I'm Mike DiFiore. For those who don't know me, I'm one of the senior biotech analysts at Evercore ISI. Pleased to host Alex Schuth, Chief Operating Officer and co-founder of Denali Therapeutics. Alex, welcome. Thanks so much for making time and being here with us today. But before we delve deep into Q&A, why don't you please give an overview of the business and perhaps key highlights?
Yeah, we'll do that. And first of all, Mike, thanks so much for inviting us, one, to the conference, and two, for your coverage over time, which is always spot on.
Thank you.
In-depth and much appreciated. So, yeah, we started Denali. It's coming up on 10 years early next year. And when we started the company, we wanted to. We had one goal. We call it Defeat Degeneration, to make effective medicines for patients with neurodegenerative diseases. And the core, we wanted to address the core obstacle in the past, which is the blood-brain barrier. So we set out to invent a technology that allows us to deliver large molecules, so antibodies, enzymes, ASOs, which are very effective medicines, but haven't had the potential to show their full opportunity in the brain, to develop a technology which we can transport these biologics through the blood-brain barrier. We call this the transport vehicle.
So now we're at an exciting point where we're at the cusp of filing our first product based on the transport vehicle for accelerated approval, early in 2025. It's an enzyme replacement therapy called DNL310 for Hunter syndrome. And then we have a portfolio of enzymes, which we look at as our enzyme franchise, which will follow very quickly on that. In addition to those programs, we have a large preclinical portfolio of programs which focus on the larger neurodegenerative indications. So Abeta for Alzheimer's, Tau for Alzheimer's, Alpha-synuclein for Parkinson's disease, and a number of other programs. We're currently well capitalized. We had $1.3 billion of cash at the end of Q3. We guided with a cash that will last us into 2028. So through the approval of 310 and potentially the next enzyme program on the line.
Got it. Thank you for that, Alex. So let's just delve into DNL310 for Hunter syndrome. Obviously, you've, in your Q3 update, you indicated things were progressing smoothly with the BLA submission. Any updates on that front? We're still on track for early 2025?
We're very much on track for early 2025. The team is working tirelessly to put together all the modules, to file for approval. We had, it was, it was only in September that we had indicated that we had reached alignment with the FDA, on qualifying heparan sulfate as a surrogate marker that reasonably predicts benefit in patients to use that marker as, the basis for accelerated approval. However, for the last 18 months, or for the 18 months before that, we had never given up hope that there was a path to accelerated approval. So we had actually done much of the preparation, at risk. So, for example, we initiated our CMC work, a year and a half ago to make sure that that doesn't come on critical path.
Wow, it was a risk well taken, it sounds like.
Yeah, yeah, yeah.
But the past 12 months, we're kind of transformative in terms of how CDER has become more open to recognize key biomarkers such as CSF, heparan sulfate, as reasonably likely to predict clinical benefit. And the spark that really helped ignite this fire under the FDA was the seminal Reagan-Udall workshop meeting back in February. However, that was a spark, but the floodgates didn't immediately open after that. It took some work, maybe perhaps to the extent that you can kind of comment on your journey post that meeting and what it took to convince the FDA to finally allow this biomarker.
Yeah. So, for context, the Reagan-Udall Foundation is a foundation that was set up by Congress. It is called the Foundation for the FDA. So it advises the FDA in matters of scientific development, but it also brings together industry and patient advocacy. So, there was this workshop, which was in late February, which was specifically called to qualify heparan sulfate as a surrogate, heparan sulfate in CSF as a surrogate marker in lysosomal storage diseases. So it was a very successful meeting, which was really spearheaded by CBER. So Peter Marks, leading CBER, as we all know, is a strong advocate for accelerating the development in the rare disease field.
Right.
He was able in this meeting to bring his colleagues from the CDER side to the meeting, where the utility of heparan sulfate was broadly discussed and agreed upon. Now, subsequently, what we wanted to make sure, that was a public community meeting, right? So different industry participants, plus academia and patient advocacy. What we wanted to make sure thereafter is that we really have very concrete and specific alignment with the FDA with respect to our clinical development plan, not only for accelerated approval, but for the subsequent conversion to full approval. So the reason why it took from February to September is because we wanted to have the interaction, including a type C meeting, a formal type C meeting, which has a certain prerequisite in terms of when you submit the documents, et cetera.
We wanted to wait for the minutes to really have it, you know, written on paper, that we actually have this path to accelerated approval and that our confirmatory phase II , III study, the COMPASS trial can serve as the basis for subsequent conversion to full approval.
Got it. Got it. And just based on the phase I trial, which you have given incremental data updates throughout the course of the past two years, I feel.
Yes.
Great reduction in heparan sulfate, almost, I think, 90% reduction, I think it is.
Yes.
acts on both peripheral, it seems to act on both peripheral and central aspects of the disease.
Yes.
Could this potentially be best in class compared to certain gene therapy competitors out there? Get your thoughts on that.
Yes, absolutely. So we are very encouraged by the data. And there are really four pieces of data that we give us the confidence in the potential efficacy of the drug. The first is the normalization of heparan sulfate. And as you mentioned, we're not aware of anyone else having achieved normalization of a substrate in the brain. So neither gene therapy nor others who use receptor-mediated transcytosis approach for the brain have been able to achieve normalization. So that's very strong. But then in addition, that is the basis for accelerated approval. But then in addition, we have now a significant reduction in neurofilament, and in fact, the last data that we showed in all age groups, we not only reduce but we normalize neurofilament, right? So neurofilament is really an established marker of neuronal damage.
It's been established even in the connection of approvals in the field of ALS for tofersen, SMA, and MS. So we're very encouraged to see the strong. It took some time. It took six months for neurofilament to start to come down, but then thereafter it's a steady reduction of neurofilament, then it reaches statistically significant and then normalizes. Three, improvement in hearing. And four, which is the endpoint for the confirmatory study, which is the Vineland Adaptive Behavior Scales. So we see in all subdomains on communication, on socialization, activities of daily living, motor skills, we see patients doing better and gaining skills. And from these children in Hunter syndrome, after the diagnosis, it's not necessarily expected that they gain additional skills. In fact, the normal course of disease, they get diagnosed at age three or four, and from there on they actually lose skills.
Taking those four pieces together, we absolutely aim for a clear best in class opportunity.
Sure. Sure. You mentioned also the phase II, III COMPASS trial for DNL310 that's instituted for confirmatory approval. I mean, how should we think about about the prospects in this trial? You have a dual primary endpoint, one of which is CSF heparan sulfate change at 24 weeks. So standard biomarker type of endpoint. But the other is clinical. It's this Vineland-3 scale at 96 weeks. I guess my question is, is this the optimal time to measure this endpoint? And how should we think about nocebo effect here? And also the third question, will there be an interim analysis in the study?
Yeah. So, let me answer. So, the COMPASS trial is intended to enroll about 54 patients, which is actually a relatively large study in the field of lysosomal storage disease, where sometimes you see a dozen or a couple of dozen patients. So we already wanted to design a substantial trial here. Number two is, we feel based on the data that we've seen from the open label study, which is in the context of an open label study, three of the four pieces that I mentioned, heparan sulfate, neurofilament, and improvement of hearing are objective endpoints. So we see an improvement on disease.
Now, Vineland is in an open label study with all the caveats of an open label study, has a subjective component, but we feel that the three objective measurements give us confidence that what we see in the open label study is actually attributed to the effect of the drug. So we do feel a high degree of confidence that that would replicate in the context of a randomized controlled trial. Now, all of that with the caveat that this is new territory, right? It's new territory. There is no enzyme replacement therapy for the brain right now.
Right.
Right? I think we set up the context as best as we could, trial size, trial design, confidence in the endpoint, but ultimately we do have to wait for the data.
I see. I see. Any chance that 96 weeks would be too long to wait? I guess you better be safe than sorry, but like, did you consider earlier time points to measure the Vineland?
I mean, typically what you see, we wanted to give it a decent treatment duration where Hunter syndrome, like all these diseases, are heterogeneous. They're heterogeneous based on the mutation status of the patient, if it's a full deletion or if it's a missense mutation, and we wanted to make sure that especially the placebo group has enough time to separate from the treatment group, and therefore we wanted to give it a full two years of treatment.
I see. Okay. Pivoting to DNL126 and Sanfilippo syndrome. Another MPS disease, slightly. It's definitely related to Hunter's, but you announced top line data in your Q3 release, very encouraging, and just given the similarities of Sanfilippo to Hunter and the identical ETV delivery platform, I mean, could we expect similar biomarker response kinetics that was seen in Hunter? And maybe in terms of speed and depth of CSF heparan sulfate reduction.
Yeah. Short answer is yes. MPS IIIA and MPS II are very closely correlated, very closely linked from a pathology perspective. It's the same endpoint. It's heparan sulfate, or it's the same substrate, which serves as the same endpoint. In fact, it's even the same patient, is it the same physicians that are treating, these patients, or there are a number of similarities. So our path, our strategy with, with DNL126 is to very closely follow DNL310, follow the path of 310 open, however, to do it faster and to do it with fewer patients. And as you know, we submitted, we recently amended our phase II, I/II in a way that we expanded it to enroll more patients. We expanded it from eight patients to 20 patients.
Got it.
Another element here to highlight is that DNL126 was selected into the FDA START program, which is a new pilot program, which was also spearheaded by Peter Marks. I mean, sometimes it's referred to as Operation Warp Speed for rare diseases. So it's one of three programs under the CDER jurisdiction that was selected in this program. Based on this, we have now active conversation with the FDA. Our goal is to align with the FDA again on a path that allows for accelerated approval based on the phase I/II .
Got it. And these 12 additional patients, that you did add to the study represent three additional cohorts. Could you elaborate further on this in terms of what doses they're using or?
Yeah, we're currently not going into the detail there, but we do want to explore the full range of efficacy in these early patients.
Got it. Got it. So obviously, and this is the last question on the 126 , the NfL data will take time to mature.
Yeah.
But what other biomarker data could we expect to see in the first cut?
Yeah. Again, just like we did in 310. So we look at other markers of lysosomal function, GM2, GM3. There are other markers. All of this points to an improved lysosomal function in these, in these DNLs.
Got it. Got it. Okay. Just pivoting also now to DNL343, your EIF2B inhibitor or activator to say in ALS. I know that Mass General controls the communication on this front, but any updates when we may expect top line data?
Yeah. We have no update here as well. It's very exciting new biology. EIF2B activation, part of the integrated stress response. It's a novel mechanism. We have a very good and strong collaboration with Mass General that is conducting the HEALEY platform trial. But it's completely in their hands.
Got it. Obviously the biology is very compelling.
Yeah.
The phase I biomarker data seemed very promising, but I guess the main concern that a lot of folks have is whether six months is enough to see clinical benefit on the ALSFRS-R score. How should we think about this? I know this is a very high risk, high reward trial.
Yeah. It's a very fair point. And frankly, we would've probably wanted to treat longer than six months. However, it's a balance with the desires of the patient community.
Yeah.
In ALS, where the average survival is two to three years after diagnosis, the community felt very strongly that they would not want a trial with a one year placebo control.
This is kind of par for the course with regards to the HEALEY platform.
Yes.
All six months.
All, they're all six months. It's one standard. It's one standard trial design, which applies to all the regimens.
Got it. In the event this trial is not successful, would this necessarily be the death knell for the product or would Denali opt to run another trial independently to kind of try again?
We'll just have to look at the data when the data come in. The primary endpoint is ALSFRS-R after six months. There is also an open label extension, so patients are dosed for longer than six months, and once we have all the data in hand, we'll have to decide at the time.
Okay. Final question on 343.
Yeah.
Any comments on how it may be differentiated from AbbVie's molecule?
We don't know is the short answer. We know that these are different chemical structures, but exactly how they translate into different properties, we do not know.
Okay. Okay. Fair enough. Now on to the ATV- Abeta platform. I guess tell us about the lead Abeta sequence that you selected. I know Biogen handed back the construct to you guys earlier in the year. And we could all kind of just guess what antibody that was for, but was never disclosed.
Right.
But, would you be able to kind of elaborate more on the sequence you selected and what species of plaque it binds to?
So overall, we're very excited about the opportunity of, again, active transport of an antibody targeting Abeta. Roche's data with trontinemab are very encouraging.
Right.
In terms of showing plaque reduction much faster than standard antibodies, showing plaque reduction after six months rather than 12 or 18 months, and showing much lower rates of ARIA. So the key safety concern for the field of Abeta antibodies. Now, what we have also learned is that the reduced rate of ARIA is a direct consequence of actively delivering through transferrin receptor rather than the route of a standard antibody, which is through the choroid plexus into the perivascular space. So we've shown data comparing the distribution of a standard antibody, which enriches in the perivascular space, which is where it might cause ARIA, and an actively transported antibody that goes through the capillary bed through the expression of the highly expressed transferrin receptor in that space. So overall, very encouraging. Trontinemab data are good. We see room for improvement.
We see room for improvement on tolerability with respect to infusion-related reactions, and probably also on a lower anemia risk as well.
Got it. I was gonna say, I know you've engineered your ATV to be immune silent, quote unquote, but, when it's bound to transfer. But just to clarify, how is this, how is your technology different from trontinemab's brain shuttle and, and why may it confer less anemia?
Yeah. So conceptually it's the same. We both use transferrin receptor to shuttle through, but architecturally it's completely different. We bind transferrin receptor with the Fc of an antibody. So with the legs or with one leg of an antibody, while Roche has fused essentially a Fab to the antibody. So it has an additional, it binds with a Fab that is attached to the molecule. So very different architecture. That architecture will translate in our hands, and we've done head-to-head studies. That architecture translates into key differences, especially our ability to make the molecule immune silent, but what we call conditionally immune silent. So it's immune silent when bound to transferrin receptor, but it's immune active when bound to plaque because you want effector function to clear plaque. So that's what our molecule can do and that's what the Roche molecule cannot.
I understand. And in the last 20 seconds we have, Alex, I mean, I know you mentioned in the past that you're also kind of developing this ATV Abeta construct, kind of in parallel, one with your transferrin construct and also with CD98.
Yes.
How's that going? And, I guess it'll all depend on how the data, but are you leaning towards one construct versus the other?
So we're going in parallel, for now. More advanced is the TfR version of the technology. But we're also exploring CD98, which could have some key advantages over transferrin receptor, but it's further behind.
Got it. Last question too.
Yeah.
This, I mean, at this time.
Yeah.
So basically when you compare CD98 versus the classical transferrin construct, I mean, is there one that kind of makes it home to the capillaries more so? And because of that, gives it a much more smoother and broader distribution or?
The key difference on CD98 is that CD98 is not expressed on reticulocytes. It's not expressed on immature red blood cells and therefore does not have an anemia liability.
Got it. Got it. Alex, I could talk for another half hour. Thank you so much for making time for us. Very helpful, and I wish you the best of luck.
All right.
So.