowtail. We also had one in the U.K. And in that study, we are going to use these rigorous measures of cognition in these patients who are receiving STK-001 every 4 months. We've also included the [indiscernible] measure in the ADMIRAL study, which is an ongoing study in the United -- The U.K., where patients are getting multiple doses. And in that case, those patients are receiving up to 70 milligrams of 3 doses of the drug.

And you've talked about how we can look for this multiple ascending dose data, I think from both MONARCH and ADMIRAL in the back half of '22, is that correct?

Right. Correct.

And can we expect to see any of that open-label extension data in 2022 as that accrues?

Yes. Well, we're actively trying to get those data. And although we're not guiding exactly what we'll be able to be in that package, we're intending to put some of the data from the open-label extension study in that package for data release in the second half of the year.

Got it. So there's a number of questions on the portal about the Acadia collaboration. First one, how should we think about the timelines for the 2 Acadia programs?

Yes. I'll let Huw Nash, who's our Chief Business Officer and Chief Operating Officer, and he worked extensively on this collaboration agreement.

So I think all 3 targets are preclinical. And I think we haven't provided any granularity really on timing other than to say that probably this year, we won't be updating on those programs. And obviously, maybe as early as next year, we'd start to provide updates with our partner. But at this point, we're not guiding towards any time to the clinic other to say that we're in significant preclinical work on those programs.

Okay. I think you touched on this a little bit in the press release, but another question here is, what's the split between you and Acadia on R&D spend?

So simply put the programs that are worldwide licenses, the MECP2 for Rett syndrome and the undisclosed target for another neurodevelopmental disorder, those are going to be fully funded by Acadia. So we will be doing the majority of the preclinical work for those targets and then handing it off to Acadia for clinical development and commercialization, but they will be funding all of that work. And then for the SYNGAP1 program, that's a 50-50 co-development, co-commercialization. So it's a full cost share, profit share relationship. So they'll be paying 50%.

Okay. Another question coming in here. Can you tell us a bit about SYNGAP1 syndrome? Does the product candidate modulate splicing of the diseased gene to restore gene expression?

Barry, do you want to take that?

Sure, I'll take that. So SYNGAP1 as the name implies, it's a critical protein that is present at the synapse between nerve cells. And in patients who have SYNGAP1-related disease, they have a haploinsufficiency of this protein, only half of normal amount is present on the surface of the nerve cells. And that impairs the function of nerve cells in the brain in multiple different regions of the brain. So the approach that we are using is very similar to what we're using for Dravet syndrome, where we are targeting a region of the mRNA to allow for increasing mRNA levels. This is done in a mechanism that's independent of the actual mutation that's present in the patients. So there are several hundred mutations that have been identified that caused SYNGAP-related disease, but we can use one oligonucleotide to increase the protein levels regardless of what the mutation type is.

Another question from the portal here. Does the Rett syndrome product candidate use the same playbook as STK-001 and 002?

I'm not sure what to playbook is -- the Rett syndrome is somewhat more complex disease, both in terms of the biology as well as the symptoms, and that's a large part of why we are so pleased to have a partner like Acadia Pharmaceuticals to help us because they have a tremendous amount of experience in this disease.

One part of the playbook is to titrate the amount of MECP2 protein to increase. This is a protein that can affect transcriptional levels and is a transcription modulator. And it's well known that too much of MECP2 can cause the disease as well. So it's going to be very important to be able to titrate the amount of increase, and that's what our technology is quite good at doing in terms of being able to have a dose response to the amount of medicine we give. So that's an important part of the playbook. The other part is that MECP2 or Rett syndrome itself has a seizure component so that does overlap with some of the approach that we've had with Dravet syndrome. But there are other behavioral components that are different, and there is a composite measurement, which our partners at Acadia Pharmaceuticals are quite expert in that has been used to assess the effect of interventions there, and that would be more likely a way to assess the effect of [indiscernible] that we designed in that disease. So there are definitely similarities, similar pages in the playbook, but there are also differences which make us very happy to be able to have this partnership.

Maybe switching to STK-002. When could that enter the clinic? And what could a Phase I trial design look like? I guess, what are the main goals you would try to achieve in Phase I?

I can start out, Jess. I think we've been very pleased we've made some very good progress on this program. So we've identified our lead candidate at the end of last year, and we're in the process of starting IND-enabling studies now. So we have had confirmation of what those studies will be, and so we expect to be able to complete those by the end of this year unless there are problems we hope to be in the clinic for next year. And Barry has given a lot of thought about what the trial design could look like. Obviously, this is a slowly progressive vision abnormality. But there are some biomarkers and maybe, Barry, maybe you can talk about that.

Yes. Again, the Phase I study is still under consideration, but the idea would be to enroll patients who have the identified OPA1 gene variant that's contributing to the disease and across a variety of ages, adults as well as pediatric patients. And of course, the main focus of the study would be to look at the safety of these intravitreal injections, so an injection into the vitreous of the eye and also assess the pharmacokinetics is we can measure the medicine in the blood. But there are also quite a few different assessments that can be made for the progress of the disease. And we are embarking right now on a natural history study to assess some of these and know what the natural course of these assessments would be in patients so that we can apply that to Phase I as well as a Phase III study. But these would include measures of visual acuity, which is a standard way of looking at the letters on a wall and looking at them at different contrast levels. But there are also structural measures that can be done, especially using a measurement called OCT that measures the thickness of the retinal layers. And we know that the retina thins out with this disease. So we can try to assess what the course of that is over time. And then there are functional measures that can look at both the function of the retina, especially in terms of the electrical signals that are coming in the retina. But even to look at mitochondrial functions, so there are ways using a visualized but noninvasive technique to actually look at mitochondrial function in the retinal cell. So a variety of assessments that we're going to be looking at first in the natural history study and then hopefully to apply in Phase I and Phase III.

Okay. We've got 1 minute left, but can you tell us what the route of administration is for 002 and what the potential administration interval is?

The route of administration is intravitreal so with a needle that gets put into the vitreous of the eye. This has become a very standard means of administration now because there are quite a few anti-VEGF therapies that are administered this way, and some patients get them administered even every month and even newborn babies and babies who are premature are getting this sort of treatment. So it is a relatively well-established treatment. We don't know the exact intermittent -- I mean, the interval of administration. But given what we have seen in our preclinical models and what has been seen for antisense oligonucleotides with other programs, we anticipate perhaps every 6 months or potentially even every 12-month administration.

Okay. Great. Well, we'll leave it there. Thanks so much, and thanks, everyone, for listening in.

Thanks, Jess.

Thank you. Bye-bye.