James Helliwell, CEO of Eupraxia, and we have Alex Rothwell hiding in the corner, CFO. Eupraxia has an interesting platform delivery technology called Diffusphere, and looking to develop it for local delivery of certain therapeutics with the current focus on fluticasone for GI conditions. Maybe I will leave James to give you the overview, and then we'll launch to questions.
Yeah, great. Thank you very much, and I really appreciate you hosting here, and thank you to you and to Stifel. Thanks, everybody, for being here today. The Diffusphere technology, sort of distilled to its simplest form, is our ability to take an API and actually package it up in these little 100-micron almost balloons, and to be able to actually inject it directly into tissue, have it remain in that local tissue, and deliver with zero-order kinetics for about 52 weeks. Turns out we can do longer than that. We just, aiming for 52 weeks seems to be really ideal for most of these things, and in EoE as well, where we're focused.
While we've worked with lots of different APIs, we've looked in lots of different diseases, really where we're focused today is, Annabel, as you said, is in gastrointestinal disease, starting first with eosinophilic esophagitis, but also looking beyond that, benign esophageal strictures, fibrostenosing Crohn's disease, ulcerative colitis with proctitis. All places where the GI physicians know that this class of drugs works, and is really looking for something where they can be directly targeting with compliance, which is really, really important, and being able to get the therapeutic effect they want with the safety that they want to see.
Great. Before we launch into the actual technology, or actual efficacy of the drug that you've seen, maybe we can just talk about EoE, because we've seen a tremendous amount of development in EoE, and we've also seen the prevalence of EoE expand. I'm not sure if it's an expanding thing or if it's just they're identifying these patients better. Maybe you can talk about the market and how this market is going to look in three to five years.
Yeah. It's been a fascinating market. I'm a physician by background, but I'm a cardiac transplant guy, so I spent my career doing heart transplants. When I went through medical school, this was not a disease. Yet, ironically, when I look back in my training, I saw these patients. These are patients who were struggling to swallow. They were getting food stuck, and we used to see them, we used to scope them, and we would say, "Well, we're not sure what the problem is. It's not cancer." Often people would be diagnosed with reflux. So, so many of these patients have had five to 10-year journeys of suffering, thinking that they had something that was reflux.
Only as Dr. Attwood was able to discover, and Dr. Straumann, these patients had a commonality, which was this type two inflammatory process that led to lots of inflammation and led to fibrosis. As we look at that, essentially, patients who were suffering realized that there was actually a disease that was out there for them to be able to label this with, and that was eosinophilic esophagitis. So it began exactly as you're saying, as the most severe patients going to the quaternary care specialists who got the diagnosis. Then it became education to general doctors, education to Gastroenterologists, and suddenly it's grown immensely. In 2022, the FDA was saying 150,000 patients. Just two short years after that, the answer was there's 500,000 to 600,000 patients in the U.S. The latest data is saying that's expanding.
Most of that, as you say, is really patients getting diagnosed. These are patients who, in a sense, already had the disease, and when we look, most of them, when you track their histories, have had the disease for four, five, six, 10 years. The KOLs do believe, though, that there is still growth in this. In other words, there is something in the environment that is leading to some kind of something that's prompting. I heard one of them say maybe it's Tide pods, but that something is leading to this disease growing as well. There's two factors, but this very rapid growth is really about spotting and diagnosing the disease.
Okay, great. Let's talk about EP-104. Obviously, you said this has the potential to be a longer duration product. Steroids do work, but there's obviously problems with steroids with daily dosing. You've got side effects from that. You also have the biologics that are one to two weeks, either weekly or maybe biweekly if you're lucky. When you talk about your ideal target product profile, you say you can get it out to 12 months. Wouldn't physicians be perfectly happy with six months or nine months? What is the ideal target product profile for you?
Yeah. We spent a lot of time working with patients
and also working with physicians to really answer this question. What is really clear is once every six months would be a really good leap forward. But who you would get with that were people who really did not want to take an oral drug, really did not want to take a biologic, physicians viewed as more severe. However, when you hit that one-year mark, everything changes. The reason it changes is because when you read the guidelines, both North American and European, these patients are already supposed to be closely monitored with endoscopy. That means they are going for an endoscopy, 60% of them at least, once a year. If you think about it, they are going to their physician, the physician is doing this procedure that carries risk with it, and they are getting no therapy.
For us to be able to say there is a therapy you can give on a procedure you are already going for, it is not an additional procedure, it is an additional five minutes in a procedure you are already going for. The patient feels nothing, knows nothing, wakes up, except for now they have got their year of therapy done. That is why the one year, we think is really important. You are absolutely right. Is there a commercial market for six months? There is. For nine months? Absolutely. But at one year, it becomes really transformational.
Mm-hmm. Okay. They are supposed to get endoscopies every year. You said 60% get it. Is it that physicians are not adopting the guidelines or patients just do not want to come in?
It's a little bit of both. Part of it is, if you're an allergist who happens to be following one of these patients, you're probably less likely to send them for an annual endoscopy because what you're worried about is actually sending this patient off to a GI who's now going to take your patient and follow them. You kind of hold onto your patients. That's about 20% of the patients. Some patients, they ask the logical question, which is, "Why am I going? Are you going to change my treatment? What's going to change?" And the answer is, "I don't have another therapy for you.
You're already there, so why would you go back, even though your disease is getting worse?" The problem is, those people then show up in the emergency room with a food impaction, and it's very difficult for them and very expensive for the payer and challenging for the physician. That's why they need to show up every year. By tying a therapy to it, what it essentially does is induces compliance. Compliance in this disease is a really big issue. When we look at oral steroids, there was a fantastic paper presented at UEG just three weeks ago. Oral compliance is so low, particularly in Europe where they've got an oral dissolving tablet of budesonide, and they basically are really sort of demonstrating just how important real-world compliance is.
That once a year, we think, really gets there, and physicians are supportive of that, and so are patients in our work.
Why do you think that oral compliance is so low? You would think that taking an oral steroid is very easy.
If it was an oral, you swallow it like an aspirin or a beta blocker, I don't think you'd have really a compliance issue. These are either oral dissolving tablets, or they're slurries, and both really face the same problem. The issue is with most of these is that you take them, they dissolve, and the whole point is they're to coat your esophagus. They do coat your esophagus, but that means you can't eat or drink while the drug is busy absorbing. Most of them will say, "Don't eat or drink for an hour." Most of us, we actually sip our water pretty often, and we like to swallow something. That makes it very challenging. Compliance can mean I didn't take the medicine. Compliance can also mean I didn't take it properly.
When we look at that, it becomes very difficult for patients to do. Then the other piece is that oral candidiasis and esophageal candidiasis, when we look at the product monograph for the oral budesonide, they report a 25% oral candidiasis rate on their product monograph. That's troublesome for patients.
Okay. We have seen incremental data only from open-label studies so far.
Yeah.
At the higher doses, it's been very good. How much comfort can we take from these open-label studies, and what do you think is the typical variability of this patient population and how that might translate into a more rigorous placebo-controlled trial?
Yeah, absolutely. I'll divide that kind of into two sections. One of it is histology. When we look at a placebo-controlled trial with EoEHSS, for example, EoEHSS really doesn't move in placebo patients. This is eight sub-scores that are looking both at the pathologic effects of eosinophils and inflammation, as well as fibrotic effects. So actually looking at the architectural changes that are occurring in the esophagus. That doesn't get affected by placebo. I think there we can look at that data and say that's probably going to translate fairly well. When we look at symptoms, I think there is quite a lot of variability in this disease, but the effect that we seem to be seeing is quite large.
I think we have a fairly high degree of confidence as we go forward that seeing strong separation from placebo is something that we should see given the histologic sort of effect that we're seeing. With the interim data that we have around the corner, that doesn't necessarily mean on that aspect it'll be statistically significant just because of the sample size. But we do think that there's a lot of translation there. Again, we've seen just a very strong effect with up to 80% of our patients in clinical remission at six months, and at the 52-week mark, still with 64% in clinical remission, where we know when we've looked at placebo in other trials, you'll see 13%-20% of people in clinical remission. So we're sort of gapped above that.
How are you measuring clinical remission? Is it on the
That's on the Straumann Dysphagia Index.
Okay. Yeah.
The Straumann Dysphagia Index, it's been a little bit different than the DSQ. Our interim data in our phase IIb trial looks at both, so we'll have the DSQ, which has really become the de facto standard. But we're going to look at both in this upcoming trial. The Straumann Dysphagia Index essentially is when you get a 30% or more, or sorry, a three-point improvement on the nine-point scale, that's considered, basically you have clinical remission. Most studies, the entry point, people have a score of between five and five and a half. So it's sort of this 60%-80% improvement in symptoms.
What you want to see is greater than three.
What you want to see is a greater than three-point improvement. That's correct.
Okay. So in the open label, what did you show on the SDI?
On the SDI, we were seeing mean changes of about 3.4 points.
That is what gives us that 80% clinical remission at six months, and that recedes a little bit closer to three points when we get to the one-year mark. At one year, 64% of our patients are still in clinical remission. What is remarkable is, they got a dose a year ago.
One dose.
one dose.
Yeah.
They're still there. Anecdotally, as we look, because this is an open-label trial, a lot of our patients are past the one-year mark. To hear the stories from our PIs of these patients returning at about 14 months, having lived a pretty normal life. I mean, they were able to go eat steak, eat bread, socialize, do all the things we take for granted when we don't have this disease. Really remarkable to hear them come back and say, "Can I get that again, please?
Because their minds had taken them to a place they no longer had the disease. They're not injecting themselves, they're not taking a pill, they're doing nothing, but they're feeling really good. That's really what we aim for patients.
How do you think that translates into the SDI?
DSQ is really interesting. It is actually asking almost the exact same questions as the SDI, except for it asks you every day for 14 days.
That makes DSQ a little bit noisy, because you have to answer eight of the 14 days in order for you to be able to actually have a valid response. The noise comes through because it imputes a bunch of values into the days you did not get. But when you look at the basic questions, they actually translate really well. There is a lot of symptom endpoints that have been used out there. SDI and DSQ are the two that really sort of stand up. Dr. Evan Dellon, who is the KOL in this space, wrote a paper with a prospective trial comparing SDI and DSQ. What he noted was, a percentage change in one really matched a percentage change in the other. They really should correlate fairly well.
What is the scale for the DSQ?
It is from zero to 84.
Okay. So the interim readout is coming soon. We're waiting with bated breath. Why don't you just tell us what the potential outcomes are here, because I think it's 50% completers, correct?
Yeah.
I don't think it's necessarily powered for statistical significance, but maybe you can tell us what you think you might see.
Yeah
And the different possibilities.
Absolutely. We'll kind of order what we think is really important here. First, and we see this a lot in development in this space, patients have to feel good. If you don't make patients feel good, you don't have a product. Looking at DSQ, looking at SDI, is going to be the first thing investors are going to look for, and the first thing we're going to be looking for as well. So there, what we really look to be able to see, and when we look at the products that are successful, that are on the market, or those that are probably likely to be on the market very soon, what they're seeing is a delta from placebo of, at the low end, four points, and at the high end, around nine, 10 points.
Everything in there says, these are the products that are available to patients today, and if you're in that ballpark, you have a product that would be considered against all of those other products. Then the other pieces get to come into play, like convenience, it's delivered once a year, and all the rest of it that we chatted about. So there, we don't expect to see statistical significance there, again, because of the noise that we know exists in those PROs. When we look at some of the products that are out there, some of them, it's 122 patients in an arm.
to get a p-value of 0.049. So that's a lot to try and get power. So we're 20 patients per arm here at the interim. If we get close to power, that is a fantastic result. What we hope to see is a very good separation from placebo that indicates that when we get to 40 patients per arm on the full trial, that we will be in statistical significance, which still, at 40 patients per arm, is a lot smaller than a lot of other trials that have looked here. The next thing that's really important to look at is EoEHSS. So again, this is the biopsies, it's looking at fibrosis, it's looking at inflammation. There's a few different scales of this, but they're all looking at the same thing. Here, what we're really looking for is to see this kind of 50%-60% reduction from baseline.
That translates into a score, depending on what your baseline is, but on the one-point scale, kind of in this 0.15 to 0.2 of improvement. That would mean that you're in line with therapies today in terms of resolving fibrosis. We've demonstrated to date that in our effect in driving EoEHSS, we are equally driven by reducing inflammation as well as by reducing and reversing fibrosis. So seeing that, we think will be really important. Again, not powered for statistical significance, but were we to have statistical significance, that would be a really positive outcome and speak very well for the overall trial. The last thing really to look at there is EREFS. So this is sort of that visual confirmation of what you're seeing on symptoms, what you're seeing in biopsies, and is visually by endoscopy looking at two things.
One is inflammation, the other is fibrosis, and wanting to see a change there as well. That's on a zero to nine scale. Again, seeing that kind of 50% reduction, and putting yourself in that place where you're materially changing all those. Again, same comment there about power. Not powered at the interim to really see that statistical significance, but if we do, again, a fantastic outcome. Then lastly would be safety. So really wanting to demonstrate that the safety profile of this drug, again, when we look at steroids used in this area, you will see candidiasis rates of everything from 5%, 8% up to 25%, some as high as 50%. We think a candidiasis rate of under 2% would be dramatically different. We've seen 0% to date. I think 0% is probably expecting a little bit much, but certainly seen under two.
We are really excited about what is to come and framing those expectations.
Okay. This is maybe just a statistical question that I cannot wrap my head around, but if you are not powered for statistical significance at this interim point,
Yeah
do you have any more possibility to increase your powering if you do not see sufficient separation? Do you have any more wiggle room on the powering there?
Yeah. Our protocol was built with wiggle room on the powering.
Okay. There was. Okay.
Based on our statistical analysis plan, this is not a registrational trial, so also this interim, we are not spending alpha on it. In doing this with our SAP, there is a group of biostats folks who are unblinded to the data in order to be able to ask some analytical questions of it. One of those questions is, do you have a drug here? Are you going to be able to deliver? If we were not showing separation, the trial would have been deemed futile and we would have stopped. The other question is, in at least one of the doses, we said patients are going through a lot, we are running this trial, and investors have invested in this. The last thing that we want to do is realize that we finished the trial, we had 40 patients per arm, and we did not quite make it.
You just needed 10, 20 more per arm. So the analysis was done prior to us closing the trial, that essentially said, looking at the endpoints of DSQ, SDI, and EoEHSS, that we know that we have ample power in at least in both or one of the doses. So before we shut down, started shutting down sites when we reached full recruitment, it was sort of biostats' last-
You have already kind of done that analysis.
Exactly. That analysis has been done, and we did not need to increase the size of the trial.
But you did have an over-enroll trial anyway, because it was in high demand.
We did.
You ended up with an over-enroll trial.
We ended up with an over-enroll trial, and fascinatingly, I think this tells us something about this product. Our team, our clinical development team, actually looked at all the EoE trials that have been done. When they started enrollment, when they finished enrollment, what their numbers were, and how many sites they had. All that's available information. This trial recruited at twice the rate per site per month of any other trial. To us, when we analyzed why that was, we think that it was this confluence of both for physicians, Gastroenterologists or interventionalists. This is an interventional procedure, and they get to do it with their scope, and they like having therapies beyond just looking at things.
For patients, it was this opportunity to not have to do anything, to just go in, get a scope like they're used to getting, and have their treatment done. Hopefully that translates as we move forward.
Yeah. That sounds like it makes a lot of sense. Can you talk about the, I guess, the practice pattern? This drug could potentially make a lot of sense for a physician, so maybe you want to talk about the economics for the physicians, and how that might fit into their practice pattern.
Yeah, absolutely. Great question, and really interesting. Often a place where we don't spend a lot of time in drug development necessarily is looking at the practice patterns. I certainly saw it when I was in my practice and ran the business operations for my cardiac transplant practice. Gastroenterologists, as I just mentioned, they're interventionalists. They see people in an office, but they also do endoscopies. Like most proceduralists, you get paid better for what you do with your hands, than what you do with your brain. In other words, you get paid more in the endoscopy suite. Immediately, more patients coming back for endoscopy, following guidelines, so moving that 60% higher, that's good for the Gastroenterologists. They want to see these patients back. They're paid to have them back. They want their clinics, their endoscopy clinics full.
Second, what they are billing right now is an existing CPT code for basically an upper endoscopy and doing biopsies. That is a screening procedure, not a therapeutic procedure. If you add into that procedure a therapeutic procedure, you then get to bill a modifier called a Modifier 59, and you get to bill an additional CPT code. That CPT code is a therapeutic code. It already exists, and it is for an upper endoscopy with submucosal injections of a drug. That qualifies. Immediately now, they are getting another facility fee and another procedure fee for the expense of what is taking them five to, at most, 10 minutes, which is easily absorbed in their endoscopy suite. They build in all these sort of pieces in case they have procedures to do. Second, this drug would be medical benefit, not pharmacy benefit, meaning that it is buy and bill.
The GIs are actually going to be able to bill an ASP + 6%. That becomes very meaningful. For a very small investment in time, doing something that they are used to doing on a daily basis, suddenly it becomes, ideally, and we hope data supports this, very good for patients, but also very good for the physician and their practice. Those of you who follow the GI space will know the drug ENTYVIO very well. ENTYVIO, when it launched in 2014, had a really good launch. Again, it is an IV infusion, a great drug, and it was buy and bill. These GI physicians set up infusion practices, based on the economics they derived from the buy and bill. It is actually setting up a whole new way of working. We are not asking anybody to do that.
ENTYVIO, even though there is a pen that exists today, so much of it is still driven by the IV infusion business. We think that we align basically with ideally providing a great option for patients, we hope, as we advance this program and can hope to see it approved someday, in addition to providing something that fits with the pattern of practice for the physician, and ideally works for the payer as well.
There were, I guess, some rumblings about the administration of it. Is it safe? Is it not safe? How easy is it? Can you talk a little bit about that aspect of it?
Yeah. Absolutely. We have to acknowledge that if you have not had an endoscopy and you are not a physician, the notion of having a tube put down your throat and someone doing injections sounds awful. But when you are a Gastroenterologist or a proceduralist, this is what you do all day long. The other thing to remember is, how do we diagnose these patients? We do a biopsy. A biopsy is taking a big jumbo forceps and a big chunk that goes three millimeters deep in a four millimeter esophagus. But nobody complains about that. Here, we are talking about a small needle that is, at most, it only extends four millimeters. In other words, it does not even extend really enough to go through the wall, and you are going at an angle, and you are doing something that these physicians do every day.
Every polyp that they remove, they inject submucosally exactly like this with the same volume of hyaluronic acid. That is the standard of care. The standard of care for 500,000 patients with benign esophageal strictures in the U.S. who are getting a balloon dilatation, is basically ripping open the esophagus. The standard of care is a submucosal injection of triamcinolone. It is a steroid, off-label. This is a procedure happening every single day in endoscopy suites all over the country. First off, physicians, when we talk about training, they say, "We do not need training. We know how to do this. We do it every day." Second, we have done 3,000 injections now. The trial is fully recruited. If you were going to have injection problems, you would have seen them. 3,000 patients, we have not had one complication related to any one of those injections.
Okay. Well, you gave me a good segue to go into other indications. You said benign esophageal stricture. Talk about that area as a means of expansion.
Yeah. This is an interesting one. This was actually brought to us by the KOLs. As they were looking at what was happening to these patients and just how much these patients were feeling better and the difference that they were seeing, they were noting the reversal of the fibrosis in the esophagus. They are actually watching rings and strictures disappear. They then came to us and said, "Do you realize we have one million patients who have benign esophageal strictures, 500,000 of whom are actually going for balloons to tear open the esophagus, sometimes as often as every week or two weeks, in order to allow them to eat and swallow?" They said, "Our standard of care is we inject triamcinolone." It is immediate release steroid. They have shown that that is better than a sham injection, really good prospective randomized controlled trials.
He said, "The drug's only lasting a couple of days. You're lasting a year. We see the effect you're having. We would really encourage you to do a trial because we want this product." We've been working with the KOLs in that space, and on the back of this data, we look forward to being able to expand into that area. There's really not anything available or in development for patients. We think that's really low-hanging fruit. Physicians have also approached us about fibrostenosis and Crohn's. Again, they see these lesions, they're visible to them, they scope them once a year. They know that steroids work in the GI tract, but they need to be able to get them targeted. Again, that would be a later in 2027.
The way we sort of look at this is, get ready and be getting going on our phase III in the middle of 2027 in EoE, move into benign esophageal strictures, again, around that-
Phase II or phase III?
Phase II. But perhaps with an adaptive design where that phase II can turn into a phase III, given the need in that area. Crohn's further down the line.
Okay, great. As we sort of finish up our time here, your data that's coming out, the interim data, what duration are we going to see? Are we going to see only patients who'd reached 12 months, six months, nine months? What does the whole package look like?
Yeah. There's a lot of data. We're going to try and keep it fairly straightforward, and we're going to be releasing that six-month data.
All those patients with that primary endpoint, that's against the placebo. There is a crossover arm, so our placebos cross over at six months, but we're also going to have that 52-week data. Really, what we want to be able to demonstrate is how we're doing relative to placebo, on symptoms, on histology, on EREFS, to also then be able to demonstrate the durability. The change from baseline, which we now understand how that will correlate at six months to placebo, how that translates out to 52 weeks, all of that picture. There may be some additional pieces, but those are the main pieces that we know people are going to be focused on, and we're really looking forward to delivering.
Okay. You'll be showing all your endpoints, DSQ, SDI-
DSQ, SDI, UHSS.
EHA.
EREFS, PEC.
Okay, all of it.
Safety, all of it. Yeah. It's a smorgasbord of.
That's an amazingly large package for an interim. How does that not mess up your statistics for the final outcome?
Because this isn't a registrational trial,
we don't need to spend the alpha. It was built into the design.
Okay, great. I think that's probably all we have time for, so thank you.
I outtalked the timer. Thank you very much. Appreciate it. Thank you, everybody.
All right. Thank you very much.