Good morning, and a warm welcome to all of you who have decided to join us here today at SynAct Pharma's Capital Markets Day 2024 . My name is Lars Frick. I'm a financial journalist at Tidningen Börsveckan, and I will be the moderator here today. Today's presentations are divided into two sections. Each section is followed by a questions and answer session, so please take the opportunity to ask management some tough questions today. When you want to ask a question, please raise your hand and you will get a microphone for the video uptake. The sections are divided by a break, roughly around 11:25 , fifteen minutes. There will be some light refreshments served outside, and some fresh air.
I would like to remind you that the Capital Markets Day is finished off with a reception and lunch, so please stay after the event. Management will be available then and there, too, so you can buttonhole them if there is anything you'd like to ask further. Anyway, that's it for me now, so I would like to welcome Jeppe Øvlesen, CEO of SynAct Pharma, to the stage. Welcome, Jeppe.
Thank you, Lars. On behalf of the management team and also the entire board, I would also like to welcome you to this Capital Markets Day. We have been looking very much forward to this day. We have a lot of news on our minds and a lot of plans that we would like to discuss. Many of you have been loyal shareholders for a long time and despite a rocky ride nine months back, I can say that we are now fully back on track. We have money in the bank and we have the first study started. We have been grateful for your support for the last many years. Without that support, we have not been able to be here today.
We are also very proud that we are a small biotech company, but we have 16,000 shareholders. So, thank you very much for staying on. I would also like to thank the new board for stepping up at a difficult time. They have really stepped into the equation and doing a lot of work, being very hands-on. So, that was good, especially because time was tough at the time. We have an exciting program today, and I will just share some of the items on that one, just to give you a small overview of what you can expect for today. Just a short disclaimer, we might have some forward-looking statements. I'll do a very brief introduction to where we are today and also a little bit on the history of the company for newcomers.
And then I will hand over the word to our chairman, Anders Kronborg. Anders, he will talk a little bit about the strategy, where we are positioned today, and where we expect to be in 18 months. Then we will have our long collaborator, Professor Mauro Perretti, joining us from London via Teams. Mauro, he has been with us for a long time. He started out in Action Pharma many years ago, then he was involved in TXP Pharma, and then moving into SynAct. Mauro, he has a deep understanding of the technology and there's a lot of details in that, but it is sort of in many ways the backbone of what we do today. And then we have the pleasure of having Asger Reinstrup from Sanos Group, the CSO from that company.
They are the CRO on the study, and we're very pleased to work with them for many years. At the same time, they are also our biggest shareholder. Then there will be a Q&A session, as Lars mentioned, and a small break. Then I will give the word to Thomas Jonassen, the founder, and also the CSO of SynAct, to discuss the ADVANCE program. We're very happy that we got that off the ground and up and running. There will be a detailed explanation of what we do, but there will also be a lot of explanation of what we learned from the last couple of studies.
All those details we have taken into the next study, and I think that will enable us to improve our chances of getting a good study. Then we have Sten Scheibye, who's a member of the board, to go into our sector and market overview. Sten is a very experienced senior management person with a background from Coloplast, where he's been the CEO, and also the chairman of Novo Nordisk. Two very successful life science companies, not only in Denmark, but today on a global basis. He will share some of the views from those companies, trying to reflect it to what we do in SynAct. Then a Q&A session.
I'll do a short wrap-up at the end, and then, as Lars mentioned, we will have a small reception afterwards, with a light lunch, and I hope that you will stay here. The management team is here. Come and talk to us. Just a very brief background on the history, also for potential newcomers. We founded the company back in 2013 . We managed to list the company at what, at that time, was called Aktietorget, later on Spotlight. We had a pretty good journey on doing that. We completed phase I in 2019, and then a couple of phase II studies and then in 2022 we managed to uplist the company to Nasdaq and in 2023 we managed to acquire TXP Pharma.
We will also come back to that a bit later on during the presentation today. And then there was a big need upon not getting the data that we wanted to basically refocus the company. And that has been done. We basically in Q2 replaced, as you know, the board and the management. We managed to raise SEK 50 million in a direct issue at a 30% premium. We strengthened the investor base, with Sanos coming in as one of the main investors, but also a couple of other bigger investors. And then we strengthened the clinical organization. In Q2, we managed to reduce the cost to management, reduce the cost to the board.
And then we got the study up and running, ready for phase II development. And we all did that through EGMs, where we had big support from your shareholders. So I think we are very much back on track. We know that the main value driver in our company is to get the study up and running to deliver data, and we expect that we will be able to do so end of next year. That's all from my side. I will leave the word to Anders, who will talk, discuss a bit more on the strategy.
Thank you, Jeppe. It's working? Excellent. So, I would like to cover the following subjects in the next 10, 15 minutes. Why are we here as a company? Who are we? Jeppe have talked a little bit about it, but I would like to present the whole management team who is, except for the business development, present today. What is actually the unmet medical need we are looking to solve? What is the main opportunity also in financial terms? And as Jeppe touched upon, what is the refocused strategy that we are implementing as we speak? So I guess you are familiar with this. This is also on our homepage.
But I think what is important to stress with this with the vision is actually we are trying to do something completely new, using Resolution Therapy to in anti-inflammatory diseases. So the mission, which is also, I think, more focused here than it was maybe a while ago, it is to drive the study. And you might have seen the press release getting out earlier today. It is up and running, and that is the main focus of the company. And as I think you have heard earlier as well, the mission for this company is it to take the study through phase II and II-B, but not running a phase III.
So equally important is to start up a business development, talking to potential partners or potential acquirers, once we have data from the phase II study, which Jeppe told you about before in the timeline. So who is the company today? I think, Jeppe, you might not have to raise and say hello. Thomas, you will be on the stage later. Jim will be dialing in, the head of business development, but Björn, the CFO, is here. Maybe, Björn, you can just introduce yourself.
Thank you.
Thomas, who has been with the company from the very beginning, I think, more or less. Then we have Kirsten. And then we couldn't have all in one page. So Mette, who's also here, got her own page. I f you could also. Then the board a little bit lack of diversity. You could argue five, four white male. Myself, I have a past in, actually worked in Genovis for many years in Stockholm. Then seven years in LEO Pharma, which is a Danish pharma company specialized in skin diseases. And then I joined ResoTher recently, which is another company which works with Resolution Therapy. I think Jeppe did an introduction to Sten, and Sten will also be on stage later. And then the other Sten who couldn't be here today, I think he's quite well known in the Swedish biotech environment.
So I will leave with that. And then Jeppe is also a board member on top of being the CEO, so a kind of American setup we have here. So what is the unmet medical need we are looking for? More than400,000 patients are diagnosed today. More than half of them doesn't actually react on the current treatment that are offered today. So we are looking to solve that, so to speak, so giving a treatment to all those patients. And I think it's fair to say that first of all, the study we have done so far shows it's very safe, it works... and then having an oral dosage once daily in all, you know, pharma industry, that's the best place to be in.
Oral, they don't want injections. Like, oral is just better, and it's easy to remember once daily. And then from a business point of view, the financial opportunity, it is early days. Take that as a kind of disclaimer, but a rough business case shows a potential global revenue of $2 billion. So what are we- what is the transformation or whatever we would like to call it, that we initiated early this year with after the failed study, with the new management in place and also the new board? It is. We are extremely focused on the study that was started today. Having that running for the next five quarters, make sure it's fully funded, and then potentially do a transaction. I guess it will be late 2025, early 2026, if everything goes according to plan.
So this is a little bit what Jeppe touched upon, what have we done recently. So I think, as Jeppe said, first, we have money in the bank, which is also nice as a biotech company. There's a lot of companies struggling out there, also in Sweden, running out of funds. We have a tight control, thanks to Björn, on the cost side of the P&L. It is a coincidence, but luckily, the study is also up and running now, so we had the first patient dosed recently, and then the focus on business development.
I think you can see that reflected in Jeppe stepping back in as a CEO, and also the board has quite a lot of experience in business development. That will be a key focus once we are a little bit further with the study that is up and running. That was all. I will be here for the Q&A later as well. Thank you very much.
Thank you very much. We continue our program. So could we please move on to the next presentation? And that would be, the, if I'm not mistaken, Mauro Perretti, the... Zoom? Yeah.
Good. Good morning, Dr. Kronborg and colleagues from SynAct Pharma. I assume you can see my screen. I'm being supported very well by Carolina and Robert. I'm sorry I cannot be in Stockholm. I would like you to believe that I would rather be in Stockholm than stuck in London, but I wouldn't, you know, elaborate any further. So it's a great pleasure to be here. I'm a professor of immunopharmacology at the Queen Mary University of London. The inflammatory response is a response which has been studied for really several centuries, if not millennia. And inflammation is a life-saving process which has been characterized with its major symptoms, which are shown here in this cartoon on the left-hand side. So you have heat or high temperature, redness due to vasodilation, the swelling, where we have the edema, and of course, pain.
In chronic inflammation, then you have the reduction in function, as we see, for instance, in arthritis. Now, these symptoms are typical of the inflammatory response, and here I would like to stress the difference between physiological and pathological inflammation. In this schematic, I present the intensity over time of the inflammatory reaction, which starts, reaches peak, and then resolves. This profile or this dynamics is typical of physiological inflammation, the inflammatory response, which is essential for our life, for our well-being. Physiological inflammation is characterized by an onset phase, a pro-resolving phase, a pro-inflammatory phase, which is followed by the resolution phase, and this is something which has been depicted quite well in the last century.
What, in the last 20 , though, has emerged, is the fact that the resolution phase of the acute inflammatory response, so the second phase of physiological inflammation, is not a passive phenomenon. So if I use this schematic here to represent inflammation as a fire, no, the inflammatory response as the fire of life, for a long time, inflammation has been thought to extinguish itself passively. So the inflammatory response is active, and then it's very florid, and then over time, it terminates spontaneously. We and others, over the last 20 years, as I said, have been able to demonstrate that the second phase of the physiological inflammatory reaction is an active process. So the fire is extinguished, not simply spontaneously, but because we throw water on it, as with this machine here.
It's an active process, which then brings the fire down. That means that our body sets in motion processes which are required to guarantee the second phase of the acute inflammatory response. Now, the concept that the second phase of this response is active has at least two main consequences. The first one is that it is pathological, essentially, when the inflammatory response carries on and becomes chronic, hence we have pathology. This could be due not only to an overshooting of the pro-inflammatory phase, but also perhaps to an inadequate engagement of the resolving phase.
The second consequence, which I think is more relevant to today's meeting, is pharmacological, and that means that we can study and harness the science resolution in order to guide and inform the development of novel drugs, which essentially represent Resolution Therapy, and these therapeutic approaches could be used to correct and mitigate the ongoing inflammatory reaction, which is typical of pathological inflammation. Now, I'm not going to go into much scientific details, but clearly I'm happy to take question, but in essence, there are many pro-inflammatory mediators which have been studied over the last decades, and we all know them, and they've been used as a guidance to develop new drugs, and there are also, however, many pro-resolving mediators shown here. Of course, I've highlighted melanocortins and ACTH here.
I will come back to this later. And again, this knowledge can also be harnessed to inform therapeutic strategies to control non-resolving inflammatory reactions. In other words, if you, if I go back to my schematic earlier, we are ignoring 50% of the biology with respect to drug discovery programs, and this is what we try to correct. I can also show you the same concept in a different way, and this will allow me to elaborate further. So the acute inflammatory response shown here on the left-hand side is mounted by a variety of pro-inflammatory mediators. These are fundamental to kick in pro-resolving mediators, which then enable resolution and then essentially the end of the inflammatory reaction.
If this path does not take place successfully, we have the risk that acute inflammation becomes chronic. This can lead to fibrosis and then essentially chronic diseases which affect our society. I would like then now to, after this initial introduction, so that we are all on board, I hope, on the difference between physiological and pathological inflammation, to discuss a little bit about anti-RA therapies, rheumatoid arthritis. It is quite accepted now that despite the successes of the last 20 years or so, there is a proportion of patients who don't respond to therapy. There are also secondary effects, important secondary effects of the current therapies, and there is also a lack of appreciation on how these therapies might control secondary organ injury that take place in these patients, in particular, the cardiovascular complications.
Again, I'm happy to elaborate on this later. What we know about rheumatoid arthritis is little in a way, but there have been some recent advancement, which I would like to bring to the fore today because I think are relevant to the overall thematic of this meeting. Rheumatoid arthritis is a disease of unknown origin. It's characterized by cycles of active diseases, so the joints becomes inflamed, essentially as an acute inflammatory reaction. But these flares, though, they finish, but the disease carries on, and these flares are characterized by immune cell invasion, pain, and also the joint does no longer function. However, it is now emerged that when we talk about rheumatoid arthritis, in reality, we are bringing together or clustering probably different pathotype, which means different diseases within the tissue.
And this is what has been shown in recent work, which I present with this schematic. Essentially, if we take rheumatoid arthritis patients, they can really characterize. They are characterized by clinical parameters, which I'm not an expert because I'm not a clinician. I'm a preclinical pharmacologist. However, study of the synovial tissue, study of what is happening in the joint, has recently allowed to stratify patients. And so, for instance, you see that these are six pictures, these are figures, becomes two, two, and two. And there is new evidence there are at least three types of synovial tissue in patients.
This is a synovial tissue which is without many immune cells, which is called mainly fibrotic, and a synovial tissue where there are many immune cells in a diffuse manner, and a synovial tissue where there are immune cells which are organized in a sort of structure, as shown here. Now, this advancement, which are enabled by ultrasound-guided synovial biopsies, have also clinical implication because how it has been shown, more recently, this can indicate that essentially there are more than one disease in terms of phenotype, and this may be important to be included in the analysis, in the clinical characterization of the patient. So the hypothesis at the time, when this was emerged around 10 years ago, was that such a different tissue pathology could impact on therapy.
I must say that the most recent data seems to indicate this. I'm going to focus just on here for time reasons, but essentially, this is a clinical study that shows that the anti-TNF therapy is not effective in patients which have a synovial tissue without immune cells. So if I go back, essentially, patients which have this type of tissue in the joint do not respond well to anti-TNF. So I think we can see that there is a great opportunity now to characterize patients in a better way in order to deliver the relevant and active, ideally effective, ideally therapeutic treatment. Now, these ongoing studies focus on the tissue itself, but clearly there are other ways to characterize patients.
And so here I am summarizing what I just said, and this patient stratification can optimize the treatment with drugs, current and novel. But I was going to say that one way to stratify patients, this can be also through the levels of C-reactive protein, and I'm sure we are going to hear about this more later, in relation to the clinical studies conducted by SynAct Pharma. So I'm not going to focus on RA, but I want to show one data set or one slide here, where CRP, so level with the C-reactive proteins, has been proposed by a cutting-edge key opinion leader in clinical pharmacology in the cardiovascular system, so in atherosclerosis. So CRP has been proposed by Paul Ridker to be an important marker to decide when to start anti-inflammatory therapy.
Paul Ridker, in this opinion study, which again, is very novel, you know, perspective as it says here, proposes that the patients with high level of CRP should receive an anti-inflammatory therapy, in this case, colchicine, in a preventive manner to reduce the risk to develop atherosclerosis. There is evidence from multiple clinical domains that the CRP can be a good marker to decide whether or not to start a given therapy. I would like now also to go back a bit more preclinical in a way, but also to elaborate two further concept, which again, are concept that we see in the laboratory, but could be, pertinent, or in my view, are pertinent to the study with AP1189. The first concept is that an inflammatory reaction, which is florid, which is proper, brings about resolution.
And so that means that pro-resolving therapy is more effective if there is a vigorous inflammatory status. These are preclinical data, which I'm not going to go , it doesn't matter what exactly it says, but this data, for instance, indicates that anti-TNF infliximab, again, is effective in experimental colitis and also in patients with Crohn's disease if there are high level of pro-resolving mediators. Presence of induction pro-resolving mediators is also important to response to therapy in settings of colitis. What I'm trying to do in these 20 minutes is to touch rheumatoid arthritis, but also to give examples in atherosclerosis or in colitis, so in other chronic diseases, because this concept really can apply to multiple clinical problems, really. Pro-inflammatory mediators upregulate resolution mediators and targets of resolution.
And the second, and so that's important because if inflammation is not florid, we call it parainflammation, and parainflammation is typical, really, of a chronic disease. So parainflammation or subtle inflammation, we propose, does not bring resolution, does not activate pro-resolving mechanism, and this implies that inflammation becomes chronic. And this is studied by Ruslan Medzhitov, where essentially, again, highlights the distinction between parainflammation and inflammation. And also Medzhitov, where again, a key opinion leader from Yale, from Boston, talks about parainflammation is fundamental for chronic diseases like obesity, diabetes, atherosclerosis, and so forth. So if I now apply this concept to the cartoon I showed you earlier, this is the path that we like.
This is the path that is coherent with the well-being, when acute inflammation or strong inflammation bring resolution, but in absence of strong inflammation, we have a parainflammation. Now, parainflammation is what prelude to chronic inflammation and to disease. So that, I think, is important to link pro-Resolution Therapy to a strong and to high level of inflammatory status. And the other concept is that pro-Resolution Therapy is very distinct from anti-inflammatory therapy. So anti-inflammatory therapy clearly are the biologics, anti-TNF, anti-IL-6, COX inhibitors, and I'll come back to this concept later. So now I would like to present a few preclinical data on AP1189, which were conducted in our laboratories from 10 years ago, essentially.
Clearly, that means that we are extremely gratified and grateful actually, to SynAct Pharma, to develop this drug, for patients' benefit. And so, before moving on to the data themselves, I want to give a brief overview on the melanocortin system. The first melanocortin which has been tested is the hormone adrenocorticotropin, which was shown in a milestone paper to be effective in rheumatoid arthritis patients in 1949 . There is a lot of science here, but also there is a translation and development with quite a few melanocortin-based drugs, which have been licensed in the U.S. and beyond. Here at the bottom, I highlight clinical trials with melanocortin-based drugs, including AP1189, that we will hear later.
So in the textbook, ACTH is reported to act on the adrenal gland and release cortisol. So up to the 1980s , up to 40 years ago, essentially, it was proposed that ACTH was effective, including in the rheumatoid arthritis patients or in the gouty arthritis patients, through the release of endogenous cortisol, which then was responsible for the beneficial effects. However, it has subsequently been shown that there are many receptors for ACTH and for other melanocortins shown here, which are present on a variety of cells, including, relevant here, immune cells, but also cells of the joint, like fibroblasts, chondrocytes, osteoblasts, osteoclasts.
So there is the clear implication that activating melanocortin receptors with the classical original hormone, ACTH, or with other melanocortins, or with drugs, can bring about a pharmacology downstream activation of the adrenal gland, but by modulating the reactivity of cells, which are fundamental to the pathogenesis of interest. So when we start working with Action Pharma and SynAct Pharma, there was this conundrum here, that this molecule, a small molecule, which means a chemical structure, not a peptide, not a hormone analog, was able to bind to MC1, but was unable to signal. So there was no second messenger induction with this molecule. So how did it work? And we came out with the fact that this molecule was activating a different signaling pathway for what has been canonically associated with melanocortins. In particular, was this phospho-ERK.
Doesn't matter, really, but, you know, the point is that it was not doing this, it was doing that, and this we thought was important, and we demonstrated it was important in this publication of nearly 10 years ago, because this signaling was responsible for the anti-inflammatory and pro-resolving effect, whereas the lack of deactivation of this signaling did not bring melanogenesis, and so that we thought was a beneficial effect. This biased agonist, this is the pharmacological term, but essentially this functional selectivity was predicted to be beneficial for clinical development, and we are, as I said, very gratified to see this is the case nowadays. Now, a few experimental data.
AP eighty-nine can inhibit the release of a variety of cytokines, and I will come back on this, but I want you to notice the degree of inhibition is around 30%-40%, okay? It's not an abrogation, it's a degree of inhibition, and I'll come back to this. Was also not only inhibiting, but was activating a specific responses like efferocytosis, phagocytosis. So activation is actually the fact that I mentioned earlier, that resolution is an active process. It's not passive, okay? When given of an ongoing inflammatory reaction, which had these kinetics, you can see here that this is these are real data out of the schematic I showed you earlier, onset, peak, resolution. Given the peak, AP 89 activates and accelerate the resolution response. This reflects an anti-arthritic effect in animals, as can be seen here.
At two different doses, orally, AP1189 can inhibit the arthritis, especially at 50 mg per kilogram in mice, and this is visualized with the joints of these animals here. And then this is all part of the study that we published in 2015. Then we also conducted another study, which is still unpublished, actually, where we assessed the combination of AP1189 with methotrexate. And this is the schematic that we use in this study, where we gave AP1189 after onset of arthritis. Not prophylactically, but therapeutically, every day, single dose, as indicated earlier, orally. And then we also gave methotrexate according to a protocol which has been validated in animals. And what we found, essentially, is that there was a degree of reduction here. I'm presenting you severe arthritis.
Mice, which had a massive arthritis, around 75% in control, around 50%, 40%, and together, you can see there was not really severe arthritis when the combination methotrexate AP1189 was given. And again, this was also shown here. Let's focus on this one here. Severity of the joints, so around 50%, and together, much more. Okay, I said earlier, so now I'm getting to the end of my presentation. I mentioned earlier the concept pro-Resolution Therapy is different from anti-inflammatory therapy, and this cartoon allows me to discuss this concept. Because here, we present, we list a variety of anti-inflammatory drugs which are widely used, including glucocorticoids, biologics, anti-TNF, anti-IL-6, or COX inhibitors here, or non-steroidal anti-inflammatory drugs. And these drugs block specific mediators, including prostaglandins or cytokines, and they're all based on the concept of inhibition.
They're all direct in the action, and they're all been developed to make sure that they provide a strong response. So essentially, Big Pharma were not interested if there was not at least 80%-90% of inhibition of the production or the function of the relevant mediator. For instance, here, with infliximab, they want to block TNF by 80%-90%. In our view, this is responsible for the immunosuppressive, for the side effects essentially associated to these drugs. In contrast, we propose that the innovation of Resolution Therapy or resolution pharmacology is that, they are based on activation, they are broad action, and they modulate the response. They never get. These compounds never give you 100% inhibition. They give a 30%-40%, and maybe you remember, recall that I showed you earlier those three cytokines, which were inhibited by 30%-40%.
So we propose that this is a good thing, and this is what it should be, because it would prevent the induction of the major side effects. The major one is immunosuppression, and so our body will still be able to combat the infection. And this is what I think will be the next challenge, to demonstrate the major safety profile in patients, not only in relation to, you know, classical health, like headache, or, you know, God forbid, lethality, but also in terms of side effects which are associated with classical anti-inflammatory. So there is a major distinction, in my view, between Resolution Therapy and current anti-inflammatory therapy. So, so far, Big Pharma have been, you know, the classical magic bullet, block, inhibit, abolish, abrogate.
A Resolution Therapy is the other way around, is a modulation, and then hit on many different players of inflammation. Not only inhibit, but also activate broad action, and this will have clinical implication. Another cartoon to express the same concept, which also allow me in a way to wrap it up. Physiologic inflammation, which I mentioned at the beginning, is fundamental and is characterized by good balance between pro-inflammatory and pro-resolving mediators and pathways. When there is pathology, there is an overshooting of the inflammatory response and possibly an inadequate engagement. So far, in terms of therapy, we have been active or intervening by blocking.
What we propose with Resolution Therapy is we want to push forward endogenous protective mechanism, and this, we think, will lead to better drugs, lower burden of side effects, and also multiple actions, as I show in the earlier cartoon. Resolution pharmacology or Resolution Therapy requires a major shift in the way we see not only disease, but we see drug development, a way to treat chronic inflammatory diseases. It's a completely different. The table needs to be turned 180 degrees. So do we have pro-resolving molecules in clinical trials? Of course, we have resomelagon. This is why we are here today. I put resolution inflammation as a key word in clinical trial, and there are quite a few hits, as you can see here.
In many cases, there is the word resolution, but there are also several therapeutic approaches under development, and I list here just a few of them, those which essentially we have an interest in. And so I think the future is bright, and there is a major opportunity to harness this new biology, this new science, this new knowledge for Resolution Therapy. Finally, take-home messages. I hope to have clarified in this 25 minutes that the resolution inflammation is a natural process, is a typical acute inflammation. A proper inflammatory response is required to bring about resolution, and as a consequence, pro-resolving therapy is more effective in presence of a good degree of inflammation. And as such, resolution pharmacology represent a new frontier that could arm us to control chronic inflammatory diseases.
In the context of rheumatoid arthritis, like, actually, like any chronic disease, in my view, this immunology identify a cluster of disease of the joints, and so it's important to select the right group of patients in order not only to increase response, but, I mean, for drug, for in clinical trial, but eventually, it is important to, in order to, deliver patients benefit. Thank you. Apology if I spoke five minutes longer than predicted. Thank you for your attention. I'm happy to take question later, and again, apology that I cannot be in Stockholm, as I would have preferred, really.
Thank you very much, Professor Perretti. It's time to move on to the last presentation of this first section. Please, Asger Reinstrup Bihlet, Chief Scientific Officer, welcome. The stage is yours.
Thank you very much. Yes, thank you to SynAct, the leadership team, and to the board for inviting me to present the topic of current and future treatments of early RA and the medical need. So first, a little bit about myself. For those of you who don't know me, I'm a pharmacist by background and have a PhD in arthritis clinical trial and methodology. I've been working in the pharmaceutical industry for many years. I've been lead scientist on multiple drug development programs leading to drug approvals by FDA and EMA. Sorry.
No worries.
That's it.
Good.
Good. So, the agenda for my talk here: so after a brief introduction, I wanted to give you a recap of the current early RA treatment guidelines. Moving into an overview of the evidence behind the treatment guidelines here in early RA, and giving you an overview of the global drug development pipeline. And finally, some conclusions on what we're showing you today. So, by means of introduction, currently, we're looking at around approximately 18 million people suffering from RA. The prevalence is between 0.2% and 1% of the population, and within that spectrum, we're in the larger end of that spectrum in the industrialized countries, as we see on the schematic to the right.
So the prevalence of RA, as a function of age expectancy, is rising over time, so we're looking at also a larger global RA burden in the future. And so, the current treatment RA landscape, moving into that, so starting from the naive patients or the patients presenting with disease, the first line of treatment is the, what we call, conventional synthetic DMARDs, so methotrexate being the mainstay, but also other drugs such as sulfasalazine and leflunomide. And moving to the second line, for those patients who either do not respond or have toxicity towards the first line, we can either add or replace by a second-line treatment being targeted synthetic DMARDs, so the JAK inhibitors, the oral JAK inhibitors, or a biologic, such as adalimumab, rituximab, or tocilizumab.
And then, again, upon toxicity or lack of response, there are third lines in which you add or replace among the former treatment lines. But importantly, across all of these lines, as you see on the bottom here, is the use of corticosteroids, which are used in particularly high inflammatory situations. So we will have patients with a large number of swollen tender joints, high CRP, so presenting with high inflammation, and this can be added to any of the existing therapies. And so in putting this into the context of the current treatment guidelines, so the latest ones, as published last year, the 2022 updates. So the overall target is, of course, to minimize, maximize response as fast as possible, as safely as possible.
And the use of corticosteroids to reach this goal has been, you know, discussed in the guidelines many times. So this last time, a specific section on the limitations on the use of corticosteroids were added. And this is super important also for the development of resomelagon here. Because what is stated now is that the use of corticosteroids should be minimized in terms of dose and duration. So it's clear that for any condition in which corticosteroids can be used, longer term use or high excessive use in terms of dose are associated with safety issues. I'll get back to that in a minute. Further, as we also talked about earlier, Professor Perretti, the current treatments here, including methotrexate, so the mainstay of treatments is immunosuppressant.
So all the treatments are immunosuppressant to a certain extent, and it's clear that we have a need for new immune modulatory treatments, so treatments that do not necessarily suppress the immune system, so ... Or in total just abrogate or ablate the immune system, but simply modulate instead. So the evidence behind the guidelines, moving into that a little further, if we start out with the efficacy part, so focusing on the early RA part. So and this is a little busy figure. I'm not expecting you to read all of it, but what I want is a good overview from Burmester and colleagues in Lancet, and what we're seeing here on the listing here. Let me see if I can operate the laser here.
We're seeing a number of biologics and targeted synthetic drugs, so JAK inhibitors. And on the Y-axis here, going out, you see the level of response in terms of ACR 20, 50, and 70. And these, the different colors of the bars, are indicating whether it's alone, so a single treatment or methotrexate alone, or the combination of methotrexate with these treatments. We're actually looking at basically all potential treatments that can be used in the first line. And even the most aggressive ones, so being methotrexate plus a biologic. This, of course, does not include the corticosteroids, which it was evaluated.
Yeah, so what is interesting about this is we can see on the far right of the spectrum here. We really see no treatments reaching 100%, and we are even seeing very few, if any, reaching above the 80%. So we're seeing a response gap. Patients really do not fully respond, and we have a gap of 20%-40% of patients who do not respond to even the more aggressive treatments in the first line. A biologic or targeted synthetic DMARD plus methotrexate. The corticosteroids, as I was mentioning earlier, they're super important, very efficacious treatment, especially if you add it to methotrexate.
That was also evaluated in combination or sort of, so in comparison with the biologics by the Nordic Rheumatology Societies in the Nord Star trial, which I'll be showing some data from here. We're seeing, as expected here, a super high response of 80%, but there's still a response gap here, and that's regardless of whether you have the methotrexate plus corticosteroids, methotrexate plus biologics. Of course, if you look at the more stringent response criteria, so ACR50, ACR70, we're seeing, of course, the response gap being even larger. This is interesting because it tells us that even to the most aggressive treatment strategies, these are the treatment strategies that we want to limit the use of. We're seeing still a response gap.
So 20% of the patients simply do not respond at all, and 35%-50% of them have only a modest or no response. So that's a big gap actually in the efficacy right now, and that's before moving into the safety part. So in terms of the safety, we look at three different categories of the safety data here. So if we start with infections, we discussed this earlier, so that's an important part. For all immunosuppressant drugs, that's the main issue. You suppress the immune system, you increase the risk of opportunistic infections. And you know, this has been documented so many times, so it's difficult for me to limit myself in terms of documentation, but I selected a few.
One paper here is specifically focusing on serious risk of serious infections with biologics. And I'm sorry for the childish highlighting here, but I'm left-handed. But what we can see is that it says that the standard or high-dose biologics are associated with an increased risk of serious infections. Not only infections, not only colds, not the simple infections, but serious infections. And also moving on to the JAK inhibitors, which are, you know, very popular and be used in many patients carried on with another risk in terms of herpes zoster. These infections that are very serious if they occur. What is clear is that tofacitinib and other JAK inhibitors across the board are associated with an increased risk of herpes zoster.
Moving on to another important element, which was also mentioned earlier, the risk of cardiovascular events, cancer risk. We see a couple of papers also here, the first one by Singh and colleagues, concluding that the conventional synthetic DMARDs are associated with an increased risk of cardiovascular issues. The second paper, also super important and published in New England Journal of Medicine, the most prestigious journal in the world, documenting that tofacitinib, JAK, oral JAK inhibitor, is associated with a numerically increased risk of cardiovascular events as compared to TNF-alpha inhibitors, but also a statistically significant increased risk of cancer as compared to TNF-alpha inhibitors. Serious risks on these products. Then moving on to the last part, which is methotrexate.
So the main mainstay of treatments, we have decades of experience with this product, and even this product, you know, again, decades of experience, so difficulty in limiting the documentation here. But this particular paper evaluating even low-dose methotrexate, and what we find in this paper is generally a significantly increased risk of any adverse event. And if we dig into the type of adverse events, we're seeing a clearly significantly increased risk of liver toxicity, infection risk, not unexpected for an immunosuppressant, and high risk or an increased risk of pulmonary events. And there are, you know, many other, and I encourage you to read the paper.
But if we, you know, try to stuff all the safety risks into one slide here on the available treatments, what we can conclude is that we have serious safety risks for all the available treatments right now. And many of these risks are of course, associated with the fact that these are immunosuppressant drugs. So moving on to something, slightly different, but with an, similar angle. So we're looking at the global RA drug development landscape. So what's going on, on out there? And, we've got an overview of the Resolution Therapy from ClinicalTrials.gov, earlier. But looking at the general landscape, we can see that around,50 products are currently in phase I, 60 in phase II, 19 in phase III. That's an active pipeline, so a lot of companies are developing drugs here.
Clearly, something to develop towards, very interesting for pharma. But what is interesting also from our perspective is the share of these clinical trials here by mechanism of action. So if we look at that on the schematic to the right, and if we look into a little detail on the mechanisms here such as TNF- alpha inhibition, B- lymphocyte antigen CD20 inhibition, all of these are immunosuppressants. So, really, nothing new in terms of the immune suppression issue. And if we look at it from. This is from another paper, so also focusing on the actual mechanistic targets of new and established drugs here. We have the T helper cells, the B cells, the dendritic cells, all the cytokines circling around these immune mediators.
So I took the liberty of adding a little schematic here and there on the drugs or the pathways currently around. You see them here with the crosses in terms of their immunosuppressive potential. And, you know, I mean, these are based on papers published on neutropenia in the clinic or hypothetical neutropenia. So, a little, a broad piece of evidence, but it's clear that the majority of the potential treatments in development now are actually immunosuppressant. So we can see that the pipeline is active. A lot of drugs are being developed, but essentially, they're trying to do the same thing, which is to inhibit the immune system....
So, putting this into perspective, so main conclusions: the medical need in RA. We're looking at a substantial proportion of the patients who simply do not respond to even the most aggressive treatments out there. And the current treatments we are using and even the ones in the pipeline, as we saw on the former slide, are associated with risks of serious safety issues. So of course, the ideal way of addressing these issues should be to have a safe and immuno-preserving, simple-to-use treatment that offers at least a comparable or an additional efficacy. And if we look at then, you know, trying to schematize this, I like schematics, so if we look at it this way, so the early RA treatments established right now and what could be.
If we see on the X-axis, determinant of disease activity, so we have low disease activity on the left and high disease activity on the right, so this could be inflammation, for instance. Putting into the perspective also the important parameter of the clinical complexity, so being the comorbidities of the patient, the age, the concomitant medication, for instance, because this in the clinical situation is very relevant. What we know is that methotrexate monotherapy is super well established as for the patients with low or moderate disease, even for the ones with a high clinical complexity. There may be some patients who need another conventional synthetic DMARD, not tolerating methotrexate, for instance.
But on the right side of the panel here, we're seeing the entire right side, basically open, where the corticosteroids currently are residing in the situation where you have low clinical complexity, so for patients who are not at risk of serious safety issues. But the upper right side is open, and considering the data we saw in the form of the EXPAND study, this is really where resomelagon is likely to be positioning and actually offering something in addition to the existing treatments, not only in terms of efficacy, but also in terms of safety. So this concludes my talk here, and I think we'll go into a Q&A in a minute.
Thank you very much. It's been enlightening. It's time for the Q&A session, so I would just like to remind you that if you have a question, please raise your hand, and you will get a microphone, so we can get it on tape. I would like to start off with a general question to Anders. You have a lot of experience from various industries and companies, and now that you've been chairman of SynAct Pharma for a couple of months, could you perhaps share your first impressions of the company?
Well, it's a very interesting company, and I think to me, being here today, I'm even more convinced than I was three or four months ago that there's a big potential, and what we're looking for is something really new. And it was also highly motivating to me at least, to have a look at the external pipeline, what is actually going on there. And I think we do, with a background in Big Pharma, they miss out that a lot.
They're looking what the others are doing, doing the same. so me, you could call it, in pharma, we would like, we would like to have the same. I think we are doing something very interesting here, and I find the company and the management team, and they're extremely engaged, and I think we all have very high hopes, which is also the reason why we have all invested in this.
Thank you. You mentioned that Big Pharma is a bit conservative, so looking back at Professor Perretti's presentation, for instance, and at the heart of resomelagon is very much that it's a novel kind of treatment, and he mentioned that Big Pharma had focused on the antagonistic, the suppressive part of current medicines. Do you think they're ready to change that conservative view and accept this novel focus on Resolution Therapy, or is that a hurdle that you have to sort of convince them? Or perhaps if data is good enough, then it doesn't really matter, they will go for it. Do you understand the question? It's a bit-
Yeah, I do. I do. If you take a step back and look at, in an even bigger picture, what we have seen, I would say, in the last five, 10 years, is that most Big Pharma companies have been cutting down their R&D departments, so doing less and less R&D and being more and more open to partnership, but also acquisitions. So I think the timing for us doing something new in a spot where there is a big medical need. They all start: What is the medical need? Is it an unmet medical need, what is the financial potential? Is there something-- Is somebody or a company doing something about it? Then we would like to have a conversation.
Yeah.
I'm not saying the hurdle is gone, but I think compared to 10 years ago, I think it's lower than it was back then.
Yeah. A related question regarding risk-reward is the question of first versus second-line treatment. There's been a lot of discussion about the positioning and the conduct of clinical development in this choice, first line or second line in rheumatoid arthritis. Maybe one of you could elaborate a bit on the big difference from a development perspective, going for these two different targets, first or second line.
I'm happy to give it.
Yeah
... a go at first. So I think what we also saw in the last presentation is the current treatment have a lot of negative side effects. So I think when we talk about hurdle here, we are talking about the prescribers, actually which will be the hurdle for the Big Pharma that is taking up this product and taking it to market, because they've been prescribing steroids for half a century, and they need to do something new, and they're all very well aware about the side effects, but today they don't have an alternative, so I think having an alternative, also in first line will be the big medical unmet need as we show the gap, depending on how we saw one with 20%, and but then 30%-50%, depending on which kind of inflammation you have.
Right.
I think that will be the talk you need to do, and you need to start early with prescribers, in my experience, because if you want them to prescribe something different that they have been doing for 50 years, it's not done in an afternoon, but it can be done.
Right.
We did that in skin diseases in different cases, but it, it's just hard work.
I suppose the very much more favorable side effect profile of resomelagon is helping, would help in that it's easier for a prescriber to sort of, excuse the phrasing, take a chance on a new drug If they see this. Yeah.
Also because, as was shown in the last presentation, we now have support in the guidance, so to speak, which was not the case five years ago.
Yeah. Please, do we have any questions from the audience? Raise a hand, and you will get a microphone. We have a question here, please. Just a second, and the microphone will come.
Yes, I have a question, I think mainly for Professor Perretti, but anyone else could also answer it. He said that RA is a group of joint diseases, which I think sounds interesting. Does that mean there could be a different etiology for different subtypes?
I think Mauro might be able to answer that question.
Yeah. Professor Perretti, are you with us?
Thank you. I am.
Did you hear the question?
I did. So, I can try and address the question, although I said it twice already, I'm not a clinician. I'm a basic scientist. But my understanding from the literature is exactly that, that the analysis of the tissue, of the joint tissue of patients suffering from rheumatoid arthritis indicates that there are different types. The technical word is endotypes or pathotypes. So there are different types of tissue, and so that can influence the disease course, but also the therapy. That's my understanding. Now, the cause or the primary cause of RA, nobody knows it, but clearly, it seems to me, there is a difference in the way patients develop. I mean, not start, develop the disease, as evident from this analysis of the tissue from the joints.
So essentially, with ultrasound-guided biopsy, rheumatologists can go into the knee joint, but even in the finger joint, and pick up a piece of tissue and analyze that tissue. And so that's the way forward. Now, so the answer is yes. There may not be just a single type of rheumatoid arthritis when the disease is overt, when the disease is there, although nobody knows what is the initial cause of rheumatoid arthritis. And if I can take another second, it seems to me that this is probably this same concept probably applies to any chronic diseases.
So chronic diseases are very unlikely to have, you know, one manifestation, one pathology, but there could be a multiple. And this is why, perhaps pharmacologically, one cannot really control chronic diseases with one drug. But you may need a combination of drug, and Resolution Therapy offers an opportunity here. I hope I've addressed the question.
Resomelagon is going to act on the melanocortin system. I wonder if that system is absolutely imperative, necessary for inflammation resolution. There ought to be the odd family that has a compromised melanocortin system. How do they fare when it comes to inflammation?
This is a very good question. Thank you. Actually, it's a complex question to answer, so I'll try my best. I think the evidence out there is with the red hair mutation of the melanocortin receptor type one. The evidence is that there is not an association between a defective receptor and inflammatory disease incidence. So this is what we have there. I also think that for Resolution Therapy, the concept that we applied so far for classical drug development might not necessarily apply, and so, for instance, you know, we know that for many targets that have been used so far for drug development, one wanted the human evidence, you know, the genetic evidence.
You lack a gene, and you develop a disease, so then I can target the gene product as a drug. I don't think that's the case for resolution necessary for Resolution Therapy because essentially it offers an opportunity, so even if the system is not altered in order to explain the pathology, if the receptor is expressed or if the target is expressed as it is, it offers an opportunity for pharmacological intervention. In other words, doesn't have to be the resolution pathway compromised necessarily to justify a pharmacological intervention, in my view, so the answer, if I go in bullet point, no, there is no genetic evidence that the melanocortin receptor deficiency or malfunctioning is associated with overshooting inflammatory response, but my own view, which is in part theoretical and in part empirical, is that not necessarily needed.
Because if you, third point, intervene with the melanocortin receptor agonist, you produce a beneficial effect, as we and others have seen preclinically and also as it is emerging clinically. And this possibly, and then I finish, can go, you know, alongside that slide I showed you with the 180-degree. So we need to change the way, in my view, we see, the drug development criteria or requirements if we want to develop Resolution Therapy.
Thank you. We have one more question here, please.
Yes, good morning. I have actually two questions, actually, maybe one for Professor Perretti and one for the people on stage here. The first one for Professor Perretti. In your mouse experiments that you did with resomelagon, could you comment on how the response looked like in relation to markers of inflammation, such as, I mean, now you're using CRP as a marker in the clinical studies, right? And so in relation to a marker of inflammation in the mouse. That's the first question to Professor Perretti. And then the second question would be, also related to CRP, is if there's any clinical study out there in literature, where they stratified the response to the treatment, according to CRP and how that data looked like. Thank you.
Lars, should I go first then?
Yes, please.
Thank you for the question. In the mouse model experiments, we did not analyze the blood markers, but what I can tell you that the treatment with the resomelagon reduced markers or the inflammatory markers in the joint, so reduced interleukin-1 , interleukin-6 , expression to a certain level, no, never abrogate, alongside what I said and also we just heard after my presentation, and the other point I want to say that we, interestingly, we saw a modulation of the phenotype of the immune cells into the joint, so there was an effective reduction in inflammatory monocytes. There was also a reduction of a specific subset of fibroblasts, which is associated with aggressive disease, so there was a modulation of some markers. We didn't do everything. We did a few.
But this was also reflected into a modulation of the number of pro-inflammatory cells, not only monocytes, but also fibroblasts. And actually, at least preclinically, the fibroblasts have become an important cell to target in the context of rheumatoid arthritis, a cell which has been ignored for many years. But as I showed in my presentation, there is a type of rheumatoid arthritis which is characterized by fibroid tissue. And so this is what we know about the association between a resomelagon effect on the other preclinical arthritis and the specific markers. We did not analyze circulating factors.
Right. The second part of the question, maybe someone from management could-
Yeah. So, in terms of, studies evaluating, stratification of patients based on CRP, so that's been done, you know, in many RA studies. To my knowledge, not with, Resolution Therapy at this point. But, you know, the value of that stratification, if we, again, go back to the point being that the immun basically, all treatments are immunosuppressant, the value of that is not great because if we look at, for instance, the IL-6 targeted treatments, IL-6 is actually sort of, directly linked to CRP. So if you inhibit IL-6, you will see a lower CRP. But CRP as a marker itself, is probably, less valuable as on a longitudinal scale as it is diagnostically. So those are two different concepts.
So looking at it, CRP, whether that goes down, that's not directly associated with response to therapy. That depends on the pathway and in which you modulate it. But when you're looking at the patient for a diagnostic, so do you have high inflammation or not, CRP is a fair marker for that. It's a little difficult. I hope that it makes a little sense. Yes.
Thank you.
Thank you very much. Are there any further questions from the audience? Please raise your hand. Professor Perretti, could I just follow up on an earlier question, regarding the pathological phenotypes? So it's very interesting to see that there are three sort of subgroups within RA. Is this kind of classification established enough to be used in a clinical setting, like, for instance, to enhance precision in patient selection? And if so, which subgroup or all of them, would be suited for resomelagon treatment?
Thank you. My understanding is that classification is not yet, what's the word? You know, is not yet utilized in every clinical rheumatology clinic. So it's still at the, I wouldn't say experimental, it's still at the validation, discovery phase in the clinical settings, though. So there are large European grants funded by the European Research Council, which in multicenters, so in many countries, which, you know, are studying tissue pathotype and rheumatoid arthritis patients' response to therapy, anti-IL-6. I mentioned anti-TNF as an example, but the same applies to anti-IL-6, the same applies to anti-B-cell therapy.
So, I don't think it's something which has been implemented in every rheumatology clinic, but definitely something which is studied actively at the clinical level in academic rheumatology clinic in several countries, both in Europe, where this started really, and also in the U.S. Regarding resomelagon, I cannot comment on this, frankly. I'm not, you know, qualified clinically and medically to qualify. But I see no reason why, in the future, perhaps, a subtype of patients should respond better to resomelagon. If I think we are not there yet, but in the future, this could be something to be considered. But besides resomelagon, in general, in my view, is something to be aware of, the fact that it could be not only for new therapies but also for established therapy. There is a refinement of the group of patients that might respond better.
Thank you. This is an investor presentation, so I would like to take the opportunity to move into more of financial questions. During the introduction, Jeppe, you mentioned the raising SEK 50 million in kroner. So could you perhaps elaborate a bit about the financing position of SynAct now and your plan to- how to spend that- those funds and how long it will last?
Yes.
Thank you.
I can do that. First of all, we were very happy that we managed to raise SEK 50 million and doing it in a directed issue at a premium, also strengthening the investor base at the time. That amount of money, and as communicated, our cash position now is around SEK 60 million and that will take us well into next year and also well into the end of next year. But of course, as any biotechs, we are always evaluating our options for raising more money. But we would not need a lot in order to get to data point. But of course, we also have a situation with data point that we need to be in a position where we can negotiate potential deals after that.
It is something that we're looking at on an ongoing basis. A key element in that strategy is that we're looking at soft money, and there is quite a lot of soft money out there. Many of the programs fit us quite well, so it's something that we're investigating into right now.
Right. And by soft money, you mean, for instance, research grants, subsidies from perhaps governments or NGOs, and that sort of-
Yes.
Perhaps more academic money, right?
Yes.
Yeah.
I think we have a track record also in other companies that we have managed those programs and those applications quite well and successfully. And I think that there's, I would say, good reason to go that way right now, and it is something that we are exploring.
And another obvious question for a biotech company or research company is, of course, the dialogue with business development and potential partners. Could you perhaps say something about the ideal partner? Would that be, well, a Big Pharma company? And I suppose the readout, the data will be the main determinant of the kind of deal that you're able to structure. Could you perhaps say a bit about your ideas on how you want to move forward within the partnerships?
Yes, we can definitely do that. And, Jim Knight, our CBO, he will also present the strategy a bit more in detail later on, today. But, I think it would be fair to say that, at last data point, a lot of the Big Pharma companies, a lot of the big biotech companies, and quite a few of the specialized pharma companies were lined up and had a big interest in the program. We didn't get the data that, we wanted, and therefore, we were not able to do the deal, but we were ready, and they were ready. And I think also what has been addressed today, that we're coming with something new, and that is really, I think, the trigger point.
Going for first-line treatment, also enable us to maybe generate an interest at some of the small specialized pharma companies. So we have taken them all into the equation, what we have done, and Jim will get into that as well. We have kept them all informed about what's going on in the company. We have discussed what are we going to do now, so that we make sure that we get buy-in from those partners at an early stage, so that we're not developing something that in a year's time, they will say, "That's not what we want." We are pretty certain that what we do, if we get positive data, we will be able to do a deal. And that is a full focus.
In that game, where we have been for the last 20 years, we know that, you know, building those relationships, keep them updated, be active part in the discussion. That is really the trigger point. So yes, we are ready, and last, we're also presenting at ACR, that has been communicated already. I think that is an important place to be. We will be at the different conferences as we normally are. And we will also go to JP Morgan in the U.S. in January, where all the partners will be. So yes, we're on that.
Seems like a busy agenda. Do we have any further questions from the audience? Please raise your hand. I have one more question here, and it regards to flares. I mean, I suppose since it's a chronic disease, obviously the treatment will follow the patient for a long time. But one of the early presentations, flares in RA, were mentioned. Earlier, when you were still in phase I, you had the intention to develop the compound for flares, so I guess that's more of an acute short-term treatment. Is that still an option for SynAct now, to have it as, well, an acute flare treatment as well in addition to the chronic treatment?
I think it's still an option. However, as a small company, we need to stay focused, and the full focus is now on getting the RA program into the clinic, produce the data, and be on time. And then, in parallel with that, we were looking at the soft money situation. If we get more money, we can do more.
I guess because you have quite a wide pipeline for the size of your company, I suppose, the exact timing of when to start focusing more on other things is tied to the financing situation. For instance, if you get a partnering deal after a successful phase II completion, then you have more options to perhaps kick off these other projects as well.
Exactly. And, of course, we're trying to keep the options open in that part of the discussion. But an interesting angle is also that, you know, in dialogue with Big Pharma, I think the issue is brought up basically every time. We could do this, and this, and this, why don't you do that, and that, and that? And, you know, we just have to say, "Listen, we're a small company. We stay focused here doing the first one." And then hopefully when we get to a deal mode, I'm sure that the RA will be the main focus point, but I could also see Big Pharma companies, even big biotech companies, developing the asset into other indications in parallel. It's just not a game that we can be part of.
Thank you, Jeppe, and that concludes the first Q&A session. Thank you very much, and thank you, Professor Perretti. It's time for a break. It's a 50-minute break, so let's try to be here around 11:40 again. To get ready for the second section, please. There are some light refreshments outside and restrooms. Welcome back. I hope all of you got some refreshments. Bullar, I'm not really sure what that is in English. Buns and coffee. It's time to move on to the second half of this Capital Markets Day, so we'll start off with Thomas Jonassen, CSO, who will talk about the resomelagon program and the ADVANCE study, of which we heard some news this morning as well. Please.
Yeah, thank you very much. And you can hear me? Good. I start here with one of the slides originally from a publication from Mauro Perretti's group. And again, highlighting this approach of excessive inflammatory responses, where there have been a tradition, or rather, most, if all, not all compounds, is targeting the pro-inflammatory or the part of the inflammation and thereby induce different levels of anti-inflammation. And if you go too high in dose or you're too aggressive, you induce immunosuppression. And then at the same time, we have had, you could say, not a neglect, but perhaps a lack of understanding of resolution that was considered, as Mauro described it, as a fire that gradually turned out.
It's highly regulated. That is what the message is, and we believe very much that we work with more excessive inflammatory responses, as we do in active inflammation, as we see in active early rheumatoid arthritis, it's possible to induce pro-resolving pathway and thereby bringing the inflammation from a very high level to a lower level, and thereby reducing the likelihood to go into chronic inflammation. That's the purpose, really, of Resolution Therapy. We have for years been working on, and Mauro also highlighted that our compound was not a traditional cyclic AMP stimulating compounds.
And that's important from the perspective that our compound is a biased agonist and thereby have some very attractive effects compared to traditional melanocortin receptor agonist. And most importantly, it does not stimulate skin pigmentation. These pictures down here indicates that it's a biased agonist and binds to an allosteric binding site on the receptors, and thereby stimulates its effect, which is quite a new unique from our compound. Again, anti-inflammatory, as Mauro highlighted, both with regard to reducing the potential activation of recruitment of neutrophils as well as anti-inflammatory markers. And here, also what Mauro showed here, that we can boost the resolution by giving the compound on top of the inflammation, and thereby modulate the inflammation, bring it to a new set point faster.
This is a kind of interesting, this, because this is the PK profile from phase I studies. Here we had during steady state, meaning that we had dosed the compound for two weeks. We had this orange dotted line that was designed as that was the target peak concentration we at least should reach based on what we had of experience from animal models or more acute inflammation. That, if we came above this, this threshold of 200 ng per ml in the animals with regard, then we had the optimal effect of the compound.
What you can see is that the 100 mg that we are working with in the clinic is well above, but it's also below that threshold, meaning that we have a trough value, as it's called, that is below. That's important as we are working with agonists, because if we had, like, you could say, a plasma profile like this, you would be above this line all 24 hours and thereby increase the risk for tachyphylaxis and thereby a desensitization of the system. We could then, well, most likely reduce the effect of the compound as the whole signal or the whole pathway would be uncoupled in the body.
So that's very important and the next question is, of course, is that a straight line? Should it in less aggressive inflammation be 100 , and thereby you should dose with a lower dose? That we don't know for the moment, but that is one we are going to have in mind and look into for the future. And this slide to the right here just show us that the tablet we are now using is, has a very same, very attractive early peak concentration and then the same PK profile as we see with the suspension we used in phase I. Then before I go into rheumatoid arthritis, there has been a lot of questions of what we do, what we have done in viral infections. And this is a paper...
This is from a recent paper that we have published here in August in British Journal of Pharmacology from the study that we made through the ResoVir collaboration, which was a collaboration between Mauro Perretti in London, his group, and Mauro Teixeira in Belo Horizonte, and his group, and we recruited clinical patients at a clinical trial during the COVID. What we saw was that the compounds given to patients who were highly infected, who had been in treatment with low-dose dexamethasone for a couple of days in order to control the inflammation, and who still had a need for oxygen therapy because they had developed a respiratory insufficiency. We were able to get them faster to respiratory recovery and faster out of hospital compared to placebo treatment.
That's very interesting approach, and in the paper here, we had added preclinical models as well as data from human white cells, strongly showing that this is associated with immune modulation as we would expect from the compound. And that, of course, gives possibility to continue development in other viral infection than COVID-19. And it has been discussed there is different possibilities to stay within the inflammatory pulmonary diseases like severe influenza, but it is also possible to look at other indications. And here, just highlighting that with the climate changes, we will have new diseases also in Europe.
This is a recent map from the European Centre for Disease Prevention and Control, showing that the mosquito, he is the bearer of dengue virus, chikungunya virus, and Zika virus, is now endemic in a larger part of Europe, and it is really a question of going further north. We still have very few cases that is described that patients do get the infection by being bitten by mosquito in Europe. But they are there, and they will increase as the years develop. Both dengue virus, who gives in more complicated cases give a severe cardiovascular affection or coagulation with dengue shock syndrome.
Chikungunya virus, who gives severe joint affections for years, and Zika virus, which perhaps is more unspecific and more in the acute setting, are especially those two viruses that we are currently looking into and see the potential of the compound. All in all, we have a pipeline where we are focusing on rheumatoid arthritis, where we have just initiated the ADVANCE study. I'll go on to explain here in the next couple of slides of what we are doing. We initiated some years ago a study, and actually, it was a few years ago, in idiopathic membranous nephropathy, one of the primary reasons for nephrotic syndrome.
It has been really a tough journey to get the patients, but we have it here, and we are still evaluating the study. We have viral hyperinflammation as a possibility to continue development, not least if we succeed with soft money to fund some of the exciting programs we believe it is possible to make in patients. Then, of course, we have, as we took in TXP, a preclinical study where we still need a few dose response studies in disease model, and then we are in principle phase I ready. So that is part of what we are going to do in the next year, is also to get this pharmacology program completed, so we are phase I ready.
I also like to highlight this because even though we are not in a super good cash position, Thomas Boesen, our COO, has a wonderful program that we should look more into one day as potential next generation compound. Rheumatoid arthritis, current treatment roadmap, Asger very nicely described it. Here, this is from the current EULAR treatment roadmap from 2022. I have highlighted here, start methotrexate. It would be logical to give the compound on top of that. We could also, as has been discussed a lot, going in early second-line treatment. But let's look a little at why this is so extremely interesting. The therapy with the conventional DMARD, which methotrexate, that should be started as soon as the diagnosis of rheumatoid arthritis is made.
That's very clear from the guideline. What we expected in the EXPAND study, as we did not specifically highlight that it should be early patients, was that some of the patients, and we know that from the clinic, that some of the patient has been going around for quite some time without getting appropriate anti-rheumatic treatment. So this is one of the things where we really have to look. If you go into the real treatment algorithm, you should also find the patient fast. Treatment should be reaching a target of sustained remission or low disease activity in every patient. That you can't reach in three months. You can only reach something that would look like sustained remission if you give glucocorticoids on top.
Glucocorticoids have been used quite a lot and are used quite a lot. Until recently, there was a rather liberal approach, especially in the European guideline, that you could give glucocorticoids because you can just give them for a few months, get disease control, and then stop it. That's not the case. If you continue with these compounds too long, then you will continue with them for years. That is really one of the big issues. Glucocorticoids are good on very, very, very short notice, but to give them for months is really no good. This is the new recommendation, go out within three months. The U.S. guideline is very, even more conservative. They really discuss whether or not to use them at all.
Then TNF blocker, second-line treatment, that should be, is not considered first-line treatment. The same with the JAK inhibitors, because they have an unwanted side effect profile. So you could not justify to take a compound with unwanted side effect profile and test that early in the disease, and also from a cost perspective, that would not be reasonable. So even though that they are not considered first-line treatment, they are introduced in many cases relatively early because the standard treatment with methotrexate is not good enough itself, and that they, these, rheumatologists don't like to give glucocorticoids. So there is, for sure, a window here for a new compound that is effective and patient-friendly. We started that approach a few years ago when we set up the BEGIN study.
It was the very first phase II study, so it was a very conservative approach. We started with one dose versus placebo, then the next dose versus placebo. We had evaluation after each cohort and interim analysis, and decided to go on with both 50, 100 and placebo. Then we reported all the data together. That was in patients who had never before been treated with methotrexate, who were referred to hospital. Here in the Nordic countries, many of them were in treatment from the day they got the diagnosis of rheumatoid arthritis, to they started the treatment with methotrexate or our compound. That was two weeks. That's very, very effective. That's not what you could expect around the world, but that is an ideal way of doing it.
Importantly, the vast majority of these patients here had CRP outside normal range of at least three, and in many cases, six and higher. What we saw in these patients, and we only had four weeks treatment at that period because we did not have longer toxicology. What we saw was that we were able to show a larger reduction in disease activity on 100 mg compared to placebo. Four weeks placebo, methotrexate plus placebo, gave a 9.3 points reduction in CDAI score. We were all the way up to 15.5, which is considered a quite relevant response in four weeks. When we look at a secondary readout of ACR scoring, we went up to 60% on our compounds in 100 mg compared to 33%.
See, this was very, very encouraging, especially as we also got quite a nice safety profile. As you can see here, and we were especially, we were very, very fond of seeing that we did not see any increases in aminotransferases induced by we know that methotrexate can do induce that. And so all in all, it was well tolerated in that study, and there was no reason not to pursue further development. And we like. So what we concluded was, well, it was safe, it was well tolerated, it worked. We, at the same time, had developed a new tablet, so we had all the reasons to continue development.
If we then then we benchmarked it to the JAK inhibitors, a very potent group of of compounds who cannot be given as first-line treatment, and has recently in U.S., been concerns about the cardiovascular side effect profile of the compounds. So they are more like third-line treatment in U.S., whereas there in Europe, are a little more open to use them as long as you are below 65 years old and not have cardiovascular disease. But they have a very, very large market, and we made this slide where we said, "Okay, this is what we saw. This is what was seen in the literature." We could predict that we could go up to approximately 80% in newly diagnosed patients.
That would be in rank with what you saw in, for example, this, the SELECT-EARLY study, with a JAK inhibitor. And we thought, well, if we can do it with the first-line treatment, we can also do it in DMARD- IR patients, because this is a very, very attractive compound. What we did was that we set it up first-line treatment. We set the EXPAND study, where we had 12 weeks dosing treatment-naive patients with CDAI higher than 22. We tested 100 mg versus placebo in combination with methotrexate. We did not specify that the patient should be newly diagnosed, and we did not specify that CRP should be increased.
What we ended up was that half of the patients did not fit into what should have been our treatment algorithm: newly diagnosed, active disease evaluated by systemic inflammation, meaning that CRP should be out of normal range. With regard to the second-line treatment, we set up the RESOLVE study. It was a two-part study where we initiated for part A in order to find feasible doses for part two of the study. Again, here we took the same inclusion and exclusion criteria that has been applied to a strong immunosuppressive compound as the JAK inhibitors.
We perhaps were a little naive and thought that we would like to go in here early after the treatment algorithm says that you, if you don't have improvement after three months of methotrexate ± glucocorticoids, and you have not achieved your target within six months, then and you have what is called poor prognostic factors present, meaning high likelihood for bad outcome, you should add. You should go on here with second-line treatment. That could be a TNF blocker or in Europe here, a JAK inhibitor, not in U.S. We thought that it could potentially be so that we should tested that as our compound as an alternative.
But in order to do that, we had to secure that we got the right patient, and we did not. And the answer to what we saw was that we, as we again took the same inclusion and exclusion criteria, only 5% of the patients actually fit into this treatment algorithm that they have been treated with methotrexate for less than six months. And therefore, we got rather inconclusive data. As the compound, as Mauro very, very clearly, nicely showed, should be given to patients with active disease. So, based on that, we set up the EXPAND study. If we focus now on what we are going to do forward is focusing on first-line treatment.
We set up the EXPAND study, we dosed for 12 weeks, and we saw a very nice, still a very good from a compound potentially with effect in rheumatology, a very good safety profile, especially no signs of immunosuppression. But we got these results for the whole study. We saw absolutely no difference between placebo and our compound on the primary readout. And that was, of course, a big surprise for us. But the measure was, well, if we looked at the patients who fit into our treatment algorithm, newly diagnosed, meaning diagnosed within six months, and with CRP outside normal range, then you got this picture.
Then we actually reached this 80% that we thought that would be possible to reach in ACR20, and with pretty much unchanged with the placebo treatment compared to the full patient population. So even though it's a post-hoc analysis, it highlights that our compound is active and fits into the original concept we had when we set up the BEGIN study, that we have a compound that is working and potent and has a potential to be introduced early in rheumatoid arthritis as first-line in combination with methotrexate, and potentially on the long run, as an alternative to glucocorticoid treatment.
If we look at the secondary readouts, we saw the same in this patient population, that the reduction in DAS28 was relevant, almost 2%, which is what you could expect for a compound that was really active in first-line treatment, and the reduction in CDAI was more than 21 points compared to 12.1. Taking this into consideration, we really think that we have a good case if we are focusing on the right patients, and that is what we intend to do moving forward. I would also just highlight here, HAQ is a way to evaluate the patient's handling of daily living.
And also in the questionnaire, a lot of different things they should explain how they handle different tasks in daily living. And here you can also see that in these patients, we also have a very high and very effective compound compared to placebo. We had a newly diagnosed resomelagon-treated patient with elevated CRP exhibit consistent responses over 12 -week on all outcome measures. It was not only ACR score, but it was also the secondary readouts, including the very well-validated clinical scoring system as HAQ, which is what I highlighted down here. So as newly diagnosed patient, high disease activity, we really see a potential for this compound.
So not to say, well, actually it worked, but still, we actually reached this 82% that we if we looked at the right patients in JAK inhibitors in first line. But that's not the same as to say that we should benchmark ourselves against JAK inhibitors. We should rather consider our compound as a new opportunity to be put into the current treatment algorithm. Because as Asger very nicely highlighted, there is a need for new compound that can reduce the use of glucocorticoids, then potentially can reduce or postpone the introduction of second-line treatments.
And y es, it would be possible to go in early if we are focusing on these patients who, after the initial dosing with methotrexate, still would have active disease, still have CRP outside normal range, still have high, clear signs of high disease activity. But they are not as common as these patients. And you could argue that if it works here, then whatever partner we will find would be able to explore into this. And then you should just have in mind, this is an add-on to existing treatment. Also, you could say an alternative to get rid of glucocorticoids that no one would like to use.
To go in here is really to try to get to compete with very well established treatments, where you could say that, "Yes, we should perhaps reduce the use of TNF blockers," but for sure not take them out, because they work very effectively and should be given in the right setting. But perhaps not already three months after induction of disease, that is more and more common in the U.S. So we believe that we should focus up here. Finally, I will say something, just one word about flares. Yes, if you in established disease have an exacerbation of disease with reactivation of inflammatory pathways, that could be modulated by our compound. Yes, it would be possible to go in there. But again, that would be to be done in the future.
But whatever we intend to do here, so what we are focusing, we are going to focus on newly diagnosed patients, high diseases, the high disease activity or sign of systemic inflammation. These patients are need for new treatment options as mono the monotherapy with methotrexate often is insufficient, and that you simply then have to go to glucocorticoids. And that there is current no second-line treatment option due to unwanted side effects that can be introduced as first-line treatment. So, we know that we can find the patients. We are working very, very well with Nordic Bioscience to find the patients and of course there will be other treatment options beyond, but right now it's first-line treatment.
This just highlighting, and just very briefly, we fit into the guidelines. So, and I think that's important. We really fit with this. What we intend to do is fit into the pipeline, is into the current treatment guidelines. We are not inventing something new. We have briefly mentioned, and Jim come back to that, so I will jump to the next. We do believe there is a large market. There is also a large patient population. And what we are going to do is to test three doses of AP1189, 40mg, 70mg, and 100 mg, once daily versus placebo, on top of methotrexate treatment. We start the same day as methotrexate is introduced to the patients. The patients should be, of course, newly diagnosed within six months of disease.
We should initiate the disease diagnosis. We should start dosing. CRP should be outside normal range. We should also have high disease activity, and glucocorticoids only allowed as a rescue medicine. Then that's a study we have just initiated with sites in U.S. One word about the primary readout. Most question we always get on the ACR scoring system, and that is a very good scoring system, but for dose range study, it's probably not the best, as it's a yes, no, and it can, in smaller study population, it can give false negative, false positive, but it can also be very difficult to discriminate between doses.
We have really, according to plan, according to recommendation from FDA's guideline from industry in development of compounds for rheumatoid arthritis, we have decided to go for the DAS28, as it's a much more reliable and would give us more information compared to what we see with a traditional ACR approach. This is simply just to say when and if we get positive results in ADVANCE study, we will go back to FDA and EMA for an End-phase II meeting, in parallel with partner discussion, of course, then we should have the more chronic toxicology and in parallel with phase III also cardio-neurotoxicity. That is normal. You run that in phase III.
CMC development up and running so that we could have that could be prepared so we could get phase III studies up and running in 2027. And the size I mentioned here is not completely unrealistic, based from a potentially effect of the compound and also for the overall safety base we have generated, and from other compounds that have been taken into phase III. So even though that is not something we intend to do, at least not as the company is set up now, I just wanted to say that that is a potential way to market. And with that, I would say thank you.
Thank you very much, Thomas. Our next presentation is a recording. We have Jim Knight, who will talk about emerging clinical profiles in newly diagnosed RA patients, the business case. Please, can we have the recording?
Hi, this is Jim Knight, and it's a pleasure to be with you today to talk about resomelagon positioning and opportunities. Now, let's continue the discussion about patients presenting with high RA disease activity at diagnosis. So methotrexate, despite being the gold standard for RA therapies, is insufficient for most RA patients, especially those presenting with high disease activity. Each year, there are about 400,000 newly diagnosed RA patients in the U.S. and Europe. Over 50% of these patients can present with high disease activity at diagnosis, and these patients can have a lower response to methotrexate. In addition, over 50% of these patients will fail to respond adequately to first-line therapy with methotrexate, and 70% of these patients who do not respond adequately to first-pass methotrexate therapy will fail to respond to a second DMARD therapy.
Resomelagon could be well suited as a complementary therapy, combination therapy to help methotrexate when methotrexate alone is insufficient. Now let's take a look at the burden of disease of patients presenting with high disease activity at diagnosis. As we've discussed, high disease activity at diagnosis is the key poor prognostic indicator in both the American and European RA treatment guidelines. These patients have a lower response to methotrexate and other DMARD therapies, with response rates as low as 33% at six months. The data on the left follows a cohort of patients who presented with high disease activity at diagnosis and follows them over a three-year period. You can see that the majority of patients, 95%, required at least one course of steroids over that three-year period, with the average dose being about 15 mg of steroids a day.
Over 90% of patients required a second DMARD, and almost 60% of patients tried a third DMARD over that period, and 40% of patients almost had gone on to biologic therapy. Resomelagon could be well suited to address the needs of patients presenting with high disease activity, not fully addressed by methotrexate therapy alone. The emerging resomelagon clinical profile could make it the treatment of choice for patients presenting with high activity at diagnosis. First, inflammation resolution is a complementary mechanism of action to both methotrexate as well as the other advanced therapies in RA. Second, we have demonstrated thus far a high degree of activity in these patients presenting with high disease activity.
In BEGIN, we saw a 61% response rate at one month, and EXPAND, we saw an 82% response rate at three months in patients presenting with high disease activity, who are naive to therapy, and who presented with evidence of active inflammation. Safe and well-tolerated. Resomelagon has been shown to be safe and well-tolerated in over 75 volunteers and over 200 patients treated to date. Importantly, in combination with methotrexate, we see no emerging safety profiles over that seen with methotrexate alone. No or low need for steroids. Steroids were only allowed as rescue therapy in the high-activity resomelagon studies, and preventing the need or lessening the need for steroids is a key driver of preserving overall patient quality of life, and convenient for patients.
It's important to note this entire clinical profile is available in a once-daily oral tablet, really increasing the convenience for patients who are taking otherwise, you know, oral therapies, possibly injectable therapies, and a bunch of other therapies. Increasing patient convenience is key. Looking at sort of the overall size of the patients presenting with high activity at diagnosis, we can see that there's a significant underserved global population. I discussed before, there are about 400,000 patients presenting each year with new diagnoses of RA in the U.S. and Europe, which equates to about 200,000 annually newly diagnosed patients with high disease activity.
When we look globally, we can see areas such as Southeast Asia, where there are over 10 million patients with RA in India and China alone, where there are an estimated 600,000-700,000 newly diagnosed patients each year. Activity in this highly active patients is a proof of concept for resomelagon as a potential complementary therapy for other RA therapies as well. Here, we take a look at the use of DMARDs in the U.S. as a sign for the need for improved complementary therapies. In the pie chart on the left, we can see the darker blue segment of where DMARDs are used alone or in combination to treat RA. And we can see two opportunities where DMARDs alone are insufficient.
In those patients presenting with high disease activity at diagnosis, as discussed, as well as in a population previously described, of patients presenting with primary DMARD- IR, are those patients having an incomplete response after their initial course of therapy from three to six months. We also see in the lighter blue segment that a good portion of DMARDs are used in combination with pretty much all of the advanced therapies. Right? This points to a need for combination therapy for these therapies. On the anti-TNF side standpoint, there are about 350,000 uses of anti-TNF agents to treat RA each year in the U.S. About 40% of initial anti-TNF users will have an incomplete response. In addition, patients who can have a good response to anti-TNF can lose or have that response wane over time.
This leads to a cycling between anti-TNF agents, as well as a switch to a new mechanism or to another biologic agent. Other biologic agents, such as, anti-IL-6. There are about 175,000 uses of these therapies each year in the U.S. Most initial uses are for patients that were deemed to be incomplete responders to anti-TNF mechanism. JAK inhibitors, perhaps our newest class of therapy here, for RA, provide very good efficacy. However, significant safety concerns really prevent the thought about using these therapies in combination with any other advanced therapies. This really points to a need for better complementary therapies than methotrexate that can really help increase the utility and the longevity of these therapies in further reducing the burden of RA for patients.
Now, from a business development standpoint, we're looking to build broad momentum with the ADVANCE trial, and with our complementary therapy positioning. First, for Big Pharma, we've had great relationships and conversations with our potential Big Pharma partners over the last few years, and we're looking to rebuild that momentum with the launch of the ADVANCE trial, and with our complementary RA therapy approach. We will look to investigate any opportunities to collaborate on additional complementary opportunities with these partners over the interim time. Specialty pharma. We've had some discussions with some specialty pharma companies, and are looking to identify additional partners who may be interested in targeting broad first-line use. These could be regional players, or they could be players focused on certain market segments. And regional.
We will continue to look for regional opportunities for resomelagon, such as, you know, the avoidance of immunosuppression therapy in Japan, or the large population-based issues facing countries like China, and the sheer wealth of newly diagnosed patients each and every year. We're gonna be looking to drive momentum to earlier engagement with partners, align on shared objectives and goals, look for sponsorship of aligned complementary opportunities, and identify opportunities to collaborate on interesting areas of RA, and RA and beyond. Thank you very much for the opportunity to have this discussion today.
Thank you very much, Jamie, for an interesting and insightful presentation. I'm curious, what's the response when you present the data on resomelagon to Big Pharma and biotech companies? What do you experience from them?
Yeah, it's interesting. So RA is, you know, you think about the sheer number of therapies that have been added to the RA treatment algorithm over the last few decades. There are quite a few, and despite that, there still seems to be a ceiling, if you will, of efficacy. And that as new agents come on board, they do well in maybe half of the RA patients, but there's this other half of patients that either work quickly through these therapies or, you know, or incomplete response to those therapies. And so there is a need for new therapies, new mechanisms to really address this churning, if you will, of patients in here.
You know, I think Big Pharma partners in general are very open to the need for a better complementary therapies. You know, both for specific instances such as, you know, patients presenting with high disease activity, as we've discussed in our ADVANCE study, but as well as for other therapies. You know, that. This ceiling of efficacy exists in RA. It exists in other most other inflammatory and autoimmune conditions such as IBD, where we really can't seem to get above a certain threshold on efficacy, and we really need to start looking at the ability to combine some of these therapies. Which is tough to do with some therapies, as most of these therapies are quite immunosuppressive in nature.
So the thought of combining, you know, biologic agents with, you know, the levels of immunosuppression, and as well as, you know, the high cost associated with that, again, sets the stage for the need for therapies like resomelagon, that can be used safely without immune suppression, and can be used to really help additional therapies. Again, helping patients achieve a stronger degree of control over the disease.
It's interesting. Thanks. And, I mean, you showed in a previous slide the criteria for complementary therapies, and when you talk with Big Pharma or with other interested parties, in general, what aspects do you push with resomelagon, the benefits of your drug candidate?
You know, I think so. So we've seen this, and it's a great question. We've seen this both with BEGIN, and we saw this through the post hoc analysis of the EXPAND study as well, the data that we have in our patients, you know, newly diagnosed patients, presenting with high disease activity, with evidence of active inflammation, is quite strong.
Speaking of Big Pharma and biotech, what would you say are the keys to finding good partners?
Yeah, there are, you know, a big piece and, you know, obviously looking at, you know, the Big Pharma, as I mentioned, we're also looking at specialty as well as some regional players as well. I think the key to finding a good business development partner or partners in general is really finding those aligned interests and opportunities, right? Someone that really sees the unmet need as we do, and sees the opportunity for resomelagon to fill a good portion of that unmet need. So it's really finding those pieces and, you know, it's really finding, you know. And part of that's why, I mean, the conversations we've had with Big Pharma over the last few years really set that stage, right? It's those conversations we build upon as we move forward with ADVANCE and our new RESET strategy.
Thanks. The theme for this presentation is positioning and opportunities, and of course, opportunities in a business or investor perspective is a lot about the market. So could you please give us a little bit more flavor on the market size? You showed the numbers of new, newly diagnosed patients, for instance. So what's the total here in each region in terms of market size?
Yeah, yeah. You know, you know, again, RA itself is a very large category. There are approaching between the U.S. and Europe, there are probably well over 4 million patients with RA, diagnosed RA in U.S. and Europe. We showed some of the numbers before, you know, you know, dwarf in comparison to some of the, as you know, you know, 10 million or so in a combination of India and China as well.
So, you know, it's a very large indication. You know, sort of the value of the indication by 2030, I think, forecast for about $30 billion overall, for sort of the market potential in RA. So very large category. You know, a lot of patients, as I mentioned before, quite a few therapies in there. So, I think it's, you know, positioning and unique positioning is really key in having success in such a large but very crowded market.
Yeah, thanks. And RA in itself is, as you say, a very, very large market. However, I can't help to think that perhaps there are some opportunities outside of RA as well for resomelagon. Where do you see any possibilities for adding new therapy areas or indications going forward a few years?
That's a great question. As I mentioned, you know, the that sort of therapeutic ceiling that exists for RA, you know, exists in other autoimmune inflammatory conditions as well. Probably the best example would be inflammatory bowel disease, where despite, you know, just, you know, it seems like almost a new therapy every other month or so, I mean, the best they're able to do is, you know, put about half the patients in remission and maintain about half of those patients. So meaning, a year or so down the road, you've got about a 25% chance of being in remission, despite being on, you know, a fairly expensive advanced therapy for a period of time.
And, you know, to the point, and the reason I mentioned IBD is they're already starting now to do combination biologic therapy, just trying to get over that hurdle, which represents, you know, a lot of problems, both in terms of, you know, immunosuppressant, you know, combining, you know, drugs with immunosuppressive profiles, as well as the cost associated with combining some of these therapies. You know, a case like that, you know, it, it's the same opportunity that we're talking about in RA, where we're trying to, you know, complement existing therapies and help them work better, and help patients be better served. I mean, that, you know, that need exists in other inflammatory conditions such as IBD.
You know, in other areas as well. I mean, there are other areas in the inflammatory space, such as inflammatory eye diseases, where the first-line therapies are really inadequate. You know, in some conditions, it's like oral cyclosporine eye drops. I mean, you know. So the first-line therapies are quite inadequate, and something like resomelagon, again, you know, well-tolerated once-daily oral tablet can really provide a lot of advantages in areas like that, too. And then even our own data, we have, you know, we had good data from virus-induced respiratory insufficiency. We had, you know, COVID data, we had from the ResoVir collaboration in Brazil.
Good, showing, you know, good ability to take these patients again, that it, it's not the virus we're treating, but it's the inflammatory response to the virus, which can cause what's called hyperinflammation or causes really pronounced overshoot of an inflammatory response that really leads to the bad things that happen in these diseases, right? It's not the virus that's gonna put you on the respirator, right? It's the inflammatory response to the virus that puts you on the respirator, if that makes sense. And so there, you know, we got good data in COVID.
There's reason to believe that we have that same ability to interdict in patients that are, you know, again, hospitalized with influenza or other conditions, and even dengue. Dengue is a, you know, is an infection that's on the rise globally. You know, again, there's reason to believe that if you can get to those patients early on before they get more robust symptoms, we can get them early and help resolve the inflammation before it totally takes out of control.
Thank you very much. That about wraps it up for me. Do you have anything, like a final takeaway message that you would like to add or wrap up? What do you think have been the key points here during your presentation?
I'm happy to, and thank you very much, Lars. It's amazing. You know, resomelagon has truly a unique profile, and I think that's what gets maybe lost a little bit in some of this. I mean, the ability to show efficacy we have in these really high-activity patients, and, you know, the signals we have of activity in other areas. I mean, all of that in a once-daily oral tablet, that to our knowledge now, does not really induce immunosuppression or other issues, right? There's no real safety and tolerability concerns. I mean, that's a pretty unique product, right?
That's a product that I don't know one that exists like that on the market today, and I think one that really could address some of the bigger unmet needs that exist, despite again all these therapies. All these new, you know, revolutionary therapies that have come to treat RA and other diseases, you know, still have some big shoes that they still need to fill, and I think there's the ability for something like resomelagon to really come on and, you know, help address that remaining unmet need.
Great. Thank you very much, Jim. Okay, that was all from Jim Knight. We're moving on to our final presentation here today. Please, Sten Scheibye, member of the board, you're welcome.
Thank you very much. Am I online? Yeah, okay. Thank you, and good afternoon, and thank you for the opportunity to be here. And I was asked to not talk about clinical profile. There we go. I was asked to talk about sector and market overview, but let me first introduce myself. I have a PhD in chemistry and moved from there into the pharmaceutical world, joined LEO Pharma in Denmark, and after 12 years with that company, I had moved from a regulatory position to become the chief commercial officer, and from there, I moved into MedTech and spent 15 years with Coloplast, 13 of those years as CEO, and following that, I had become chairman of Novo Nordisk and later on chairman of the Novo Nordisk Foundation.
So instead of talking about sector and market overview, I would rather talk about whether resomelagon administered together with methotrexate is utopia. Is it a dream, and or can it be reality? To illustrate that, to me, I thought a little about my personal history. In Coloplast, we had a couple of utopian situations. The first one was in ostomy. We sold millions of sophisticated plastic bags to be worn by ostomy patients.
And of course, ostomy patients wearing an ostomy bag 24/7 , 365 days a year, they sometimes had a need to not wear a plastic bag. Very understandable for intimate moments, when they wanted to go swimming, it was very impractical to wear an ostomy bag. So the idea was to develop a plug which you could put into the stoma. You couldn't have that in place for too long a time because of the output, but maybe for an hour, two hours, three hours, depending on the situation for each individual.
And we did develop such a plug, the Conseal product, which was maybe not the biggest seller, but it was a huge brand value to the company because to the specialized nurses and to the end users, this was solving a need of the patients, which nobody else had dared to do. So a huge value in that perspective. Another example was a company which you may know, we didn't have many products in Coloplast that I would wish for anyone to need to use, but Compeed was actually a product, which was to solve the pain and heal blisters fast. And, in that case, when I became CEO, we had the product, and we tried to kill it, and we tried to kill it. It was just so good, it could not be killed.
So we found a much better solution, namely to sell the rights to the brand, to Johnson & Johnson, who could position it, in the consumer market as a sub-brand to their Band-Aid product. And they could sell it. We earned a very nice profit on selling it, and we then continued producing it for many, many years, and it is still very successful in the market. So two cases from Coloplast and from Novo Nordisk. When I came onto the board in 2003, I have to admit it's more than 20 years ago. But at that time, it was known, of course, that insulin could never be administered orally. And there was also probably a spin-off from that, that GLPs cannot be administered orally. These are very sensitive molecules, and they will not be possible to administer that way.
There was also an idea in the head of primarily the CEO of the time, that there could be an opportunity for GLP-1s in obesity. But at least when I came onto the board, it was the general attitude that there is no obesity market. The products in the obesity market was small molecules, and they basically all failed. So there was no appetite to move into that. But luckily, the CEO and the CSO were very adamant, and we, as board, listened carefully and eventually backed the development of these products. And Novo Nordisk is currently selling about SEK 68 billion per year in obesity.
So when I was presented with the opportunity to join SynAct six months ago, of course, I listened to the story. I tried to evaluate it, as well as I could, and I was convinced, as we've heard today, that there is an opportunity in having resomelagon together with methotrexate as first-line treatment, and that's why I'm here today, and thank you for your attention.
Thank you very much, Sten. It's time for a Q&A, so same procedure as always. Please raise your hand if you have a question, and you will get a microphone. Please, we have a question here on the fourth row from the back.
Yes, a clarification or misunderstanding from my side. In this study, you showed that you had a good effect for the appropriate patients, sort of short period of MTX and a high elevated inflammation. If you would consider the other part of the patient group that you excluded to get the positive effect, it seems like in that group, it maybe was even an adverse effect. Is that correct?
Yeah, what you say is that if you, in the overall group, have approximately 55% responders, and you take half of them, you get 81% or 82% responders, then you get 30-something in the rest. Yes. And that most likely, honestly, I think that that was something Mauro was trying to address, was the need for the compound in a case where you have an active inflammation. There the compound as an agonist can go in and make a difference as it is stimulating a relevant receptor, and thereby you could say it increases an endogenous pathway in a way that is beneficial.
You could then take the other way around and say, if you have a compound going in and stimulate a pathway that should not, that has already, you could say, been stimulated by the endogenous system, you can reach a certain level, and if you go higher than that, you should probably stay away with the compound. That could be the conclusion from what you really, really highlight here. And that's probably an important piece of information that we have to bring forward. That we have to go to these patients who have active disease, active inflammation, and there we can make a difference with our compound. Whereas we, at least at the dose we tested so far, we should stay away from those patients who do not have active inflammation. That is for the future to further understand that, but from the way we interact with an endogenous system, in a way, makes sense.
Yes, and then a shorter question. Because in your target group, patients will, of course, have the MTX as a baseline therapy, but as time goes on, they will not be sort of naive or new to the treatment. So does that suggest that there is a window of benefit effect as patients staying for longer on MTX, will that, will your positive effect tail off, so to speak?
I think that it's, again, extremely relevant question. Yes. Now, what we are doing in the ADVANCE study is we are testing a fixed dose, three different dose levels. An alternative approach could be that we had going in with a higher dose in the beginning, and then we're going down to see whether it's needed to continue on the high dose. That is something we discussed a lot internally, whether we should try to put that extra level of information into the study, but we decided to keep it as simple as possible, but you highlight something of importance, and that would have to wait until we have longer toxicology studies so we can continue with dosing for longer periods, but in principle, yes.
Also, when we get more grip on this, right now, it's a relatively unspecific marker of inflammation we are working with CRP. In the future, it would be like we are characterizing the joints in different approaches. We will also be better to understand how the dynamics in the inflammatory response is going on, and then you could have like a more personalized approach, but that's for the future.
And finally, Sten has experience from Novo Nordisk, and the question is, chronic inflammation as a low level. It's almost a lifestyle problem issues for many people. Proportion of people are pre-diabetes, perhaps without knowing it. So is there a risk that more and more of us, we're not eating what we should, and we're not as active as we should, and you could sort of have a lot of sort of you can experience low level of chronic inflammation in naive patients?
I think what Novo Nordisk has demonstrated is that obesity is, of course, a worldwide problem. It is much more than just a question of obesity. It is having a lot of other influences on your body, on your health. If you can reduce your overweight by X%, which the GLP-1s can do, then you can actually alleviate some of the other problems that you would eventually run into, the cardiovascular problems and so on. It is much better to keep normal weight instead of overweight, but a lot of people just can't do that. There is also an opportunity that people can be on medication and learn to control their condition so that they can eventually skip the drug and stay normal w eight. So there are many opportunities.
Yeah. Another way of putting it is that, is it possible to control that risk of having patients with low level of chronic inflammation in the studies?
I don't know the answer to that.
In our study-
Yes.
In our study, I mean, when we include the patients, they will have what we would consider a high level of inflammation.
Yes.
We are modulating that through the 12 weeks dosing period, and some of them would. After these twelve weeks, we will probably have a spread, some who have responded well, some who have responded lesser, some who had developed the inflammation to another level, somewhere we have stopped it. But that's really all what's about in trying to modulate an inflammatory disease. Yes, and we will bring that to a new level. Yes, and now I think I got it.
Yeah.
You say if you have treated with a classical anti-inflammatory, you would take out the inflammation.
Yeah, I put it even easier. You have two patients, correctly identified patients in your study. They, they're naive, they're newly diagnosed, and they haven't been on MTX for long. One is sort of has a lifestyle problem and was entering this with low level of chronic inflammation. One was sort of, luckily very healthy and had extremely low levels of inflammation, but both will potentially qualify into the study.
We tried really with what we're doing now here is that I think was one of the mistakes we made in the previous study, that we were too broad in our inclusion criteria. First of all, all patients have to have high disease activity. Second, all have to have a certain level of inflammation that is reflected that CRP is outside normal range. Meaning that they all, and of course, that gives, there's different range of inflammatory status. Yes, and also when we then learn about how the disease is presenting itself in different ways in the joints. The ambition with our compound is to modulate that response, not to take it out.
There will be different levels of inflammation at the end of the study as there were before the study. But overall, the ambition is really to try to see whether we can reduce the pro-inflammatory activity of the neutrophils, not necessarily to reduce them in... We don't reduce them in the bloodstream, but probably do something about their phenotype. And the same with the macrophages, as we so nicely have shown, that we get a larger fraction of these macrophages with the ability to phagocytosis. If you then look into how the joints is, is how the synovium is arranged with the barrier, macrophages and the fibroblasts going in, of course, the ambition is that we get that controlled in a beneficial way. And some of them will have some level of inflammation, yes, after the treatment.
Thank you. All right. Any further questions from the audience?
I have a question. A question about business development. Are you seeing any interest in other disease areas than rheumatoid arthritis, considering for this kind of drugs you usually talk about pipeline in a pill. So are you seeing an interest for other applications in your discussions?
I think we have over the last two or three years, we have discussed a lot of other applications of the compound. Especially on the Big Pharma side, an indication like IBD is of major interest. Jim mentioned dry eye is a possibility. And we have had several other discussions about quite a few other indications. I think in an ideal situation the focus will be on the RA component, but I'm pretty sure that the Big Pharma will initiate other developments in parallel with what they're doing on RA. So I think we have proven in the past that Big Pharma have a big interest in other indications as well. Yes.
How might the deal be structured?
Yeah, it's difficult to predict, but I think, you know, we have a track record of doing different kind of deals in the past in other companies. So I think we're open for many, many models. Some of the models that have been discussed have been, you know, ranging from basically full acquisition, but also, of course, to licensing models, where we could play a role as a company, in relation to getting the project into phase III. So we have an open mind for different structures. I think also it'll be fair to say that it differs a bit from company to company. Some of the very big ones, they have sort of, you know, one strategy. Some of the smaller ones, a bit more flexibility in what they want to do.
One more, and then we have in the back, please.
Great. Can I ask a question that ties in a little bit to that? On one of the timeline slides, you showed your CMC operations, and there was one small chunk in the beginning, then there was one large CMC chunk coming after data. Could you elaborate a little bit on the CMC side to make sure that we understand what's in those parts? Because my impression from partnering discussions is that Big Pharma becomes more and more sensitive to what type of CMC work that has been done before they sign a deal. Thank you.
We have Thomas Boesen, our COO. Mic. He's with us today, so I think he would be probably the one qualified to answer that question.
I mean, you're absolutely right that it's a factor that we need to count in here, but we also need to balance what's the risk of how far can we develop. We need to ideally hit a point where Big Pharma can take over and develop and fit it into their production line and so on. So we're not kind of locked into something that they cannot take over, that they have to go back and do again. So it's a balance. What we're doing now in the small chunk is to be able to supply to the clinical trial. I mean, there are a number of sites, they all need tablets, and they need to have enough because we are running this blinded, so there should be enough for more than the patients that we're actually taking in.
And what we have done now is we have developed the tablet to phase II. Before you go into phase III, you need to develop it to a stage where it potentially can be commercialized. You need to do scaling, so we need to prepare to show that we can scale. We have done some of that already, so we are kind of ready to scale, but you need to show that also. And when you have done that, you are making your CMC, both your API production and your drug product, your tablets, at the scale that is needed for phase III. And this is where you lock your production in for your commercial batches. Because you need to have something that is ready for the market, you need what's called NDA stability.
That takes three years, so you need to be ready for that, and that's a factor that Big Pharma will look at. How long will it take to get onto the market? So we need to be prepared for that and be ready, and at the same time, it's a lot of money, so you have to look at your clinical trials and see when do you get results, when do you invest your money? Because you should be far enough but not too far in order for these reasons that Big Pharma can take over, you don't overspend, so that's, that's the point.
Perhaps check that. Can I borrow the microphone? We have a further question here from the audience. Varsågod.
Given that the present study is positive, am I too optimistic or even naive in asking or even suggesting that two huge markets, obviously China and India, that can be difficult to cover, why not sell off Greater China or India against the financing of phase III studies for getting an approval and keep the product for the time for Western countries? Then you can possibly get a partner, but at much better terms than the usual 10% and a few milestones.
You're not naive at all. It is a thought that we are working with as well. And as Jim mentioned, regional deals is also on the table. We have had some initial discussions on that as well. But we also have to realize that conducting a phase III study for a small company like SynAct is a big task. We need a partner. But we could do it the way you described. It is a strategy that we also are evaluating. We have had some initial contacts in the regions that you mentioned, and there could be a potential interest there as well.
Any further questions, please raise your hand. One of the other questions touched on possible new indications, and I would like like to go back to the viral data that you have, which obviously are very interesting. Just so, maybe it's a stupid question, but if you want to proceed along that route, would that entail a completely new phase II trial, or can you somehow work with, I don't know, a label extension, or how would you address that potential market?
What we are doing right now is that we are collecting all the data that we have in relevant disease models both human samples, as well as animal models, and we are building that into the overall business case. We are evaluating the possibilities, and I, again, we have to be focused right now as we are in this situation. We are in a company where we have to be very focused, but we set up this, recently, collaboration a couple of years ago under the COVID, and we are working with the possibility to reactivate that also from a clinical perspective. We have briefly discussed it with Nordic Bioscience and how we could use them in a positive way, that way around, and also with the possibilities to go into dengue virus as a possibility.
Now, I mentioned also chikungunya, because the case is that it is something that is being a larger and larger burden around the world. Buenos Aires was for the first time this year affected by a larger epidemic in dengue. And we know that when it really goes... The description from Belo Horizonte is that they, in February, March, or into April, had 3,000 new cases every day, whereas 3,000-4,000 new cases every day, whereas up to three hundred had need for IV treatment. That's a lot. And that also gave the possibility, of course, to in a very structured way, to get a proof of concept of our compound. And, that is, of course, one of the possibilities we are working into. But evidently, we need additional clinical data, but that would, of course, be phase II.
Yeah. Another question you mentioned, it's perhaps unrelated, but it had been a little difficult to find with a patient recruitment within your nephropathy. And given today's news that you're starting with recruitment for ADVANCE, I suppose it's easier since RA is a much bigger disease, so hopefully easier to be on schedule with patient recruitment?
Yeah, and what we did when we set up, we were kind of opportunistic a few years ago. We started parallel development in rheumatoid arthritis and nephrology. It turned out to be much more complicated to get the patients in nephrology than we ever expected. Also, basically, we have had a complete drought of patients in the sites here in the Nordic countries for two years. Basically, there were no one after the pandemic. Realistically, it will not be our focus area moving forward, but we are now closing down the study in a decent way and get what we can get out of that.
Yeah. Thank you. If I'm not mistaken, my first question today was to Anders Kronborg, Chairman of the Board, about what attracted you to SynAct. So I'd like to close off this Capital Markets by asking the same question to you, Sten Scheibye. Can you just tell me shortly what attracted you to join SynAct?
I've been on the board for a little less than six months now, and I think I can only say what the chairman said. I have worked together with the management team and the coworkers, and I'm very impressed about the focus, which I think is very, very, very important for a small company. You can only do very few things, and I think we as a board can only help management by making sure that they are not distracted into a lot of the other opportunities, because you can only do so much, and you have only money for so much.
And therefore, that is our task together, to manage that and make sure that we get fast study results with the highest value impact, and that is what has been described here. I'm very optimistic that we have a good team who can do it, and Anders and I will try from the board to help them.
Great. Thank you, Sten. And also, thank you for your excellent work at Novo Nordisk. I'm a very, very, very small shareholder. I wish I was a big shareholder, but... And who knows, maybe SynAct can be, an equally successful, albeit at a smaller scale, share to own. Now, it's time for Jeppe to round off this pre-Capital Markets with a few words. Welcome, Jeppe.
Yeah. Thank you very much. Just a very short wrap-up of the day. Anders, the take-home there is, you know, stay focused. We have a pretty clear path towards the strategy, and we know where we're going, we know the timelines are that we will get data end of next year, and that is that is the primary focus. Mauro Perretti, we have worked with him, as as you saw, for a long time, and as he explained, I think we have a nice opportunity here for coming with something different. There is a lot of other compounds in development, as you know, based on more or less the same technologies, based on the same type of action.
We're coming with something new, and it fits, I think, very well into something that could turn into a deal, and that is important. We will continue to work with Mauro, as we have done for a long time, and he's doing a lot of very important work in the lab. It's great to have Asger here, showing again that we fit in with the guidelines and that the study is dimensioned the right way, that the market is there. To have them on as a shareholder is nice for us as a company as well. Thomas discussed some of the learnings that we have done on the previous studies, even that we didn't get the results that we hoped for and that we wanted.
We learned a lot from the studies, and that's- I think that's very important to understand, that, when you get a huge amount of data from a study that is, maybe not giving you the results, then there's a lot of learnings. And I think, therefore, we have been able to optimize what we're doing now with the ADVANCE study. Jim Knight talked about the business potential. We have mentioned that several times today. I think it's pretty clear that there is a market potential out there. There's takers that are interested in working with us. We need to get a bit closer to data in order to get them signed in. But I'm sure that there will be several opportunities for us to do a deal.
And then it was great to have Sten on board. As I mentioned in the beginning, it's sometimes a bit difficult to recruit highly qualified board when you're a company that's a little bit uphill. But they really stepped up. They not only stepped up when it was difficult in the very beginning, but they're also being very engaged in the company and very operational. And that is very nice for us. We don't have to work with seven or eight people in the board. We can work with three that really steps in and knows what's going on and have a pretty tight connection to what we are doing. So, with that, I will thank you all for staying on. Hope you will stay for a light lunch, and then, come and talk to us. All management are here, so, we are available. Thank you for your support.