Hi, everybody. Thank you for joining us. My name's Leon Wang, the desk-based analyst at Barclays focusing on the healthcare sector. It's my pleasure to welcome Jean Franchi, CFO of Disc Medicine, and John Yu, COO of Disc Medicine. Folks, thank you for joining us.
Thanks for having us.
All right, perfect. Why don't we get into it? Can you give us an update? Also, just for those who might not be as dialed into the Disc Medicine story, just a summary of what you guys do and what does the future look like?
Yeah. Thank you again, Leon, for having us here today. It is particularly such an exciting time in the Disc story. As the name of the company implies, and also our ticker symbol, our company is focused entirely on developing drugs to treat severe disorders, hematologic disorders. The way we have gone about doing that is to develop a portfolio of agents that manipulate what we call fundamental processes or pathways of red blood cell biology. What that means is we have programs that regulate how heme is synthesized and also control how iron is metabolized. That strategy has worked out extremely well for us. We now have three clinical programs from mid to very late-stage development, mid to late-stage clinical development.
We have a lead program called bitopertin that is a heme synthesis inhibitor that we're taking into a rare disease called erythropoietic protoporphyria. We completed our phase two program last year. We had remarkable data that then led up to a series of successful meetings with the FDA. We are now on a registrational path under an accelerated approval path. The entire company is getting ready to file an NDA in the second half of this year. That propels us into sort of the next stage of growth for the company. If all goes well, if the drug ends up being approved, this has the potential to become the first disease-modifying therapy for a very serious disease.
Perfect.
At the same time, our pipeline has also come together extremely well. We have these other programs all involved in manipulating iron homeostasis by controlling a hormone called hepcidin, which is the central master regulator of iron. We have programs that are able to downregulate hepcidin to make iron more available. That can be used to treat a wide variety of anemias. We also have a program designed to upregulate hepcidin to restrict iron. That can be used in a variety of conditions, including polycythemia vera. There has been a lot of news about that recently from Takeda and more recently Ionis. There are applications beyond PV as well in sickle cell disease and iron overload disorders. For our program that is designed to go after anemia, we are starting with MF. We had very strong phase one B data that we showed at ASH.
We're now in MF. This is a very severe anemia, very serious unmet need in these patients. The data that we showed was unprecedented. We're in phase two right now. We'll have an update on that at the end of the year. We've also begun to explore the opportunity for suppressing hepcidin in other indications as well. We had a little bit of data in CKD and for CKD last year, very early stage, single ascending dose study. Even at single ascending doses, we were able to see increases in hemoglobin. That's very exciting for us. We'll have an update in CKD end of this year as well. That kind of opens up what the opportunity is in these much larger anemias of inflammation. The last program, which we are getting, which is designed to induce hepcidin and restrict iron.
We also had data at ASH last year showing that the drug in healthy volunteers does exactly what it's supposed to do. It induces hepcidin. It restricts iron in a very meaningful and dose-dependent, controllable way. We are getting ready to bring that into PV first half of this year. We will be exploring other applications for that as well. Remarkable time for the company.
Perfect. Definitely have a lot to talk about. You guys are pretty unique, in my opinion, in that you're targeting. You have so many things going on, but also leveraging your core competencies in understanding blood.
Yeah, that strategy has worked out remarkably well for us.
Yeah. All right. Why don't we dive into your lead program, bitopertin? I guess for those who might not be as familiar, can you provide some background on the mechanism of action and the indication you're pursuing? In this case, I'm a fan of acronyms. Let me try this. It's erythropoietic protoporphyria.
Almost erythropoietic protoporphyria.
Porphyria. Excellent.
EPP.
Yeah.
Yeah, happy to. So bitopertin, it's an oral small molecule. It's an inhibitor of a target called GlyT1 or glycine transporter 1, the transporter that's on the cell surface of developing red blood cells. It's designed specifically to import glycine to support the synthesis of heme, which you need in vast quantities to be able to support red blood cell production because your body just makes so much hemoglobin. That's why it requires glycine to be able—that's why it requires this transporter to bring in glycine. What happens in EPP patients? Erythropoietic protoporphyria, it's part of a family of rare genetic diseases called porphyrias. These are all conditions where you have mutations in the heme synthesis pathway. Instead of making heme, what happens in these patients is you end up accumulating large quantities of toxic metabolites that are precursors to heme.
Each of these different—and these are all called porphyrins. Depending on the mutation that you have, you accumulate a different form of the porphyrin. That causes all kinds of complications in these different diseases. In erythropoietic protoporphyria, you have a mutation in an enzyme called FECH, and that results in the accumulation of a metabolite called protoporphyrin IX. The problem with this is that protoporphyrin IX is a phototoxic, photoactive metabolite. It's very similar to chlorophyll. What happens in normal subjects, you have zero protoporphyrin IX. In EPP patients, instead of producing mature heme, you're producing a lot of PPIX. The consequence of that is these patients, whenever they go outside and are exposed to sunlight, they start developing excruciating pain. It feels like burning. There's swelling, redness.
If you're out in the sun long enough, it results in blistering and these horrible attacks that last for days. What happens is the way that patients manage their disease is that they end up staying indoors. It has huge consequences on quality of life. It completely alters the way that they live. The concept behind our drug was that the inspiration for this was that we knew that in patients who become pregnant, and there were cases you have with EPP, they had a reduction in PPIX levels by about 40% or 50%. What happens is during the time period that they're pregnant, the disease essentially goes away. What that told us, you know, at a biochemical level, made a lot of sense.
If you're able to reduce PPIX, your disease should be able to resolve because you're changing, you're addressing the underlying cause of the disease. This phenomenon was really exciting to us because we realized if you can reduce PPIX, you don't have to reduce it entirely. You can result in something that resembles a functional cure. That's what inspired us. Okay, if we have a molecule that can inhibit glycine uptake, that can reduce the production of PPIX, that should have profound results in patients. The long and short of it is we ran our phase two study, and the biology translated beautifully. We saw PPIX go down to that about 40-50% level. We saw patients be able to spend significantly more time in the sunlight. They had a statistically significant improvement in quality of life.
Most importantly, they were not able to trigger—there were no attacks by the end of the study. This was remarkable for us. We took that data, we met with the FDA, and they gave us a path forward under the accelerated approval pathway using PPIX as a surrogate endpoint to support accelerated approval.
Yeah, it really sounds like you have a lot of biologic rationale, scientific rationale. There is a precedence, stories coming along together. Great. You just mentioned about the accelerated approval pathway. What does that mean in terms of next steps for a program?
Yeah. What that means is there were two interactions that we had with the FDA at the end of last year. One was to understand what the pathway would be. We were able to get alignment on using reduction in PPIX as a surrogate endpoint for efficacy in these patients. We also were able to bring to them the phase two data that showed the effect that we had on all these outcomes as well. I think that was very supportive of that interaction. The second piece of the puzzle was getting alignment on what the confirmatory trial would look like because typically in this situation, you have the accelerated approval, but you still need to complete a confirmatory trial. We got alignment on what that study looked like. That was the package that we were looking for.
That was what stimulated us. Once we got alignment on that, what we are doing right now in the company is we're getting ready to file an NDA the second half of this year. Also in parallel, getting ready for, if all goes well, getting commercial readiness and preparing market development.
That is quite a step for a company that has been clinical the entire time. You guys are going into commercialization. For those who are not familiar with this disease, and being a rare disease, there are probably those who are not. Can you tell us about the market opportunity and kind of the framework of how people should view in terms of what you guys could potentially achieve with this medication?
Yeah. It is a rare disease. I think to give you a feel for how many patients—it is not, as you can imagine, it is not a silent disease in that it emerges when you are a child. It takes a little bit of time for you to get the definitive diagnosis for EPP. You know you have the disease. What that meant for us was there was a pool of patients already available who know they have the disease but have no treatment available, no effective treatment available for them. The question for us when we entered this space was, just how many patients are there? We had looked into literature. Historically, the numbers always seem to come around like, oh, there are about 3,000 patients in the U.S., similar number in Europe.
When we dug into the literature, we realized that the methodology for calculating the number of these patients was kind of rudimentary. It's very common in rare disease. People give rough estimates of how many patients are there. You have an agent that's available. Suddenly, there are more patients than you anticipated. We expected when we looked at the methodology that this was probably an underestimate. At the same time, the first formal genetic prevalence study was conducted by MGH and the Biobank that pegged the number in the U.S. at closer to 20,000. We thought, that's a big difference. We need to understand a little bit more of what the market looks like. The good news is that an ICD-10 code is available for erythropoietic protoporphyria. That was not available until about seven years ago.
Now we realized, oh, we can do some claims analysis around EPP. We ran that study. It turns out there are about 14,000 patients in the U.S. that are identifiable under the ICD-10 code, which kind of triangulates well with our sense of what these numbers are. That is what we feel the addressable patient population is. I think we've done other cuts. We've shared this in the past of what makes sense in terms of which patients are most engaged with the health care system. That's how we're kind of thinking about the preparation.
Based on this evolution of how many patients are actually out there, is this just something that's overlooked because people didn't think that there was as big of a market opportunity there that you guys more have come to understand that there is? What type of treatments are available and currently in development?
Yeah. I think this is common in a lot of these rare diseases where there isn't a ton of work to try that is put in prospectively to understand the market dynamics until there is a drug that becomes available. You have kind of a chicken and egg situation. That's very much the case in EPP. There is one drug that is approved. It is called Scenesse. It's a surgical implant that's designed to induce tanning. It requires a procedure that is administered once every two months. It's fairly cumbersome. It hasn't been made widely available. That's the only agent. It was only approved, I think, in like 2020. It's the only agent that's available. It is not disease modifying. It doesn't reduce your PPIX level. Beyond that, there really is not much else in development.
is one other drug that is currently in phase three as an oral tanning agent called dersimelagon. Beyond that, there is nothing else. It is very much a condition that has a high unmet need. The patients are out there. There is patient advocacy support. There has just been a dearth of innovation in this space.
How have you approached or have you begun preparation for commercialization at this stage?
Yeah. I think a lot of this is what I alluded to before in terms of just understanding where the patients are, understanding what the patient flow is, and understanding how they're interacting with the health care system and their providers. We're also developing a close relationship with these centers of excellence because I think it's very important that you get that support from, and these are the same people who are helping run our clinical trials, but they have a deep understanding of the mechanism, a deep understanding of the science and what the medicines can mean for patients. We develop that sort of support among the KOLs and thought leaders. The last piece, which is, I think, most critical, is developing the trust and relationship with the patient advocacy groups. There's two in the U.S. There's American Porphyria Foundation. There's the United Porphyria Association.
Both of these are sort of critical to be able to develop in rare disease to make sure that you develop the trust of these organizations.
Perfect. I want to focus on some of the other programs as well in the pipeline. Can you tell us a little bit about your hepcidin programs, beginning with 0974? Just kind of overview of how it works and kind of what does it do for investors out there?
Yeah, exactly. Hepcidin is the central master regulatory hormone for iron. Iron is critical, but critical for multiple processes in your body. There are cases where you can either have too little iron or you have too much iron. Being able to control that, what we always felt was an important window to be able to treat a variety of diseases. We have a program called DISC-0974 that's able to reduce hepcidin. The other program we'll talk about is DISC-3405 that's designed to be able to increase hepcidin. 0974, this first program we'll talk about, it suppresses hepcidin by inhibiting a target called hemojuvelin. This is a genetically validated target that there are patients who have mutations in hemojuvelin who develop a condition called juvenile hemochromatosis. The consequence of that is they have elevated iron.
That was what gave us confidence that this was a target that was spot on in terms of being able to regulate iron. We put the antibody into development. We were able to find that the drug is extremely well tolerated. It is extremely good at being able to downregulate hepcidin. The pharmacology, once again, translates extremely well. You are able to see upregulation of the iron. What we have been able to see in one clinical study after another is that that increase in iron is able to translate into improvement in hemoglobin. Now we are seeing improvement in anemia. As I said before, we shared data from our Phase 1b study of MF patients with anemia. We were able to see just really extraordinary hematologic activity in a condition where that is extremely difficult to treat.
In terms of the insight that you glean from that, what does that kind of mean for the program overall?
Yeah. So what that means is we're currently in Phase II in the MF program, really just to expand the patient numbers and to have a better understanding of how the drug is performing in different study segments, patient segments, to really set us up for eventually a phase three trial. To give you a little bit of context on what the activity was that we showed and what that means, in the U.S., there's about 25,000 patients with MF. And almost all of them are anemic. It's a very severe form of anemia. Many of these patients require transfusions. This anemia is particularly refractory to other treatments. Historically, what to consider active in this patient population is like a 10%-20% response rate. What we were able to show in our Phase 1b data was something in the neighborhood of like 60%-70%.
This was remarkable for us. I think the other takeaway, I would say, from that 1B data is that when we looked at whether or not the drug could be used together with what is currently the standard of care in MF, which is a drug called Jakafi, it turns out the efficacy is maintained. That is important because Jakafi, which is the mainstay in this treatment, actually worsens your anemia. A lot of these patients either are not able to stay on Jakafi because of the anemia or they are on suboptimal doses of Jakafi. There is this vicious cycle of this anemia that is just not only causing horrible quality of life in these patients, this requirement of transport transfusions, but it is also stymieing optimal treatment of the underlying disease.
The fact that our drug is able to improve anemia in these patients on Jakafi really just opens up the opportunity. It means that we're able, there is potential for this drug to be applied in every segment of the patient population that's anemic, whether you're on Jakafi, whether you advance on Jakafi, whether you're on a low dose of Jakafi. This would really open up, this would address a critical unmet need in this patient population. We are taking the 1B data. We selected our dose, 50 mg once a month. We are taking that into our phase two study now. We had 35 patients in our Phase 1b. We are now expanding the study to 90 patients. We will have an update at the end of the year on how that study is going.
The phase two data should read out next year.
Do you have competitors who's also targeting anemia this way?
You know, the MF space is remarkably crowded in terms of agents that are going after MF itself. In terms of anemia, it's remarkably sparse. There was really just now several of these competitors have fallen by the wayside. They've tried to go after other targets in the pathway. Some have tried to go after hepcidin just for reasons that we probably don't have time to go into here. Those targets just don't have the same level of therapeutic index that we've been able to show with hemojuvelin. There is now standing just really one real competitor in the MF space. That is luspatercept, which is currently in a phase three trial, a drug called Reblozyl. It works reasonably well in myelodysplastic syndrome. The efficacy that we've seen so far from their phase two data really hasn't been as strong as it is in MDS.
We think that the activity that we've seen in our 1B study, understandably that it's early, seems to be more robust. That's it in terms of having agents that are designed to treat anemia in MF.
Gotcha. OK. Let's move on to 3405. Lead indication, polycythemia vera. Can you tell us a little bit about this drug and the therapeutic rationale for its indication?
Yeah. This is a very exciting time for therapeutic iron restriction in hepcidin. The way the drug works is it's an antibody. It inhibits a target called TMPRSS6. TMPRSS6 is a regulator of hepcidin in that if you're able to inhibit TMPRSS6, it enables the production of hepcidin. As hepcidin goes up, that allows you to be able to restrict iron. The concept here is that there are a number of different diseases where therapeutic iron restriction would be highly beneficial. The reason why we went after polycythemia vera is because it's another chronic leukemia. It affects about 150,000 patients in the U.S. It is a disease where what's driving it is a mutation that causes erythrocytosis, overproduction of red blood cells.
That results in all kinds of complications, notably a high rate of blood clots, stroke, thromboembolic events. The concept was very simple. If you're able to restrict iron, that should be able to reduce the red blood cell production. That was proven out really by the leaders in this field, our Protagonists and Takeda. They recently read out remarkable positive phase three top-line data from the Verify study showing that administration of a hepcidin mimetic, so a slightly different approach than us, but still using hepcidin to be able to restrict iron, that that was able to result in not only maintenance of hematocrit control, but also improvement in symptoms. We have a different approach, which is as opposed to administering hepcidin itself, we are enabling the body to produce its own hepcidin.
There are all kinds of advantages, we believe, to that, in that you'll have a better dosing regimen. You'll be able to avoid injection site reactions, which has been observed with rusfertide. We think we also will be able to get deeper and more controllable iron restriction. Very excited about that and starting a phase two study first half of this year.
Excellent. In this current environment, folks are focusing on ability to raise money, your cash balance. You guys recently did a follow-on offering. Can you tell us a little bit about that rationale? What does it mean for the company in terms of your runway?
Yeah, absolutely. The company is well capitalized to fund what Jonathan has overviewed across the portfolio. We ended the year with $490 million on the balance sheet. To your point, we did raise, and we did an offering in January. We brought in another gross of $259 million. Very well capitalized. We have also created tools for the company with optionality, right? We also have a debt facility for $200 million. We have only drawn $30 million on that debt facility. That allows us more optionality also with capital, at low cost, at small increments, really at the company's option. We have not assumed any further draws in that runway. Really important. We will be deep into our U.S. launch. We will be commercial within that runway.
We will have the proceeds coming back in from our commercial launch, which is a very efficient market in this rare disease. Those proceeds are also not included in our runway. We really feel well capitalized to deliver on the proof of phase two concepts across 0974 and the PV program, and obviously be a commercial company at that point in time.
Perfect. Any closing comments or anything you may think investors are not dialed into as part of the story for Disc Medicine?
Yeah. I mean, I think it's just such a remarkable time for the company. The business plan is really coming together. 2026 is going to be a huge year for us. I think maybe two takeaways. One is that the company is unique in that we have our lead program that's getting ready for commercialization. We also have a very rich pipeline. That does not only provide you multiple stages of growth. I think the second point is it also provides a level of diversification that most companies do not have.
Perfect. Great. Thank you for joining us. I hope you enjoy the rest of the conference.
Thank you very much, Leon.
Yeah.