Of Seraxis. Gentlemen, please go ahead.
Thank you very much, Robert, and thank you for folks that have dialed in to listen to our presentation. Robert said, my name is Jonathan, I'm the CEO of Sernova. Sernova is a Toronto Stock Exchange-listed company. With me on the call is Dr. Will Rust, who is the CEO of Seraxis. Several weeks ago now, we announced that we are merging the two companies to form a new entity called BetaNova Biotherapeutics, and we'll clearly explain what the mission of that company is.
At a high level, we are integrating our respective sciences. We're doing this with a great passion because we are working to develop what we call a functional cure for the hideous condition that is type 1 diabetes. As we move on, I encourage everybody to take a screenshot of this slide as we will be making forward-looking statements.
You should bear that in mind during the presentation. Okay. At a high level, I'm happy to summarize what we're doing. It's the mission of both of these companies to create an entity called BetaNova Biotherapeutics that we believe will be the differentiated leader in using cell therapy to treat type 1 diabetes. We do have a very bold mission, and our mission, quite simply, is to develop this functional cure for type 1 diabetes. Just to let you guys know, I am type 1 diabetic, have been most of my life. So this is very personal for myself, and it's very personal for Will, and we are super charged up and enthusiastic to achieve this mission.
The way that we're going to do this, once the companies are fully merged subject to shareholder approval, we have three things that we are bringing to the table respectively. First of all, on the Seraxis side, Seraxis has two types of cells which can be used to treat T1D. We have SR-02. These are allogeneic insulin-producing cells, and I'm pleased to report that in April of this year, the IND for utilizing these cells in T1D patients was cleared by the FDA. Also, Seraxis brings to the table some gene-edited cells called SR-03, and these are immune-evading insulin-producing cells. We are respectively doing the IND-enabling studies right now so that we can file an IND for the SR-03 cells also next year.
Sernova has been working for quite some time in the field of type 1 diabetes, and we have an implantable and retrievable medical device, which we call the Cell Pouch, which has completed a phase I/II clinical trial. We have an open IND with this, and in this study, we did meet both our primary and our secondary endpoints. We will talk a little bit about that in this presentation.
The third leg of our stool, we are using advanced immune system management to prevent the islet cells that are implanted either being recognized by the immune system or being attacked by the immune system. We will be using co-stimulatory blockers, like Tegoprubart. We have a collaboration with Eledon Pharmaceuticals as part of our immune tailoring strategy, and we will also use standard of care in the trials as well.
We are blessed that we have a number of upcoming milestones in the very near term that we believe will correlate to a value inflection on our stock price. I am on the right-hand side of the slide now. We did enter into the merger agreements approximately three, four weeks ago. Again, that is subject to shareholder approval in December.
We believe we already have the required number of votes to get this approved. We are enrolling sites right now. Sites have been enrolled for the trial, and we are starting to recruit patients in this quarter. The plan is that the phase I/II trial with our SR-02 cells, we will start dosing early in the new year, which means that we will be getting patient data in the first half of 2027, which is very exciting.
We also are working to advance the SR-03 cells through to IND approval in the second half of next year. Also right now we are preparing to get ready to be listed on NASDAQ. We are currently listed on the Toronto Stock Exchange, but we plan for possibly a dual listing, and we will get that done in the first part of next year as well. That is a top-line summary of where we are.
I am going to jump in and describe the cells a little bit here. Jonathan mentioned that we have two cells. From the Seraxis side, we have worked about 15 years developing these cells. I think the best way to describe it is that the proof of concept here is rock solid, right? No one is doubting the proof of concept. The proof of concept is that if we implant into patients' cells that we manufacture in the lab that secrete insulin, then that will be curative for the symptoms of type 1 diabetes, right? Patients who receive these cells similar to these in the clinic have stopped injecting insulin, right? They have complete autonomous control of blood glucose. It is not a question of whether the mechanism of action here works. What it really comes down to is execution.
So there's only one company ahead of us that started a clinical study. They manufactured cells, insulin-secreting cells from embryonic stem cells. They were able to do that, but there was a number of issues with manufacturing and stability of those cells. What we're offering here is that we can manufacture cells that are just simply better. We're better at executing it.
The reason that we're better is that instead of starting from an embryonic stem cell source, we start from a proprietary stem cell that we engineered from a human pancreas. This is better because when we start with a pancreas, our manufacturing to make more pancreas is just simply more efficient. At the end of that process, we get cells that are also, we believe, more potent. So they secrete more insulin, and they do so in response to glucose.
That's the SR-02, and you can see that on the right side of your screen. These SR-02 cells, they came from a very compatible donor. We selected that on purpose. So they are very compatible as an organ transplant. However, the patients that receive these will need immune suppression, at least initially. What our goal is to tailor these cells with an immune suppression protocol that is more modern and would enable us to wean the immune suppression medication down to low levels over time. We know that with the compatible graft, that is highly possible with this type of transplant. There's clinical data already demonstrating that that's possible. But we've got another strategy, and that's SR-03, and that's right below.
SR-03 is essentially a version of SR-02 that we've gene-edited to take that already highly compatible cell and make it even more compatible as an organ transplant. The goal here is, we think that there's a good chance when we wean patients off of immune suppression, we can take that level down to zero, not just a low level.
The data you're seeing on this slide is reasons why we are so confident in that outcome. When we put SR-02 into animal models, there were antibodies recognized that were generated against it. When we put SR-03 in animals, there were no antibodies generated against it. It was essentially invisible to the immune system. It was so compatible. These are the two programs that we're advancing.
SR-02 goes in the clinic, wean off immune suppression as low as we possible can, and it is non-gene edited, and then a gene-edited cell. Okay. If we go to the next slide. Here's some independent testing. I told you just now very confidently that our cells were better. It has been independently tested. What you're looking at here on the right are human islets that were harvested from a donor pancreas, and our lab-generated islets, insulin-secreting cell clusters on the left.
Those traces are very similar in both the shape and also the amount of insulin secreted. On the bottom is the insulin secretion, on the top is the mechanism of their secretion of calcium influx. So, we feel that at the time of the implant, these are going to be more potent than anything that's been tested before. Could we go on?
Let me put forward this to you. Here is something that is very well known now. The FDA has made very clear that if we were to implant cells that don't need immune suppression, we need a method to retrieve those cells just in case there should be a safety event. The safety event anyone is scared of when you talk about implanting a stem cell-derived graft is oncogenesis. So it has to be removable. This is where the magic of our partnership with Sernova comes into play. When we form BetaNova, we get their Cell Pouch, and here you are looking at it now. So in the middle is the pouch behind a quarter for scale before implant, and then a pouch after it has been residing in a patient for five years.
They did this phase I/II study where these pouches, the void spaces in the pouches were filled with islets, the insulin-secreting cells that were harvested from donor pancreases. After five years, what was remarkable is that they were still there, and they were still functioning. This trial hit all of their first and secondary endpoints, the primary and secondary endpoints, demonstrating that it was safe, demonstrating that it created this environment where the insulin-secreting cells could survive and function stably long-term.
That is the only device ever demonstrated clinically to achieve that goal. So when we marry this pouch, this delivery device, which improves the safety profile by providing an environment for cells to survive that is fully retrievable with our stem cell-derived islets that are potent and manufacturable, that is why we are confident that we have got the first practical cure for insulin-requiring diabetes.
I am going to show you some more about the pouch on the next slide. This is remarkable. This is data from their phase I/II study that we are leveraging in BetaNova. So we are looking at a cross-section of that pouch that was residing for five years, and each of those circles represent a space where the islets were residing. You can see on the bottom that space stained for insulin in the color red and blood vessels in the color green. You can see that the criteria were met.
The cells are there secreting insulin, and they are nestled against blood vessels so that they can sense the glucose in that patient and secrete the appropriate amount of insulin. So truly remarkable. I will say that again. We are creating a little pancreatic environment outside of the pancreas where we can house our potent lab-derived manufacturable replacement insulin-secreting cells. That is the strategy. With our two approaches to eliminating the immune suppression, we are going to have near-term readouts that demonstrate the potential for relieving T1D in these patients that need it so badly. You can go on.
Yeah. Thank you, Will. Folks on the line, we've given you a very high-level overview of the merger and what's happening and our respective technologies. For those of you who know someone with type 1 diabetes, you may be type 1 diabetic yourself. This is a disease that's killing people every single day. All they are suffering from serious comorbidities.
So we are empowered, and we are motivated, and we are passionate about developing the functional cure that Will just described. If you'd like to get in touch and speak to us, you can see the email here of David Burke, who's our VP of Investor Relations. And Robert, other than that, we have just over 10 minutes left, and we'd be happy to take some questions.
Well, great. Thank you very much. That was a very fascinating presentation. It seems, if I'm interpreting this correctly, it seems as if you've focused on the cells themselves and how to deliver them and make them retrievable if necessary. I've spoken with other companies that are working on the immune suppression part and that part of the process of implanting islet cells. Would it be correct to say that you're working on the cells themselves and refining that to practice so it can be applied to the entire diabetes population?
Go ahead, Will.
Yeah, I'll answer that, Robert. That question is spot on. The challenge here is making it a practical cure that people have actually access to, right?
Yeah.
You are right. There are others out there that have been pretty vocal about their methods for avoiding immune suppression. They are all based on genetic engineering. SR-03 is our genetic engineering attempt, right? I am going to say two things. Our philosophy towards genetic engineering to achieve evasion of immune destruction are different. I do not know if we have the time today to get into the scientific minutia behind that, but they are very different, right?
Our philosophy is that we want to make the cell as compatible as it possibly can be, but not causing it to be overexpressing foreign synthetic proteins, right? Instead of an active approach to try to turn away the immune system, it is a passive approach to try to hide from the immune system. We feel the passive approach is better because it is a stable cell line that can be manufactured over hundreds of cell generations in our manufacturing facility.
Very stable. Whereas when you have overexpression and you are following the philosophy of trying to actively turn away the immune system, then you run into those issues of stability and off-site mutations, and in our hands, it was not practical. That is one very big difference in our philosophy. There is another big difference in our philosophy is that we have got two shots on goal, right?
We have got one strategy that is not gene-edited, and I am going to tell you the beauty of a non-gene-edited strategy. If we have a non-gene-edited strategy, we can take advantage of the body's natural process of establishing tolerance. There are patients that receive very compatible grafts and develop tolerance, meaning they do not need immune suppression because they accept the graft itself.
That is very powerful because it has a clinical record of success. These gene-editing approaches, they have got terrific non-clinical data, but no clinical data to prove they exist. We think that the most conservative, the most straightforward, the best path strategy is to do both of these approaches, and we are the only ones who are doing both, right?
We are going to go first with the non-gene-edited, try to establish tolerance, and develop a safety profile, and then we will approach the agency and say, "Look, we are going to do the exact same thing, same cells, same manufacturing, same lot release, same delivery method. Everything the same, except we are introducing a few gene edits to improve the compatibility." We think that is the smoothest path to achieving the goal near term. Let us remove the requirement for insulin in these patients. Those are differentiators between us and what everyone else is doing.
One of the things you mentioned, in terms of the immune system, is that you have collaborations with other companies. You mentioned Eledon and Tegoprubart, the standard of care, tacrolimus, and anything else that is in development. It sounds as if this would be compatible with any currently approved or standard of care for immune suppression right away.
That is 100% our purpose in this design. We will use standard of care just to remove variables. We do not want risk. We want to prove to the shareholders and our stakeholders that this works. Then we switch to next-gen immune suppressants like Tegoprubart, which offer so many patient benefits and opportunity to remove side effects, opportunity to begin weaning. Tegoprubart is currently used with other medications in concert. There are multiple drugs that are taken at the same time. One of our goals would be to remove those so that it is monotherapy, and then begin reducing the monotherapy, and there is a clinical path to achieving that.
Here you have transplanted islet cells that go into the patient, produce insulin, and the patients become insulin independent. They normalize their blood sugar and HbA1c, and then will no longer require immune suppression for maintenance either.
That is right. Step one, establish a stable graft so they do not need insulin. Step two, wean off the immune suppression. One of two cell lines is going to be best at doing that, either the allogeneic non-gene edited or the gene edited, and we will find out.
Robert, a lot of people who are not type 1 or do not know anybody that is type 1, a lot of people thinks we have cracked this nut, and we have fixed it. Look at myself as example. I use an insulin pump, and I have a continuous glucose monitor that speaks to my insulin pump and turns it up, turns it down. But I only have insulin, which is only a part of the equation.
My blood sugars in a normal day can goes flying sky high. I can go hypoglycemic to a point where you are skirting very dangerous territory if your blood sugar goes too low. One in 10 people with T1D die of severe hypoglycemia. But what you saw on the slide that Will showed with the cells in the Cell Pouch in a T1D patient, there are multiple hormones that we need to regulate blood glucose.
We need insulin to bring your blood sugar down. Then you have glucagon to counteract the insulin and stop your blood sugar going too low. Then you have a hormone called somatostatin that controls insulin and glucagon. Finally here, we will be giving T1D patients the necessary hormones to regulate their blood sugar. We have shown we can do this in the clinic in type 1 diabetics with the cadaveric islet cells in the Cell Pouch, so now we are replacing those with commercially viable, because of how we manufacture and the quality of the cells, where the mission that I stated at the beginning is at arm's length. We are going to touch it very soon and execute.
Well, you raised an interesting point in that for the past 30 years or so, I have been hearing about longer acting insulins, insulin pumps, inhaled insulin, and all of these ways of living with diabetes. This is the first time I have really heard success in addressing the root problem and replacing the cells that make the insulin. This was, I hesitate to use the word cure, but this was science fiction not that long ago. This is really remarkable.
Robert, at the risk of aging myself, when I was diagnosed with type 1 diabetes, I woke up from a coma in intensive care to be told that I had type 1 diabetes. And the days after, I was introduced to my reusable glass syringe, and I was introduced to my insulin that had been extracted from pig pancreas. I was injecting porcine insulin from a glass syringe, and no way of knowing what my blood sugar is.
In what is, relatively speaking, a short amount of time, we have had recombinant insulins, long-acting insulins, rapid insulins, continuous glucose monitors, pen injectors, insulin pumps. We are a long way improved from where we were when I got out of the gates of this disease. But you look where we will be in the next two, three years here, when we will be filing for a Biologics License Application to get this product approved, subject to the clinical data, of course. Then I will be a very, very happy man because I will have seen going from pork insulin, and before pork insulin, type 1 diabetes was a certain death. To getting what we, I know you are not a fan of the functional cure terminology, but we will be making people independent of the need for external insulin.
Well, I am a big fan of the term, but cautious to use it just because of the history.
Yeah, absolutely.
You also just brought up an interesting point about clinical milestones. Are there any things that we should be watching for in terms of clinical development that would be milestones that we can look forward to?
Yes, lots. Go ahead .
Yeah. It is a very small trial, only six patients, and we will be releasing data as we get it. Luckily, they are very near term, very concrete milestones that indicate that the graft is working. The best one is what is called C-peptide. C-peptide is secreted alongside insulin in the blood, and it can be measured, and there is a very linear correlation between the amount that is secreted and benefit to the patient.
What we will do is, we will be tracking that within months of the implant, and that will generate data that we can make public. This path has been trod before us, with Vertex Pharmaceuticals and their clinical study. We got patient data from patient one, and then early data from patient two. And it was used to generate quite a lot of excitement in the field, so we will do the same thing. That's a very early milestone that directly points to efficacy of our graft, and we'll have that shortly after treating our first patient.
Okay. Just one thing about the happy man. I think you'll make many thousands of-
I walked the whole world
And millions of people happy. Well, yeah. Their families too.
It's a big
In terms of who this would be applicable to, the type 1 diabetics, the type 2. Are there any particular patients that are well-suited or contraindicated, or is the entire patient population potential candidates?
Go ahead, Will.
Yeah. So like any clinical study, we're safety first, so we treat the patients who need it most, so the sickest patients. So, we'll first be enrolling patients that suffer from hypoglycemic episodes that they can't feel coming, and the reason for that is it's very dangerous. Episodes of hypoglycemia can lead to death. We will treat those patients first. Once we begin to establish a safety profile, then, obviously, we will try to expand our enrollment to other types of patients. Type 1 diabetes has no lack of patients who would benefit from the therapy. The incidence of disease is accelerating globally every year. There are patients who have insulin-requiring diabetes that are not type 1 diabetes that could benefit. It is quite a large market.
Yeah. In terms of the long-term consequences and cost avoided, not to mention the insulin, the value of this is just astronomical per patient.
We agree.
Okay. I think we are out of time, but this has been a fascinating discussion. I look forward to hearing about these clinical milestones and following your progress.
Yeah.
Thank you very much.
Thank you, Robert. We appreciate the time. Bye-bye.
Bye