Regulus Therapeutics Inc.
Q4 2021 Earnings Call Transcript

Published: 10 Mar 2022

[Operator:]

Ladies and gentlemen thank you for standing by and welcome to the Regulus Therapeutics Q4 2021 Conference Call. I’d now like to turn the conference over to your host, Cris Calsada. You may begin.

[Cris Calsada:]

Thank you operator. Good afternoon and thank you for joining us to discuss Regulus Therapeutics fourth quarter and full year 2021 financial results and corporate highlights. With me on today’s call is Jay Hagan, President and Chief Executive Officer and Dr. Denis Drygin, Chief Scientific Officer. Jay will provide opening remarks and share progress on our ADPKD program and I will review the financial results before we open the lines for questions. Before we begin, I’d like to remind that this call will contain forward-looking statements concerning Regulus Therapeutics’ future expectations, plans, prospects, corporate strategy and performance, which constitute forward-looking statements for the purposes of the Safe Harbor provision under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in our filings with the SEC. In addition, any forward-looking statements represent our views only as of the date of this webcast and should not be relied upon as representing our views as of any subsequent date. We specifically disclaim any obligations to update such statements. I will now turn the call over to Jay.

[Jay Hagan:]

Thank you, Cris. Welcome everyone to our fourth quarter and full year 2021 earnings call and business update. 2021 was a transformational year for Regulus with the accomplishments in our ADPKD program and steady progress in our Alport syndrome program made by our partner Sanofi. I'll begin first by mentioning the financing last November, in which we successfully closed a $34.6 million private placement on favorable terms that included several new institutional investors and support from several of our existing institutional investors. Given the challenging recent market conditions in the biotechnology sector, and more broadly, our ability to secure this financing speaks to the promise and viability of our pipeline, which continues to move steadily forward. In December, we announced the appointment of Dr. Muhammad Ahmadian as Vice President, Chemistry and Pharmaceutical Development. Most deep experience leading operations for life science, company and background managing various projects including the development and manufacturer of therapeutic oligonucleotides, make him a natural fit for helping to guide our programs forward. His hiring came at a particularly opportune time as we entered into discussions with the FDA regarding the IND for RGLS8429 ADPKD program. In January, we announced the successful completion of the pre IND meeting for RGLS8429 which included minutes detailing FDA's overall agreement with the sufficieny of the nonclinical package, the overall trial design and the length of plan phase one study. With this feedback, we remain on track with our plan to submit an IND application in the second quarter of this year. As a reminder, our phase one study plan involves a single dose escalation study in healthy volunteers, followed by a multiple dose escalation study in patients with ADPKD. With the goal to establish a dose. Around the dose level where robust clinical biomarker effects were demonstrated with RGLS4326 the first generation compound. Top-line biomarker data in the first cohort of RGLS8429 treated patients with ADPKD is anticipated in the first half of next year. And we look forward to providing updates on progress. Importantly, we are leveraging the clinical pharmacology data from the first generation molecule to better understand the relationship between dose and exposure, which we intend to use in fine tuning the dose selection in the SAD and MAD portions of the phase 1/B program. We plan to extrapolate the dose for the fourth and final cohort based on the PK data from the first two cohorts of the SAD in healthy volunteers and the exposure at the NOELs and the IND enabling talk studies. This will allow us to demonstrate safety and tolerability in humans at the exposure levels from the NOELs. We will also use these data along with the learning from the first-generation PK results to ensure that the dose levels chosen in the MAD portion of the study in patients will provide the exposure it was achieved at the one milligram per kilogram level, and that produced the robust increases in poly system levels noted last year. Importantly, we believe our completed IND enabling talk studies for RGLS8429 will allow us to dose significantly higher than the one mig per kig where we saw the impressive increases in poly systems in the first-generation compound. And one other bit about the upcoming study we also look at changes in GFR, total kidney volume and cystic architecture over the three month dosing. Since this is a short-term dosing study we're not likely to see meaningful improvements in these parameters. However, we may be able to quarterly polycystic changes with cystic improvements, a potentially significant advancement in understanding the impact of targeting mere 17 in this disease. Turning briefly to the Lademirsen (RG-012) program for the treatment of Alport syndrome. Last month, we announced Sanofi's completion of enrollment in the phase 2 global HERA clinical study evaluating Lademirsen for the treatment of adult patients with Alport syndrome under our collaboration and license agreements Sanofi. Alport syndrome represents a significant unmet need with no approved therapies. Final data from this phase 2 study is expected in the first half of 2023. Under the terms of the agreement, the company is eligible to receive $25 million upon successful completion of the ongoing HERA study or initiation of the next phase of development for Lademirsen and more importantly, potentially provides further validation of our platform technology designed to address genetic kidney diseases. This potential additional cash infusion which further our cash one way into 2024. We have an ambitious, but achievable year ahead of us and I look forward to continuing our work to further understand the role of microRNA disease where we can leverage our technology to ultimately improve the lives of patients. I'll now turn the call back over to Cris for discussion of our financial results. Cris?

[Cris Calsada:]

Thank you Jay. Turning to our financial results as of December 31, 2021, our cash and cash equivalents totaled approximately $60.4 million. We expect that our distinct cash will fund plan activities through 2023. This guidance does not include the potential Sanofi milestone. Research and development expenses for the fourth quarter of 2021 totaled $4.4 million compared to $4 million in the same period for 2020. For the full year 2021 R&D expenses were $17.8 million compared to $15.3 million for the prior year. These amounts reflect the internal and external costs associated with advancing our ADPKD program and our other research efforts in our pipelines. General and administrative expenses for the fourth quarter of 2021 totaled $2.6 million compared to $2.1 million for the same period in 2020. General and administrative expenses for the full year 2021 were $10 million compared to $8.8 million for the prior year. These amounts reflect personnel related and ongoing general business operating costs. Net loss for the fourth quarter of 2021 was $7.1 million compared to a net loss of $1.3 million for the same period in 2020 which included an interim enrollment milestone of $5 million from our ongoing collaboration with Sanofi for Lademirsen. Basic and diluted net loss per share for the fourth quarter of 2021 was $0.07 per share compared to basic and diluted net loss per share of $0.03 per share for the same period in 2020. Net loss for 2021 was $27.8 million compared to $15.7 million for the previous year. Basic and diluted net loss per share for 2021 was $0.32 per share, compared to $0.45 per share for the prior years. With that, I will turn the call back over to Jay.

[Jay Hagan:]

Thanks Cris. We're happy to take any questions now. Operator please open the line.

[Operator:]

Our first question comes from Brian Cheng with Cantor.

[Brian Cheng:]

Hey guys thanks for taking my questions. So first question is on your phase 1 study, I'm just curious how you view COVID as a factor in meeting the timeline that you have laid out for data from the Phase 1 set portion and also Phase 1b in patient portion as well and I have one follow-up.

[Jay Hagan:]

Sure. Thanks, Brian. Yes, with respect to the SAD we're planning to study at the same site we used before, where a couple of years ago COVID was much more significant impact. It happened to be in a state that tend to be a little more liberal with respect to COVID restrictions and didn't really encounter any significant issues in terms of recruiting healthy volunteers at a single Phase 1 unit. So we don't anticipate any impact on that. Of course these are forward-looking statements and things could change with respect to the pandemic. And then with respect to the Phase 1b in patients, we're targeting about double the number of sites we had in the first in a study with first-generation molecule which should alleviate concerns about hitting timelines with respect to the time beginning data here.

[Brian Cheng:]

Okay. And to follow up on your comment about some of the efficacy measures for the second gen molecule in the phase 1b you will be looking at GFR and total kidney volume. Based on what you've seen in preclinical data what's your thoughts about how long we'll need to for the patients to be on the study, to be on treatment, to see a meaningful response on GFR or total kidney volume?

[Jay Hagan:]

Yes. So we obviously always in patients with the disease, we've only studied treatment for six weeks thus far. So I'm basing our commentary primarily based on what has been required for other compounds in development. And of course, so our mechanism is quite unique. I think the impact on cystic architecture we've seen with targeting mere 17 to our knowledge, we haven't seen that with any other mechanisms. So we're hopeful that we can see something in a short period of time, but that's why we guided that we're cautiously optimistic with respect to seeing something in shorter three months. In terms of where we think it would take ultimately in the trial design we've discussed before in a Phase 2 study of one year in duration to see an impact on TKV we may see something in GFR in that timeframe, but it may take a bit longer and that's again, based on historical precedent. But importantly, there are advancements in MRI imaging that enable one to look at what we're describing as cystic architecture, cyst count and cyst volume. And that's where we're particularly intrigued to see if we can't correlate a change in poly system levels from baseline with changes in that architecture which would be quite interesting and that's where we might be able to see something in the shorter term duration study.

[Brian Cheng:]

Got it. Thank you Jay.

[Jay Hagan:]

Sure.

[Operator:]

Our next question comes from Yi Chen with H.C. Wainwright.

[Yi Chen:]

Thank you for taking my question. My first question is could you clarify what exactly needs to happen for the company to perceive the additional $25 million milestone payments from Sanofi?

[Jay Hagan:]

Yes. So some of this is obviously confidential with respect to negotiated agreement. We tried to describe it here and that is success in the Phase 2, meaning hitting the primary end point or their decision to advance further into clinical development because often when you prospectively designed a study, you're not quite sure of the treatment effect and so you might see trends that don't quite reach statistical significance and you still may decide to move forward into clinical development. So in our view, that is two ways to win here.

[Yi Chen:]

Got it. So my next question is so recently we have to receive the complete response letter for . So how do you see that affects the field of Alport syndrome and for ADPKD as well? Thank you.

[Jay Hagan:]

Yes. I don't know any more than, than what's been disclosed by but obviously they've indicated they plan to work with FDA to find what additional information they can provide to address the complete response letter with respect to the CRL for Alport syndrome. So I do know that discussions with our partner that we still have the potential here to be potentially first approved therapy which is a very significant unmet need as was discussed at the is what we know with our work with Alport community. And given the pharmacology that was described in that advisory committee. I don't expect there to be much of a difference in the ADPKD setting where you do have an approved therapy, and it is an older patient population who might be at a greater risk for potential cardiovascular events. So we shall see. They have made a number of adjustments to the trial design including the amount of followup. I think they extended from four weeks to eight weeks and increased the sample size. So that's ongoing and we will see.

[Yi Chen:]

Okay. Got it. Thank you.

[Operator:]

And I am not showing any further questions at this time. I would like to turn the call back to Jay for any closing remarks.

[Jay Hagan:]

Great. Thanks everyone for joining us today. We appreciate your interest in supporting Regulus and look forward to providing updates as we move forward with our programs. Thank you.

[Operator:]

Ladies and gentlemen, this concludes today's presentation. You may now disconnect and have a wonderful day.