Stealth BioTherapeutics Corp
Q1 2021 Earnings Call Transcript

Published: 18 May 2021

[Operator:]

Greetings, and welcome to the Stealth BioTherapeutics First Quarter 2021 Earnings Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now pleasure to introduce Henry Hess, Chief General Counsel. Thank you. You may begin.

[Henry Hess:]

Good morning. I'd like to remind listeners that management will be making forward-looking statements on today's call, including, for example, the company's expected timeline and plans for development of Elamipretide, SBT-272 and other pipeline programs, regulatory interactions and financial guidance regarding the period in which we will have capital available to fund this operations.

[Reenie McCarthy:]

Thank you, Henry. And thanks to those on the line for joining us today. In addition to Henry and me, you'll be hearing from Jim Carr, our Chief Clinical Development Officer; Brian Blakey, our Chief Commercial Officer; and Rob Weiskopf, our Chief Financial Officer, and we will be happy to take questions after the presentation. We will be showing slides today to facilitate our discussion, so hope that you've been able to access those by the webcast. Our goal for today's call is to familiarize you with the roadmap of upcoming milestones we expect to achieve this year into early next year, some of which are included on Slide 4. With additional funding now secured under our development funding agreement, we're executing on multiple preclinical, clinical and regulatory initiatives that we expect to accomplish by early next year. Our near term milestones include, first our initiation, enrollment and readout from a new Phase 3 randomized withdrawal trials to support our Barth NDA submission anticipated early next year. Second, our anticipated receipt of Phase 2 data and geographic atrophy from our ReCLAIM-2 study which will coincide with intravitreal formulation feasibility to inform partnering and Phase 3 trial designs. Third, our initiation of a Phase 3 clinical trial and primary mitochondrial disease due to nuclear DNA mutations or nPMD. Fourth, our initiation of several other ongoing Phase 2 clinical trials in other rare cardiac indications, including Friedreich's and Duchenne. And finally, with respect to our pipeline, our completion of studies necessary to ensure that our next generation clinical stage neurology assets, SBT-272, is Phase 2 ready during the first half of 2022. On Barth syndrome at the time of our last update in April, we had just conducted an impromptu meeting scheduled at the request of leadership within the division of cardiology and nephrology, and the office of cardiology, hematology, endocrinology and nephrology of the FDA to discuss our Barth program, which was our third meeting in six months with the division.

[Jim Carr:]

Thanks Reenie, and good morning to those on the line. As Reenie mentioned, when we last met with the division of cardiology and nephrology, and the office of cardiology, hematology, endocrinology and nephrology at the request in early April, we were advised within acceptable approach to generate additional data to support a Barth NDA would be a Phase 3 randomized withdrawal trial in which patients who have been taking elamipretide for almost three years in open label extension would receive either elamipretide or placebo until a minimum number of events leading to treatment failure occur, which we expect to occur within about six months.

[Brian Blakey:]

Thanks, Jim. And thanks to those on the line for joining today. I'd like to just briefly outline the commercial potential we're seeing with Barth and across our cardiology platform. While Barth is of course an ultra orphan disease, with less than 200 diagnosed patients in the United States known for the Barth Syndrome Foundation, the work that we are disease may have a broader footprint that is currently appreciated, which may be due in part to the lack of approved therapies driving better diagnostic practices. We know from our conversations with doctors treating the disease that initial misdiagnosis disease often occurs and we think that our efforts to broaden awareness, and certainly a potential approval may shorten both the diagnostic journey and broaden the market potential. To that end, we are pleased that our Barth cardiac data was presented last weekend at the Annual Meeting of the American College of Cardiology, which is the Premier Clinical Cardiology Forum, signaling the increasing recognition of mitochondria as a therapeutic target for rare metabolic cardiomyopathies, such as Barth, Duchenne and Friedreich ataxia. As Reenie mentioned, we're also pushing forward with European initiatives to broaden our potential market reach in response to both and interest from potential partners. I'll turn the line back to Jim to discuss our other clinical programs. Jim?

[Jim Carr:]

Thanks Brian. Beyond Barth cardiomyopathy, as Reenie mentioned, we're also actively engaged in supporting initiation of the Friedreich study, working with Duchenne patient advocacy group to broaden regulatory guidelines to encompass the cardiomyopathy, which is a leading cause of early mortality in that disease, as well as exploring other clinical initiatives. We expect to have at least two and possibly three additional cardiac initiatives in the clinic including Friedreich and Duchenne by this time next year.

[Brian Blakey:]

Thanks Jim. Reenie and Jim both referenced our recent ARVO presentation, which links mitochondrial health with the potential to ReCLAIM visual function in geographic atrophy. Our key take-away from this data is that intervening earlier in the course of the disease may improve clinical outcomes for patients, which could eventually translate to better compliance and adoption. Age-related macular degeneration is a progressive disease, which affects millions of Americans and while wet AMD and late stage geographic atrophy are each thought to affect by the million Americans. The earlier stage of the disease funnel is much broader. The work that we're doing to develop an intravitreal formulation that we hope could result in only several doses annually will also help with accessibility as these earlier stages of disease. Since once or bimonthly intravitreal injections may pose patient compliance challenges.

[Jim Carr:]

Thanks Brian. On the neurology front, Reenie mentioned that we will be meeting with the division of rare disease and medical genetics this summer to discuss our Phase 3 protocol for patients of primary mitochondrial disease due to nuclear genetic mutations or nPMD. Our discussions with our investigators and underscore the validity of the signal we observed in this pre-specified subgroup of patients in our MMPOWER-3 trial, which also identified an exposure response relationship and compelling enrichment strategies we're bringing into Phase 3. As you can see on the left on Slide 13, the nPMD patients improved on their six-minute walk test on elamipretide with little chains observed on placebo, and that was particularly apparent in patients with mediated nuclear DNA mutations, which include mutations in preliminaries gamma, the most common cause of primary mitochondrial disease. Notably, this is typically associated with progressive external ophthalmoplegia, which is the progressive weakening of the eye muscles, offering an important enrichment strategy to ensure patient selection - approximate patient selection. We'll be kicking off the Phase 3 year-end on Slide 14, you can see the proposed design we'll be discussing with the FDA this summer. Our next generation clinical compound SBT-272, which continues to look promising in various clinical models of neuro-degeneration is on track to be Phase 2 ready during the first half of next year. Brian, do you want to expand a bit further on the commercial landscape for nuclear PMD before turning the call over to Rob to review our recent financial updates in first quarter results.

[Brian Blakey:]

Yes Jim, thank you. Our early estimates suggest around 7,000 Americans may be affected with primary mitochondrial disease due to nuclear DNA mutations. With SBT-272 and our SBT-550 series opening potential development initiatives in other rare neurological diseases, we hope to further broaden this franchise as those pipeline candidates progressed into the clinic and patients potentially as early as next year for SBT-272. And with that, I'll turn the floor over to Rob to discuss our first quarter results.

[Rob Weiskopf:]

Thanks Brian. And thank you all for joining us today. Before reviewing the financials in the quarter, I also want to highlight few important financial updates. In May 2021, the company received an additional funding commitment of $30 million under the development funding agreement, Morningside payable $8 million during the second quarter of 2021 and $22 million during the fourth quarter of 2021, extending our cash runway into the second quarter of 2022.

[Reenie McCarthy:]

Thanks Rob. Before opening for questions, I'd like to provide a bit more color on our enthusiasm about our science and the very challenging but meaningful lessons learned over the past 18 months. We are deeply grateful for Morningside continued support, which is also premised on its appreciation that these lessons learned help elucidate further clinical development strategies with our first-in-class investigational candidates. In short, we've learned that longer duration of dosing may lead to reverse remodeling of pathological adaptive changes to mitochondrial and metabolic dysfunction, and we've gleaned key insights into enrichment strategies in both genetic mitochondrial diseases and in geographic atrophy, which is a disease of ageing. Our team is highly engaged and truly optimistic that our development initiatives over the next weeks and months may result in meaningful improvements in the standard of care for patients suffering from the typically progressive rare cardiac, ophthalmic, and rare neurological disorders of mitochondrial dysfunction that we are studying. With that I'll turn the call over for questions.

[Operator:]

Our first question comes from the line of Charles Duncan with Cantor Fitzgerald. Please proceed with your question.

[Charles Duncan:]

Yes, thank you. Good morning, Reenie and team, nice to see the progress. Thank you for taking our questions. I had a couple, the first is really on oriented to Slide 6, which is the Barth proposed randomized withdrawal trial. I guess I'm wondering if you could provide a little more color, I note that you proposed a p value of 0.1, which seems like that suggests - the agency appreciates the challenges with this trial and meaningfulness of any data but any incremental difference? But I'm wondering, what would you anticipate the timing of events to be and also the percent difference that you would like to see to be meaningful or is really any difference enough to drive for within potential approval and would you be seeking a spa on this or not necessarily?

[Reenie McCarthy:]

So I'll take a part of that, and then turn it over to Jim. We are not seeking a spa as we are - you know, as we've had as we've mentioned, three meetings over the past six months with the division of cardiology. We really took on board most of the suggestions they made at our last meeting. And the proposed protocol that we outlined on Slide 6 is going to be submitted to them over the next week or so. And so, the division has been very engaged with us very active in sort of providing us feedback. So at this point, our preference is just to proceed with that protocol hopefully with feedback coming to us from the FDA. In terms of time to events Jim, maybe you can jump in for that.

[Jim Carr:]

Yes, our belief is that the occurrence of events should be fairly quick. And there are some - I guess I would characterize them as anecdotes that help give us some insights into that. So patients during the course of the trial that unbeknownst other people, their parents, for example, had withdrawn from therapy did experience events and again that tend to occur fairly early. So based on our conversation with RPI, we do have some belief that the - again the occurrence of events should be fairly quick, within a couple of months, two to three months.

[Charles Duncan:]

Thank you for that. And for those patients who happen to be randomized to, well any of them that experienced events. What happens for those that are randomized to control, do they have the opportunity come back on the drug? And is there any necessity to follow them up for a certain period of time to provide that data to the agency.

[Reenie McCarthy:]

So we are going to provide them with access to come back on the drug through some type of an expanded access protocol. We have not had any discussions of necessary follow-up of those patients with the agency.

[Charles Duncan:]

Okay. And last question moving on to the nPMD program in Phase 3 initiation. I note that you are planning to use 60 milligrams versus 40 milligrams in the Barth trial. And I guess I'm wondering what you think about that, why use a higher dose is it due to the patient sizing? And then finally, how do you measure, how you best evaluate the pharmaco economic value of elamipretide, at least in these very rare disorders?

[Reenie McCarthy:]

Yes, so for the first question, really just as a reminder, skeletal muscle system really has the most mitochondria in the body, so - higher target for target engagement. But Jim, maybe you can talk a little bit about the exposure response relationship we observed and then we can turn to Brian for the pharmaco economics discussion.

[Jim Carr:]

Yes, and appreciate the question Charles about the dose. So in that the SPIMM-301 trial, MMPOWER-3 in this subgroup, we did see evidence of an exposure response relationship and which was statistically significant. And so, we do believe that there will be additional benefits essentially, a more robust effect if we increase the dose. So that's the rationale behind the increase in the dose to 60 milligrams

[Brian Blakey:]

And I can just on pharmaco economics sorry about that Charles, thanks for that question on it as well. We've done a fair amount of work on Barth with the cardiomyopathy with payers and due to the devastation of this disease, and quite frankly, DMD as these young men dying at an early age from cardiomyopathy, it does support that ultra orphan pricing in the populations for Barth being ultra orphan and even DMD being orphan size, we feel we'll support a price range. We've said before, potentially in the range with that. We are now starting our work on the nuclear PMD. We have experience from our PMM trials of working with payers on that, and we will - we think that number may come in consistent with what we've seen with the other indications.

[Operator:]

Our next question comes from the line of Matthew Luchini with BMO Capital Markets. Please proceed with your question.

[Matthew Luchini:]

Hi, good morning, everyone. Thanks for taking the questions. So I want to ask a couple first as it relates to Barth. So it sounds like there's still a little bit of misalignment or an open question as to whether or not the proposed withdrawal design will be acceptable to FDA that they're looking for some additional patients? So I guess could you just talk a little bit more about what it is that they're looking for? It sounds like you have seven patients. So what is it that they're hoping for and what are the next steps to actually, you know getting resolution on this issue? Is it just protocol being submitted and FDA accepted or is there something else? And then secondarily, for the design as it stands now, are these patients coming from the ongoing open label extension study? In other words, do you have them all in sort of in hand or do you need to call some patients back in order to get in order to reach your target of seven patients?

[Reenie McCarthy:]

Great Matt, thanks for this question. So yes, when we had this meeting, kind of the impromptu meeting in April, with the division and the office, there was a suggestion that if we could recruit a few more patients, and I think the number three was thrown out in that context. Then that would seem like a, a greater number, there's not really great scientific solidity or support for doing that, for one thing, if we were to bring new patients and obviously, there would be a big mismatch between seven patients with almost three years of therapy, and these new patients that you would treat for like six to nine months. And what does it really add to the statistical powering in any meaningful way. And so we did, right back to the agency pretty quickly following that meeting, to tell them what our plan was that we were accepting the recommendation to do the randomized withdrawal of the existing patients, we didn't really agree with the scientific validity or as per statistical rationale for including additional patients. And that we'd be happy to speak with the agency about the protocol either before or following the submission of it. And we haven't heard back from them. And so what we know from the last time, we support, we submitted a proposal to the agency, as we heard back immediately when they didn't agree. So, I guess we're taking that as a somewhat good sign. But I think for in terms of your next steps, really, the way to resolve this is when we submit the protocol over the next week or so, the agency does have about 30 days to respond again, the dynamic and the engagement has been really strong and much more immediate than that over the preceding months and advocacy of course, is also very much at the table on this and supportive of our approach. And so, we would hope to be able to have engagement sooner than the 30 days. But worst case, you know, we would expect to hear back within 30 days of protocol submission. In terms of your question on the patients, these are the patients who have been and are still taking drugs for almost three years in open label extension. So we do know these patients, we don't have to go back and bring other patients in. It wouldn't make sense because of that interruption in therapy were we to do that. And we have reached out or the investigator has reached out to these patients. So we have pretty good confidence that we'll be able to fully enroll this trial in a reasonable time period.

[Matthew Luchini:]

Okay, great that's all very helpful. Thank you. And then, you make mentioned in the release about, sort of starting to have some engagement with EMA. And I was just curious, if you could talk a little bit more about that and sort of given the continual nature of your engagement with FDA what your expectations are around EMA's expectations or at least if there's precedent from them around similarities and regulatory path. In other words, I guess, if you are reach align with FDA is that expected to be sufficient for EMA?

[Reenie McCarthy:]

I think the one thing that we know will be certainly required in Europe is the pediatric investigational plan. So that's some of the work that we're doing right now, that's really required to engage in any path that leads to marketing authorization in Europe. And we do have experience dosing some very young children with Barth and related diseases, but that's an expanded access setting. And so kind of getting the engagement and hopefully getting to alignment on a path is an important step for us in Europe.

[Matthew Luchini:]

Okay, great. Thanks. And then one last one from me. Since its previously described as a gating step in GA, can you just remind us or talk a little bit about where you stand in terms of the latest efforts on the intravitreal formulation?

[Reenie McCarthy:]

Sure, I mean, we're conducting feasibility. So we've got some promising early data that makes us hopeful that we can get to a situation where we would be hopefully looking at quarterly dosing or less, so that's kind of the early data that we're now doing feasibility, and the game plan would be to have that feasibility complete together with a readout. I don't know that it's gating. I mean, we've done market research suggesting that patients would tolerate once daily subsequent dosing, which is what we're doing in the current study, many of these patients are older, and diabetic as well. So used to injecting themselves, but clearly for commercial purposes and partnering purposes, and IVT would be desirable. And so again, we're just - we're encouraged with what we know so far, but obviously continuing to do the feasibility studies, which we hope to have by the time of the readout.

[Operator:]

Our next question is coming from the line of Yi Chen with H.C. Wainwright. Please proceed with your question.

[Yi Chen:]

Thank you for taking my questions. Would you be able to clarify that today of any - are things from patients that have been receiving an appetite ever voluntarily terminated therapy?

[Reenie McCarthy:]

So clearly, there were patients who did not transition from the double blind placebo controlled crossover trial into open label extension. So 10 of the 12 moved from the crossover into OLE and then two of those patients who moved over, one of them was having injection site reactions, which the investigator did not think we should continue to dose through and the other did drop out or though has since asked whether sit back to the program. So I think that answers the question. Jim anything to add there?

[Jim Carr:]

No, that's a good summary Reenie.

[Yi Chen:]

Okay. So do you think those patients that are currently in the open-label extension are willing to participate in a trial where they may think they could receive ?

[Reenie McCarthy:]

Yes, so that's a great question. I appreciate you're asking it. Got a few part answer. One is that, we understand that Barth Syndrome Foundation met with FDA recently and to kind of underscore patient eagerness to kind of get to therapies and their willingness to participate in placebo controlled trials. So certainly the advocacy group as a whole both in their patient focused drug development meeting and in recent listening session that they had with the agency has underscored their really desire to progress towards the therapy for this terrible disease. In our case with our patients, we know that the investigator has reached out to all the patients who are still on drug and open-label extension. And her expectation is that all patients will agree to participate we didn't have that direct conversation, but that is the expectation of the investigator. And I think an important aspect of that is that the criteria right for events needs to be such that if the patients are having increasing symptoms of their Barth Syndrome that they're able to withdraw consent or indicate that in some way so that it could trigger an event which would potentially allow them to go back onto therapy.

[Yi Chen:]

And with respect to the Phase 2 investigator initiated trial in Friedreich's Ataxia, do you have a general - how does this trial could generate report data once it started?

[Reenie McCarthy:]

Jim, we're doing an interim analysis at nine months, is that right?

[Jim Carr:]

Yes, nine months after all subjects have been enrolled, and we think enrollment can be fairly brisk.

[Reenie McCarthy:]

Assuming - go ahead Jim.

[Jim Carr:]

We're hoping to have this trial enrolled by year-end. The belief is it should take about three months to enroll the trial.

[Operator:]

Thank you. There are no further questions at this time, I would like to turn the call back over to Reenie McCarthy for any closing remarks.

[Reenie McCarthy:]

Thank you for that. I appreciate it. So again, thank you to everyone for joining today. We appreciate your time this morning. We look forward to updating you on our continued progress over the course of the year, which we believe will lay a potentially transformational foundation for mitochondrial medicine across our cardiac, ophthalmic, and neurology platforms. So again, thanks for your time today. With that, we'll end the call.

[Operator:]

Thank you for your participation. This does conclude today's teleconference. You may disconnect your lines at this time. Have a great day.