Good morning. I'm Salveen Richter. Thanks for joining us, the Biotechnology Analyst at Goldman Sachs. And with us, we're really pleased to have Denali and Ryan Watts, the CEO. Ryan, thanks so much for being here.
And to start, could you just remind us of the clinical data that is expected across your portfolio for the remainder of this year and as we look to next year and what you are most focused on?
Salveen, great for I'm really grateful to be here. Thank you for the invitation. It's exciting to be with you. It's such an exciting time in neurodegeneration drug discovery and research. I think we're on the cusp of I think really important medicines for patients.
And so, you asked about what to expect from Denali in the next 6 to 12 months. And let me just start by saying we have 5 clinical stage programs across different therapeutic areas and modalities. And as a result, we have a lot of data coming in. I would say that, in fact, in just next month, we'll have an update on our DNEL 03:10 program, which is an ETV IDS or enzyme transfer vehicle, ironate to sulfates-four hunter syndrome in which our plan is replace aloprase with an enzyme that is engineered across the blood brain barrier using our transport vehicle technology. And so, that data we plan to present at the medical conference in the second half of July.
It's the 6 month data on the first 5 patients. And our focus here is can we have a sustained pharmacodynamic response and we'll get into more detail, but you may recall that 4 out of 5 patients actually just after 4 doses had normalized heparan sulfate, which is pretty much unprecedented. And the second I'm sorry, the 5th patient is now nearing normalization after the 3 month data, which we presented in February. So we're very excited about that data. We're also looking for the safety in line with eloprase and sustained pharmacodynamic response that will be driving our decision around the DN L310 program.
I think importantly, that program is our 1st transport vehicle enabled program. So it's a large molecule engineered across the Flurbank Ferry. We have a number of additional large molecules engineered across Flurbank Ferry using this vehicle technology. And so the early data was, I think, critically important for validating that since berm receptor is a viable path to the brain. Now we're asking the question from having a sustained response.
So I think that's probably the most evident data that we have in the portfolio. The second program, these are wholly owned assets, ETB IBS and our plan obviously has been and we've discussed this before is to build an enzyme replacement franchise using this transport vehicle technology. The second program that we should expect data on is our EIF2b small molecule activator program and that program is in healthy volunteer study. We continue to dose escalate. However, the data that we have in hand was sufficient to make the decision already to move to a Phase 1b in ALS patients.
We plan to share data from the clinical study in the second half of this year and an update on really our small molecule programs, but in particular the EI2b program. The 5 other small molecule programs that we have in sorry, the 3 other molecules that we have in development are 1 for MARP-two, DNL-one hundred and 51, and that's in partnership with Biogen and there we're basically designing the clinical trial, the late stage clinical trial for that molecule, working very closely with regulators, very closely with Biogen and plan to launch that study and share more details on that study again second half of this year. And then the last program, the RIF kinase program, this is in partnership with Sanofi. We have actually 2 molecules. 1 is a peripherally restricted compound that's entering Phase 2 studies in peripheral inflammatory diseases of PNL758.
And again, Sanofi is leading that study. And then the second is a CNS management DNL-seven 88 and that molecule is in healthy volunteer study and we plan to make a decision to move it into patient studies and hopefully share data, but again Sanofi is leading that program. So, in summary, 5 clinical stage assets, 2 programs moving to late stage clinical development, the DN L310 program for Hunter syndrome and then DN L151 program, MARC 2 for Parkinson's moving to late stage development. So it's a very exciting time with a lot of data expected even within the next month.
And Ryan, you started off by saying this is an exciting time for this space. Could you comment on with the approval of an Alzheimer's disease, what this means for the field or the read throughs to the field of neurodegeneration and specifically your portfolio with the acceptance of biomarker as an endpoint here, how that might read through your programs?
So in the very early days of Denali, we built the company on 3 principles. First is genetic pathway potential, which we call the degenerogenes. So genes when mutated that cause neurodegeneration and APP is I think 1 of these hallmark degenerogenes. Mutations in APP lead to early onset Alzheimer's disease. Mutations in APOE lead to early plaque formation and much increased risk of developing Alzheimer's disease.
And then there are protective mutation in APT that protect people from developing Alzheimer's disease and actually directionally they're opposite, meaning mutations that increase A beta cause disease, those that decrease A beta are protected. The challenge has been translating that to clinical benefit. And it's still a challenge. We all admit that, but very striking genetic data supporting this as a target. The second principle we've built the company on is engineering brain delivery.
So getting molecules into the brain, I think standard antibodies get limited exposure to brain. We're definitely getting into the brain, but it's limited. And then I think the 3rd area and principle that we've built the company on is biomarker driven development. So obviously, the FDA recognizing the importance of these disease relevant biomarkers is critical for the field, especially diseases that take a very long time to develop and also are very difficult to assess ultimately clinical benefit when you're intervening very late in disease. So I do think it's an important step.
I think anchoring these biomarkers on genetics that are definitive, knowing that these genetic targets are positive in these diseases is going to be critical. So obviously, we've talked a lot about biomarkers. We've spent a lot of time presenting data on ARP-two biomarkers and obviously our hunter program on disease relevant biomarkers such as heparin salt data. So, I think it's great to see the FDA being forward thinking about how these biomarkers can translate to clinical benefit.
Great. And then the partnerships that you mentioned, you have 1 clearly with Biogen, but also with Sanofi. Could you just talk about your current strategic approach here and how you're thinking about what to advance and what to keep to yourselves?
Yes, great question. I love this question because partnerships have been such an important part of the growth of Denali and we think it's really important to solve these problems in partnership. That includes big partnerships, which is the Biogen partnership on NORQ2 and an abeta antibody enabled biotransferred vehicle technology or the Takeda partnership, which is 3 targets using the transport vehicle technology or the Sanofi partnership. But what you'll see thematically in these partnerships, they're often around the large indications such as Alzheimer's and Parkinson's. And the way that we've built Denali is that some of the smaller indications that have high probability of success such as Hunter syndrome, which is a monogenic disease and we're getting an enzyme across the footprint barrier, our plan is to keep those assets as folate on to build an enzyme franchise, to basically manufacture and market those molecules ourselves.
And so that's been very exciting to see that evolve. And those maybe there are 30,000 patients worldwide that are on enzyme replacement therapies that could benefit from the technology getting enzymes across the liver and barrier across more whole lysosomal storage diseases. The second area are these rarer, we'll call them more rare. So, let's take ALS 200,000 patients. There we have a wholly owned EIF2B program that we plan to continue to advance ourselves, 2 pivotal studies.
And then you take again, as I described, the larger indications where we're sharing both risk and upside. And those larger indications often have longer development timelines as well. And so you see that balance within the Denali portfolio where we're essentially partnering on Alzheimer's and Parkinson's and many of these, I would say, smaller indications, faster timelines, high probability of success, especially the lysosomal storage disease were against ourselves. Now that's just the beginning because the transport vehicle platform can actually be applied to other modalities such as antisense Oligible. So we've recently shown that we can knock down gene expression using ASOs, which is another sort of sub platform like the enzyme transfer vehicle, we now have the oligo transport vehicle.
Again, we'll be strategic how we think about partnering. And then maybe the last point is that there are indications outside of our core areas. So, of course, there is really neurodegeneration and even neurodegeneration associated with rare diseases like lysosomal storage diseases, but there is potential for the transport vehicle in broader neurology, including pain, oncology, infectious disease. And in those cases, we do may see us basically pursuing select partnerships to enable the platform to use it in these other areas where we haven't built our own clinical
expertise. Great. So moving to your lead program in the blood brain barrier technology platform, so 3.10. Could you just comment how meaningful the GAG reduction that you've observed in the urine and CSFR and frame the implications for lysosomal biomarker just reductions?
Yes. I think what's important to recognize with the lysosomal storage disease is they're monogenic. It's an enzyme loss of function and there's a clear track record of clinical success in replacing the enzyme. So, you replace the enzyme, you reduce the substrate and then you have this downstream sort of distal effect of benefit. And so heparan sulfate is an incredibly relevant biomarker.
It's a disease causing biomarker. In fact, if you look across the various lysosomal storage diseases, you see that heparan sulfate itself is both necessary and sufficient to cause CNS related dysfunction. So CNS involvement always is associated with heparan sulfate in lysosomal storage diseases. That's 1 point. The second is that it's a peripheral biomarker that again generally correlates with clinical benefit.
So our decision making has is really focused on the ability to reduce heparan sulfate. We had originally set the bar about a 50% reduction in CSF heparan sulfate in part because our animal models kind of predicted that that 50% reduction may translate to complete rescue of cognition and behavior and motor function, including bone defects. But then we were actually really surprised to see both in the timing and magnitude response basically normalization in hunter patients with BNL-three 10. So that it is the hallmark biomarker, it's the driving force for decision making and our goal is to essentially normalize that biomarker. Now we see also further reduction in urine and I think this is in part because we have a higher dose in Eloprase, number 1.
And number 2, it's on a TFR backbone, it's on the transport vehicle, which may improve biodistribution also throughout peripheral tissues where transferrin receptor is spread. So, if we actually go back and we look at the data and compare the animal data to the human data, we actually have never normalized heparan sulfate in the animal model. So it's probably like a ceiling effect and yet in humans we're seeing this normalization. We think this will be the strongest correlate with clinical benefit is in fact
terms of the reductions there, it may take longer to demonstrate a difference. And that could be also dependent on patient age and severity. What gives you the confidence that patients in either your cohort A or cohort B could be capable of demonstrating a robust response?
So when we set out to basically develop a medicine for Hunter syndrome, we also decided to explore new biomarkers that have never been assessed before. So actually neuro filament has only been reported once and it was by us looking at elevated neurofilming. We also looked at lysosomal biomarkers such as GM3 or BNP. And the way we look at it is basically once you've lowered heparan sulfate, you should essentially normalize at some point these other biomarkers or at least reduce them. And what was really fascinating is in our animal studies, we really did 2 experiments.
We did 1 which we'll just call prevention study where we treated animals before they had elevated neurofilament. And then we did a study where we treated them after they had elevated neurofilament. And what we saw is that among the biomarkers, neurofilament was the least responsive. We had a mild reduction in serum, about 15% and maybe 20% to 30% in CSF. And by the way, that could also be that we're halting further addition because in animal models, you see that it steadily increased over time.
However, that reduction led to a complete rescue of cognition and motor function in the mouse model as well as improvement in bone. So it may not be as responsive as maybe the lysosomal biomarkers and certainly not as heparan sulfate. But our expectation is that if we can intervene at the right time and for the right duration, we should reduce neuro filament levels as well. And we're looking forward to seeing that data. We did a sort of a power analysis and we realized that 5 patients is not sufficient to see a significant effect.
And we have the complexity that it's not an animal model, it's the human disease. And these patients, for example, in cohort A are 5 to 10 years of age, they have had neuropathic disease anywhere between 3 7 years with pretty severe neuropathic phenotype. So, obviously, it's exploratory, it's heterogeneous, it's not elevated to the same level as you see in other diseases like CLN2 or SMA, but we're very interested in looking at this as a potential biomarker.
And then I guess, what is clinically meaningful here?
Yes. I mean, the reality is what's clinically meaningful is the clinical end point. So, the exploratory we're looking at exploratory global assessment in cognition and behavior and that's ultimately what is going to drive the ultimate success of the program. We don't know what the correlation will be between, let's say, neuro filament and these endpoints or heparan sulfate and these endpoints. And so when you're blazing the trail and you're the first 1 to show a biomarker, in some ways it's your accountability to sort of ask yourself how do these things relate over time.
You've also discussed that based on your powering assumptions and small size of cohort A, it may be difficult to demonstrate statistical significance. What should we be looking for in this mid-twenty 21 update?
Yes, that's correct. And I think part of that was an assessment of looking at variability of neuropline over time in different diseases and we only had a handful of 100 patients where they have longitudinal data. And again, so not a significant magnitude of elevation, some heterogeneity in neurofilaments. And so we haven't set expectation. We just want to see more data, longer duration, intervening earlier and we look forward to seeing that data soon.
Great. And could you talk through your expectations for Cohort B and Cohort C? What are we looking or what are you looking to understand, particularly from the latter cohort to help you design the registrational trial or just give you the overall increased confidence on the program?
Yes. So when we started this program, COBRA is really focused on somewhat older neuropathic patients and the goal there was to assess does the drug work, do you get target engagement, do you get pathway engagement and then looking initially at patient phenotype. Cohort B is really around dose and so we have 3 arms, separate arms in Cohort B, 3 mgkg, 7.5 mgkg and 15 mgkg. And the question here is what basically dose is required for normalizing heparin sulfate. And we already know that 3 mg per kg and 7.5 mg per kg is very potent, that's what we saw for 4 weeks basically normalization.
So we're going to these patients will be on those doses for a longer period of time before we select the final dose. Now cohort C is really interesting because this is in patients younger than 4 years of age, neuropathy, probably have the highest probability of basically cognitive benefit, behavioral benefit, other biomarkers related to neurodegeneration would be in this younger cohort, certainly if our animal models are predicted that would be the case. And so that's where we'll have some of our first signs, we'll look at exploratory data across all the populations and we'll share that. In fact, our update in July will be pretty comprehensive for Cohort A. So, at this point, Cohort B is on track and we're looking forward to begin enrolling cohort C around we're really thinking about selecting the dose for that population.
So, there's a lot of interest in the program and it's advancing rapidly.
And do you have any clarity from the FDA on the endpoints needed in the pivotal trial? Do you have to demonstrate functional benefit?
Yes. So, very much right now involved with the FDA. We look forward to sharing the plans. There are others in development who have kicked off Phase III space. You can get an idea of what the FDA is requiring, head to head comparison with eloprase, looking at either behavioral and cognitive endpoints and generally where we're going.
But let's not forget that there's a very powerful biomarker, which is heparin sulfate, and we're obviously engaging regulators, what does this mean? And I think here it's just a question of that correlation with reduction of heparan sulfate, let's say, in CSF with clinical benefit. And when you're pioneering the field, it's more difficult to you have to essentially establish that relationship. So, at this point, having disclosed the design of that Phase IIIII trial, but it will certainly include functional endpoints, cognitive behavioral as well as biomarkers. And what we're focused on right now with the FDA is what does it look like to be registrational.
And given this data that you've seen for this program, it basically derisks to a degree your ETV platform. Yes.
That's a great question and
we get this question a lot.
And Yes. That's a great question and we get this question a lot. And we've looked at now a number of sub modalities that you've highlighted. So, the enzyme stands for people, I think there's essentially a 1 to 1 relationship, meaning that we can plug other enzymes now onto the TB and we should get a very robust pharmacodynamic response. As I mentioned, the animal model is actually in some ways underpredicted probably capacity for transfer of the blood brain barrier in humans and that's again why we saw this normalization of heparan sulfate.
So we're really enthusiastic about bringing additional enzymes forward. We have 6 more enzymes in the portfolio. We've made the decision to build our own clinical manufacturing to help accelerate this portfolio. And then it relates to the other molecules. So pro granulan behaves very similarly to an enzyme and in fact has a really sustained pharmacodynamic response to mean that we can give a dose and you'll have rescue lysosomal function in microglia in granular knockout for over a month after a single dose.
And so it has this very similar dynamic, you know, and we know that it's localized in the lysosome. So I think that's probably the end of 1 to 1 relationship. What I think is really fascinating is when you start to look at the antibodies. So in the case of ATVs, we have ATB trend 2, we have ATB HER2 and we have ATB A beta, all of these moving very rapidly. I think obviously relevant to today's discussion or at least this week is what is it what happens when you put ATB on an A beta antibody.
We see anywhere between about a 10 fold increase of brain exposure, so a much lower dose to achieve equivalent plaque reduction. So we're obviously rapidly advancing that program and Biogen has the ability to opt into that program. And so the antibodies, again, it's we the animal model data is really striking for TREN2, another example. And so I think what the ETV does and what the DN L310 data does, it sort of derisk transferrin receptor as a viable path to the brain. It asks a real fundamental question, which is does this even work?
Can you use the TB to get molecules into the brain? And now it's going to be all about the properties of each of these unique molecules like TREN2 increasing the number of microglia, like how do we what is that going to translate to clinical benefit? What is the dose needed? And what I can say for the antibodies is that when you put it on a TV, they're highly potent. So a pretty low dose and you get very good brain uptake.
And we're guessing that when we scale with humans, that will certainly be the case as we see a big capacity for transverse. Maybe my last point is that the ASOs, it's a lot like enzymes in the sense that once you get an ASO into the brain, it has this sustained pharmacodynamic response. So, again, I think the data is really promising the BNL threat-three 10 that essentially validating that OTDs may be a viable path as well or viable platform as well.
And on the TRM-two and Probanulin programs that are IND enabling, when could those enter the clinic?
Yes. So, both of those are basically we received milestones for initiating IND enabling studies with Takeda. They have the ability to opt in with share in cost and financials fifty-fifty in U. S. And China.
And both of those are on track basically for IND and or CTA filings by end of year early next year. So, a lot of work on those. They're in the middle of these studies right now and writing up basically the clinical protocol. So, we're excited to bring 2 more transport vehicle enabled molecules into the clinic within the next 6 to 9 months.
And then you've spoken about the need to expand your manufacturing capabilities as you brought in this portfolio. Could you speak more to this point and what scale do you anticipate being necessary as you look to commercial use? Right. So, as you look to commercial use?
Right. So, our manufacturing will be focused on 2 things, clinical material, we still will use commercial partners as we go transition to commercial and the biotherapeutics platform. So we focus on the transport vehicle. We have excellent partners now and we'll continue to work with these excellent partners on manufacturing. So capacity, we have the ability to use others as CDMOs to basically advance the portfolio now and in the future.
But because the transport vehicle portfolio has rapidly expanded, we both in speed, really I think mainly in speed, but also in cost that will be more efficient for us to manufacture ourselves. So this will be a clinical manufacturing facility and it will basically enable the future TV portfolio.
And how are you thinking of prioritizing your resources here as you look to as you expand beyond these first 3 TV programs, how are you going to decide how to which ones to move into And I guess not even just in TV, but also in your other 2 verticals?
Yes, right. So obviously, we have small molecules and other modalities. So for the transport vehicle, we've made the decision to build an enzyme franchise. So that's a priority for us. In terms of our trend 2 program and our program, those are in partnership with Takeda.
So that really enables us to advance the programs for those costs covered there. And prioritization really comes down to there are the smaller indications with clear biological rationale and clear genetic associations. And then as you go to larger indications there as we discussed earlier that risk benefit is different and there are often partnerships that have allowed us to advance forward in Alzheimer's and in Parkinson's disease. And so our portfolio has been prioritized by probability of success, potential for the platform and you'll see that we've essentially taken at least 1 molecule for each of the sub modalities forward first, so we can validate that sub platform and then we're expanding each of those sub platforms. And in terms of small molecules, we'll continue as we have to find the highest probability of success targets and bring molecules forward on a regular tip into the clinic against these neurodegeneration targets.
Perfect. And then on the LRP-two program, you presented some Phase 1 target and pathway engagement data last month. Can you remind us what you found with 151's profile and what gives you optimism that the inhibitor will be meaningful in Parkinson's disease and how then you're thinking about translation to clinical outcomes?
It's really exciting to see where we've come with MARC 2. I started working on MARC 2 in 2006. It was discovered in 2004. Mutations in MARC 2 lead to increased kinase activity, represents about 3% of the Parkinson's population, this increase in kinase activity. So, we began before even before Denali working on small molecules that could cross blood brain barrier and effectively inhibit LRP-two.
And we learned a lot about LRP-two. And 1 of the things we learned is that LRP-two modulates the lysosome and linking lysosomal dysfunction to Parkinson's disease and there's obviously a link with GBA as well. And so it's really exciting. We got our first data with 201 and then our data with 151. And what we see with 151 is that we can maintain very robust inhibition with QD dosing, which is superior to what we had with 201, which was likely going to be BIV dosing.
And really, we think about the book end. On the 1 end, we want to bring MARK2 kinase activity back to normal levels. So the mutations increase kinase activity by about 2 fold. That would be sort of the minimal dose is basically that normalization. And then on the other end, when you inhibit MARC-two between 70% 80%, you see changes in lysosomal biomarkers.
These lysosomal biomarkers are actually elevated in LARP2 patients and we can normalize those lysosomal biomarkers at the higher end of the dose. So really excited that we've been able to basically identify a molecule that is generally well tolerated and we can get QD and basically explore these 2 hypotheses, the kinase hypotheses as well as the lysosomal biomarker hypotheses in terms of the dose moving forward. So now it's all about clinical trial design, looking at clinical endpoints and translating these biomarkers to clinical benefit.
And then remind us on the rationale for your Rip K1 program and why you're targeting that pathway for ALS and Alzheimer's disease? And then how we should think what we should be looking for from this healthy volunteer data in the second half?
Yes. So, Ryp kinase is actually 1 of the first targets we started working on that in MARC 2 in the very early days of Denali. And what's really fascinating about Ryp kinase is it regulates what's called the metcroptosis pathway downstream of TNF receptor 1. And there's a lot of data across different degenerative diseases that there's an inflammatory component to these diseases that essentially TNF is elevated among other cytokines and what some of the hypotheses of this when you actually activate RifK in certain cells, such as microglial cells, they become inflamed and in other cells they go through this net proptotic cell death. So, the strongest rationale for RIF kinase inhibitor is actually in peripheral inflammatory diseases and hence the reason we developed a perfectly restricted compound DNL-seven 58 that Sanofi is advancing.
In neurological diseases, there are both genetic and pathway links to rip kinase. So there's, for example, an Alzheimer's disease and substantial evidence around microglial dysfunction and hyper inflammation. And so that's 1 of the strong connections there. In ALS, there's actually more of a genetic link to optaneurin and CDK1, links to RYP kinase signaling. And so that's 1 of the reasons we're pretty enthusiastic about embedding RypK in ALS and in Alzheimer's disease.
And then on 343, which is your brain penetrant activator of EIF2D, Remind us why this is an intriguing target also in ALS, but then in FTD and you've guided to starting a trial in the second half. So, why of all your portfolio, why this next?
So, we in fact, we already announced that we're now initiating that ALS study. So, a little bit ahead of time based on the data that we have from the healthy volunteer study. So, let me tell you a little bit about the IFP. It regulates what's called the integrated stress response pathway. And I think the simplest way to think about this is that when cells are undergoing cellular stress, they lock down their mRNA and they stop translating and it's a transient protective mechanism.
And interestingly, mutations in this pathway lead to diseases like vanishing white matter disease. And in fact, in ALS, about 40% of the genetic associations are related to this particularly stress response pathway and specifically RNA and DNA binding proteins such as PDP-forty 3 or plus. And what happens in we believe what happens in ALS is that the body goes through some cellular stress and certain individuals are predisposed to lock these RNA stress granules into place as a result the cells then starve and they die. Now when you activate the IF2B, you can unlock these stress granules. And in fact, we've shown that in cells that form these stress granules, TDP-forty 3 associates with these stress granules and we can add DNL-three 43 and essentially dissolve the stress granules within minutes, which is really fascinating.
So we want to go into a patient population that has pretty much definitive evidence in these only stress granules. ALS, 95% of patients have these TDP-forty 3 positive inclusions. So I think the exception would be the SOD1 mutation population, which we wouldn't likely go in that population. And essentially what we've seen across multiple models, including venous and white matter, retinal ganglion cell damage, ALS is that when we inhibit the IL-2b, we essentially protect cells from dying. And what it really does is it sends them back into homeostatic state allowing them to translate proteins.
So in terms of the data there, we have begun that healthy volunteer study, now dose escalated, we're in the multi dose and have obviously the safe program. And so now, you know, we're in the multi dose and we have obviously the data in hand to make that decision to report into Phase 1b. I would comment it's a competitive target. There's at least 1 other clinical stage program. And so now for us it's really about validating the target going forward in ALS and exploring other indications as
well. And maybe as a last question here, what else should we be focused on with Denali as you continue to evolve as a company in this neuro space? Yes.
It's been an incredible transition in the last year for Denali. I think we went from getting our first patient data in Alzheimer's as well as in Hunter syndrome to then expanding our portfolio, expanding our partnerships and now we're making that transition to medicine and beginning really the commercial stage, thinking about commercialization, building an enzyme replacement therapy commercial franchise. And so I think that's some of where we're going now is becoming a fully integrated global biotech company. And I think it's exciting to see that the initial data validates the platform, puts us in a position to now build more broadly. And so that's it.
I mean, for us, it's about now getting our medicines to patients. And very excited that we're in a number of patient studies now.
Perfect. Well with that Ryan, thank you so much for your time today.
Thank you, Sal.