All right. Good afternoon, everyone, and thanks for joining us at the Morgan Stanley Global Healthcare Conference. I'm Mike Gold, one of the biotech analysts here, and it's my pleasure to introduce the team from Silence Therapeutics, including Craig Tooman, CEO, and Steven Romano, Head of R&D. Before we get started, I just need to read a quick disclaimer. For important disclosures, please see the Morgan Stanley Research Disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. With that, Craig and Steven, thanks for sharing your time with us today. Maybe I'll hand it over to you, Craig, just to make some introductory comments for people that may not be familiar with your story.
Thank you. Thank you for having us. Silence has been involved in siRNA technology and the platform for over two decades, and has built a great intellectual property estate over that time period. Reverse merger with a German company, our labs are in Berlin and the UK. We've recently opened a US office, so a very global footprint. We really, really like the applicability of this technology. It's obviously very safe and durable, and the efficacy that we've seen in a variety of our studies is really outstanding. We'll talk more about that, I'm sure, today. Broad appeal because we've seen in our three clinical programs already, areas such as large cardiovascular areas in Lp(a) and also smaller areas like PV, polycythemia vera, which we'll talk about, and areas in between. We have a partnership with AstraZeneca, a multi-target deal with them.
It allows us this technology platform to explore both for ourselves and with partners. We think it has a lot of flexibility and a lot of opportunity for growth.
Great. You touched on the platform a little bit, but maybe we can expand on that, your mRNAi GOLD™ platform and just some of the advantages of that approach, you know, relative to sort of traditional small molecules or antibodies.
Yeah. You know what's really great about this technology platform is the efficacy, safety, as we've talked about, durability really has all of those. It's also reversible. Unlike gene editing and other technologies, you can just stop taking the treatment, of course, and you don't have any further effect. We really like that. Also, it's endogenous. Unlike some of the other compounds that we see utilizing some of the competitive arenas, this is something that's a naturally occurring hormone. We feel like it's something that we can explore a little bit more in terms of dosing that way. It really has all the flexibilities I mentioned before on exploration of the things that we think we can do. Steve, you've had a great opportunity to look across the portfolio with that technology.
Yeah. Maybe just to say a little bit more about the technology. You mentioned messenger. This is siRNA, so these are small interfering RNAs, which is a little different. We target messenger RNA and quiet messenger RNA or silenced messenger RNA, so they're not producing the disease-associated proteins that we're targeting for the conditions that we're interested in. Our technology is very robust. We're able to choose sequences that are very specific for the protein blocking that we want to do. They're very potent and they're durable. That's been translated into the clinic in both elevated Lp(a) patients that we're targeting, so the silencing of Lp(a) as well as PV.
Great. You know, with your sort of comments about translating into the clinic, let's dig into some of that a little bit. Let's start with divesiran. It's in development for polycythemia vera or PV for short. You know, maybe you can just give us a brief background on the disease first and where the unmet need is.
Very exciting arena, PV, rare blood cancer. What this is associated with is overproduction of RBCs, red blood cells. Unmet medical need, almost 80% of those polled who are patients today do not have great hematocrit control. Obviously, once you look at that hematocrit level, you have a good sense of where that patient stands. We'll talk more about that in terms of the clinical study. What this exhibits is kind of a thickening blood with the RBC overproduction, and that leads to clotting and cardiovascular effects. What we're really looking to do is limit that RBC production. It's very effective in the phase 1 trial that we've seen.
Can you maybe talk about the patient numbers out there and sort of what that looks like?
The patient number is 150,000 in the U.S., 3.5 million worldwide, undertreated and underserved. We really, again, like the technology and what we're able to do here.
What is sort of the how are these patients currently managed? Is there anything that you can do for them?
They're actually managed with phlebotomy, multiple phlebotomies, blood draws, and cytoreductive agents currently. There are a few other technologies on the horizon. We're very, very pleased to be first in class in the siRNA arena here. It is something that we've seen in our phase 1 open label study, 21 patients. When we have patients who come in who are well controlled at that 45% level, they've actually stayed controlled during our clinical trial without phlebotomy. It really is almost 100% efficacy within that group that's well controlled coming in. For those that actually come in at higher levels, we've seen them move to the mean. Really incredible opportunity that we've seen with that phase 1 trial. Of course, we're in phase 2 now, and we're hoping to replicate that.
Yeah. Can you talk a little bit about the mechanism of action and how you're sort of?
Yeah, sure. The mechanism of action is it's blocking TEMPR6. TEMPR6 is a negative regulator of the production of hepcidin. These patients generally have low hepcidin levels. Hepcidin, what we're doing by blocking TEMPR6 is taking the brake off the production of hepcidin by the hepatocytes. You increase hepcidin, and that causes a restriction of iron to the bone marrow. With an overproduction of erythropoiesis or red blood cell production, it needs iron to churn out the RBC. You're really blocking or preventing iron from getting to the bone marrow. That helps reduce hematocrit in hemoglobin. Obviously, that has a benefit for the patients because we know keeping hematocrit levels below 45% is a safe range, if you will. Elevated levels of hematocrit above 45% are associated with cardiovascular outcomes. That's essentially how it works. We're seeing elevations of hepcidin very early on in the intervention.
Those elevations of hepcidin persist within physiological range, but they are elevated enough that they are associated with a reduction, as I mentioned, of red blood cell production based on the restriction of iron to the bone marrow.
Yeah. You talked a little bit about the effects and the profound effects, particularly in those patients less than 45. Any other sort of data points that you can talk about from the phase 1 study that are important either on efficacy and then maybe also safety as well from what you're seeing there?
Sure. First of all, we see obviously a reduction in hemoglobin and hematocrit. That's exactly what you'd like to see. We saw that, as Craig mentioned, across a range of patients that we included in the study. In the phase 1 study, it's an exploratory study. We didn't restrict the inclusion criteria. We allowed patients to come in whether they were well controlled, meaning their hematocrit was below 45%, or whether they had hematocrit levels much higher. Across the board, we saw reductions of hematocrit. We saw elevations of hepcidin, as I mentioned, and that's really the mechanism. That gave us proof of mechanism and confidence in moving forward into phase 2. We saw obviously the fact that you didn't need to have phlebotomies during the treatment period for those well-controlled patients, and a significant reduction in need for phlebotomies in the higher hematocrit patients.
We also saw, for instance, ferritin levels increase. Ferritin levels suggest that these patients are typically iron deficient because so much of the iron is being taken up by the bone marrow. We saw ferritin increase, which means the iron storage in the body is improving. That could potentially have an impact on their deficient status.
Yeah. You mentioned, you know, you're sort of in your phase 2 study and enrolling patients. Maybe talk about the design there and any key differences between what you've done in phase 1.
Yeah. The key difference is, you know, in phase 1, as I mentioned, we're exploring the broad population. In phase 2, what we did is we restricted enrollment to patients who are well controlled because here we're looking at the effect of transitioning people to the product in a blinded fashion. We have placebo and then two intervals, same dose, but two intervals, q6 weeks and q12 weeks of the drug. Rather than have everybody come in with hematocrit levels across the board, you bring everybody in who is well controlled. What your study attempts to demonstrate is that you can maintain the control, but with the reduction or alleviation of the need for phlebotomies. We're looking to enroll over 40 patients in that study. We're enrolling very, very nicely, and, you know, we're very excited about completing enrollment by year end. It's a 36-week study.
That will put us in having data in the second half of next year.
I think we really benefited by having the open-label phase 1. You actually could see every patient coming into the trial, and it was extremely consistent. It allowed us to really set up for a great phase 2.
Very, very promising results. I guess, you know, when you think about when we see the phase 2 data, what's a reasonable expectation? You know, you had, I think, zero phlebotomies in this patient group. Is that reasonable or just kind of what's the bar, how to think about that?
We are certainly confident in the mechanism. As I mentioned, in that small phase 1, the well-controlled population, which was about half of the 21 patients, obviously did not require phlebotomies. Many of them did not require phlebotomies for even months following because the design of the study allowed patients to get four doses at q6 week intervals, and then we followed them for an additional 16 weeks. We got a sense of the durability of the effect. That was very, very robust.
Gotcha. Can you talk about just dosing? I think you're testing, you know, maybe less frequent dosing or something.
Maybe six weeks and q12 weeks. We chose one dose from our phase 1 study. We haven't divulged that dose, but we looked at 3 mg/kg, 6 mg/kg, and 9 mg/kg. One of those doses is brought in for the phase 2, but we're evaluating two intervals.
Gotcha. You said enrollment on track. You're.
Going very well. As we said, by year end, we want to fully enroll, and that looks very good.
Okay. Anything else in any other data points in the phase 2? You know, obviously, safety and sort of phlebotomies are important. Anything else that?
Yeah. I think we're going to look very closely at symptomatic improvement as well because these patients, not only are they burdened by the phlebotomies, but phlebotomies can actually contribute to some of the symptoms that are part and parcel of the underlying condition. For instance, you know, iron deficient status and that is associated with the condition. You have fatigue. You can have brain fog. Patients complain of concentration problems as well as other symptoms, splenomegaly, which can be uncomfortable. You have abdominal pain, pruritus, etc. We'll also want to look at the reduction of those symptoms. Not just the ability to maintain hematocrit below 45% in a durable and confident manner and reduce the dependency on phlebotomies, but also symptom improvement.
We know that's going to be critical because not only, you know, you want to show that you can keep patients under control, but you also want to show that the patients are benefiting with regard to the symptom burden.
Sure. I guess once you share the data, next steps for the program.
We would go to an end of phase 2 meeting with the agency, and then hopefully design what we think is the most efficient or agree to the most efficient completion of the program.
What's kind of the standard endpoint for these studies? Is it sort of defined or is there an opportunity to add things or change?
Yeah. If you look at the precedent set by rusvertide, which is one of the compounds also targeting hepcidin, but it's a mimetic, they're giving synthetically available hormone. It's to reduce hematocrit, maintain hematocrit below 45% while removing the need for phlebotomy. It's a combination of those two outcome measures. Symptom management, as I said, is also important, but probably not the primary outcome. The agency, that's generally been the precedent set with the agency.
Yeah. It's pretty amazing how many phlebotomies these patients actually have. You know, three in the last six months or five in the last year prior to coming into our trials at minimum. If you look at the clustering that can occur and you see this in some of our data, it is pretty amazing how many phlebotomies they actually have.
Yeah, very dramatic difference. It is.
Yeah. You mentioned rusvertide, sort of one of the competitors. Maybe just talk about any differentiation that you've seen from your program versus theirs or how to think about that.
You know, again, we're in early development, so I have to be careful about that. Obviously, they have shown a nice effect size, and we obviously would like to also demonstrate that. We clearly demonstrated in our phase 1, but we have to do it in a placebo-controlled randomized trial, which we're doing right now in phase 2. Now the difference is, again, theirs is an exogenously administered hormone, and so they have to be given obviously more frequently. They're given subcutaneously on a weekly basis. We, as I mentioned in phase 1, looked at q6, and we're hoping to extend that potentially to q12. That will be a sort of key differentiating factor.
Okay. Great. Maybe we can shift to zerlasiran and maybe just talk about the status of that program, you know, and maybe touch on some of the prior data you've shared there.
Very proud of the team that we've actually made this program phase 3 ready, including the manufacturing arena CMC, which is, you know, not easy to do sometimes. This is in a very nice position now being phase 3 ready. We have mentioned that due to the size of the required study, the CVOT, that we would be seeking a partner for that, Lp(a). We'll come back to that disease area. We have been in dialogues and continue to have interest in the Lp(a) program. Given the level of investment, you know, $300 million plus in that trial, we've decided to seek partners first. Lp(a), very exciting arena, as you know, no specific treatment approved today to treat Lp(a). It's becoming more widely known here in the last few years. It affects up to 20% of the world's population. Huge, and it's the world's population, not just the U.S.
Very, very pleased to have an asset kind of ready during those partnership dialogues.
Maybe you could touch on some of the data you've generated by sort of what's promising there.
Yeah. No, it's very compelling. We have a very robust effect on lowering Lp(a). In our phase 1 study, we did a single-standing dose as well as multiple dose. At the peak reductions, we're in the, you know, well over 90%, upwards of 95%, 98%, 99%. Very robust silencing of Lp(a) with significant drops, both absolute value-wise and percent-wise. We also demonstrated durability of the drug after both single injections and multiple. In the multiple phase, we looked at q4 and q8, lower doses on the q4 weekly dose, and saw a persistence of the effect out to almost 210 days. Very robust effects. Yeah, 150 days, excuse me, on the phase 1. In the phase 2, we went out to 210 days and saw also a persistence of the effect.
Our summary or takeaways from the phase 2 is we have a very robust compound, potent and durable, that we have a competitive profile. It would be at most given on a quarterly basis, could be given on a less frequent basis, and reach, you know, sort of potency greater than or the top reductions over 90%, which is exactly what we were aiming for.
Yeah. We do know investors are looking at the Horizon trial, which for the first time has been moved into 2026 for that readout. For the first time, we'll show that pharmacotherapy can lead to reduction in cardiovascular events. We're aware of that and continue those dialogues.
Yeah. How validated is lowering Lp(a) to sort of reduce PV events? I know that's sort of that'll be the first outcome study we've seen, I guess, you know.
Proven in a study then.
Yeah. I mean, the epidemiology, the GWAS studies, the Mendelian analyses, the population data that continues to be analyzed, everything points to an independent contribution to risk associated with elevated Lp(a) levels. In fact, you know, what we thought five or six years ago was required with regards to the level of reduction is probably half of what's needed of that now. We really see that elevated levels, but at much lower than we might have anticipated, can really move the needle with regards to reduction in risk. There's a lot of confidence in the field. I think people are feeling very good about the design of the current ongoing trials, and they're well-powered to see a minimum reduction probably of 15% to 20% risk reduction. I think people are feeling very comfortable. All the data points to, you know, sort of a confidence in the outcome.
Until you see that first data set readout, it's, you know.
You said 15 to 20%. Is that kind of considered like the meaningful bar, or?
I think that's generally considered a clinically meaningful effect in reduction of risk is in that 15% to 20% range. The trials are probably conservatively powered for that. That doesn't mean you might not see even a more robust effect, but that's, generally speaking, sort of a conservative estimate.
Maybe just talk about the patient population with Lp(a) and kind of what those treatment options are today, if any.
Wow. 20% of the world's population, it is huge, right? The epidemiology is actually very similar to the statin market for cholesterol. Many, many companies doing considerable revenue basis in this area. We're hoping to find a third party to work with as a partner and move this study forward.
Maybe just put your data into context as a couple of other competitors out there. I know very different, you know, studies, and maybe it's hard to compare, but just generally.
The siRNAs are very effective, very potent, robust, and durable. Clearly, we feel we, as I mentioned earlier, have a very competitive profile. As you know, the first study out is an antisense oligonucleotide, and they're potent as well in the 70% to 80% suppression. The siRNAs, as I mentioned, can extend the potency beyond 90%. Whether that is a meaningful difference, we'll have to see in the studies. The bottom line is we feel very confident about how our profile stacks up to the other agents. The Amgen compound is an siRNA like ours. Lilly has an siRNA. Lilly also has an oral compound. It's generally a relatively busy field. As Craig said, this is a huge market. 20% of the population has elevations of Lp(a) that are considered meaningful as far as contribution to risk. It's a large pie.
It is genetic. It's not something you can alter with diet and exercise, right? It is something you're largely born with and can alter very little without.
You had asked about our current treatments, and there really are none that are specific. The PCSK9s have shown a modest effect, maybe 20% to 25%. Niacin, an old drug, but very tough to tolerate, probably in that range as well, maybe a little more. The bottom line is to really reduce the risk of elevated Lp(a), you really have to have a specific and potent intervention. That's what this new group of products, including ours, are likely to be accomplishing in this.
Gotcha. Maybe we can shift now. You have a collaboration with AstraZeneca. Maybe just remind us where you're focused with that and sort of the structure of that collaboration.
It's a multi-target deal, and we actually are in phase 1, moving hopefully into phase 2 on that program and supporting that program. The way it works, multi-program, we have up to 10 targets we can identify and work together with AstraZeneca on. What we do is we identify areas that we would like to pursue and vice versa. Once we decide on that program, we largely assist on the preclinical work. Once it goes over to AstraZeneca, they conduct the clinical work. It is an undisclosed program currently. I wish we could tell you more because I'd love to have analysts model it. We're very, you know, we're looking forward to this and continued programs with AstraZeneca over time.
Targets undisclosed, but is there a general area of focus? You know, like.
It's cardiovascular, metabolic, respiratory, renal. Those are the general areas. It is a broad area, as you can imagine.
Yeah, figure it out. Okay. Got it.
Yeah, you're going to have to ask them.
Okay. Great. You also recently were talking about sort of prioritizing some extrahepatic targets. Maybe just talk a little bit about that, what you saw and what drove that sort of decision.
Yeah. Obviously, there's interest in targeting conditions where proteins are produced in other parts of the body that are largely associated with disease-associated proteins outside of the liver that you can target in the liver. We are very interested in that. A lot of companies are already kind of moving in that space. We've done, we're looking at a number of different cell types and tissue types outside of the liver. We've generated preclinical data and are just getting some compelling preclinical data. We're not yet at the point that we're going to divulge that. The good news is that our technology, which we have, the sequences, the linkers that have concurrent constructs and chemical modifications clearly can apply to other cells and tissues. It's now more about identifying the right ligands to get into those particular cells and then show a benefit and active activity in the cell.
Gotcha. As you push maybe some of these programs forward, is this something you would continue to push forward on your own, or do you pull a partner in, or just how are you thinking about that?
Thinking is both. We do have parties come to us and want to explore that area, and we'd also like to look at it for our own portfolio.
Gotcha. Earlier this year, you sort of announced the sort of prioritization on some of your programs. Maybe talk a little bit about that and your current cash position and kind of what the runway looks like.
It makes sense, I think, for us to look at things that are kind of right-sized on our chassis. Certainly, the PV program is one of those in rare disease that we prioritize because whether we do that ourselves or do it with a partner, it's something that, resource-wise, fits on our biotech model a little bit better. In terms of our cash, we have $114 million at the end of Q2 in June, and that gets us into 2028. That gets us comfortably behind the answer in 2026 on the PV phase 2. We're pleased about that and managing it very well.
Okay. Great. Maybe we can jump into a couple of macro questions, you know, topical questions we've been asking sort of all our companies at the conference. There are three, and I'll just start at the top. I guess with just China's rise in biotech innovation, you know, how are you thinking about your competitive position here, and will this influence your R&D or BD strategy?
It certainly will have an impact longer term, and we've seen it a little bit more on the earlier stages of development and not as much now in the later stage for us, but in the earlier stages. You have something definitely to consider. I remember back in the 1980s and 1990s when Japan was first coming on, it wasn't well known. A lot of the Japanese companies, it's amazing how far they've come now, and they're name brands now, you know, these Japanese companies. I'm sure the Chinese companies will come along and have a seat at the table at some point. Yeah, definitely, I think, something to consider.
Makes sense. Second question, just, you know, how are you currently leveraging artificial intelligence or thinking about AI's future disruption potential in the field?
There's no question, actually, we're already applying artificial intelligence and machine learning to a lot of the activities that guide our discovery and development activities. For instance, when we think about sequences that we choose, that's driven by a fair amount of machine learning to identify the most potent sequences for our siRNAs. We also can apply that to evaluating off-target pharmacology. That allows us to really expand our understanding and view of potential off-target because obviously, you want to have as specific a compound as possible and minimize any off-target pharmacology. Additionally, with our chemistries, and chemistry is a big part of our IP and how we modify our compounds to ensure that they're stable and durable.
If you make any changes or you attempt to optimize your platform, artificial intelligence and machine learning can also apply to getting a better understanding of the predictive effects of any chemistry modifications to make sure that they're safe and you can feel confident moving forward, even though obviously, we do a lot of in vitro work before you move into in vivo and obviously demand. Also, just in identifying new opportunities. When you have to digest very large datasets to get an idea or insight into the underlying biology, to identify some of the genetic mechanisms associated with particular diseases, and the ability to target those proteins, that is clearly facilitated by machine learning, both data that we train on, but also datasets that we can bring in externally.
Even in clinical trials, you can look at opportunities to identify patients that are more likely to respond to your drug by looking and then therefore, sort of incorporating that into your trial design so you have more efficient trials and designs with greater confidence in the outcomes by analyzing large data clinical datasets. That is obviously, again, facilitated by machine learning and artificial intelligence. We're already there. It's just going to become a more important part of how efficient your discovery and development efforts are.
Makes sense. Maybe a third macro question, you know, just what has been most impactful for you from the regulatory side? Would it be more FDA changes? Would it be MFN? I guess probably not. Maybe tariffs, maybe.
Certainly, as those have impacted larger pharmas, the ecosystem with partners and potential partners, you see the impact of that potentially for us on a daily basis. FDA would be one that we've seen it a little bit more. I think it's a period of time, hopefully, where that kind of corrects itself. MFN is, I think, TBD, if you will. Certainly, a lot going on there. It's interesting to see the back and forth a little bit that's occurring on MFN, but less of a direct impact for us.
Yeah, makes sense.
Yeah. I'd also say, you know, there's a lot of changes at the FDA as well. It's hard to predict how many will be helpful and not. Hopefully, some changes could make it, you know, I don't want to say easier, but allow for options around managing or targeting certain conditions that might otherwise be a hurdle from a clinical standpoint or from a development sort of simplifying some of the complexities associated with some of the trials. They've already announced some sort of flexibility around some rare conditions, which is very important, particularly for us in the genetic side of medicine and drug discovery. I think there are opportunities for benefits there, but it's just not predictable.
Yeah. Right. It does impact your planning. You can imagine CMOs, etc.
Yeah.
Yeah.
How have you had interactions since the recent changes? Have there been any issues or not?
No. I mean, obviously, we're always communicating with agencies about our programs. A lot of those are written communications, but nothing that has changed the trajectory or the decisions we made with any of our programs. In time, we'll see how that changes.
Right. In the phase 2, talk about.
I think all of us would welcome greater flexibility. Hopefully, there'll be an opportunity to have more efficient trial designs and programs and get drugs to the market faster.
Sounds good. Maybe just last question. We talked a lot about these things, but maybe just from today, take us forward. What are the next key focus areas for you over the next year or year and a half?
Polycythemia vera trial, for sure. That's going to be a major focus for us, getting it fully enrolled by year end and then getting that data out in 2026. That is going to be our key. We'll continue the dialogues on Lp(a). I mean, those are our two lead programs, of course. AstraZeneca, again, to the extent that a program moves forward, we'll be letting the market know because, you know, three programs in the clinic for a company our size is pretty incredible. Beyond that, we'll look certainly at the pipeline and see what we can do while we're trying to be very cost-conscious.
Yeah. Okay. Great. Thanks so much.
Thank you. Thanks.
Appreciate your time.
Appreciate it.
Thanks for having us.