Syntara Limited (SNT) Earnings Call Transcript & Summary

Good morning, everyone. The clock has been now past 11 a.m. So we'll get started with today's special investor briefing with Pharmaxis' CEO, Gary Phillips, who will provide an update on the clinical trial program and the exciting FDA developments. My name is Alfred and I'm part of the Pharmaxis' Investor Relations team, and I'll assist Gary with running the briefing today. I'll just quickly run through some of the formalities. [Operator Instructions] It's obviously a very busy day on ASX today, especially being the short week. So Gary has been very generous with his time to present the quarterly activities and plans going forward. I won't take up any more of your time, Gary. Let me hand over to you.

Thank you, Alfred, and good morning, everybody. Yes, I don't mind spending my time with you. This is a particular time in the life cycle of Pharmaxis where we're ahead of some clinical trial results coming through. So it's always a period when the level of excitement grows. It's a period when we start to see the fruition of the investments that we've made over a number of years to get to this point, so an exciting point in time. So happy to take your questions at the end. And in the meantime, just the usual forward-looking statement to take note of. So refocusing this morning on 2 key areas, the trial in myelofibrosis, which had a number of developments during the last quarter and some excitement coming up. And then the skin is going steady. So let's start with the myelofibrosis study. And those of you who have been following this know that it's a study that we're aiming to recruit 24 patients in. It's a monotherapy study. So we're looking at treating myelofibrosis patients who have failed on the existing standard of care, a JAK inhibitor, only have about a year to live at this point, and then treating them with 5505, our drug as a monotherapy. Now that's proven to be quite difficult to recruit. These patients are very rare. We've opened up 20 sites across the world in order to recruit these 24 patients, and we're currently standing at 21 out of the 24 patients recruited. Each patient stays on for 6 months. But when we discussed this with the FDA, I mean, this is an IND approved study. We discussed it with the FDA at the beginning. And they'd always said to us that they wanted to see a minimum amount of data from these patients to check on the safety. And as we were going through the study, we saw that the safety profile of the drug and certainly some of the early signs of efficacy were really promising, and particularly the safety profile was really clean. So we felt that even though we haven't fully recruited the study and certainly not finished the last patient -- -last study, I mean we expect to fully recruit it in this quarter, and therefore, we're going to have data from all of the patients by the end of the year. But we felt that we had enough data to go back and justifiably ask the FDA whether they were comfortable with the profile of the drug they were seeing. And therefore, would they think of our plan to move forward immediately into the next stage of development, which is where the drug is going to be used as an add-on to the standard of care, the JAK inhibitors in myelofibrosis. Now that's a really important clinical question because we believe that the mechanism of our drug is ideally suited to be fitted with a JAK inhibitor. The JAK inhibitors tend to produce an immediate improvement in spleen size and some of the symptoms, whereas our drug, tackling the fibrosis in the bone marrow, deals with an underlying cause of the disease, and it's likely to lead to a longer-term improvement in these patients. So patients who are on a JAK inhibitor are still gradually deteriorating because the JAK inhibitors aren't curative, and our drug with it would be a real benefit. So we were very keen to move on from a clinical sense with this add-on study. And also from a commercial sense, talking to companies that have JAK inhibitors, that are active in this space, they will be keen to see the data that we get with the JAK inhibitor as well. So the question we posted to the FDA was, are you comfortable? We've showed them all the data that we had to date. This is an open-label study, so we were able to show them all the data we had from all the patients so far, both the safety and the efficacy profile. And we reported in the last quarter of '22 that we felt we were seeing encouraging signs of clinical efficacy and a very strong safety profile. And I was really pleased to report earlier this quarter that the FDA engagement that we had through requesting a Type C meeting with them was very encouraging, and they thought that we did have enough data to move on to the next study, certainly to give them a protocol for the JAK inhibitor combination study. They gave us some guidance on what we might think about in preparing that protocol. And one of the key things with this plan is that we are then able to move on really quickly with the next study. So 2 things that are behind that statement of being able to move quickly. The first thing is that we can now do this as an additional arm to the existing study. And that means we don't have to start up a new study. We can keep the existing sites going. We've already talked to our investigators in many of these sites, and they are enthusiastic about going on to the next arm. So there's no long protracted period at the beginning where we're contracting sites, getting the CRO set up, getting the protocols and everything else worked on. We'll be able to move on really quickly, and that's an enormous benefit. The other thing is that in discussion with the FDA centered around which dose we might use in the add-on study as well. And if you may remember, but this first study that we did in monotherapy, we went through a dose-finding period first. So we started at a low dose and then built it up until we got to the highest dose, which is 200 milligrams twice a day. And that's what the patients have stayed on in the 6 months expansion study. The conversation with the FDA was a positive one, and we believe that they are comfortable with us going in straight away with that high dose of 200 milligrams because of the safety profile that we're showing, which means we don't have to go through a dose escalation phase, which again, drops a long period of time off the start of the study and getting it going. So we aim to get this study and start recruiting this before the end of the year, so the second half, with a really fast start. And in the immediate future, towards the end of this quarter, we will have a further major update from the data on the monotherapy study as well. So some really key elements of this clinical development plan, which really expand both the clinical utility of the drug going forward and also its commercial value as well. Add-ons to JAK inhibitors are valued by both the clinicians and potential partners and have driven very large acquisition deals in the space in the last couple of years, in fact, with a couple of companies going from more than $1 billion with Phase II data showing effectiveness in a combination setting. So that's really exciting. The other study to talk about briefly is the scarring study that we're doing with Professor Fiona Wood over in the University of Western Australia in Perth. And that's an established scar study. So we've recruited patients who have a scar of at least 10 centimeter squared in size and have had that score for at least 1 year, so it's sort of a period of 1 to 5 years. The treatment is a cream, which is being applied to the scar. And we're looking for signs of improvement in both the structure of the scar. So we are looking at the -- taking skin biopsies from these scars before and after, and we're also looking at the appearance of the scars as well. This is a 3-month study, and it's placebo-controlled. So we finished recruitment in quarter 4 last year. And I'm pleased to say that the last of those 50 patients, which were enrolled in this study, was dosed in March, which means that we are now in the period of cleaning the database. So the data is currently still with the sites going through it, analyzing the data. They're looking at the images of the scars before and after still in a blinded sense and assessing how they're scoring the scars. And we expect that later this quarter, that data will be unblinded and we'll be able to announce the top line results from that. So it's a really exciting period. Talking to Professor Wood last year, she felt that the first few patients that came into this study, that were on active treatment, that she was seeing some changes in the scar. But we need to see that relative to the placebo effect. So I remain excited to see the results, and we're looking forward to announcing that and talking in much more detail about the potential for this treatment in scars, not only in changing established scars, but also looking at how we might use our pan-LOX inhibitors to treat the scars that occur after surgery as well. So looking at this in a prevention setting, and this is an ongoing dialogue that we have with Professor Wood and her team on what other indications we can go after with this drug and where it might be best suited. So looking forward to announcing that data later. So really, those are the highlights of both the quarter that's just gone and the excitement leading ahead. And I'd just remind you, Pharmaxis is a company with several irons in the fire in terms of clinical studies. We have 4 or 5 trials going on at the moment, the fifth one being the JAK inhibitor combination study that's coming up, which will deliver near-term value. So as a small biotech with a pipeline of assets, all of them in the stage where we're looking to show clinical proof of concept and looking at real valuation events in the future of the company coming up. And that goes all way from the myelofibrosis studies that we've talked about, where I think I've got an addressable market here of $1 billion. But we know that the lead product in this particular country is already selling more than that. So that's a conservative estimate of the commercial value of the market. And if we can demonstrate that the drug works with an add-on to the JAK inhibitor, then there's a real possibility of a really significant commercial opportunity there. And then in scarring, I thing I said before, there are very few drugs in the market that can be used. The standard of care is laser therapy or steroid creams or injections into the scars, which don't always produce a good outcome. Our drug is, I think, one of the only drugs in clinical development that's a pharmacological treatment of scarring. We've got a lot of interest from potential partners in this as well and the market for this is absolutely enormous. Looking at keloid scarring globally and hypertrophic scarring that comes from surgery after burns and other injuries, that in its own is $3.5 billion a year. So a huge opportunity if we can demonstrate some efficacy there. And then finally, but not last, is the repurpose drug that we have. It's an anti-inflammatory agent, and we've identified it as a potential treatment in neuroinflammation and in Parkinson's disease, in particular. And that study in a sleep disorder is about to start recruiting in the middle of the year. So again, another exciting going forward and that's one that we're working in partnership with Parkinson's U.K., who have fully funded this study. So News Flow. We've announced earlier in the quarter already that we've strengthened our Board, 2 new members. We announced a new publication in Nature Communications, a really prestigious publication on the effect of 5505 in another kind of hematological cancer, myelodysplastic syndrome. And then we've already announced the FDA feedback we've got on the ongoing myelofibrosis study. But still to come this quarter is the update on the myelofibrosis monotherapy study, the full recruitment of that study where they're looking forward to data by the end of the year. And then more details we'll announce on the protocol for the add-on therapy to JAK inhibitor once we've had a further dialogue with the FDA. Topical drug, 6302, top line data coming up before the end of the quarter in the established scars, and then hopefully kicking off studies in scar prevention. And the iRBD, the sleep disorder study, Parkinson's disease study kicking off around the middle of the year as well. So a really exciting couple of quarters ahead of us, and I look forward to talking to you more about that. And in the meantime, I'm very happy to take your questions on anything that we have in the quarterly report what I've talked about this morning.

Excellent. Thank you very much, Gary, for the informative presentation. We have had quite a few questions come in already, which we'll start answering in a moment. But if anyone does have more questions, please type them into your Q&A box. Gary, quite a few questions have come in about the different drugs. I might start with 6302 and the scarring trial. The first question, Gary, comes from Jawahar. Could you please elaborate on the preliminary findings of the ongoing human trials, the ointment trials being conducted by Fiona Wood. And do the preliminary findings indicate whether the ointment is working on big scars versus small scars, and also old scars versus new scars?

Yes, good question. So the entry criteria for the study is that the patient has to have a scar of at least 10 centimeters squared. That actually doesn't count as a very big scar. And we're finding actually some of the patients in the study have much larger scars and they're treating a small area of it. So we're only treating a 10 centimeter square area, whether the scar is only that size or it's much bigger. The scars have to be at least 1 year in age and up to 5 years. So talking to Fiona Wood and her team, we don't believe that once the scar gets to a year, it changes in its type after that point. So we were looking for a stable scar to see whether we could have an impact on that. Now the early results from that study were encouraging. In particular, I think we took skin biopsies from these patients, the first patients that were treated. And we were able to use our assays to look at the number of collagen cross links in the scar and the amount of collagen and the amount of locks in the scar. And we found that there were physiological changes within the scar, which showed that the cream was doing something. It was changing the structure of the scar. That I think is the bedrock of our optimism going forward that we are doing something. When it comes to the appearance of the scars, we rely very heavily, of course, on the assessment of Fiona Wood and her team. They're treating patients in the study who they've known sometimes for years that Fiona herself would have operated on years ago that resulted in the scar. So she knows them well. And I think we talked publicly that she thought she was seeing signs of improvement in the appearance of the scar and also the feel of the scar. But of course, these clinical trials in scarring are, I would say, quite difficult, that the endpoints are subjective. And that's why we've looked at this as a placebo-controlled study. So we can try and tease apart the effect of the drug versus the effect of rubbing a cream daily on these scars. I think we take heart from the preliminary data that we saw, but it will be good to see that matched up against the placebo arm, so that we can start to really identify what's going on here and what's the best thing. I think we'll learn an awful lot about the drug from this trial. We're very confident that we are doing something to the structure of the scar and we will change scars. But I think the questions remain in terms of how long do you need to treat, what kind of scar would respond best. And with Fiona Wood and her team, we're dissecting that and looking at what happens next. So yes, very looking forward to seeing the data.

Just a follow-up to that one. Does the study also include keloid scarring?

No. We've excluded keloid scar from this. A keloid scar is quite different in structure from the scar you get from some of the injuries like burns and things that we see. A keloid scar is prevalent in certain skin types, Asian and African skin types. And it tends to be much, much heavier in collagen. And a lot of that collagen isn't actually cross-linked. So it is a different kind of scar. So we wanted to make sure that we -- again, we got to be very careful. There's a lot of different skin types out there. There are a lot of different types of scars. And if we look at recruiting to broader picture, we might end up with a very confusing mix and not understanding what the drug is doing. So this first one is very much looking at that. We are looking at keloid scars. That's a potential future study. And we've held, with Professor Wood's help, national advisory boards with keloid scar experts from across the world sitting down and looking at the mechanism of our drug and talking about the difficulties in looking at keloids. Nobody has done an effective study in keloid scarring, so we really need to understand the genetic basis for the scar, what the current standard of care is, and how best to use our drug on it to make an impact.

Thanks, Gary. I'm going to combine a question from Jonathan and Dennis about 6302. Based on success of the scarring trials, what is the proposed plan of action? And what further studies and approvals are proposed? And then do you expect to present this at a conference presentation? Or would you announce it via the ASX as a standalone announcement?

Well, the second part of the question is easy. This will be a stand-alone -- this will be an ASX announcement. We always are faced with issues with publication and reserving data for conferences and the like. But clearly, this is a price sensitive piece of information and we will be disclosing it through our normal channel for the ASX as soon as the data is unblinded and we've looked at the data and are able to say that we think we understand the data and there's nothing -- there are questions in there we've been able to answer before we announce it, so it's not misleading. So yes, that will be that. With regards to the first part of the question, the next steps, I think there's 2 parts to that. One is, we recognize that dermatology is quite a specialist area and dealing with the regulators in this area and understanding the end points that regulators might see is quite a challenge. So we have already started to engage with specialist dermatology companies who are looking for assets in this area. And we're trying to learn from them in terms of what kind of data would they like to see. So I believe that this first study will be very encouraging for both us and will allow us to engage the regulators in a much more detailed discussion based on the data we're seeing and say, okay, this is the kind of endpoints we think might work. But it will also enable us to talk to potential partners and say, okay, here's what we know. This is what we've learned. Now what is the study and which are the indications which are really going to drive a big commercial valuation of this asset. And that's something that we'll be doing around the middle of the year. Fortunately, this year, the world's largest pharma partnering conference takes place in June. We expect to have maybe just in time for that data from this study. So it will be a good time to be engaging with people and thinking about what do we do next, but we are already engaging with Professor Wood and the team on looking at keloid scarring as a potential option. We're looking at Dupuytren's, which is a scar which forms in the tendons of the hand and leads to like a trigger finger. That's a commercial opportunity. There's all kind of manner of things that you could use a treatment like this, which deals with fibrosis in the skin. Another example would be surgical adhesions, where the skin sticks together internally in the body after abdominal surgery, for example. That's an opportunity as well. There's cosmetic surgery and the impact that you can have on either preventing a scar emerging or dealing with people who already have scars from cosmetic surgery as well. So there's a whole world out there, but we're very keen to be data driven on this and look at the data we get from this study before we decide exactly what is the best place to go there.

Thanks, Gary. I might [indiscernible] couple of questions about 5505 and the myelofibrosis trials. A question from Rick. How closely will you be working with the JAK companies in the [indiscernible] trial? Would you see merger potential if early data is encouraging?

Well, clearly, the JAK inhibitors on their own are not leading to a change in the outcome of myelofibrosis. I mean these patients still -- they have a life expectancy of around about 5 years. Most of them drop off of JAK inhibitor before the end, and once they do, they have less than a year to live. So the market itself is very large. But clearly, those companies that have a JAK inhibitor would like to be able to do more for the franchise and more for the patients that they are currently treating. There are a number of different approaches being trialed. Some of them are in the clinic ahead of us. But a lot of them deal with a different aspect of myelofibrosis than we do. So we believe that we are probably one of the few that's dealing with the fibrosis in the bone marrow directly in this particular approach that's this advanced and where we've already got FDA guidance on going ahead with the JAK inhibitor combination study. So we believe that there's certainly commercial and clinical room for us in the myelofibrosis treatment area despite us not being as well advanced as a couple of the assets going forward. And the discussions that we've had to date with the companies with JAK inhibitors, which seem to suggest that they are certainly interested in tracking us and seeing what we're doing. The monotherapy data in itself, I think, is important, and it certainly gives an indicator of what the drug can do. I think the question specifically about merger opportunities. And I think the more data we can get and the quicker we can get it in combination with a JAK inhibitor showing that both -- we don't make the safety of the -- the JAK inhibitors are poorly tolerated, they cause cytopenias in these patients. Anything we can do in that perspective, which the preliminary data seem to suggest that we were stabilizing or improving cytopenias in these patients. If we can repeat that in combination with a JAK inhibitor and really synergize the effect of that, then I think that yes, there's every chance that this would be a drug that would be partnered at that stage, acquired by one of these companies. And the history of this has been -- yes, there have been a couple of companies that have been bought for over $1 billion, MorphoSys being one, Constellation being another, which have driven very large deal values on the basis of Phase IIb data.

Thanks, Gary. Still on 5505. A question from Dennis. Have any subjects dropped out in the first month of treatment?

Yes, I think that we've had 1 [Audio Gap] in the first month of treatment. The others have [Audio Gap], and that's part of why we went to the FDA. They want to see at least 1 month of data from the patients that they wanted to see. So we were able to present them with a lot of patients with significant amounts of data, which is why I think they were [Audio Gap] in their response to us and encouraged us to submit a protocol for add-on therapy and we [Audio Gap] much more quickly than we had originally planned. That was all good news.

Thanks, Gary. Just one more question. So if anyone does have any questions for Gary, please drop them in the Q&A box while he's available. A question from Michael. What is the current cash position to fund these trials? Was the decision to discontinue Rochester a function of cash constraints?

So at the end of the quarter at $15 million in the bank, we are currently looking at the feasibility and the budget for doing the combination study. But as I said, as well as being efficient in time, it's also very efficient in terms of cash as well to add an arm on to the existing study rather than to start a completely new study in stand-alone. So we are currently working with our CRO on understanding the cost of that, and we will make our position a bit clearer on that later in the quarter once we've got more feedback on the protocol from the FDA and we understand exactly what we're going to do. With regard to the Rochester study, there were 2 sides to that. One is the study had not recruited having been open for 6 months. So we felt that the -- it was an investigator initiated study and in talking with the investigators, they were still very enthusiastic and they did the preclinical work in hepatocarcinoma in liver cancer as well. So they were keen to keep going, but they recognized as well that based on the entry criteria that they've agreed with the FDA for the study, that this was going to be an extremely difficult study to recruit in a single center, and we would need to add on more centers in order to recruit in a reasonable time. So we didn't feel that given the single center nature of it and the numbers of patients that were available to that center, that we weren't going to see a result in a reasonable length of time, and it was better to stop that study now and think again about that indication and that how we might approach it in the future rather than push ahead with the study that was just going to pick over 1 or 2 patients every quarter and then never come to an answer, which is what we're trying to do. We want to use our cash to get answers to studies as quickly as we can. So that was certainly one thing. Cash was a consideration in thinking about that, not to have that locked up and allocated to that study. The other one was thinking about the profile of 5505 and the interest that we're seeing in it, and the publication recently in myelodysplastic syndrome as well, all led us to believe that there is value in a strategic focus in hematological malignancies with this drug. And if we are going to add on other indications going down the track and looking at the interest we've got in it and where other companies might want to put this drug, then myelodysplastic syndrome might well be a better option than going down the solid tumor route, which, as we know, is a difficult area to treat. Lots of drugs failed in Phase II. It's a real problem for commissions and patients with these ones, where you're seeing liver cancer I think with 12 months life expectancy, and pancreatic cancer is the other one with less than 6 months. So regrettably, we felt that it was better at this time to focus our resources in the current financial climate on blood cancers and myelofibrosis is a priority and then thinking about other ones we might add on later.

Excellent. Thank you very much, Gary. We are running a bit tight on time now. So I'll wrap up the questions there. Gary, thank you very much for your time today. If any investors do have any further questions, feel free to email them through by replying to an email you've received from Gary or David. Otherwise, Gary's contact details are available on the final slide of the presentation deck. Recording of this webcast will be made available shortly on the Pharmaxis website. Gary, on behalf of the investors in attendance and those that couldn't make it, thank you very much for your time today.

Pleasure. Thank you very much.