Thank you very much for joining us, and we'll just kick right on in.
Yeah. First of all, thanks so much, Mark, for the invitation to this wonderful conference, but also for your coverage of us over the years and following us so closely. A lot has happened since we first started.
Yes, it has. Enzyme Replacement Franchise, should we start there?
Yeah. Happy to.
Let's talk a little bit about DNL310.
Good. Let me just put that in the context where that fits into our overall portfolio. The purpose of Denali, what we want to do, is to develop and deliver what we call a new class of medicines. This is barrier-crossing medicines. The first barrier that we intend to cross is the blood-brain barrier, which historically has been a massive challenge for drug development and for all therapeutics that are based on biologics. In the space of enzyme replacement therapy, enzyme replacement therapy has been around for a few decades and has shown tremendous benefit in patients in the periphery. First, drugs were approved in the late 1990s, and then with respect to our lead program for Hunter syndrome in 2006, ELAPRASE. The challenge is that traditional, conventional enzyme replacement therapy does not cross through the blood-brain barrier.
The tragic thing in these children, and it's mostly children, is that while they have peripheral benefit, they continue to grow, organ function continues to improve, their neurocognitive state continues to regress. Tragically, very often, they lose the ability to hear, to speak, to communicate, and have any neurocognitive function. What we set out to do, or what we did, is to discover and develop and now validate what we call the transport vehicle. It's a protein-based technology that can deliver any biologic, antibodies, enzymes, oligonucleotides, and other cargoes through the blood-brain barrier. Based on this technology, we've built what we call the enzyme, the ETV franchise. ETV stands for Enzyme Transport Vehicle. We have a total of seven programs in clinical and preclinical development, three in the clinic and four preclinical.
The most advanced of those, Mark, and this is, I think, sort of a long intro to your question, the most advanced is DNL310. It's targeted for Hunter syndrome. With this program, we're now at the stage where we intend to file for an accelerated approval path early this year, and we aim for approval by the end of this year or at the latest, early next year. What I really want to sort of highlight is sort of the franchise together. DNL310 is the proof of concept. DNL310 is the first product which is based on this technology. The second, which comes shortly thereafter, is DNL126 for Sanfilippo syndrome. There are many similarities between Hunter and Sanfilippo. One is MPS II, one is MPS IIIA.
Similarities with respect to the patient population, actually the same biology, the same substrate, the same physicians that treat these indications. As we have engaged with the FDA, also the same regulatory path is what we're aiming for here.
I think one of the other things that's very similar is the biomarker that you're using. Let's talk about that in the lead product and then in the second product.
Right. In these diseases in enzyme replacement therapy, these are enzyme deficiency diseases. A gene is either missing or defective that codes for a certain enzyme, and the enzymes have certain substrates, the proteins or the sugar molecules that they degrade. In the case of Hunter, the enzyme that is missing is called IDS, iduronate-2-sulfatase, and that leads to an increase in heparan sulfate. Heparan sulfate is a sugar molecule, one of a complex form of a sugar that's called a group called glycosaminoglycans. That same substrate is also processed by an enzyme called SGSH. That enzyme is missing in Sanfilippo syndrome. Different gene defects, different enzymes, but the same substrates are elevated.
The proof of concept that we've shown with DNL310 is that after weekly dosing of DNL310, after a few weekly doses in some patients and after six months in all patients, we can normalize heparan sulfate levels. These children have massively elevated heparan sulfate levels in the brain that is not addressed by peripheral enzyme replacement therapy. With DNL310, we can normalize that. The link to 126 is that it's the same substrate. What we have described is that we have also achieved proof of concept with 126 late last year, where we have seen in the first cohort, two cohorts of patients where we have seen significant reduction of heparan sulfate, including normalization in some patients. Now back to sort of the link between Hunter syndrome and Sanfilippo.
With Hunter, we have alignment with the FDA for an accelerated approval pathway based on reduction of heparan sulfate. Now what we're seeking is to replicate that alignment with the FDA with DNL126, where we would also aim to have the similar path to the market.
Right. They haven't signed off on that yet, but it's highly likely they will. It's kind of how we think about it.
That's right. They have not signed off on it yet, but they did accept or invite us into what's called the START program. It's a new program at the FDA, which was spearheaded by Peter Marks and modeled after Operation Warp Speed during the pandemic with the intention, how can regulators and companies actually work together, collaborate on the design of a clinical development path that leads to an accelerated access to the market? We are one of only three companies within the CDER umbrella that has the START designation. Based on that, we are confident that there would be a pathway to accelerated approval.
Let's go back to 310 for a second. The idea is to get this approved and launch yourself, correct?
That's correct.
What is the competitor out there? How big is it? How does your product compare to theirs? What kind of commercial organization do we need to drive this product?
Yeah. The current standard of care, and that's sort of the first benchmark, is ELAPRASE, marketed by Takeda, approved in 2006. ELAPRASE sells about $700 million per year. It's priced at $360,000 per year. The price is essentially the same around the world. Now, that $700 million is our sort of benchmark. We have a product profile that is at least as good in the periphery as ELAPRASE is. In fact, we have shown on some markers, we have shown significant improvement, for example, urine heparan sulfate. We can further reduce this by about 70%-80% on top of or after ELAPRASE treated patients switch from ELAPRASE to DNL310. That is sort of the market size that we're aiming at.
We believe we have a superior product profile because we're at least as good in the periphery and we're superior in the CNS. Now, with respect to investigational products, there are really two competitors, two other candidates that are in clinical development. One is also an enzyme replacement therapy that is enabled through the blood-brain barrier from JCR Pharmaceuticals. The other one is a gene therapy from REGENXBIO. Now, neither of them have shown normalization of heparan sulfate. We have shown a reduction of 90%, which normalizes heparan sulfate to the same level of heparan sulfate that we have in the brain here. That's point number one. Both of those have sort of leveled out at about 60%-65% reduction. The second point, really important, is that nobody else has shown a reduction in neurofilament light. Now, neurofilament is a very good marker of neuronal damage.
Neurofilament is a structural protein in neurons. When neurons die, neurofilament essentially spills out into CSF. Neurofilament has been validated in other indications like SMA, ALS, MS, and neither REGENXBIO nor JCR have shown any reduction. Our takeaway is in order to see the reduction in neurofilament, you probably need to normalize heparan sulfate.
The thought process for us is $360,000 is the cost per patient per year for the standard of care today. That is the starting point for where you would come in, basically.
That's correct.
Is there any reason for anyone to be on ELAPRASE with your product on the market? For instance, would a new patient ever need to go there? Would there be any switching? Would there be combination? Help us understand that.
Yeah. It is entirely a switching strategy. This is also the paradigm that patients and investigators are now used to in the clinical trials. The vast majority of the patients on the 310 trial were on ELAPRASE up until a few weeks before switching onto DNL310. As our drug is not one that only gets into the brain, it gets into the entire body and the brain. It would replace ELAPRASE.
What kind of side effects, anything? What are we seeing?
The clinical experience that we have is very much akin to the experience with standard enzyme replacement therapy. There are some infusion-related reactions. There is some immunogenicity early on. This is a foreign enzyme to these patients. They don't have the enzyme. It's substituted. The body does mount an immune response. What we have seen and what we have shown and what's very encouraging is that over a not-too-long treatment duration, the number and the severity of infusion-related reactions comes way down. We are able to dose through that and then have a very benign profile.
What is required for the so-called confirmatory study and the timeline of that?
Yeah. In parallel to the Phase 1/2 study, which is the study in 47 patients, which is relatively large in a small indication such as this, in parallel to that study, three years ago, we started a randomized controlled Phase 2/3 study called COMPASS. In this study, we compare DNL310 to ELAPRASE. Patients are either dosed DNL310 or ELAPRASE. This study has the initial target set of patients fully enrolled. We expanded the study moderately because there were patients on the waitlist, and we feel we can increase the number of patients in the study without much impact on timelines or cost. That study has a two-year endpoint, fully enrolled at the end of last year.
After two years, we'll read out, and we believe that or we intend that that is the study which will then support the conversion from accelerated approval to full approval.
What is required for Sanfilippo?
Yeah.
Who's getting that approved?
Yeah. For Sanfilippo, under the START program, again, we're seeking that conversation with the FDA. The difference for Sanfilippo with Hunter is that there is no standard of care for Sanfilippo. Any randomized study would have to be against placebo, which in a rare pediatric disease seems not the right thing to do. We're seeking the conversation with the FDA about an open label pathway for the confirmatory study.
Interesting. For the confirmatory study, though.
Right.
The accelerated program.
The Phase 1/2 is also is that already is that's right.
That's what the bio, yeah.
Yeah.
Okay. You had said that there was a third program that was in the clinic. What's the third program?
That's right. The third is our PTV progranulin program. Now, it's not technically progranulin, and this is for patients with frontotemporal dementia. Now, progranulin is not technically an enzyme, but we put it in the same franchise as it is protein substitution. Patients with FTD, especially those with granulin mutations, lack levels of progranulin. It's a very direct mechanism of action. We substitute progranulin in these patients. We've shown in the hase 1 that we can achieve very high levels of progranulin in the brain of these patients, up to 27-fold, and that it was well tolerated. We are now in Part B of that study where we are enrolling patients. We are very excited about the direct mechanism of substituting progranulin in FTD patients.
Just coming back to enzyme replacement, what are the other pipeline products that you think?
Yeah. There are two programs that are in IND enabling studies, which we're advancing with great emphasis and speed, which is ETV:GAA for Pompe and ETV:GCase for Gaucher's disease. Now, both of these two diseases have standard of care, but the standard of care does not cross through the blood-brain barrier again. Here, we want to leverage the observation that TV-enabled enzymes not only get through the blood-brain barrier, but that they also more efficiently internalize in all cells in the body. What we showed for GAA, comparing ETV:GAA to Lumizyme and Nexviazyme, is that not only do we have superior reduction of substrate in the brain, which we expected, but we also have significantly reduced reduction in muscle. That is a function of transferrin receptor-mediated internalization into the cells. All cells need iron. All cells express transferrin receptor.
We latch on to transferrin receptor and internalize. That is sort of our step from predominantly CNS phenotype to really broadly enzyme replacement. Ultimately, what we want to do is sort of develop the next generation enzyme replacement therapy for all lysosomal storage.
What we're doing is we're basically taking this technology that you were trying to get across the blood-brain barrier. Now you're saying it's crossing the cell way better than standard of care.
That's right.
Is what you're basically saying?
That's right. The same mechanism that crosses it through the blood-brain barrier also internalizes more efficiently.
What is the timing of those two programs?
They are both in IND enabling study. We will file at least one of those for an IND this year. What we have stated is that we have six programs in IND enabling study, and we want to file one to two per year. This is mostly a capacity limitation at this point.
Interesting. Okay. Let's talk about the, well, actually, before I go into negotiation, just to come back to commercializing Hunter.
Yes.
I just want to make sure we understand that. What kind of commercialization effort? How much is this going to cost? Because I would think that the product, the data is going to sell itself a little bit.
Yeah. Yeah, yeah, yeah. Thanks. I didn't answer that question before. The advantage with Hunter syndrome is that, or ELAPRASE, is that essentially all patients that have been identified with Hunter are currently on ELAPRASE treatment. The therapeutic proposition for these patients and for these families and investigators is very straightforward. It is you're used to weekly enzyme replacement therapy, but your enzyme does not get into the brain. Here is one that does everything that the other one does, and it also gets into the brain. Same paradigm, same modality, same treating physician. It is a switching strategy. Switching can sometimes be really challenging, but sometimes it can be an opportunity. Here, we feel it's an opportunity because we can leverage the existing experience, the existing infrastructure. To your point, we don't think that it needs a very large commercial organization.
What we focus on right now, and Katie Peng, our Chief Commercial Officer, joined us actually three years ago already. She has experience. She launched Evrysdi and Hemlibra and Ocrevus before. Especially Evrysdi is a good example. We focus here primarily on an MSL network, which we have in place. We have that in place in the U.S. and in Europe primarily for the conversation with treating physicians and investigators. We will build, and we're in the process of building, a small field sales force, but it will not be very substantial.
20, 30 people or something.
Yeah, if that.
If that.
Yeah, if that. Another element which we're building is sort of all the patient support services. The patient hub, the call center, everything that goes around the therapeutic experience with the patients.
This is going to be a very high operating margin product right out of the gate.
It will be a high operating margin. Also, maybe one point on COGS. What is really interesting is that because this enzyme is now an Fc fusion protein, because our transport vehicle is an Fc fusion, the manufacturing costs are actually significantly lower than standard enzymes. Because in the manufacturing process, you can use a column A. You do not have to use several purification steps. You can do it in one step. It is actually possible to manufacture this product very cost-efficiently. We are to capture part of that value. We are building our own clinical manufacturing facility in Salt Lake City, Utah right now. Our first manufacturing run for clinical material just started in December. We are excited about the economies of scale that we can create.
Yeah, I'm glad you brought up CMC. I just want to make sure. Is that all buttoned up? Are we?
CMC is 100% buttoned up. DNL310 commercial supply is made. We produce with Lonza. DNL126 is produced with WuXi. We are also well on track there.
Good. Good, good. Okay. It is a good time to switch to neurodegeneration.
Yes.
We started to kind of go down that path. Talk about some of the other programs that you're working on there.
Yeah. I do want to highlight one program that's in clinical development, and then I'll go to preclinical. In clinical development is our LRRK2 inhibitor program, which is with Biogen. Now, this is a small molecule. This is a bit sort of the legacy of when we started Denali. One of our first programs was a small molecule LRRK2 inhibitor, which we then partnered with Biogen in 2020. Biogen paid just over $1 billion upfront for that deal. This program is now in a large Phase 2b study, 640 patients. The study is called LUMA. It is in idiopathic Parkinson's disease. The study will or is expected to fully enroll this year. It is a 12-month treatment duration, and we expect data on that study next year. This study was prospectively designed to be potentially registrational.
If the data are spectacular, Biogen and us would seek the conversation with regulators for an accelerated path. The base case is that it would be one of two registrational studies.
Just explain to everybody, because it's a LRRK2, however, it's idiopathic.
Yes.
Just explain that.
Yeah, yeah, yeah. Good. LRRK2 is a kinase. LRRK2 is a negative regulator of lysosomal genesis. Essentially, it's a suppressor of lysosomal function. When LRRK2 is overactive, the lysosomes, they coalesce, they clump up, and they cannot degrade proteins well. Now, lysosomal dysfunction is a core pathology in Parkinson's disease. A fantastic example is back to GCase, GBA, and Parkinson's. To illustrate the role of the lysosome in Parkinson's disease, GBA is a fantastic example. If you have homozygous mutations in the GBA gene, you have Gaucher's disease, clearly a lysosomal storage disease. If you're heterozygous for GBA mutations, you have a very high risk factor for Parkinson's disease. That shows that lysosomal dysfunction, lysosomal impairment, is a core pathology in Parkinson's. What a LRRK2 inhibitor does, it improves lysosomal function regardless of the cause of the lysosomal dysfunction.
That's the link from LRRK2 carriers to idiopathic Parkinson's disease. The therapeutic hypothesis, regardless of why the lysosome does not function well, is that a LRRK2 inhibitor will boost lysosomal function and will improve protein degradation. Of course, Parkinson's alpha-synuclein aggregation, Lewy bodies, is a protein aggregation.
What is the hypothesis here on how much lysosomal dysfunction is causing Parkinson's? You know what I mean? Like, how much is that? Is that correlated at 100%? Is it correlated at 50%?
Yeah. I mean, Parkinson's is probably a multifactorial disease.
That's why I was asking.
Different insults, these can be genetic or there is a link to pesticides and others. They seem to all converge around the lysosome, and the lysosome not functioning well. This is why we believe that regardless of what the actual cause is, the central pathology or a large part of the pathology, and we cannot answer to your question what exactly.
We do not really know, right?
We're not there. This Luma study is for sure the best test of the lysosomal hypothesis in Parkinson's.
At first, you were doing two studies, right?
Yes.
A LRRK2 only. It was like, wow, these are tough patients to find, right?
Yes. We are again doing two studies. There are just two. At first, they were two studies which could be potentially registrational with a clinical endpoint also on LRRK2 carriers. They are hard to find. They are only 2%-3% of all Parkinson's patients. What we did together with Biogen, we focused on Luma, which is idiopathic. What we did independently, we set up a biomarker study. The study is called BEACON. That is in 50 patients with confirmed LRRK2 mutations where we assess the impact of a LRRK2 inhibitor on those patients.
It's a part within the study?
No, it's a separate study.
Separate study?
BEACON is a separate study, and it's a biomarker study only. It does not have a clinical endpoint. It only has a short double-blind period, and it has an open-label study. That will give us a really strong insight into the biomarker movement. Those two studies should read out essentially at the same time. Luma in idiopathic and BEACON in LRRK2 carriers. We can overlay the data. We'll have the data, the biomarker data in LRRK2 carriers. We'll have biomarker data and clinical data in idiopathic.
Okay. Good.
Yeah, so neurodegeneration.
What else?
Yeah. Preclinical now, Alzheimer's and again, Parkinson's. Three programs in preclinical development, all in IND enabling studies. The first is an A-beta antibody that is enabled by our transport vehicle. Preclinically, we have shown that we can, by delivering more A-beta antibody into the brain, have superior plaque reduction. This is preclinical in mouse, but superior plaque reduction and much lower rates of ARIA, much lower rates of essentially vasogenic edema, so a much better safety profile. You can think about this as a much wider therapeutic window where we can compare to lecanemab or donanemab, where we can more efficiently reduce A-beta plaques. That is number one. Number two is an ASO, an antisense oligonucleotide targeting Tau, that is IV administered. Tau is the other big pathology, of course, in Alzheimer's disease. Here we have a peripherally administered ASO.
The third is, again, back to Parkinson's disease, targeting alpha-synuclein. Here we have an ASO for targeting alpha-synuclein for Parkinson's.
Got it, got it, got it. Okay. None of those are partnered? Because I know Biogen has the rights to something in Alzheimer's.
No, Biogen does not have any rights anymore. In the reorganization of the Luma study, we essentially focused the collaboration on LRRK2 only.
Got it. Okay. Anything we missed? I think we got it all, right?
That was all.
All right.
Just me being late. Thanks for.
All right.
Thanks for rushing through.
Thanks for joining us. Appreciate it.
Thank you so much.
Good to see you.
Yep.
All right.