Regulus Therapeutics Inc.

Hello and welcome to the Regulus Therapeutics Inc. Q3 2022 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touchtone phone. To withdraw your question, please press star then two. Please note, this event is being recorded. I would now like to turn the conference over to Chief Financial Officer, Chris Calzada. Please go ahead. Thank you, and good afternoon.

And thank you for joining us to discuss Regulus Therapeutics Third Quarter 2022 Financial Results and Corporate Highlights. Joining me on today's call is Jay Hagan, President and Chief Executive Officer, and Dr. Dennis Dryden, 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 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.

Thanks, Chris, and welcome, everyone, to our third quarter earnings call and business update. I'll begin with a general update on our ADPKD program. We continue to make progress in the clinic with RGLS 8429. In September, we announced positive top-line safety and PK data from our Phase I single ascending dose, or SAD clinical trial of RGLS8429. RGLS8429 was well tolerated with no serious adverse events reported. Among the 32 subjects treated with RGLS8429 or placebo, there were only nine adverse events, all of which were mild, except one, a sinus infection, which was graded moderate in severity. In addition, importantly, Preliminary results suggest that plasma exposure is approximately linear across the four dose levels tested and is similar to the PK data from the first generation compound, RGLS4326. Last week, we announced the dosing of our first patient in our Phase 1B multiple ascending dose, or MAD, study of RGLS8429. Since then, we've enrolled the second patient and have several more in screening at the six sites that are now currently active. The study is a double-blind, placebo-controlled, multiple-ascending dose study to assess safety, tolerability, and pharmacokinetics of RGLS8429 in adult patients with ADPKD. The study will evaluate the safety and efficacy of treatment with RGLS8429 across three different dose levels, including measuring changes in polycystins, cystic kidney volume or height-adjusted total kidney volume, and overall kidney function. The first cohort is being dosed at one milligram per kilogram of RGLS A429 or placebo every other week for three months. Top line data from the first cohort of patients are now anticipated in mid-2023. Switching gears, during the three months ended September 30, 2022, we sold and settled approximately 2.2 million shares for net proceeds of $4.5 million under our ATM facility. Almost all the shares were sold to a new institutional investor. With the completion of this transaction, we believe our cash, cash equivalents, and short-term investments will now fund current planned activities through 2023. Last week, we presented data at the American Society of Nephrology Kidney Week meeting in Orlando. The poster presentation was titled, Discovery of Next Generation Antimere 17 Oligonucleotide RGLSA429, for the treatment of autosomal dominant polycystic kidney disease. And it highlighted data supporting the potential of A429 in this important disease. We are excited about our progress as well as the attention Argyllis A429 receives in the marketplace, which helps validate the effort our team is putting forth each day to advance this therapy and its potential to improve the current standard of care. With that, I will turn the call back over to Chris for an update on our financials. Chris?

Thanks, Jay. Thanks, Jay. Turning to our financial results, as of September 30, 2022, our cash equivalents and short-term investments totaled approximately $45.3 million. We expect our cash runway to extend through 2023. Research and development expenses for the third quarter of 2022 totaled $5.3 million compared to $5.9 million in the same period in 2021. These amounts reflect the internal and external cost associated with advancing our ADPKD program and other research efforts within our pipeline. General and administrative expenses for the third quarter of 2022 total $2.3 million compared to $2.5 million for the same period in 2021. These amounts reflect personnel-related and ongoing general business operating costs. Net loss for the third quarter of 2022 was $7.6 million compared to a net loss of $8.6 million for the same period in 2021. Basic and diluted net loss per share for the third quarter of 2022 was 50 cents per share compared to basic and diluted net loss of 99 cents per share for the same period in 2021. With that, I will turn the call back over to Jay.

Thanks, Chris. At this time, we'd be happy to take any questions. Operator, please open the line.

Thank you, Jay. We will now begin the question and answer session. To ask a question, you may press star, then 1 on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star, then 2. At this time, we will pause momentarily to assemble our roster. Our first question today comes from Whitney Agyem with Canaccord. Please go ahead.

Hey, guys. The question I have, I guess, is around expectations headed into the data mid-next year. Can you remind us what you saw in animal studies with slightly extended dosing? I know there's three months of dosing here versus a slightly shorter course. in the first-gen compound. So curious what you saw with longer dosing in animal studies, and if you think there's read-through there, too, what we should be expecting from the clinical data readout next year.

Yeah, maybe I'll touch on the clinical part and ask Dennis to comment on dosing duration in a variety of animal models, which, you know, depending on the animal model, some are more rapid than others, offering less opportunity to dose for extended periods. But just to remind folks that at the one milligram per kilogram dose level that we're testing currently with our next-gen compound, we saw a statistically significant increase in both polycystin-1 and polycystin-2 from baseline of approximately 60 and 40 percent increases in those at that dose level. And as I mentioned earlier, the PK between the molecules is very similar. So we anticipate with this next-gen compound to see similar types of effects. And if you recall, the trajectory of the change from baseline would suggest that with continued dosing, higher levels of polycystin could be achieved prior to it plateauing once we reach steady state in the kidney. So that's what we'll be looking for in the clinic. And Dennis, I don't know if you want to comment on duration of dosing in animals.

Thank you, Jay. Indeed, as Jay mentioned earlier, the majority of the models for ADPKD are quite aggressive and do not allow extended period of treatment. However, we did test first-generation molecules in a longer non-orthologous model where the treatment was for seven weeks. And with the longer treatment, there was more and more evidence of the inhibition of fistula expansion and growth.

Great, thanks.

Sure. Again, if you have a question, please press star, then one. The next question comes from Yanan Zhu with Wells Fargo Securities. Please go ahead.

Hi, thanks for taking my question. I mainly have a question about enrollment and timeline for the data from different cohorts. So I think previously the data expectation for the first dose cohort might have been first half 23. Please correct me if I'm wrong. And this time we hear mid-year. Could you elaborate on this might be a small change of first half versus mid-year, but any changes in your expectations for enrollment, speed, or any other factors? And also, for the additional cohorts, do you have any suggestion on potential timeline for the data from those cohorts? Thank you.

Sure, Yanan. So the guidance that we provided for data from the first cohort in the first half of 23 dates back to when we did our financing in October, November last year, outlining, you know, at that time our expectation for both initiation of the SAD and then initiation of the MAD. And as often the case, you know, as you work through these processes, sometimes things take a little bit longer to get up and going. So we chose to update our guidance in terms of when we would have data now that the MAD is actually initiated. We're a year after that initial guidance was provided, where you know, we're taking a look at how quickly we think we're going to enroll the study and think guidance of mid-23 is more accurate than the first half of 23, which includes the first quarter. So effectively, we're saying the first quarter is likely out. You know, we'd have to be done enrollment this month probably to hit the first quarter. And, you know, enrollment is obviously a forward-looking statement. Actual results may differ. We're pleased with the progress the team's making thus far in getting now six sites up and a good pipeline of patients in screening and two now in the study of the total 12 that we're targeting for the first cohort. And so guidance for mid-23 feels more appropriate and accurate with how we project enrollment's going to go. When the last patient is initiated, we know quite clearly the time it will take then to complete that. They're going to have three months of dosing and one month of follow-up, after which we've got the analytical work that's needed. So that forms the basis of the overall timeline for the first cohort. As far as the subsequent cohorts, I mentioned earlier that we have six sites up. We're targeting up to 25 total sites currently. And so as more sites come up, then obviously more potential patients will come into the queue geographically and otherwise. And so while it's premature to estimate the time of enrollment of subsequent cohorts, one can anticipate that it could go more quickly than the first cohort, just given more sites up and active. So what we've guided to for data from the second cohort is the second half of 23. Got it.

Thank you. Thank you for the answer, and congrats on the progress. Thank you.

Again, if you have a question, please press star, then 1. Seeing no further questions, I would like to turn the conference back over to Jay Hagan for any closing remarks.

Great. Thank you, Operator, and thanks, everyone, for joining us today and for your support of Regulus. We look forward to providing you with future updates as the program advances. Take care.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.