Good afternoon, everyone. Welcome to our second day at our Piper Family Healthcare Conference. My name is Yasmeen Rahimi. I'm a Senior Biotech Analyst at Piper. Really excited to have Design Therapeutics with us. Pratik, it's always wonderful to have you. Lots to cover over the next 25 minutes, and let's get started.
Wonderful. Thank you for the invitation. It's terrific to be here at this great conference, and since this is live webcast, I should say that during this discussion, I'll be making forward-looking statements about our business, our R&D plans, and our financial condition, and obviously, the actual results may differ materially, and please refer to the risk factor section of our recently filed 10-Q with the SEC. With that out of the way, we can get started.
Perfect. Thank you. Let's maybe start off with a recent update at the earnings, which was a big announcement, which was announcing DT-818 that's going to enter the clinic in the first half of 2026 for a DM1 program. Maybe help us understand sort of the mechanism of DT-818. And two, it's a question that many will ask you is, how does it differ versus other approaches that are currently in development?
Thank you for that question. We were very excited to announce the regulatory clearance to begin our clinical studies with DT-818 for DM1 outside the U.S. And the molecule is a gene-targeted chimera like the other programs that we are pioneering. And that means that the molecule is a small molecule. It's a bifunctional molecule. And it is designed to dial down the expression of the mutant toxic DMPK RNA that is the known genetic cause of DM1. And so there's a CTG/CTG repeat expansion in the DMPK gene. And it's a dominant negative genetic. So an individual only has to have one mutant allele in order to, unfortunately, get DM1. And the reason that the disease occurs is that the mutant gene produces an RNA. And the C's and G's fold over on themselves, and they form hairpins and tangles, and you get this sort of RNA hairball.
And you can actually see it. You can visualize it under a microscope in patient cells. And what this does is it serves as a place for splice proteins that think of these as splice junctions to bind to, and then they get stuck in this RNA tangle that we call a nuclear foci. And because the splice proteins are stuck in the tangle, all kinds of genes get misspliced. And that ends up creating a tremendous amount of cellular dysfunction and ultimately the disease manifestation. And so what 818 is designed to do is actually recognize those long CTG repeats in the mutant allele itself and to dial down or essentially turn off the production of the toxic gene product. And that's the mechanism by which we're attempting to restore cellular health and provide therapeutic benefit.
And in that sense, it's very different from all of the programs from other sponsors that are in clinical development in that all of the molecules in clinical development are essentially oligonucleotide-based. And oligonucleotides have a difficult time sort of getting into cells naturally. And so all of these programs have oligos conjugated to something, whether it's a monoclonal antibody like in the case of Avidity or a Fab fragment in the case of Dyne or other conjugations, which are oriented to target muscle. And what DT-818 has in its sort of corner as a potential for differentiation is it distributes widely to all of the key affected tissues. And the conjugations with oligos are oriented to go into muscle. And so to the extent that distributing broadly to all of the affected tissues, including CNS, could deliver therapeutic benefit beyond oligos, that could be very exciting.
Secondly, what we see is a very profound pharmacology. And in what we think of as a highly relevant preclinical model system, which is myotube systems derived from patient cells, we see a profound pharmacology in that the mutant RNA, which are visualized as foci in the nucleus, are reduced by over 90% with the treatment with 818. And that's highly different from what's been reported from many other types of approaches with oligonucleotides. In addition, 818 is selective for the mutant allele, and it leaves the wild-type DMPK kinase expression unaltered. And so all of these are opportunities to have a best-in-category type profile, which we will determine as we generate data from our human studies.
And maybe help us conceptualize this 90% foci reduction and the preclinical models versus, you know, the competitors only get like 30%-55% reduction, so I guess in other words, is there sort of a translation from preclinical foci reduction to magnitude of splicing benefits in DM1 patients, and maybe what does that suggest, and what is the sensitivity of these comparisons?
Yeah. So we've learned a lot from the great work that's been done by other companies in this field. On one hand, it's very exciting that one can see clinical manifestation of benefit with clinical data from other companies, which targets the DMPK RNA. And to see that in as little as 12 weeks of treatment with relatively small groups of patients is exciting because that means one can determine whether there's a very promising agent relatively early in development. On the other hand, there's still a lot of unmet need, even with all of that exciting clinical data. And the question is, why is that? Why is there still a limited clinical benefit? One explanation could be that one has to target beyond the muscle.
But the other explanation is that since the fundamental dysfunction comes from these toxic RNA, which are visualized as foci, and as a result, there's spliceopathy across multiple genes, maybe one has to do better in terms of the splice effect. And if that turns out to be the case, then having an agent like DT-818, where you see an over 90% elimination of the toxic RNA and the foci and that type of profound pharmacology, could be an aspect of the 818 that really drives it to be a potential best-in-category approach. And mechanistically, it makes sense because instead of fighting continuously produced toxic RNA, like oligos are designed to do, this mechanism works upstream of every other oligonucleotide-based therapy.
So by turning off the faucet, if you will, instead of fighting the flood with mops and buckets, you might have that analogy as a way to say, why is there such a profound pharmacology? And that's very exciting.
What is any note to sort of the correlation of toxic foci reduction to splice index? And then can you maybe connect it one further? What does the clinical translation mean? Or is it just if you're already seeing these changes, that means you're seeing changes in splicing, which then translate a high POS, that you're going to see a clinical benefit?
Right.
But the correlation is not as clear yet until you get the data.
Right. Well, there's been good reports in natural history studies to try and validate the splicing indices as being predictive of clinical status and of myotonia and of various muscle dysfunction. And so that literature has been very helpful in establishing that link between improvement in splicing and clinical results. That's been further validated, if you will, by the work of other companies in the space, where we've seen that reductions in or improvements in splicing anywhere from 16%-25% or, in one case, 54% do seem to result in some clinically measurable improvements in myotonia with a video of a hand-opening test, for example. Now, there remains no approved therapy in this area. So we look forward to seeing these advance and hopefully get to patients. So there is a relationship now established between splicing and clinical benefit.
But there remains more to be done for patients in this field for the reasons I mentioned. Either we have to go beyond muscle, maybe try and improve spliceopathy. The other factor, which is interesting, is when a patient reports their DM1 repeat mutation length, they're really reporting on their blood test results. What I think is not as well appreciated is that the repeat length in the affected tissue is much longer. It's 10 times longer on average. So you have 2,500, 3,000 repeats in an affected tissue. And in general, oligonucleotides have a harder time the longer and longer the repeats get. And so that's another interesting aspect of the 818 mechanism, is that it is just as potent on long repeats as it is on short repeats.
Because the goal is to provide therapeutic benefit to the actual affected tissue where you have long repeats, that could be another hypothesis as to why we may have an opportunity to deliver more benefit.
Also, the MAT study in DM1 patients is kicking off in the first half. It's in patients, and it's right away you don't need to do a SAT and move into a MAT. What are the rate-limiting steps to kick off the study and help us also visualize what is the current tox package for 818?
We have the regulatory clearance, so at this point, it's just a matter of operational execution to initiate the multiple ascending dose study for DM1. And in terms of the non-clinical work, we have certainly sufficient non-clinical work to do the multiple ascending dose study. As I mentioned earlier, we've seen from other sponsors that in as little as 12 weeks, one can see both splicing and, in some cases, clinical results. I think one sponsor has shown results in as little as four weeks after a single dose, and so we expect to have all of that non-clinical to support getting to a robust readout on the effect of DT-818 on splicing in DM1 patients in 2027.
What is this Design staggered? Is it a SAD followed by a MAD?
No, it's actually what we're planning to initiate in the first half of 2026 in patients is a multiple ascending dose study. So we have embedded into that an initial dose followed by multiple doses so we can go in a more accelerated fashion to understand the pharmacodynamic effect of 818 on splicing.
And then maybe in terms of sort of cohort size, any color there? Or we will learn when you initiate the study.
No, it's a pretty typical cohort size in rare disease, which tends to be in the kind of handful of patients per cohort.
You have said that the initial splicing correction data would come in 2027. Help us visualize what do you need to see in the study to really give you sort of clinical validity or utility of this in DM1?
We are going to explore two different routes of administration. That's actually yet another feature of 818, which could potentially drive differentiation or adoption because in addition to an intravenous route, we're also exploring a subcutaneous route in the clinic, and so if the subQ works, then that would be very unique because all of the other sponsors are pursuing intravenous routes, but the first objective is to be able to establish not just route, but also dose level and an initial dosing interval, and getting splicing data will help us choose a dose level and a route, and having done that, we can then explore how the splicing translates into other features like broad distribution or selectivity or the activity on long repeats, how all of those in sum total position us to explore the clinical differentiation, so those are all on our minds.
But our initial focus is to establish that splicing result to pick a dose and a route.
Okay. I would love to talk about DT-216P2, which is an FA. Maybe a good place to start is, have you had correspondence with the agency in regards to your clinical hold?
I'm actually happy to use this forum to report that we are off clinical hold.
Yay.
Yes.
That's amazing.
So we are conducting a study currently that we call the RESTOR-FA study that's ongoing in patients with FA with DT-216P2. And that's a multiple ascending dose study. And we are in the process of using that study to understand the effect of DT-216P2 on increasing endogenous frataxin expression.
Congrats. That's amazing. This is the RESTOR-FA data that's expected to read out in the back half of 2026. It's a 12-week study. Help us understand what we're going to gain from that study, sort of how many potential doses and maybe the tissues that you would be measuring Frataxin in.
It's very exciting to have the possibility of increasing endogenous Frataxin levels in patients with FA because this is the whole idea of genetic medicine, is to try and address the root cause, and to use a small molecule to restore endogenous expression is particularly exciting because natural endogenous Frataxin is fully functional in patients that just the levels are low, and so what we plan to do is measure that in a couple of different ways. I think the most widely used system in the literature is to measure Frataxin protein in whole blood, and so we'll be using what are considered the gold standard approaches to measure Frataxin, which would include triple quadruple mass spec-based measurement of Frataxin in whole blood, but we'll also be measuring mRNA.
And then because we had developed an assay for looking at Frataxin in affected tissue, muscle is an example, we will also be planning to do muscle biopsy at baseline before treatment and then after treatment in order to look at Frataxin levels in the muscle and also mRNA in the muscle. So we're going to try and get a picture of the totality of the effect. And this is intended to help us really make a clear definitive decision about the program and.
With the subQ formulation.
So we're doing both routes. So we're doing a subcutaneous formulation, but we also are doing an IV administration because both are entirely viable. And the hope is that we can see a significant increase in Frataxin expression from a patient's own baseline level. And so that's the objective of the study. And we'll be using the Frataxin data to help us again choose a route and a dose level.
Remind us, how large is the cohort for the?
Again, it's similar. It's a handful of patients per cohort. And that is sufficient given the way we've run this type of study in the past. And we know that that's a big enough sample size for us to use at this stage of development.
Do we have a better understanding of what level of Frataxin protein reduction or mRNA level do we need to see in this particular study?
You know, we.
To determine clinical benefit, yeah.
Yeah. I think it's now been acknowledged by other sponsors based on their conversations with the agency where my understanding is that for sponsors who've discussed co-primary endpoints, for example, that for Frataxin as one of two co-primaries, any statistically significant increase in baseline Frataxin from an individual would be considered sufficient. Now, that's not based on our conversations with the FDA. This is just from what we are hearing from others in the field. And I think in general, the field has gotten to the point where any significant increase in a patient's own Frataxin ought to be beneficial is the belief. Now, having said that, carriers are clinically healthy. And they have about half the level of Frataxin as an unaffected genotype.
And so if one can get to carrier levels, I think there would be little doubt as to whether that level of Frataxin can restore cellular health based on the carrier phenotypes.
Thank you. That's very, very helpful. And obviously, the regulatory path has changed too. So because after that data, I think one can recognize that Frataxin could be a regulatory endpoint to move forward. How do you think sort of the next step beyond the RESTOR-FA data?
Yeah. Our focus is on generating that information as the first objective. And I think if that is successful, then we will look forward to proposing and negotiating, hopefully, the subsequent study to establish a path to registration. There is no clear sort of definitive answer to that at this point. But certainly, the things that I've heard from other sponsors is encouraging in terms of everyone recognizing the importance of Frataxin in this monogenic condition.
Perfect. Maybe the next four minutes would be great to also talk about a third program, DT-168, another big catalyst for 2026. It's going to be the phase 2 data reading out in the back half of 2026. This is a four-week study. Maybe help us understand in which you concurrently also ran an observational study in 250 patients to really understand the biomarkers that are predicting sort of the disease progression. I guess after knowing what are the key measures in this disease that no one has really followed, you're going to be reporting your first data. So maybe put into context again, step one, what does that first study design, this four-week study look like? And what do you hope to gain?
So Fuchs is a surprisingly commonly diagnosed condition, and majority of cases are driven by a monogenic mutation. The family history has been known for a while, but it's the mutation in the TCF4 gene, which is called the CTG18.1 mutation, which, similar to the DM1 pathology at the cellular level, creates a toxic RNA, and so what we've created in 168 is a molecule that can dial down the expression of that toxic RNA, which is affecting the health of the corneal endothelial cells. Now, we've developed it as an eye drop, and so all of the preclinical studies supported the idea that the eye drop is sufficient to get to the corneal endothelium and do what it was designed to do, which is turn off this toxic RNA production and help those cells get back to health.
We had been looking for whether there is a biomarker strategy available. There hasn't really been one in the literature. We developed for the first time an assay system in which we were able to actually find that if one were to take corneal tissue from a post-corneal transplant setting, which might otherwise be just medical waste in a post-surgical setting, we can actually extract sufficient RNA to reliably measure splicing in these cells. That gave us for the first time an opportunity to see whether DT-168 does in humans what it was doing in preclinical models, which is, does it get to the corneal cell and does it fix splicing?
And so, what we have ongoing is a biomarker phase two study where patients who are already scheduled for a corneal transplant would take these eye drops for four weeks or longer before their scheduled surgery. And because the tissue would have been discarded anyway, it gives us a chance to measure the splice effect to see whether DT-168 works. Now, there's a very novel approach. Nothing like this has been done. We can't take a pretreatment baseline. So the effect has to be large enough that it would be detected in this type of a setting. But if it works, it would leave little doubt that DT-168 is doing what it was designed to do by getting to the corneal endothelium and fixing splicing. And if so, that sets us up with high confidence that we have a molecule that could slow or stop the progression of Fuchs.
Now, we've been running separately an observational study to evaluate other endpoints like visual quality, like microscopy of the corneal endothelium or measurements of corneal edema so that we can design a clinical study following the biomarker study. And all of that work is ongoing. But it's exciting to have a biomarker-based approach to confirm the mechanism.
That's wonderful. Busy year ahead of you for 2026. Maybe just last question is, what is the cash and cash runway for the company?
We have a strong cash balance. We closed last quarter with over $200 million, and we have runway into 2029.
That's wonderful. That's fantastic. Congrats.
Thank you.
I think the clinical hold lifted. What an incredible news and thank you again for being here.
Thank you for this opportunity.