It's Ben Burnett, biotech analyst here at Stifel. Pleased to be here with Jonathan Yu, COO of Disc Medicine. Thank you, Jonathan.
Thanks, Ben.
Format for this one will be a fireside chat, and if there's any questions, let me know. I think maybe to start, just maybe give us an overview of Disc Medicine, and we'll get into it.
Yeah. So thanks, Ben, for having us. Disc Medicine is a company focused on developing therapies for the treatment of severe hematologic disorders, as the name Disc implies, which is the shape of the red blood cell. We built a fantastic clinical pipeline based on going after what we call fundamental pathways of red blood cell biology. So we have programs designed to control heme synthesis and programs that are designed to control iron homeostasis, critical components that are required to make hemoglobin. And so we have three programs now, all in clinical development, from early to now late-stage development. Just very briefly, our lead program, bitopertin, is a heme synthesis inhibitor. We're taking that into a rare disease called erythropoietic protoporphyria. We're coming off the end of a very positive end of phase II meeting that has created a path forward to registration, including the potential for accelerated approval.
Our next program is called DISC-0974. It's our lead iron homeostasis program. It controls iron homeostasis by manipulating a hormone called hepcidin, which is the central regulator of iron. It's designed to reduce hepcidin and increase iron, and that we're taking into development for the treatment of various anemias of inflammation, the lead of which is for myelofibrosis, very severe, very difficult to treat anemia. We had mid-year data that showed the drug is performing extremely well, and we'll have wrap-up data from our phase I-B portion at the end of this year at ASH, and that'll propel us into getting ready for a phase II study, and then we also recently showed that this same drug is able to access a much larger kind of set of anemias.
We showed our first data in anemia CKD, which is very exciting for us as well, because this will be one of the first mechanisms that is not related to EPO that's been able to show an impact on anemia and CKD. And our last program, DISC-3405, we have proof of mechanism data that we showed mid-year. We're going to have the wrap-up of that data at the end of ASH this year as well. This is designed to be able to also control hepcidin, but in the opposite direction. So it potentiates expression of hepcidin, and doing so restricts iron. There's also a range of diseases you can go thereafter there, any various iron-loading diseases, and polycythemia vera. so we plan to go into a phase II study next year in PV. So great setup for us rolling into next year and beyond.
Fantastic. Let's start with bitopertin and EPP. Maybe just give us a quick highlight of the data that you've generated there and the recent FDA interaction that you just communicated to us.
Yeah. So EPP, it's a disease. It's a rare disease caused by a genetic mutation in the heme synthesis pathway. The consequence of that is that you're not able to make mature heme, and instead, you can accumulate a very large quantity of a toxin called protoporphyrin IX, or PPIX. Protoporphyrin IX is a photoactive metabolite. And so what happens in these patients is, from basically since birth, they're accumulating large levels of this toxin called PPIX, and it makes them unable to go out into the sunlight. The moment you go out into the sunlight, sunlight activates PPIX, and it causes enormous pain. And patients live. They develop attacks. So they basically live their lives indoors. So they're unable to go outside.
Over the lifetime, the PPIX also accumulates in the gallbladder and in the liver, and it causes all kinds of complications there as well. So very serious disease. Bitopertin is designed to be able to reduce PPIX by inhibiting the uptake of glycine in the red blood cell. Glycine is the fundamental building block of heme. And by reducing glycine uptake, you're able to reduce the production of PPIX. And we were able to show that now in two phase II studies. And not only does our drug reduce PPIX levels in meaningful ways, that has translated into substantial improvement in photosensitivity as well. The key of the data, so we ran a phase II program, one open-label study and also one double-blind placebo-controlled study, the BEACON and AURORA studies.
And what we showed in both was that patients were able to spend a lot of time outside in the sun. And in the AURORA study, PPIX went down. The patients were able to spend more time in the sun, and their attacks essentially went away. So very exciting efficacy data. Wrapping up the phase II program, we then had an end of phase II meeting with the FDA seeking a registrational path forward, basically to discuss what a phase III study would look like. And so we got a green light on the study we proposed. But in addition to that, the FDA gave us a green light on potential accelerated approval pathway as well, using PPIX as a surrogate endpoint. So very exciting for us, because obviously, that would bring forward the timeline for us.
Fantastic. I mean, I think investors are kind of focusing on the potential now to fully solidify accelerated approval. Disc will have another meeting with the FDA. I guess, given everything you've established with them in your first meeting, what is your primary message to the FDA in this next meeting?
Yeah. I mean, we had a very robust discussion with the FDA about this specific topic. And they were able to look at not only the PPIX reduction data, but also look at it in the context of the clinical efficacy we were able to show in the phase II study. So I think the key question of using PPIX, how much PPIX reduction, is this meaningful for patients? We sort of walked through that door, which is a very important first box to check. But I think the other pieces of it now are also important in that when the FDA thinks about accelerated approval, they immediately start thinking about, well, what is the full package going to look like? And so they invited us to have a separate meeting to talk about what does a confirmatory trial look like.
That's going to be the key thing that we're going to be discussing. We need to propose the specifics of the protocol and have a more robust discussion of the study, of what that study looks like with the FDA. We're planning to propose the APOLLO trial, which was the design that we had proposed for the original phase III trial. As our confirmatory trial, we think that should be a very robust and very acceptable study to the FDA. But we'll be having that meeting with the FDA. And then in Q1 2025, we'll provide more granular guidance on that, as well as timelines for NDA filing and things like that.
So in your view, is there any more clarification needed on using PPIX as a surrogate? Or is this all about just what is the design of the confirmatory study and what would that look like?
That's what we think is going to be the cRux of the discussion. Obviously, the FDA always reserves the right. But we feel very good for a variety of reasons. One, PPIX is more than just a biomarker. It's what drives the disease. Second, we sort of moved outside the realm of the theoretical because they were able to look at the PPIX data in the context of attacks going away, patients spending more time in light, and quality of life improving.
I guess, why hold a second meeting? I guess we've had some investors ask, why not just do all of this with the end of phase II meeting?
Yeah. I mean, these are pretty heavily choreographed meetings, and you have a very limited amount of time with the FDA. You have to choose which activities you want to discuss, and remember, we originally went in there really just wanting to get alignment on what a phase III trial looked like. Our team did a great job proposing and preparing the rationale for that phase III trial, so we were able to spend the majority of our time discussing the rationale for PPIX and the surrogate endpoint. What that means is that it doesn't leave much time for the remainder of these things that you do need to sort of discuss with the FDA.
OK. Maybe you could also just talk about, so going back to the APOLLO study that you mentioned, the design that you proposed would include adolescents. Is that right?
Yes. Correct.
Why include adolescents, and I guess, do we have a sense as to what sort of the placebo response would be in adolescents? Should that be any different?
It really shouldn't be any different, and we did include adolescents in the BEACON study. The majority of the patients, you live with this disease your whole life, are adults, but the adolescent patient population and younger patients, it is an important part of their life as they develop to be able to go out in the sun. Most patients become diagnosed the moment that, in their pre-teens or their teen years, and if we're able to be able to bring the drug to patients who are younger, I think this could have a profound impact on patient life, and so there's no reason, a priori, for us not to pursue these patients, and the earlier you can sort of address their quality of life, their ability to go out into the sun, the better.
Yep. Yep. Ok. And I guess, kind of regarding the execution aspect of this, for APOLLO, would you use the same clinical trial footprint that you have for that you use for AURORA? Would this kind of be expanded beyond that?
You theoretically could. I think we're still going to rely on these centers of excellence. That seems to be where our experience has been lately. They recruit extremely rapidly. They have the best connectivity to the patient groups, and they already have relationships with these patients, so I think and that's where the expertise is. We will be expanding into Europe, so we'll be adding European sites. It's a very similar pattern, but that's the main difference from the last studies we ran, but also a center of excellence kind of model and very tied to the patient community.
OK. Talk about HELIOS. So this is your extension study?
Mm-hmm.
I guess, who's enrolling into that study? And what do you hope to learn from that?
Yeah. I mean, this HELIOS is the open-label extension. We set that up to enable patients who were on either the BEACON study or the AURORA study to continue their treatment if they wanted to. We decided that these patients, so in both of those studies, you were studying either 20 mg or 60 mg. HELIOS patients will be allowed to be on 60 mg, and we just continue to follow these patients as they stay on the drug. There has been an extremely high conversion rate of patients that were on BEACON and AURORA. I think we've said over 80% of patients, maybe higher than that, have decided to continue on the drug. This also allows patients who are maybe on the placebo arm in AURORA to get a chance to get on active as well.
Excellent. I think one of the points that people have focused on, just going back to sort of the accelerated approval and the potential to kind of go that path, is that I think you've communicated or Disc has communicated that you have all the data in hand that you believe that you would need. So I guess, as you're accruing data in HELIOS, how critical are these new data and new follow-up times to accelerated approval?
We don't think it'll be a core part of the submission. I think maybe some additional experience, a little bit more safety experience. But we kind of know the safety of the drug. It's been extremely well characterized. And the core efficacy data has already been established in BEACON and AURORA.
Great. OK. And just on the commercial opportunity, I mean, this is one where I feel like there's been some evolution here as you guys have done some claims work. What is your current view on sort of the size of the population in the U.S. and also in Europe?
Yeah. I mean, this is very typical in orphan diseases, where as more people become familiar with the disease, suddenly you have a better understanding that there are more patients than you originally thought there were. Historically, the prevalence was, we feel, underestimated, largely because it was really developed based on individual centers that had patients in their size. And it was kind of a nose count kind of approach, not very rigorous. What really confirmed that was the first rigorous genetic studies that came out a few years ago that pegged the number at closer to 20,000 patients in the U.S. alone. We then embarked on a claims analysis and showed that there are actually about 14,000 patients with diagnosed EPP in the U.S. alone.
We've gone deeper in the analysis and looked at, there's a target core group of very engaged 3,000-6,000 patients that we'll be focusing on initially. What that tells us is, and this kind of resonates with our experience in our clinical trial recruitment. It resonates with our experience with patient advocacy groups that while this is maybe a new area of medicine, this is a fairly well-established, and the infrastructure of this patient group is different than some of these other new orphan diseases. You have an ICD-10 code. You have patient advocacy groups. You have centers of excellence. And so I think that bodes well for us as we start thinking about being able to bring the drug forward, because you have kind of a ready group of patients who are eager and engaged to be on for therapy.
What about in Europe? How organized are those patient groups?
It's also very similar, and it's really the relationship between the patient groups together with these centers of excellence, and I think those are the two things that we were looking for, and it's a very similar kind of setup there.
Great. Any questions on EPP? All right. Well, good. Let's move on to DISC-0974. Start with myelofibrosis. Maybe just give us the high-level view of the hemojuvelin biology and then some of the data that you presented.
Yeah. I mean, we were very deliberate in choosing hemojuvelin as the way to be able to reduce hepcidin. This is a multi-decade now odyssey trying to find how are you able to reduce hepcidin to increase iron. And different approaches have been tried, from trying to drug hepcidin itself to other members of the signaling pathway. We chose hemojuvelin largely driven by the genetic evidence. So there are patients who have mutations in the loss of function mutations in the production of hemojuvelin that develop a condition called juvenile hemochromatosis. And the only phenotype of that is low hepcidin and high iron. So that gave us a very good sense of not only the efficacy, but also the potential safety profile. This is a very iron-specific target. And so we developed an antibody to be able to antagonize hemojuvelin.
We've since taken it through the paces between animal studies and healthy volunteer studies and now two patient studies. The biology translates extremely well. You're able to get very good, very durable suppression, very controllable suppression of hepcidin. That results in higher iron. That now, we've shown, translates into improved erythropoiesis.
Awesome. And then going into myelofibrosis, I think some of us think about the market of myelofibrosis as sort of ruxolitinib, just given that it's such a dominant drug. It's sort of you have ruxolitinib patients, and then you have post-Rux patients. I guess, how do you guys think about that? Is that the right way to kind of dice the patient population?
I think for agents that are entering the direct anti-MF type of market, that's maybe the only way to think about it in that Rux is so monolithic as an agent. You basically have to get in line for a second line. But the issue is that most of these agents, they're able to address symptoms, and they're able to address spleen size and MF. But they do not address the most important cytopenia, which is anemia. So the way we've thought about it is independently of whether you're on Rux, or you're advanced on Rux, or you're not on Rux, if you're anemic, you need to have an agent designed to treat the anemia. And then for us, so that means you can cut across all these different patient segments.
It is also very important that the drug is able to work together with Rux and patients who are on Rux or not on Rux. We sort of view the market as kind of running sort of in parallel. You have the MF agents that are kind of evolving. There's a very regimented treatment algorithm that is sort of evolving there. Then on the anemia side, it's pretty sparse. It allows you to be able to cut across all the different lines.
Excellent. I think we've seen some data from various competitors looking at anemia control within the setting of myelofibrosis. What do you think is meaningful in terms of kind of anemia control, the amount of hemoglobin production, transfusion burden? What are the endpoints we should focus on?
I mean, this is a very difficult-to-treat anemia. And the bar is actually fairly low for what physicians consider active. And the response rates are like in the 20%-30%. And that's what folks have considered to be active. Now, depending on whether or not you're transfused or whether you're not transfused, there are different ways to be able to look at activity. Essentially, for patients where you're not being transfused, an increase of about a gram of hemoglobin has typically been the bar, a gram, a gram and a half of hemoglobin. We've gone after a little more rigorous bar for you. Not only do you need to have a gram and a half hemoglobin, but it needs to be persisting over 12 weeks so you know that the effect is durable.
We've been able to get fantastic efficacy in those patients in like 60%-70%, which is far above that threshold I was mentioning before. In transfusion patients who are transfused, it's hard to be able to measure the efficacy. You don't have something as simple as hemoglobin because you're getting transfused, and that affects your hemoglobin level. Then you really have to look at transfusion burden. We've been able to show a difference there as well. In patients who are transfusion dependent, in the I-B study, we had two of those patients. We were able to, one of them was converted from transfusion dependent to transfusion independent. More importantly, every patient who was receiving some level of transfusion had showed a 50% reduction in transfusion burden.
And I guess the last thing I'll say is patients who are receiving ruxolitinib, it doesn't seem to affect the efficacy at all. So ruxolitinib has a reputation for worsening anemia. But then we had a number of patients who were receiving Rux. When you gave our drug on top of it, it didn't seem to affect the efficacy. We were still getting that 60%-70% efficacy. So what that told us was our profile was essentially intact, that the drug is working not only very well, but it seems to have consistent efficacy independent of what patient segment you're in.
What are we going to learn at ASH with regards to this program?
The goal at ASH is really to close out the I-B portion. Our goal originally in I-B was just to identify a dose to take forward into phase II, and this is the beauty of being in hematology, is that you're able to get signs of efficacy, which we just talked through, so the goal at ASH is really to close out the I-B portion and set us up to go into phase II, select a dose, point it out to a dose, and then enable us to start a phase II trial that ultimately will serve as the jump-off point for the phase III program.
Excellent. And then who do you view as your biggest competitor in this arena?
I think the one agent that is probably most advanced is, of course, luspatercept. They're currently in a phase III trial looking at the drug in patients who are receiving ruxolitinib and are transfusion dependent. We think our activity has been extremely robust in our phase I-B that we've shown so far. I think the efficacy, if you look at the luspatercept experience in MF, it's been a little less consistent. There's for sure patients who are responding to the agent. But that efficacy seems to be more order of magnitude what you've seen with ESAs and some of the historical agents. But that is a pure anemia agent. It's a similar kind of positioning that we have as well. So luspatercept is probably the closest competitor.
It's interesting. There's luspatercept, which is targeting, I think, the ligands for this complex that you're targeting. You're targeting the receptor. But I think that dimerizes with another receptor, including ALK2, which is what we see from Incyte. Biology all kind of coalesces on the same point. But the efficacy data does look different. What do you think that is?
Yeah. I mean, I think with luspatercept, it's the same family, but it's actually a different receptor complex. So I think they're going after it in a different way. We call it sort of like a kind of a growth factor, kind of trying to push. So it's almost kind of orthogonal to the way that we think about it. I mean, we are really just enabling the body, like releasing the iron so that it can produce red blood cells. Now, you refer to some of the other receptors in the same signaling complex, specifically ALK2. And that was really what gave us confidence that hepcidin was the right target to go after in MF. The problem with ALK2 is that we just don't think it's as strong of a target as hemojuvelin.
Some of the efficacy data that's come out on these ALK2 inhibitors just hasn't been as consistent. It might just be because of the molecule or the receptor or the target itself. But you're just not able to get the knockdown of hepcidin that we've been able to get. It's also not as clean of a target as hemojuvelin. So I mentioned before that there are patients who have hemojuvelin knockouts who are otherwise normal, except they have high levels of iron, which is the pharmacology we're looking for. But ALK2 is embryonic lethal. So it is involved in other pathways as well. So that was the reason why we specifically avoided ALK2.
Excellent. OK. And so we'll learn about the design of the phase II, the dose, and everything coming up at ASH.
Yeah, exactly. And that should give us a setup for the next phase of MF.
Excellent. OK. Well, speaking to the point you mentioned around safety, so you're looking at this in other indications, bigger populations. Talk about the anemia associated with chronic kidney disease data that I think came out at Kidney Week.
Yeah, that was very exciting for us for a number of reasons. I mean, hepcidin drives anemia in millions of patients because it's upregulated when you have inflammation. And so that, it's a case in CKD. It's a case in rheumatoid arthritis. It's a case in IBD, basically any inflammatory disease you have, an issue with anemia, including MF as well. CKD was the tip of the spear for us to show that there is an opportunity beyond MF. CKD was also where hepcidin was really first characterized as a driver of anemia. Not only do you have underlying inflammation, but hepcidin is cleared through the kidneys. And so you have this mechanical elevation of hepcidin in these CKD patients. So they all have an iron metabolism issue. Historically, it's been tough to be able to drug hepcidin, as I mentioned before.
We were really excited to take this agent into CKD anemia. We were looking specifically at the non-dialysis dependent CKD patient population. That's where we feel like the greatest need is. We ran a phase I SAD study in CKD anemia. This was originally designed for us to just choose a dose. We were really delighted to show that the pharmacology, even with a single dose, we were already showing some level of efficacy. We showed that the drug does a very good job of knocking down hepcidin, increasing iron. It increases reticulocyte hemoglobin. Then we were able to show an improvement in hemoglobin as well with just a single dose. This was quite important, we feel, not only for our drug, but for the field as well because this field has been entirely dominated by EPO or EPO-related mechanisms.
And we know now that EPO has safety issues associated with them. So this gives a very clean, non-EPO-related, iron-focused kind of approach to treat a very, very serious issue. Not only CKD, but now it tells us, OK, we have efficacy in MF, efficacy in CKD. It really kind of, we think that there should be breathing through to other opportunities as well.
Excellent. The kinetics of the biology here are a little bit complicated, right? So you have kind of the lifespan of red blood cells. You have hepcidin. And you've also shown TSAT, so iron in the plasma. This is all from a single dose. So I guess, what should we expect from multiple doses? And would you expect any of those parameters to change? Or is it just more about?
Yeah. Yeah. I think that's exactly right. I mean, I think the way we're thinking about, so we're still wrapping up the I-B portion and going to phase II. What are the objectives here? I think it's exactly what you're saying is, can we tune the iron improvement profile a little bit better to be able to, I guess, clean up the efficacy score, efficacy signal that we saw? So are you able to get, if we used a higher dose, for instance, or if we were able to do multiple dosing, does that allow you to be able to improve the iron profile to be able to get you, does that translate into better or a larger proportion of patients with a hemoglobin response?
I think all of those are really about refinement before we go into a phase II study, in large part because with a single dose, we're already seeing we're touching on the efficacy levels that I think will matter. So now it's a question of, OK, optimization of the dosing regimen. I think what it'll end up, what it'll end up being is we'll be able to show, I think what this tells us is once-month dosing subQ is well within the realm of the presentation. It could be less frequent than that, potentially, as well. So I think this is really what we want to explore.
OK. Excellent. I think, yeah.
I was just going to ask a question, if that's OK. I'm not as familiar with Disc Medicine as maybe others. But talk a little bit about the manufacturer of these drugs. Do you manufacture all of them yourself? Or do you use other entities to help you manufacture them?
Yeah, we're very.
Just for the webcast, so the question is around manufacturing and if Disc Medicine manufactures your own drugs. Go ahead.
Oh, right. So like many companies at our stage, we have relationships with CDMOs. So we don't have any of our own manufacturing facilities. But these are robust processes. And what's typical is you transfer these to a partner, and they'll manufacture it for you.
That's very efficient.
Yes, absolutely. Yeah.
Very common question I get around the CKD program is, do you expect to have to run a MACE study or an outcome study eventually?
Yeah, we know that the FDA certainly does care a lot about safety, and this is certainly a consequence of the experience of both the ESAs and also with the PHIs. I think that this is also why we chose a pathway that was so clearly outside of the EPO pathway, in that our drug really just affects iron metabolism. I think that should bode well in our discussions because I think if you look at what's the best analog, if you look at parenteral irons, there were two parenteral irons that were approved in recent years that were able to show that, and they tracked cardiovascular safety, but they were able to show that they were either non-inferior or actually superior on cardiovascular safety, so I think it's going to be important to the FDA.
I think we have a pretty excellent hand in being outside EPO, iron-focused, and I think the last thing I'll say is the way that we're able to improve hemoglobin. It's very controlled. It's very gradual, so those are the things that are on the FDA's mind.
OK, great. On the last minute, I just want to ask about polycythemia vera program and just maybe walk us through when we can learn more about that.
Yeah. I mean, we are in the middle of a healthy volunteer study right now. We showed a single-dose study mid-year. We're able to show the drug seems to be doing exactly what it's supposed to. It increases hepcidin, and it restricts iron. And this has a consequence on, as you would imagine, hematocrit and hemoglobin. We'll have the multiple-dose portion at the end of the year. And that should give us a very good sense of, do we have a good iron restriction agent? And what is the profile of it? I mean, it's already looking as if it's like once monthly and it's very deep iron restriction. And it's durable and controllable. That should be the setup then for going into a phase II study in PV. And our premise is all, to be sure, there are many other agents going after this.
But I think our premise has always been, it's all about iron restriction. And the best agent that gives you the best tool to be able to control iron restriction is going to ultimately prevail.
Actually, just to squeeze one more in here.
Sure.
Can you talk about the rationale behind the recent debt deal that you did? And also just what does that do to your cash runway?
Yeah. I mean, we also gave our recent 10-Q, and clearly, we're extremely well capitalized. We have runway well into 2027. The debt deal allows us to be able to have just one other tool in our toolbox to be able to give us financial flexibility. Clearly, we have a lot of things happening in the company right now. We have a very good program, a very good problem in that we're kind of firing on all cylinders on every program. So it just gives us the flexibility to pursue these aggressively. We'll be looking at building, thinking about this next phase of development, potentially commercialization, and then 974 is advancing, 3405 as well. So this just gives us that much more room to maneuver.