Good morning everyone, and welcome to the Jefferies Global Healthcare Conference in New York. My name is Ella Rosenblatt with the Jefferies Investment Banking team, and it is my great pleasure to introduce Frank Gleeson, CEO of Satellos Bioscience.
Well, thank you very much, Ella, and thanks to Jefferies for the invitation. I look forward to telling you about Satellos this morning and appreciate you taking some time to visit in person or online. Satellos is about regenerating muscle. Our focus is the area of Duchenne muscular dystrophy and additional dystrophies and diseases of muscle degeneration, where we have a very different approach and paradigm-shifting technology platform for restoring the ability of muscle to regenerate and to bring back function. Of course, we're a publicly traded company, so basically everything I'm telling you may be in the realm of forward-looking statements, so beware of anything I tell you. What is it about DMD that's important to us, and why are we attempting to assist children and young people who live with this devastating condition? Our mission is to change lives.
Many companies will say that's their mission, and rightly so. We're all trying to do our best. In our case, what we're trying to do is restore the body's natural ability to repair and regenerate muscle. In children who are born and live with Duchenne muscular dystrophy, their body's ability to repair muscle and create new muscle is severely compromised. This is an aspect of the disease that we have identified as Satellos, and it's an aspect of the disease that has not been featured or focused on despite 40 years of development since the discovery of the gene. It is also a huge market opportunity. It's a fatal condition. It affects one in 5,000 males born worldwide. In the U.S., at any one time, approximately 12,000 individuals are living with Duchenne. It's characterized, as I mentioned, by ongoing loss of muscle mass.
Imagine you lose your ability to move your body. It leads to functional decline and ultimately to premature death, usually by cardiorespiratory failure. There are no treatments either that have been approved or in development other than what we're working on that are designed to regenerate muscle. In a disease in which the pathophysiology is caused by muscle loss, no treatments are designed to restore muscle. We find this in just an incredible situation, but also a remarkable opportunity. The treatments that are approved or in development often come with side effects or consequences. Standard of care corticosteroids often yield very toxic side effects. The lone approved gene therapy is restricted to a very young age group, and exon skippers, by their very nature, being exon- by- exon, are limited to narrow subsets of the population.
Yet the value ascribed to this area is by any one standard, quite substantial. Sarepta , Wave , Dyne, Avidity, Solid, Capricor, all very substantial valuations. Earlier this week, Servier purchased the DMD asset or the dystrophy asset of Edgewise for $2.5 billion with $1.5 billion upfront in cash. That alone is 10 x the market cap of Satellos. The potential for this approach, if successful, is truly enormous. What is it about Duchenne muscular dystrophy that we've identified that everybody else has not identified? In this progression of the disease, you can see from infancy through to end of life in the late 20s, typically early 30s, by cardiac failure. You can see on this slide what most people look at is the right-hand side of this slide. The wheelchair, then progressively the inability to even sit in a wheelchair, then the ability to breathe being lost.
That constant progression, and ascribing that to muscle fragility, ongoing muscle fragility. What most people have never really focused on is that in the early years, children grow, children make muscle, children stand, they walk, their muscle has strength. Somewhere in this age group that we refer to as the tipping point, between 5 and 10 approximately, children go into a very significant decline. By decline, what I mean by that is their ability to continue to make muscle is outstripped by the damage. Their bodies can't keep up with the combination of the growth signals and the damage signals, and they start to begin to physically lose muscle, even at that young age. Our focus is on restoring muscle regeneration and consequently muscle function. We're very unique in what we're doing.
Firstly, our medicine is a small molecule pill. This is not required to be taken by infusion. It's not required that there are co-therapies to deal with immune responses. It's safe and tolerable, and it's suitable for all individuals with DMD, regardless of genetics, and it has the potential to be disease modifying. We are conducting two clinical trials right now that are both phase II trials. One is called BASECAMP. The age group is seven, eight, and nine, so that tipping point age group that I described a moment ago. The second is called TRAILHEAD, and these are in older patients, 16 and above. We're trying to capture bookends of this trial. Our goal is data from both of these trials in 2026 with the objective of filing for an NDA in 2027 for approval.
We have already demonstrated both pre-clinically and clinically impact of our drug. We've shown muscle regeneration, in other words, the ability to make new muscle cells in a canine model of DMD. We've shown strength gains in that same model of up to 4x in those animals, and we've shown gains in strength in adults treated with our drug of up to 2x in terms of their grip strength, which is one of the last remaining muscles that adults with DMD have. Let me walk you through some of the data that give us confidence that we're going to see positive results in our BASECAMP and TRAILHEAD studies. When I speak to regenerating muscle, what you're looking at here on this slide are three samples.
On the left is a sample of a hind leg bicep muscle in one of the canine animals that we treated prior to treatment. In the middle is four months later after treatment. On the right is a healthy comparator that's intended to show you what healthy muscle in a canine bicep hind leg at the same age would look like. I think you can appreciate that there's been a transformative change between the pre-treated and the treated muscle that now starts to look very closely like normal, healthy muscle. What characterizes the damage on the pre-treated muscle is the infiltration of the immune system into the muscle itself because of the weakened fiber, the weakened membrane of the fiber that is consuming damaged and dying tissue. It's not repairing itself.
When the body's able to repair itself, you don't see that constant infiltration of the immune system and macrophages and phagocytes coming in to basically consume necrotic tissue. This, we believe we will expect to see a similar type of response in the children through biopsies that are part of the protocol of the study. When we treated healthies in a phase Ia trial, we did not see any meaningful side effects that concerned us or any of the physicians that we have worked with. We also saw very, very clear and clean PK profile of our drug. This is important because as we want to think about modulating dose, if we do want to do that, we've got a very consistent pattern and a drug that clears very quickly and very easily.
This is not a drug that will accumulate in the system, which assists, of course, with the side effect profile, but also is consistent with the mechanism of action of our target molecule, which is a protein called AAK1. When we treated DMD adults, what we saw very quickly was an effect on muscle. We now know, not just pre-clinically, but clinically, our drug is active on damaged muscle. These markers that we've picked out were identified through a SomaScan analysis, which is a proteomic analysis of a panel of approximately 11,000 proteins. We're showing you the five that all moved in a significant way in all patients treated in our trial. They are all established markers of DMD that are signals of damage. All of them have gone down.
This is really powerful for us as an indicator that our drug, as I mentioned, is active, it's active in muscle, and we hope and expect will read through as we continue our studies. I'm showing you here in that same adult cohort, treatment results after 28 days on drug. This was a preliminary phase I-A study only designed for 28 days. This was the limit of our tox coverage at that time, a year ago, over a year ago. What you can see here in all patients, we saw an increase on average across all of the patients, whether it was their dominant hand or their non-dominant hand, of almost a doubling in grip strength. This wasn't ascribed to one outlier that dominated the group. We saw three of the five patients show improvements, and the other two were stable.
This is in an age group where individuals have lost massive amounts of muscle mass by the time they're in their 20s and have suffered the ravages of this disease in many different ways. When we correlated the results to either the Cmax of the drug, so how much drug did they see of 3247, or creatinine, which is a marker of baseline muscle mass, we saw in both cases, the same individuals that responded the most saw the most drug and had the most muscle mass. Again, we expect when we move to children who have a higher proportion of muscle mass, this is very encouraging. In our clinical study in children, we'll be studying two dose groups to see if Cmax shows a difference. Now we roll those adults into a long-term follow-up study.
This is a slightly messy slide, which I'll try and walk through and explain as best I can. Those individuals came back on drug in a new study called TRAILHEAD. This is a 12-month study in adults. This will enroll up to 30 individuals. We're just opening this study in the U.S. in the next month or so. We have FDA clearance. What you can see here on this slide on the left, you can see the gain in grip strength of those individuals in the first 28 days of the study. What happens in between was a gap period between the time the phase I-A study stopped and TRAILHEAD restarted as a new study, and that gap for some individuals was a couple of hundred days, and for one of the individuals was 328 days, almost a year. During that time, of course, these individuals all got older.
One year later, we brought them back in, put them back on drug, retested, and what you can see here is that those gains, that doubling of strength, was sustained over one year later. Now, there's noise in the system. As you can see, this is part of normal human physiology, but you can see that the error bars basically overlap. Essentially, the gains that were seen a year ago held one year later. This is quite remarkable and not precedented by what others have reported. This is all outside of natural history by a significant margin. On the left of this graph, you see natural history of individuals from age five to 30, and you can see how in the early years, children are able to build strength, and then they go into a very steep decline, and they never recover from that.
Whereas what you see on the right-hand side, where we've overlaid our data to that map, you can see individuals have reversed the trend. This, again, we think is very, very powerful and portends well for what we're planning to do in children, and continuing in adults. What's upcoming for Satellos as we move forward in both TRAILHEAD and BASECAMP? The TRAILHEAD study is designed, and the outline of the study is laid out here. Across the top, you see from the very first dose to month 12, the intervals at which we will be measuring various characteristics. Down the left-hand side, you can see the first cohort of originally five individuals that were in the phase I-B study. Four returned to this study. One individual became too ill, naturally, due to the progression of the disease.
In TRAILHEAD, we will be adding up to an additional 25 individuals that will be on for a full 12 months. We will be looking at a range of factors, fat fraction by MRI, the PUL study with the PUL test, which is the pulling down, dynamometry, which is looking at grip strength again, and of course, multiple safety measures at various intervals over the course of the study. We've opened a study in children called BASECAMP 7, 8, and 9. This will be ambulatory children with DMD, N of 51. It's a 12-week study, so 12 weeks on drug, weekly administration, taken orally, placebo-controlled, double-blind, randomized 1:1:1 into two dose levels of our drug 3247 or placebo, and then a long-term crossover with placebo group randomized to one of the dose groups. Eight countries are approved for this study. We plan to do up to 21 clinical sites.
Clinical assessments will include safety and dynamometry. These will be primary sort of points for us. Muscle fat fraction, muscle morphology by MRI and biopsy, strength and function by multiple measurements. We'll do the conventional NSAA, stride velocity, a range of biomarkers. We are allowing patients in the trial who are on steroids, who have had prior treatment with gene therapy or with exon skippers, and/or are stable on givinostat. We've tried to make this as inclusive a study as possible to give us the greatest potential to see benefit and to see benefit against a background of other medications. This study, which is a 12-week study, is laid out here, ages seven, eight, and nine. Typically, the screening period is about four to six weeks. Four weeks on drug, at which point we do a safety measurement.
This is important because this is what we take forward to our DSMB to allow us to continue the study, and then eight weeks on drug. Baseline measurements across a range of measurements, biopsy, MRI, NSAA, safety, dynamometry, stride, and then 12 weeks later, those same measurements. Rate- to -date, 12 sites are operational. We have a number of sites that will be operational before the end of the month. That will bring us our full complement. We already have more than 51 participants, either in pre-screening or actually being dosed, and we intend to be fully enrolled by the end of Q3, with top-line data by the end of the year. What does that look like for our future plans and financings? Just a quick outline of the two studies. In Q1, we updated the market at MDA, and we started BASECAMP with site initiation.
In Q2, we submitted to the FDA to begin TRAILHEAD in the U.S. That's been cleared, and we've provided updates on progress in BASECAMP, such as we're doing right now. In Q3, we will provide progress updates and enrollment updates on TRAILHEAD and BASECAMP . Similarly, in Q4, we will have a one-year readout on those original four patients in Trailhead, and we will have top-line data in Basecamp. Throughout the year, we will have poster and other sessions at various conferences. Early in the second half, we will submit an IND and a CTA to initiate an FSHD trial in the U.S. and Canada. That trial we will get up and running in the second half of the year. In terms of where we are financially, we have, at the end of Q1, $70 million in the bank.
That provides us runway to complete all of the milestones that we've talked about through to the end of 2027. We now have eight analysts that are covering us, including Canaccord, Oppenheimer, Guggenheim, Wainwright, Leede Financial, Leerink, and Cantor. We're beginning to make more and more progress now that we're both a TSX and a Nasdaq-listed company. That wraps up our story. Happy to take any Q&A for the remaining time that we have, which is about eight minutes, and really appreciate your attention today. Yes. Wildon, do you mind joining me?
I'm just going to sit over here because the lights are really bright over there. Feel like I'm going to go blind.
Is it on? Okay.
Yes.
Could you discuss the grip strength and the use of a measure that's more effort-based? I'm just looking at the phase I-B data, and I'm just thinking grip strength. How objective is that? maybe talk about what regulators would want to see for approval ultimately.
Sure. Wildon, why don't you take that?
Yeah. grip strength is an assessment that has been evaluated in Duchenne for a very long time now. As Frank showed, there's a very clear established natural history. Jean-Yves Hogrel, from the Institute of Myology, has published the paper that Frank described the natural history from. This is an endpoint that is recognized by the FDA. if you look at the 2018 DMD guidance from the FDA, they talk about myometry, which is dynamometry, as a potential path to accelerated approval. If one can show improvement in an intermediate endpoint like strength and then correlate that to function, that is a path to accelerated approval. I think to your question around is it subjective? Is it reproducible? This is why we looked at the baseline data to see is it consistent with the natural history? in that slide, what you see is, in fact, it is.
The participants, when they had their initial assessments, it was all consistent with what would be expected in the natural history. What was different was how they performed at the day 28 assessment, and then how they have continued to perform in TRAILHEAD. That is different than what is typically seen in the natural history, where you see the decline in strength that progresses with time because of the loss of muscle. The loss of muscle has been documented in many different papers of whether looking at creatinine levels or looking at different DEXA scans or MRI. The data will continue to play out over time. We believe the TRAILHEAD data was an additional incremental demonstration of benefit, where we continue to see the improvement in grip strength. We began to see stabilization or improvement across additional muscle groups, across the elbow, across the shoulder.
We'll have the opportunity in TRAILHEAD with muscle MRI, with the PUL. We'll have opportunity in BASECAMP with muscle biopsies, with MRI, with NSAA, the different assessments we have there. It's a story that will continue to play out. It's a small data set, relatively short period of follow-up
Right now, but it's all very encouraging, and it's all consistent with what was seen pre-clinically and with what we would hypothesize based upon the biology that Michael Rudnicki and others have published. Yes.
Can you talk about what the dystrophin level. I know previously it was all about the dystrophin and what the dystrophin was about. Can you just discuss how that looks on your slides and how it looks on a biopsy when you guys do it? Does it change dystrophin at all, or is that not a factor here?
Our approach is dystrophin independent. We're not putting dystrophin back in the body. We're not attempting to modulate dystrophin. Dystrophin is either not there or it's in such a compromised state that it's not useful in these patients. What we have discovered is that there is another problem that these children live with, and that's that their bodies cannot repair and regenerate muscle. The reason for that is that the cell population that gives rise to new muscle, which are called satellite stem cells, AKA muscle stem cells, hence the name Satellos, which is a play on satellite. Those satellite cells dysfunction. We discovered why they dysfunction and how to correct that. That's why we designed a small molecule drug that interacts with a protein called AAK1, that can reset the regenerative biology that these children lack. It's very elegant.
In fact, it's very simple and straightforward after 30 years of research to figure it out, but it's elegant. This is why the side effect profile is so minimal because we're very specifically targeting a particular protein, and we understand its function, and the biology that we're modulating is consistent through evolution. We've identified a target and the purpose of that target in a biological system that's conserved all the way down to Drosophila. We think this is extremely robust, and it has nothing to do with dystrophin. What is really valuable about that is that this is therefore generalizable treatment.
This can be used in all patients, whether they've had gene therapy or not had gene therapy, whether they're on skippers or not on skippers, whether they're taking steroids or not taking steroids, because we are working on a completely separate mechanism that is lacking in the bodies of these children, but is intended to be there. Yes.
One last one from me. How good is the dog model or the canine model in DMD like as a-
It's regarded as the most predictive of all of the models because animals, dogs, actually contract DMD spontaneously. It's not an induced model. When you're working in mice, it's an induced model. You induce the genetic defect. Animals, dogs rather, believe it or not, spontaneously develop DMD. This allows researchers to create colonies of animals that have naturally occurring DMD, and the pathophysiology in the dogs is virtually identical to human. Any other questions? Well, thank you very, very much again. Really appreciate your time and a lively discussion. Thank you