All right. I'm Chad Lefauci , biotech analyst here at Wells Fargo. We have Disc Medicine for a fireside chat at our halfway conference. John, I appreciate you guys making the time.
It's great to be here. Thank you.
Again, usually I will just give a couple of minutes for the overall winter remarks, where you guys are at, next catalyst, and then we'll go into a more detailed discussion across the pipeline if that works for you.
That works great. Yeah. It's a really exciting time here at Disc Medicine. I think as most people know, we're focused on rare disease and hematology with three drugs in the clinic, all designed to control diseases of red blood cell biology by either manipulating heme biosynthesis or changing iron metabolism. Our lead program, which works through the heme biosynthetic pathway, is called bitopertin. We are in the middle of an accelerated approval pathway with the FDA. We're projecting that we'll file our NDA in October. That sets up then finding out about PDUFA dates in December. If you have a priority review or a standard review, you get to a likely PDUFA date somewhere between June and October of next year. That's a very exciting moment for the company. This will be the first commercial program, if all goes well.
Needless to say, we're ramping up the effort to aim at launch as well. We think it's going to be an important rare disease market and super excited about providing some benefits to this group of patients who have a disease called erythropoietic protoporphyria. Otherwise, coming into the end of the year, our second program will have data in two diseases: anemia of myelofibrosis, likely at ASH; anemia of chronic kidney disease, either at the ASN Kidney Week in early November or also at ASH. We haven't quite committed to all the conference.
Fair enough.
Those are the data events. The third program is just starting phase 2 now.
Got it. No, perfect. Most of the focus, most of the inbounds have focused a lot on bitopertin specifically, right? You're on track to submit probably in October. Had a lot of initial questions on the filing, right, based on BEACON and AURORA data without needing a confirmatory trial. Can you just kind of recap what were all the interactions with the FDA that made you comfortable that you had that accelerated approval path open and that they were willing to actually take a look? It feels like it fits straight out the guidance for a rare disease accelerated approval. You have a biomarker and likely translates to clinical benefit. How were some of those early interactions?
Yeah, yeah. No, it's a great point. We feel very good about our package matching up to the letter of the regulation on accelerated approval. The way this came about, we had a phase II program that had an open-label study called the BEACON study in Australia, about 25 patients. The AURORA study, a placebo-controlled study in the U.S. with about 75 patients. A total of 100 patients' worth of data. The primary endpoint was reduction in protoporphyrin IX, which is the metabolite that causes the disease. The disease is called erythropoietic protoporphyria, a disease of excess protoporphyrin. We call it PPIX to keep it short. There are a lot of names in this space.
We had P-value less than 0.001, reduction in PPIX at levels that should be very clinically meaningful. There was a whole set of secondary endpoints that were clinical endpoints, looking at how much time these patients can spend in sunlight because one of the hallmarks of the disease is sunlight provokes excruciating pain attacks. These patients then have to live their whole lives essentially in darkness. The other consequence of disease is serious liver complications. We saw a great reduction in PPIX. We saw stat-sig even in a small trial improvement across a number of these clinically meaningful endpoints, although not all, but we were numerically positive on every single clinical endpoint that we measured. We looked at this and felt like, okay, you know PPIX is a very credible surrogate endpoint for these patients because remember, this is the chemical that causes all of the consequences of the disease.
We went to the FDA and said, okay, we'd like to design a phase III trial, but we also think there's a rationale here for PPIX to be a surrogate endpoint, use the other clinical endpoints as a kind of evidence of likely clinical benefit, and drive towards an accelerated pathway, in which case you'd consider the next trial to be a confirmatory trial. We were gratified the FDA was kind of responsive to that, really felt like there was a good rationale for going down the accelerated pathway. That was about a year ago that we had the end of phase II meeting. That set off a series of four meetings over the year. One was a type C to discuss the confirmatory APOLLO trial design.
One was an end of phase II CMC meeting to discuss how we could compress the CMC package down to match an accelerated timeline, which was not trivial and was important, not kind of that exciting for, I think, the investor community, but as an operator, it's important. Then we had our pre-NDA meeting. That was just this summer, really kind of aligning with the FDA that, yes, we should be submitting an NDA this fall with a data package that's our phase II data set using PPIX as a surrogate and the various clinical endpoints as the additional evidence.
Got it. You have data from BEACON and AURORA , the open label. One of the things you mentioned is kind of funny because CMC is the part that public investors have the least due diligence on, but it is incredibly important for the submission. What can you share about CMC readiness and to the extent that you can disclose publicly, how comfortable are you now that you've talked to the FDA and tried to compress those timelines? How are you feeling about your odds of success on that part of the regulatory package?
Yeah, you know I have to say, despite all the noise about the FDA, the derm division where we are has been incredibly diligent, hit all the timelines. When they look at the CMC package, it's pretty conventional in a rare disease space because of these compressed timelines for there to be some concessions around all the aspects of the CMC program. In fact, we were like one in a standard indication you might do five commercial batches and show comparability and stability on all five, like a year of stability on all five of those batches. Now, if you think about a rare disease, if we did five batches, we'd probably have like a 10-year supply of drug. The FDA understands that it's not reasonable to make us go do five batches. If we had to do that, that would extend our timelines out by an extra year.
It was alignment that we could do three batches and use some of the stability information from even some of the clinical batches to help bolster the package. You know I think behind this, one thing that really helps is this is a simple small molecule. It's a once daily dose small molecule. The drug substance is stable for over a decade.
Sure, yeah, the safety data across.
Yeah, it's standard database and it's a simple tableting. I think because it's a pretty straightforward, you know we're not talking about gene therapy and viral manufacturing, anything like that. It was pretty straightforward to get to alignment with the FDA around the kind of package we'd submit.
Got it. No, you kind of gave us some rough timelines of where this could land. I want to talk more about the market, but let's talk a little bit just about APOLLO, again, as a confirmatory trial potentially here. What are some of the key differences between APOLLO and AURORA? You said you expect to enroll APOLLO from the beginning of 12 months, which seems pretty impressive. Timelines for execution for phase III, 150 patients, right?
Yeah, yeah. Yeah, I mean, this is right. We see in the claims data 14,000 diagnosed patients in the U.S. And enrollment in trials has not been a problem. It really, and hats off to the patient advocacy groups who have, I think, put energy into helping kind of bring patients into the trial. Yeah, we project to enroll in about a year. In terms of, yes, that APOLLO trial, what we learned from our phase II program is the effect on protoporphyrin IX is robust. It doesn't really need to be studied again, but obviously we will have that as one, that's the co-primary endpoint. The other co-primary endpoint here and the clinically meaningful endpoint is around measuring the time these patients are able to spend in light. Right. There's one approved drug, it's called Scenesse. It has to be surgically implanted on an every two-month basis.
As a result, it probably penetrates only about 3% - 5% of the market. A lot of patients aren't taking the drug, but nonetheless, the FDA approved that drug on the basis of a total time that patients spend in light. We measured that endpoint in our phase II program. What we learned is that while Scenesse works by tanning and therefore all the patients are functionally unblinded, and that's been published, our drug, you can't tell if you're on, it's just a chemical suppressing the production of PPIX. What we learned is that there's a substantial placebo effect. Actually, patients come into the trial, they're excited to challenge themselves, spend more time in light. You see all the groups go up very rapidly, probably more rapidly than the drug effect, actually. The placebo group trails back towards baseline over about a two-month period.
Meanwhile, the treatment arms kind of continue to improve. The key to getting separation between and measuring genuine drug effect is to look not across the entire duration of the study, but to look at the second half of the study. In this case, the way we designed it is to look at the sixth month of the six-month trial and assess the time patients are able to spend in light at that point in time. What we expect is that the placebos will go back to baseline by then and that the, you know, in phase II, what we saw was about a 2x increase in light by the end of the six-month period.
Got it. No, fair enough. I covered some of the timelines there. Let's talk about the market. Surprisingly, there's still some pushback and some debate there. I think to your point, Scenesse is often thrown as a comp, like such modest commercial effect. Part of that is the efficacy part. We also heard from physicians that a very limited number of centers were actually credentialed to install the implant, so maybe it's not even fully reflective of demand. What are some of the learnings, I guess, perhaps from that experience and that launch, and why would it not translate to bitopertin's experience and drug profile?
Yeah, I mean, I think, you know, I don't want to say a lot about Scenesse or their competition, but the way, because it's a surgically implanted drug, they basically just set up certain approved surgical derm centers where the drug could be administered. Those didn't really correspond to the KOLs who were responsible for diagnosing and caring for these patients. I think, you know, it's not even clear what percent of patients are aware that that drug even exists, right? I think one thing we've really focused on is disease state awareness, trying to really make sure that people are aware that this is an important disease and that there may be therapies available and that people should start to think about that because historically there's been nothing for these patients, right? There's no option.
I think one thing we also benefit from is we've been able to use the Komodo Claims data, which there's a, you know, with the approval of Scenesse, there was, became an ICD-10 code for this disease. That then allows us to see patients that are diagnosed and what physician cared for them. Now we have a small MSL team that's out calling on that list of physicians to try to validate where the patients are so that when we get to approval, the sales force can go out and hopefully be just making warm calls, right? Just calling on doctors where we've already validated that they have patients on board. Like I said, that claims data showed us 14,000 patients.
You know, already the MSLs have, if you just look at kind of the major centers, they've been able to validate that, you know, more or less in aggregate, the number of patients at those centers is what you would predict from the claims data. It looks, you know, there's always a question, is the claims data really telling you to provide a little bit, you know, and it differs at some sites, but by and large, it looks like it's checking out, at least in the initial foray.
Got it. What are some useful ways of actually trying to segment that patient population, right? I'm assuming there is a severity spectrum. You also have in the past segmented patients that have more constant contact with healthcare facilities and seeking treatment or at least follow-through. What are some useful ways of thinking about it in terms of narrowing down the addressable population for bitopertin?
Yeah, I mean, on the question of severity, the fact is anybody who goes through it takes about five years to get to a diagnosis, not because the diagnostic test is hard. You just need a blood sample, check for PPIX, you're done, right? You need to find a doctor who thinks to do that test. Typically, it's a very difficult journey for the patients with a lot of skepticism, because often it's a child who complains about, you know, excruciating pain after playing on the playground. People wonder, did you rub up against poison ivy, like, you know, stinging nettles? Like what, right? You end up going to allergists, dermatologists, neurologists, sometimes even psychiatrists because there's a suspicion that the child is just making it up. It's actually a really difficult diagnostic journey. Our belief is everyone who's diagnosed has a disease that is severe enough to require therapy.
Otherwise, they wouldn't have gone through all that diagnostic trouble. We don't tend to stratify, from a commercial point of view, on a severity premise. We do think it's important to look at the degree of engagement with the healthcare community because I think a common story for these patients is, well, I got my diagnosis and I asked the doctor what I can do about it. The answer is really just, you know, don't go out in the sunlight, which is, you know, not super helpful. They are supposed to have yearly check-ins, particularly to monitor their liver health because that's the major, like really severe complication of the disease that can be fatal. You see some patients who are diligently, you know, kind of getting that care. We classify those as our engaged patient population. That's about 6,000.
That's how we sized our sales force and MSL team, to make sure we're able to call on the doctors who care for those 6,000 engaged patients. There's another 8,000 patients who we claim, you know, appear to be not that engaged. Our.
They have been diagnosed and are likely to have some degree of severe disease.
Right. They have an unmet need. The question is, you know, probably we'll access those through patient advocacy groups, social media, right? It's going to be a more diffuse strategy.
Got it. I guess somewhat related to this whole question, one of the pushbacks we get is related to duration of therapy. It's like, oh, why wouldn't this be just a seasonal? I take it during the summer months. There are liver complications there. It's a lot more nuanced than that, but perhaps any nuances there in terms of patients that are likely to take this chronically, patients that are likely to take this more intermittently. How are you envisioning some of that dynamic?
Yeah, it's a great question. There's good published information now that the higher your PPIX level is, the greater your risk of liver complications. All the KOLs would like to see people's PPIX levels be as low as possible. I don't think there's any question that the clinical guidance is going to be, you know, just use it all the time. Don't try to play the game. The other thing is that we see patients in the winter in the Northeast who are on therapy spend more time in light. It tells you that even in the winter, patients are limited by their light exposure. There are some patients who say, hey, in the winter, it's worse because the sun is at a lower angle. It's kind of hitting my skin at more of a perpendicular angle.
They feel like actually it's worse on a, you know, okay, on a cloudy day, it's maybe better, but it's often worse in the winter. I think the seasonality question, I think most patients are going to want to be able to eliminate their symptomology around.
Yeah, with the safety profile established so far, it's not like you actually have a ton of drawbacks to it, right?
Essentially none. We see a lot of patients experience a moment of dizziness during the first two weeks, and then it goes away. That was evident actually in the long-term follow-up data we provided just at EHA this year. If you look at the safety, the dizziness, which occurs in over half of patients in the first few months on drug, disappears as a side effect in the long-term follow-up.
Yeah, no, that makes sense. Again, thinking about rare disease analogs here, either from a size of the market, pricing power, things like that, do you feel like there are some good analogs out there to guide the street on how to think about pricing, ramp, anything from that perspective?
Right. I mean, I think, you know, everybody's familiar with a lot of different rare disease molecules and how that's done. If you look at Scenesse directly in our indication, it's priced at about $300,000- $350,000 a year, assuming you get all six implants every two months, right? That's actually not even including, you know, surgical costs. There are also procedural costs with that molecule. There is a related kind of porphyria that occurs in the liver called hepatic porphyria, or AHP or AIP. Alnylam has a drug in that space called Givosiran. That's priced at $575,000 per year. It works actually by modifying heme biosynthesis. Mechanistically, it's a kind of a sister program to ours.
Yeah. Got it. No, that's helpful. Perhaps the last question on Bito, because I do want to move on the pipeline. I think that's becoming a bigger part of the story. Just on IP, can you just kind of recap the IP state for Bito, anything that you're working on on there to extend it? How should we think about the duration of the assay?
Yeah, so we have orphan protection that would give us seven years in the U.S. plus potential pediatric extension. We have method-of-use patents for the treatment of porphyria and EPP with this drug. Those run until 2042. The composition of matter is likely to expire, you know, in the next year or so. It's really built around method-of-use and orphan exclusivity.
Sorry, I know I said that was the last question on Bito, but we haven't spoken about the actual market opportunity. I don't know if you can just touch briefly in terms of number of patients, pricing power, how that could play out as upside to current estimates.
There's certainly a lot of patients in Europe and also likely in Japan. In fact, the genetic prevalence in Japan is estimated to be like 4x higher. That's a meaningful market. We expect to go after all of these, probably more on the, not on an accelerated timeline, on a regular approval. We'll get the APOLLO data and then, you know, file an application in Europe and Japan. Yeah, lots of patients, you know, pricing power is very much country dependent. It can be challenging. One thing that is great about Europe is that they tend to have these big centers where everybody goes. For example, a KOL in France will say that he has 400 patients at his center in Paris.
That is commercially attractive because it looks like a very simple, you know, kind of one-stop shop to make sure you get this drug to most of the patients in France.
Got it. No, fair enough. Yeah, let's move to some of the earlier stage assets, I guess. DISC-0974 in myelofibrosis, it's kind of interesting. I think we got a lot of folks just brushing off. It's like, oh, you're just treating anemia in myelofibrosis. Like, is that really a market or not?
Right.
You're showing some efficacy across very different degrees of transfusion burdens, several different settings. Big picture, based on a mechanism, what is the potential commercial positioning for this drug? It feels like it's much broader than what you're giving, the investors are giving you credit for.
I mean, there's been decades-long demand for a treatment of anemia in myelofibrosis. In fact, if you think about this disease, it's often diagnosed as a cryptic anemia, right? Patients show up anemic and no one can figure out why. Ultimately, you get a bone marrow biopsy and you see the fibrotic progression of scarring in the bone marrow, and that can lead to the diagnosis. Often anemia is the first morbidity that these patients have, and it definitely degrades the quality of life. It's also been studied and it shows a correlation with poor outcomes and poor survival. There's been a desire for more than a decade to actually have a therapy to manage anemia in these patients. People have tried EPO. It doesn't give a very sustained effect. There's a drug called Danazol, which is an androgen. It gets used, it has a modest effect, it's off-label.
You can go back to the Celgene days. They tested the IMID class, pomalidomide, to treat anemia in these patients. It failed. Celgene's successor, BMS, took Luspatercept from my old company, Acceleron. That recently showed some signal, a patchy signal in phase II. They took their best subgroup, studied it in phase III, that just read out and also failed. Maybe it's discouraging, a lot of failure, but I guess it demonstrates there's a lot of unmet medical need here. People have been trying, and now we are the only drug that I'm aware of in development to try to manage this morbidity in these patients. Our data look really good. We're in kind of middle of phase II, but with over 35 patients' worth of data, we're seeing really great efficacy across essentially all categories of patients.
If we can provide an anemia solution for all anemic MF patients, that's an estimated market of about 22,000 patients. If you look at how does an anemia drug get priced in this kind of indication, you could look over at Luspatercept in MDS, which is a kind of a similar type. Their pricing is ballpark $200,000- $300,000 a year on a weight-based dosing. Now we'll be doing fixed dose, but it gives you a sense.
Yeah, no, it adds up.
It really does. I think it's an important disease state. People should understand that. I think, you know.
You know that there's substantial strategic interest in this space as well, right? There has been a lot of activity in the MF space.
Correct, correct.
For the initial phase II data update that we're going to get, what do you expect to learn incrementally about the drug profile, right? Because again, based on the data we've seen so far, you have some degree of efficacy across most patient subgroups. You have hemoglobin increases. All the biomarkers are trending in the right direction.
Right.
What are the unanswered questions, I guess, that you're hoping to gauge here?
It's really just adding to the first 35 patients that we shared all now at the same dose level, right? That's an important thing. A dose of 50 with the potential to escalate to 75. We'll get a set of patients at that dose level. Hopefully, we'll increase the numbers of transfused patients, which were a little bit sparse in the first data set. Interestingly, the mainstay therapy for these patients are JAK inhibitors. There are some new JAK inhibitors on the market now, momelotinib, pacritinib. We'll be able to show data of our drug on top of those. We've already alluded to a general sense that it does work, but we'll show the actual data and kind of tell the story about how the drug can be combined. What we hope is across all co-therapies.
Again, same molecule also being studied in CKD anemia. I guess a little bit more skepticism there, mostly because of the high rates of failure. Same thing with the HIFs and all that debate, right? What are your expectations for the debate? Strategically, myelofibrosis, rare disease, pretty much within your wheelhouse, CKD anemia, likely much bigger trials going forward. How are you thinking about that optionality?
Yeah, CKD is a longer-term, larger program, but also a huge commercial opportunity. Millions of anemic CKD patients in the U.S. alone. Like you said, there's been a lot of failure in the space, but there's also a very good rationale for why. I mean, these patients have very high hepcidin levels, and lowering that should address anemia. I think the main question is going to be, you know, heterogeneity, right? We saw, we provided just a little bit of single-dose data last year at ASN Kidney Week, and it was patchy looking, right? There were a couple of really good responders and then a number of non-responders. I think the question we have now is, are we going to see with multiple doses a more consistent response, or is it going to continue to be patchy?
If it continues to be patchy, then really progressing the program is going to depend on us being able to identify those.
Identify and sort of segment.
Who are the responders?
Yeah.
That's really what to look for. I think, you know, three scenarios. One is generally we get great responses, then this is a fantastic program. Second best would be we get patchy responders, but we can identify them and design a program around that subset. The least desirable outcome is, we know we have some responders, but we can't necessarily figure out who they are. That will require us to maybe spend some time evaluating this whole thing before we progress.
Okay, good problem to have.
Good problem to have. Yeah.
Yeah. I guess just lastly, talking about 3405, anti-TMPRSS6 program. As far as I know, had encouraging data this year. Do you have a similar approach, I guess? Like, yeah, how are you thinking about some of the comps here and where you can actually differentiate and move center of care?
Yeah, right. Rusfertide is a peptide mimetic of hepcidin itself, delivered once weekly, typically once weekly subcu injection. In polycythemia vera, the goal was to eliminate phlebotomy and reach target hematocrit levels without requiring phlebotomy. I think hats off to that team. They really delivered great data with 75% phlebotomy-free. Remarkably, showing patients feeling much better, right? I think the rationale there is that phlebotomy works by taking iron out of the body, putting patients into a state of iron deprivation, and thereby suppressing red blood cell production to achieve target hematocrit. When you say all that, it's sort of obvious that if you could give them a drug that would, instead of taking the iron out of the body, simply prevent the red blood cell compartment from using the iron, right? That's what hepcidin does here. These patients actually feel much better because they're not whole-body iron deprived.
I think that's the outcome that really is going to drive a lot of interest in using this drug, rusfertide. I'm like a commercial for them, right? As a replacement for phlebotomy.
Yeah, you have a mechanistic read-through through your antibody, right?
Exactly. Our antibody, the way it's going to work is by stimulating endogenous hepcidin production. Our phase one data look great. We're kind of hitting the target that you'd expect to achieve efficacy in PV. We think pretty well de-risked. The area of distinction is that, you know, giving an antibody in a good formulation, we don't expect and haven't seen so far any injection site reactions, which has been a very significant side effect with rusfertide. Moreover, we should be able to dose less frequently, right? We think with those two things combined, we can give patients a better experience than they'll get with rusfertide. I think we'll be able to, that'll be a rationale for achieving meaningful market share when, you know, assuming we're able to enter the market.
Yeah, makes sense. I guess the last question just related to financing, capital allocation, right? You have APOLLO going as a confirmatory trial, launch prep, MF, like a lot of things going on there. How do you feel about your capital position? What's your runway guidance so far? What would you do differently in terms of accelerating and prioritizing some of the pipeline here if you had more resources?
Yeah, no, we are well funded. We're really appreciative of where we are. We had $650 million on the balance sheet at the end of quarter two. We guide that that takes us into 2028. In that runway is completing the APOLLO confirmatory trial, all of the commercial builds for bitopertin, the start of phase III for myelofibrosis, progression through phase III for CKD, progression through phase III for PV, and some money left over to do even some additional indication exploration with our iron modulation programs. A lot is built into that runway. What's not in that runway is any revenue, right? As we launch bitopertin, if that's successful, it's going to start to feed what we're doing and help us build the pipeline with a minimum of dilution.
Our goal, not necessarily saying we won't do any more equity financing, but certainly the goal is to get off of that, become a self-sustaining entity driven by the revenues from bitopertin to build out what we think is a really exciting heme portfolio, and then potentially even accessing these much larger type indications.
Got it. Fantastic. I guess we can probably leave it at that. Thank you so much for your time.
Yeah, thank you. I really appreciate it.