If you have any questions, please reach out to your Morgan Stanley sales representative. For this session, we have Disc Medicine with CEO John Quisel. Good afternoon and thanks for attending, John. I thought we'd commence by inviting you to make some comments, provide a bit of an overview of Disc and some catalysts coming up.
Sounds good. Yeah, it's great to be here. Yeah, so Disc Medicine, for those of you who don't know us, publicly traded under the symbol IRON, focused on red blood cell biology by manipulating the metabolism of heme and iron. We have three molecules in the clinic, mid and late stage, the lead program called bitopertin, in development for a disease called erythropoietic protoporphyria with an NDA due to be filed under an accelerated plan in October. Starting to ramp up towards potentially, if all goes well, a launch next year. The next two programs in myeloproliferative disorders like myelofibrosis and polycythemia vera, you know, solidly in phase II with some data coming near the end of this year and other data readouts next year.
Fantastic. We'll dig into that in a minute. I've got three macro questions that I'd like to ask you. The first one is with China's rise in biotech innovation, how are you thinking about Disc Medicine's competitive position here and will this influence your R&D and business development strategy?
Yeah, I mean, interestingly, our third program was actually in-licensed from the U.S. subsidiary of a Chinese biotech company. It's been a good collaboration, high-quality antibody. I think it's actually nice to see that. Our other programs, interestingly, we feel like we're pretty unique in the biology we're exploiting and we're not seeing fast followers from either the U.S. or China. Not feeling any competitive heat necessarily and seeing some benefits of collaboration.
Wonderful. How are you currently leveraging AI or thinking about AI's future disruption?
Yeah, it's a fascinating question, right? I think we're exploring how to use it in the context of what I would say some of the more rote documents, right? A lot of the clinical trial documents, regulatory documents, there's some serious thinking and intense writing that has to happen in some parts of those, but a lot of them are sort of formulaic in nature and probably could be done by AI to free up the team to do more higher value tasks. We're talking to some vendors who have solutions in that area. That's probably the first place it'll manifest. Otherwise, not intensively using it.
Okay, wonderful. Thank you. What's been most impactful on this from the regulatory side? Has it been interactions at the FDA? Has it been MFNs, probably a bit early, or tariffs?
Yeah, I mean, I think like everyone, we're working our way through tariffs. We are fortunate that our lead program is entirely manufactured in the U.S., so that at least we don't have to worry about. In terms of the FDA, I have to say we've been, our lead program is being reviewed by the Division of Dermatology. They have been stable. If anything, I think the pronouncements from the FDA around the importance of rare disease development, trying to create smooth and efficient paths for approval in that space, have been favorable to us. I think we're generally supportive of the efforts going on.
Great. Thank you. Maybe to get more specifically on this. Starting with bitopertin, expected to submit the NDA in EPP next month, I believe. How are you thinking about the launch plans and the commercial strategy?
Yeah, yeah, great point. Right. The NDA due in next month at this point, that's, you know, I'd say a high degree of confidence in that because it is really just a matter of formatting and proofreading at this point. That sets up, we learn in December then what our fiduciary date will be, you know, if it's, you know, sometime in the second half of next year, presumably. We are deep in the commercial launch preparations. We've got, we've hired our Chief Commercial Officer. She's hired much of her leadership focused on having a lot of experience in rare disease launches. I think a lot of what preparation goes into that is kind of understanding the size of the patient population we're trying to address and then finding the physicians who treat those patients, right? We've hired an MSL team.
Everything can be done with a pretty small team, but that team is out on the ground contacting physicians, trying to validate what we have, you know, in this claims data, which tells us there's 14,000 U.S. patients, some of them concentrated at some of the large centers. So far, I would say the boots on the ground approach is giving us a number that matches up pretty well with what the claims data suggests. The digital world, the real world, they're connecting pretty well so far.
Would you be able to walk us through, I think you said 14,000 patients, just walk us through how you think you'll approach that, what the actual commercial opportunity might prove out to be.
Right, right. Yeah, if you try to size this, the genetic prevalence of the disease as predicted by a paper from Mass General, we put it at about 20,000 patients in the U.S. We went to this Komodo claims database that looks for the ICD-10 code for EPP, and we're very fortunate that our disease has a unique ICD-10 code. That points to 14,000 unique patients in the U.S. That's in a seven-year look back. If you look at people who had one claim against the EPP, that's the full 14,000. If you look for people who've had multiple claims against that code, you get down to about 6,000 patients. We're viewing that as a group of 6,000 engaged patients actively looking for therapy for the disease. We think that's going to be the easiest group of patients to activate.
The way we look at it is, there's a group of patients on trial, probably about 150 of those at launch who can eventually convert to a commercial product. There are the key centers that have another kind of concentric ring of patients. We're really sizing the sales force so that we can call on all the physicians who treat that 6,000 engaged patient group. To get to the full 14,000 opportunity will probably take a little more time. We're going to be relying on the efforts of the patient advocacy groups and our own social media campaigns, et c., to get the word out about the exciting therapy and activate that final 8,000 patient.
It sounds out of the gate that you've got a pretty accessible patient population that might be on a therapy, and that's the way that you're approaching it. You hope that the market will build out from that initial subset of patients.
Yeah, I think that's about right.
Thank you. I guess based on the data observed today, can you provide more color on how you're thinking about the commercial dosing strategy as well as expectations around price?
Yeah, so, you know, we've run two phase II trials to really establish the dose. The goal here in this disease is to reduce the toxic, the buildup of a toxic metabolite called protoporphyrin IX or PPIX to keep it short. What we're seeing is that the higher the dose, the lower the PPIX gets. We're using a 60 mg dose to achieve about, I'd call it, 50% reduction. At that reduction, the literature would suggest there should be a major clinical improvement. We do see signs of that in the trials we've run so far. 60 mg , once daily, very simple oral pill, convenient presentation. In terms of pricing, I mean, look, it's likely to be in the classic rare disease pricing corridor. If you look in other porphyria therapies, there's one price at about $300,000 per year. There's another price closer to $600,000 a year.
I think that matches up with rare diseases.
Got you. Thank you, John. What are the key learnings from the HELIOS extension trial regarding sustained PPIX reductions and improvements in quality of life measures?
Yeah, great question. We just presented that data at the European Hematology Meeting in June. Patients had the option. We enrolled about 100 across the phase II program, and we were pleased to get about 85 of them who chose to roll into the long-term extension and have had very little dropout from there. What we saw in that data is, first and foremost, PPIX levels are suppressed within about a month of dosing, and they are sustained, seemingly for years at this point is what the data shows. That's, I mean, as expected, but also very exciting to see that really playing out. If you look at how the patients are feeling, almost everyone reports feeling much better when you survey their PRO score, which is also just really affirming to see that.
Right.
Yeah.
Okay. What are your expectations for the confirmatory APOLLO trial in terms of enrollment timeline and the trial needing to be well underway for bitopertin to be approved?
Right. As part of the accelerated pathway, we're working on the confirmatory trial we call APOLLO, about 150 patients to be enrolled, primarily in the U.S., but also at sites in Europe, Canada, and Australia. By and large, there's a lot of enthusiasm in the community. We're seeing enrollment go well. We started enrolling in May, and we expect it to take about a year to enroll. We expect it to be fully enrolled by next May, map that against potential PDUFA dates. I think there'll be no debate that the trial is well underway, meeting FDA expectations before approval.
Great. I've got a couple of questions on the APOLLO co-primary endpoint. What are you hoping to show in terms of PPIX reduction? How confident are you in the study's ability to demonstrate stat-sig average monthly time in sunlight?
Yeah, absolutely. PPIX reduction is really not in debate anymore, right? Even in our small phase II program, the P-value was less than 0.001. Having that as a co-primary for the APOLLO trial feels like a very certain win for us. Hoping to show ballpark size of reduction continuing to be in that 40%-50% range. As you mentioned, the co-primary is the time that patients are able to spend in light. It's a voluntary endpoint, meaning that patients choose how much time they want to spend in light, regardless of the capacity the drug has given them. They keep it through a diary. We learned in phase II that there's a placebo effect during the first two months of trial, but the placebo group fades back to baseline after about two months. We've set this study up as a six-month study.
We're using the last month of time in light data as the key measurement interval. If you apply that approach to our phase II data, even in that small 25-patient per arm study, it would be pro forma stat-sig, right? Now you translate that to a 75-patient per arm one-to-one study. We have a very high degree of confidence that we're going to be able to hit that.
Wonderful. For investors that might be less familiar, just talk about the severity of the disease, how it compromises life.
Yeah.
Maybe draw a comparison, with bitopertin, to what is currently on the market.
Sure. Yeah. So it's, you know, widely regarded as a very severe disease. The primary manifestation is this light sensitivity. To call it light sensitivity is to understate it. When patients go out into sunlight, this PPIX metabolite that's flowing through the bloodstream absorbs that light energy and turns into a free radical and damages all the surrounding tissue, importantly damaging nerve endings. These patients suddenly experience this excruciating pain. They describe it as like there's lava in their blood, and it takes typically days for this to resolve. People are often, we've learned now, about 1/3 , 40% of patients are managed with opiates, even though they don't show efficacy. Quite a horrible pain attack. Needless to say, patients avoid the sun like anything, right? If you had that kind of pain hanging over you, they take great efforts to avoid the sun.
That changes everything about life: career choices, choices of not playing sports in high school, not able to go to social activities that are outside, but even not being able to sit near an open window, right? Driving a car, the light coming in, because it is visible. It's both visible and UV light that triggers it. That's why sunscreen doesn't work. If you wanted to cover yourself in tar, you know, that might do the job. Really every aspect of life is changed on a daily basis for these patients. The other really difficult complication is that same PPIX, it can build up in the bile duct system of the liver and crystallize there, causing damage to the surrounding liver tissue. About 1/3 of patients have evidence of ongoing liver damage.
They'll have gallstones, gallbladder removal, and then in a small percentage of patients, actually liver failure can happen, which is a potentially fatal complication requiring a transplant to survive.
Wonderful. Thank you. I might jump over to 0974. The phase I-B data showed that greater than 50% of patients receiving concomitant JAK inhibitor therapy achieved major hematological responses. How might this influence treatment paradigms for MF patients with anemia?
Yeah, we're really excited about this program. You know, it works by mobilizing your internal iron reserves, which are known to be impaired in myelofibrosis patients, right? Anemia is often the first detected morbidity in myelofibrosis patients as the bone marrow starts to be damaged through this inflammatory process. It's also a continuing morbidity associated with poor outcomes, poor quality of life. There's been a desire for decades now to have a therapy that would manage anemia in myelofibrosis patients. Nothing has really worked. What we're seeing in our, you know, we presented 35 patients with our data at ASH last year. We're seeing, you know, call it ballpark, about a 50% aggregate response rate is exceptional. Really, you know, looks like we're really correcting one of the major drivers of anemia in these patients. That's really exciting. It's also exciting because of the mechanism to the point about Jakafi.
Jakafi, JAK inhibition is an important mainstay therapy for these patients to try to decrease spleen enlargement. Because the way we work is by mobilizing iron, these are, you know, highly orthologous approaches, right? The hypothesis is that it would combine well together. There wouldn't be any drug interaction. That is, in fact, what we've seen, that basically if you're on Jakafi, not on Jakafi, the response to our drug is basically the same. That's what we want. Our goal here is to provide a once monthly simple subcu injection, hopefully very safe, that doctors can use to manage anemia in these patients, regardless of what therapy they may be on to manage underlying spleen, you know, fibrosis, whatever other aspects of disease.
Got you. Can you discuss the decision to update the RALLY-MF trial protocol?
Yeah, yeah. We're in the middle of this RALLY-MF trial. We had set aside a 10-patient exploratory cohort for patients who were on a new drug called momelotinib. The question was, you know, we were worried that patients receiving momelotinib may be like last line patients, highly recalcitrant to therapy. We put those into an exploratory cohort. What happened as we got underway is, and we don't usually update on enrollment, but in this case, it was exceptional. We had just enormous demand from people who'd gone onto momelotinib, remained anemic, were very interested in anemia therapy. Our trial is really one of the only ones now available. We over-enrolled the cohort. We thought it would be nice if we could actually roll those patients back into the overall 90-patient study and create more capacity.
In order to do that, we needed to have some confidence that the drug would work on top of these patients. We took an early look. We haven't shared quantitative data. We'll share that actually at ASH. In an early look, it appears that the responses on top of momelotinib are the same as the responses in non-JAK-treated patients, you know, Jakafi-treated patients. It doesn't seem to really matter. Our mechanism is orthologous, distinct from these other drugs, and the response is about the same. With that, we amended the trial to eliminate this exploratory cohort and just fold those patients back into the core 90-patient phase II trial.
Wonderful. Thank you, John. What are your expectations for the initial data readout in the phase II RALLY-MF trial, which I think is in 4Q? What would you consider a clinically meaningful outcome?
Right. Yeah. We anticipate presenting, you know, near the end of the year, likely at ASH. Of course, we have to wait for the abstracts to come out. That's where we've typically presented year -over -year. A win there would be really sustaining the remarkable response rates we've seen to date, which are hanging in around the 50% range, you know, focusing on hemoglobin increases for those patients who are not transfused and looking at transfusion avoidance in patients who are heavily transfused. Across the board, we should have a snapshot in time. Like I mentioned, you know, we can pretty much guarantee that you'll get data from the 10 patients who were on momelotinib therapy. A good look at how that dynamic is playing out. It should be an exciting, but, you know, midpoint data check-in.
Sure. Wonderful. What biomarkers or baseline characteristics might help identify which MF anemia patients are most likely to benefit from 0974?
That's a great question. I think going into the study, we expected a good deal of heterogeneity. We weren't sure how well people would respond. We've been very pleased with this 50% response rate that we're seeing. Even those who don't meet the criteria of responder are typically having some kind of benefit. I think in a sense, it appears that identifying a subgroup isn't going to be that important. I think one fairly intuitive thing is that most of these patients have elevated hepcidin, which is the core hormone that controls iron in the body. The way our drug works is by decreasing hepcidin levels. Fairly obviously, patients who have elevated hepcidin are going to be good targets for drug therapy. Fortunately, that and part of why we went into this disease is almost all patients do have that criterion.
Sure. Just thinking about the competitive landscape, if there have been any recent updates on the competitive front and how you view the positioning of 0974 in the MF space.
Right, right. Yeah. One competitor was luspatercept, which is approved as REBLOZYL to treat anemia in myelodysplastic syndrome, a related disease. There was a phase III trial running in the most severely affected, heavily transfused patients and on Jakafi being run by BMS. That trial read out and they missed the primary endpoint, P-value 0.067. The drug is clearly having some effect, but not enough to reach stat-sig. That does remove, I think, a competitor. That said, luspatercept is used off-label by some physicians who feel like it provides some efficacy, as is EPO, is used a little bit off-label. I think, though, as a major competitor, as a broad spectrum treatment of anemia and myelofibrosis, we're unlikely to see that. At this point, actually, there is no therapy approved to treat anemia and myelofibrosis. There's actually no therapy in development to accomplish that either.
We really feel both a burden and a privilege to be kind of the last standing drug trying to address this important medical issue.
Sure. Thank you, John. To move on to 0974 in non-dialysis-dependent chronic kidney disease, with the MAD phase I-B data expected in 4Q, what will you be specifically looking for for this to select the right phase II dose?
Yeah, so we'll be exactly as you say, we've been running single ascending dose, multiple ascending dose. We shared a snippet of single ascending dose last year. I would say middle of the road data, some responders, some non-responders, but only one dose. Now we'll have a full data set where we go to the highest dose in this study, 90 mg, and then one or more doses chosen from multiple. I guess, what are we looking for? If you look in other drugs that have been used and developed to treat anemia in this population of non-dialysis-dependent chronic kidney disease, you're seeing on average, it seems to meet the bar for efficacy if you're getting about 0.7 g/dL- 0.8 g/ dL increase. Here, small cohorts, six patients on drug, three placebo. If we can get to that threshold, that clearly is a dose to take forward into phase II.
The alternative path here is we may get responders, but not necessarily an aggregate response, right? There'll be a bit of a challenge in trying to figure out how to characterize and identify those responders, kind of to your point about the MF population.
Got you.
Here, you know, CKD seems to be a more heterogeneous population, a much larger population than that kind of subgroup identification may become an important part of the program.
Sure. Can you talk a little bit about the mechanism of 0974 and whether it, you know, the differentiation from current standard of care in CKD ?
In CKD , sure, sure. Yeah, right. The central regulator of iron in your body is this hormone called hepcidin. In cases of inflammation, hepcidin becomes very high and it traps the iron so that your red blood cells don't have sufficient iron and get a kind of anemia called anemia of inflammation. In chronic kidney disease, there's a second issue that develops, which is that hepcidin is actually cleared through the kidney. As clearance rates fall, hepcidin becomes elevated. These patients essentially have a double whammy of increased inflammation as well as decreasing clearance. You get these very high hepcidin levels. There's been a longstanding hypothesis that if you could bring hepcidin down, release the iron from internal stores, you would be able to treat the anemia in these patients. Current therapies are really IV iron or EPO.
IV iron, if you give someone high hepcidin for years, that person will end up iron deficient because it also blocks your body's uptake of iron. I think there's a lot of reasons why these patients end up iron deficient. Once you're iron deficient, IV iron is an appropriate therapy because you're literally putting iron in the body. Our drug works by mobilizing iron you already have. If you look at ferritin, which is a measure of internal iron stores, a low ferritin person, like below 50 ng/mL, they should be getting IV iron. If you're above 50 ng/mL, today, sometimes they'll get IV iron anyway, even though it would appear that you have adequate iron on board. Our drug is really designed to provide an anemia therapy for those who have adequate iron, but just need it mobilized.
The other alternative is EPO, ESA type agents, which are sparsely used because some of the risk of adverse events have been identified.
Sure. I guess to the back to the population, just to clarify, could you discuss any potential biomarkers being evaluated to identify non-dialysis-dependent chronic kidney disease patients most likely to respond to 0974?
Sure. I mean, I think the most intuitive biomarkers that we're starting with are actually ferritin levels. The intuition being, if you have very low ferritin at baseline, you may be a better candidate for IV iron than for our therapy. As those ferritin levels go up, it's an indicator that you have adequate iron, also that you have inflammation and therefore may not be able to mobilize it. That would be one. Prospectively, the suspicion would be the higher your ferritin, the more likely you are to respond to our therapy. I think another hypothesis that remains undetermined as of yet would be that baseline EPO may matter. Almost every form of anemia is marked by very high EPO levels because your body is desperately trying to make more red blood cells to provide adequate oxygen supply. As a consequence, EPO levels get very high.
Chronic kidney disease is different because as the kidney fails, the capacity to make EPO is diminished.
Sure.
These patients may be quite anemic and yet their EPO levels may be low or just normal. I think one question that we're looking to answer is whether in a setting of low EPO, a low baseline EPO, is mobilizing iron sufficient to restore red blood cell production, or do you need patients to have at least normal or higher levels of EPO? You look over at myelofibrosis where we have fabulous responses. Those patients have very high levels of EPO. Their body is ready to go to make red blood cells. They just need the iron refreshed. Here with the CKD population, it may be a little bit more in question. If you sort of sit back prospectively, you'd say maybe we'd predict people with higher EPO levels at baseline would be better responders to that iron replenishment that we provide.
Sure. Wonderful. What are your thoughts on potential combination approaches with 0974 still in CKD?
Yeah. Combination will work beautifully in, you know, with EPO. We know this already from some mouse studies we've done. It's pretty well understood that EPO provides the pressure to make red blood cells, and then you need iron in order to actually form them mechanically. You can't make red blood cells without iron, and the two together provide a very powerful erythropoietic response. I think, you know, a combination in that patient population would be a very effective therapy.
Wonderful. Thank you. Moving on to 3405, you more recently initiated phase II in PV. The phase I data showed meaningful reductions in hematological parameters, including hemoglobin and hematocrit. How might these translate to clinical benefits in PV patients?
Yeah, it's great. We're really excited about this program. It's coming into phase II now, you know, with insight of POC data. It's a good time to pay attention to it. The goal in polycythemia vera therapy, at least in what I call kind of mid-stage patients, is to, you know, the disease drives excess red blood cell production, which sets up a risk of thromboembolic events. The goal is to get hematocrit down to a target of about 45%. The way that is the standard of care to accomplish that right now is phlebotomy, good old-fashioned bloodletting. It's not so much mechanically removing the blood from the body. That's not the real basis for the therapy. It's actually, as you remove the blood, you're removing iron.
Sure.
By over time, you remove enough blood and iron from a person's body, they will become iron deficient. It's a way of forcing someone into iron deficiency. On the one hand, for a PV patient, that means your bone marrow can no longer produce red blood cells effectively, and you see the hematocrit come down and come into control towards that target of 45%. On the other hand, making someone iron deficient induces a lot of discomfort. You get brain fog, you get some itching. There's a whole syndrome that goes with iron deficiency. This phlebotomy type therapy, while providing some ability to achieve that target, 45% hematocrit, avoiding thromboembolic events, probably is theorized, comes with the side effect of a lot of the discomfort. Hats off to a protagonist with a program called rusfertide, basically delivering hepcidin mimetic, right?
This hormone that controls iron in a subcu injection weekly just read out from data showing that this does restrict erythropoiesis because now you're not taking iron out of the body, but you're restricting it away from the bone marrow so that red blood cell production is restricted, but you don't have to induce whole body iron deprivation. The other remarkable result from that program, from that phase III trial, is that patients feel much better, which is sort of intuitively, yeah, it should be that way, that if you hit your target hematocrit, but you're not removing iron from the body, patients feel great by comparison to phlebotomy. I think there's a lot of excitement now about this approach of iron restriction for treating PV and replacing phlebotomy. Our goal with our program, anti–TMPRSS6 antibody , is rather than giving exogenous hepcidin, we're giving an antibody.
You could probably do that once a month, something like that, and achieve the same overall biologic effect.
Wonderful. Thank you. What are you expecting? What should we expect from the phase II data during PD next year?
Yeah, the protocol is designed, trying to be very patient efficient. You know, 20 - 40 patients will enroll. We give them a quick rising dose to get to kind of the maximum dose and then allow titration from there. The goal would be to show that we're causing the majority of patients to become phlebotomy free. Right? That's the objective, get to target hematocrit or maintain target hematocrit while relieving the need for phlebotomy.
Wonderful. Thank you. Are there other iron overload conditions that you might be able to throw 3405 at?
Yeah, this approach of iron restriction has a lot of potential indications. Hereditary hemochromatosis is a fairly common genetic disease marked by iron overload. It's literally a genetic defect that causes excessively low hepcidin levels. Our drug would raise those back to the normal range and presumably provide a mechanistic fix for the disease. That's one. We've also seen really interesting data in mouse models of sickle cell disease, where the theory is that by restricting iron, you restrict the production of the sickling hemoglobin and thereby, you know, achieve some therapeutic benefit. That's something we are working on getting going as well.
Sure. Coming up to time, a couple more questions. The first one, just your balance sheet position, cash position, and how that times up with commercialization.
Yeah, so end of Q2, we had $650 million on the balance sheet that is projected to fund us into 2028. Good runway. It does include within it the commercial build to launch bitopertin next year. It does not include any revenue from that. It is a very conservative runway statement in the sense of like we're spending money to launch the drug, but we're taking no credit for any revenue we may receive. It also includes expenditures to get us into phase III for myelofibrosis and then through phase II for PV, for CKD, and even some other indications as well.
Okay, wonderful. Final question is, is there something I should have asked that I didn't?
No, I think you covered the whole pipeline in almost exactly half an hour. Yeah, a good set of questions. I think you covered everything.
Wonderful. Thank you for coming, John. Appreciate hosting you.
Yeah, thank you for your time.