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spk00: Ladies and gentlemen, thank you for standing by. Welcome to the Regulus Therapeutics Second Quarter 2021 Financial Results Conference call. At this time, all participants' lines are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press Star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press Star 0. I would now like to hand the conference over to Chris Calzada, Chief Financial Officer of Regulus Therapeutics. Thank you. Please go ahead.
spk01: Thank you. Good afternoon, and thank you for joining us to discuss Regulus Therapeutics' second quarter 2021 financial results and corporate highlights. Joining me on today's call is Jay Hagan, President and Chief Executive Officer, and Dennis Drygen, 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 line for questions. Before we begin, I'd like to remind you 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 Security 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. 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.
spk02: Thanks, Chris, and welcome everyone to our second quarter earnings call and business update. The team at Regulus had a very productive second quarter, continuing through the last several weeks, which I'm pleased to share with you today. We just completed our preparations and associated documents and have requested a Type A meeting with FDA. The objective for this meeting is to get feedback on our overall approach to addressing the remaining hold requirements and the data generated to date that forms the basis of the modeling requirements laid out by FDA. When a Type A meeting is requested, FDA typically grants a meeting or provides feedback within 30 days from receipt of the meeting request. We look forward to sharing updates on that progress. This past June at PKD Connect, we announced additional data from the first cohort of patients in our Phase 1B clinical trial of RGLS4326 in patients with ADPKD. The additional data demonstrated clinical proof of mechanism by showing that short-term treatment with RGLS4326, led to target engagement in the kidneys and consequently led to statistically significant increases in both polycystin 1 and polycystin 2. The overall trend in these protein changes show increasing levels of both PC1 and PC2 over time with a sustained effect one month after completion of dosing, which suggests to us that less frequent dosing could be utilized. Measured levels of PC1 and PC2 have previously been shown to be inversely correlated with disease severity. Thus, these data serve to further validate MIR-17 as a target for ADPKD treatment. Also at PKD Connect in June, we presented new data generated by our collaborator at University of Texas Southwestern, Dr. Vishal Patel. These new data were from a certain preclinical model that is very analogous to the human disease and showed that treatment with RGLS4326 results in increased gene and polycystin levels in vitro, as well as significant improvements in total kidney size, cyst count, and overall kidney health. The model is relevant in that it harbors a PKD1 mutation equivalent to human ADPKD. With regards to safety, as previously reported, RGLS4326 was well-tolerated by all nine patients in this first cohort, with no serious adverse events reported. And all reported AEs or adverse events were mild and generally transient in nature. Returning to our ongoing Phase 1B clinical study of RGLS4326, we're also pleased to announce today that we've recently completed enrollment of the second cohort of patients. Now, these patients are being administered 0.3 milligrams per kilogram of RGLS4326 every other week for four doses. The dose of RGS4326 for the third and final cohort will be chosen based on the results of this second cohort in relation to what we've been able to demonstrate already at one milligram per kilogram. And enrollment in that third and final cohort would be expected to commence sometime in the fourth quarter this year. We anticipate top line data from the second cohort in the fourth quarter as well. And finally, after completing what we believe is a robust and extensive non-GLP tox assessment of our next-generation compound targeting MIR17, we have formally nominated the molecule as a clinical candidate named RGLSA429. GMP manufacturing for GLP tox and Phase I clinical studies is underway, with an IND anticipated in the first quarter next year. Recall this molecule was designed to have an overall improved product profile compared to RGLS4326. By retaining all of the key beneficial aspects, including its potency for the target, MIR17, as well as preferential kidney distribution, while also dialing out activity towards the putative receptor underlying the clinical signs associated at the dose-limiting tox level of RGLS4326. And finally, a team back in our labs at Regulus continues to advance our understanding of the role of microRNA in important disease areas. I'll now turn the call back over to Chris for a discussion on our financial results before we get to your questions. Chris.
spk01: Thanks, Jay. Turning to our financial results, as of June 30, 2021, our cash and cash equivalents totaled approximately $41.4 million, which is approximately $9.8 million more than our $31.6 million cash balance at the end of March 31st, 2021. During the three months ended June 30th, 2021, we raised $15.4 million in gross proceeds through our ATM facility at an equated average price per share of $1.26. With this addition to the balance sheet, we now expect our existing cash can fund planned activities into Q4 2022. Research and development expenses for the second quarter of 2021 totaled $4.2 million, compared to $4.2 million in the same period for 2020. These amounts reflect the internal and external costs associated with advancing our preclinical and clinical pipelines. General and administrative expenses for the second quarter of 2021 totaled $2.5 million compared to $2.3 million for the same period in 2020. These amounts reflect personnel-related and ongoing general business operating costs. Net loss for the second quarter of 2021 was $6 million compared to a net loss of $6.9 million for the same period in 2020. Basic and diluted net loss per share for the second quarter of 2021 was $0.08 per share compared to basic and diluted net loss per share of $0.23 per share for the same period in 2020. With that, I will turn the call back over to Jay.
spk02: Thanks, Chris. Obviously, a quick update, but a couple of important milestones that the team has hit on, and now we're ready to take your questions. Operator, please open the lines.
spk00: As a reminder, to ask a question, you will need to press Star 1 on your telephone. To withdraw your question, press the pound key. Please stand by while we compile the Q&A roster. And your first question is from the line of Yanan Zhu with Wells Fargo Securities.
spk08: Thanks. for taking my questions. So with regard to the FDA meeting that you have requested, would the topic of the meeting mainly be the model, or would you also be talking about your clinical data from at least the first cohort? And by the time, and also, With regard to the model, could you elaborate a little more on what is the input and what is the output of the model and what is FDA looking for in a model? Thanks.
spk02: Yeah, good question. I'll try to tackle that in stride here. So, yes, our objectives are twofold. to get feedback on our approach, which is basically the model that we've built to predict exposure of extended duration. That's number one. And then the second objective would be then what level of safety margins would they want us to see in any simulated dosing, dose level and dose frequency. And so the model incorporates data, and I think We've discussed this in the past. We were waiting to get data from the first cohort to finalize the model because we wanted data from patients for plasma to predict exposure of extended durations. And so we have that data now. That was the final piece that went into the model. It took us a bit of time to get it right. We wanted to be as prepared as possible before we requested the meeting. So we've included those data with the submission as well as the biomarker changes in addition to the safety and PK data.
spk08: Great. And a quick follow-up. Would you be able to share any cohort 2 data with FDA by the time the meeting occurs. And lastly, how would you like to communicate the SDA meeting results to investors? Thank you.
spk02: Yeah. Yeah. So as far as cohort two data, you know, just as we did with cohort one, Yanan, we are blinded and don't have access to the data until it's complete. And so right now I wouldn't anticipate that we'll have cohort two data within the next month. And as we've guided, the FDA typically provides feedback or meeting date within 30 days of the request. So unlikely. But importantly, we don't need the data, we don't believe, because we've got the requisite plasma exposure data for which the model is built. And we know earlier in our MAD studies in healthy volunteers that exposure was dose proportional. So it wouldn't really serve to necessarily improve the model significantly over what we have already. Longer term, we may include it when we get to a complete response because the step after this, if we have positive engagement with FDA and get this feedback, would be a complete response to the remaining hold requirements, which we then could determine whether or not we want to include it. And lastly, I'll just make sure, I know you didn't ask the question, but the biomarker changes, you know, whether or not we see them in second cohort is not necessarily relevant to addressing the remaining hold requirements. And then as far as how we communicate with investors, I think, you know, let us have the meeting and then we'll figure out how best to communicate. As you know from your experience, Sometimes you choose to wait to get meeting minutes in the event there's not clarity in the meeting. So we'll make that call when, you know, when we have the meeting.
spk08: Great. Thank you, Jay.
spk02: You're welcome.
spk00: And your next question is from the line of Andres Argue Rides with Wedbush Securities.
spk05: Thank you, operator. Good afternoon. This is Andres Argue Rides.
spk04: Just a quick one from us following up from the FDA question. When can you expect following the meeting and the feedback that you get from there? Well, what can you expect feedback from the FDA following the meeting? What's the usual timeline?
spk02: Yeah, so typically the way it works, Andreas, is that we may get even draft feedback to the questions ahead of the meeting, like within, say, 48 hours of the meeting. So we'll have a sense of going in, you know, is there additional, you know, last-minute prep we need to make or otherwise. And you can further define your sort of topics of engagement with FDA based on the preliminary feedback you get right before the meeting. And then you obviously have the meeting. And, you know, they can choose to just provide written feedback and say we don't see the need for a meeting, but we don't suspect that to be the case here. And then, you know, through the course of the meeting, obviously a discussion there, then the meeting minutes are finalized, which typically come, you know, within a month after the meeting.
spk03: Okay. That's all. You guys are pretty straightforward on timelines and clear on all these things, so I appreciate it. Thanks, Jay. Sure.
spk00: And your next question is from the line of Eachin with HC, Ryan White.
spk06: Thank you for taking my questions. Jay, just to clarify, you have completed all the required tests by the FDA, and you Now you are just meeting with the FDA to see whether the results meet their expectation. Is that correct?
spk02: Yeah, correct. We were told that we needed to build a model to predict exposure of extended duration. And obviously that's a mathematical simulation model. which involves assumptions and all sorts of stuff. So we want to get their feedback on the approach we've taken. These are population PK models that you build. And so do they find our model to be robust and predictive? And so that's question one. And question two, if so, at what dose level and dose frequency, i.e., that equates to a safety margin, are they comfortable with us moving forward at. And so those are the two main objectives.
spk06: Got it. So if the FDA is satisfied with the output of the model and the PK data, they should remove the remaining part of the partial clinical home, right?
spk02: That's what we're hoping for. Okay.
spk06: With respect to the new molecule, the 429, is that right? 8429, yes. 8429, 8429, okay. Okay. So, what additional preclinical studies need to be conducted before this molecule enters clinical trial?
spk02: I'll ask my colleague, our chief scientific officer, Dr. Dennis Dragin, to maybe chime in on what work is ongoing there.
spk07: Good afternoon. We are currently in the process of completing the IND enabling studies, as well as manufacturing of the supply for the phase one trial. There are also some minor ebony studies, which are just a common battery you go through before starting the clinical trial, which are still ongoing.
spk02: And we also, you know, just from an exploratory standpoint, you know, we've been asked, you know, how does, you've seen in our corporate deck, you know, how 4326 stacks up against Tolvap, and we similarly have conducted some efficacy studies looking at head-to-head and also in combination and see nice additive effects there. Those data have not yet been published, but... That is correct, yeah.
spk07: This is the work that is done by Dr. Shalpatel, our collaborator.
spk06: Got it. So is the development status of 4326 going to affect in any way the future development of CD429?
spk02: That's a good question, and we look at it as this is a two-pronged approach, providing optionality. One is for life cycle, and we could spend a bit of time talking about that in greater detail. Right now, 4-3-2-6 is dosed in a weight-based approach, milligrams per kilogram. And so unless we switch that to a fixed dose, with an auto-injector, it presumably would be administered in, you know, a physician's office. That's part of the reason why we're interested in looking at monthly dosing. And then 8.429, you know, it's earlier in development, obviously, not yet in the clinic, could be positioned as a, you know, potential fixed dose approach with an auto-injector. and could ultimately cannibalize or put 4326 in a different niche setting. And so those are some of the options that we're kicking around internally as we think about development. A429 should benefit, if I showed you the two structures, they look awfully alike. And so it should benefit from the work that we've done already validating MIR-17 with the changes in polycystin levels, both from a dose... and dose frequency standpoint such that the clinical development can be accelerated for 8.429 because we'll be doing less dose range finding work and basically following quickly in the footsteps here of 4.326. And obviously as a contingency plan too. If it turns out that in our discussions with FDA that there's more extensive work that needs to be done such that 4326 no longer retains a significant lead in terms of time potentially to market, then we may choose to pursue 8429. So we'll see how that plays out. But we like where we're at from a positioning standpoint. having this optionality. And I think you and I have discussed in the past, like every small molecule developer, you know, you're always developing next-gen molecules with improved profiles. And so we've similarly done that here.
spk06: Got it. Thank you.
spk00: And so there are no further questions at this time. I will now turn the call back over to Jay Hagan, CEO of Regulus Therapeutics.
spk02: Well, thank you very much for joining us today, everyone, and I do want to mention that on the investor front, we'll be participating in the upcoming Wedbush PAC Growth Healthcare Conference tomorrow, and we appreciate your time and support of Regulus. Thank you.
spk00: Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.
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