Welcome to the Cantor Global Healthcare Conference. I'm Pete Stavropoulos, Biotech Analyst with Cantor. With us, we have SCYNEXIS, and I'm pleased to introduce David Angulo, President and Chief Executive Officer. Let's start off with an intro of yourself, followed by a snapshot of the company, and touch on the milestones that will shape the company over the next 12- 18 months.
Thank you, Pete. Thank you for inviting us to really participate in the conference. Briefly about myself, I'm a physician by training. I'm a pediatrician and infectious disease physician by training. Been in the pharma industry for the past 30 years, and I joined SCYNEXIS initially as the Chief Medical Officer about 11 years ago, and I became the CEO about four years ago. A little bit about the company. SCYNEXIS is a biotech organization.
We're based in Jersey City, New Jersey, and for the past years, we have been dedicated to developing our own proprietary platform of antifungal agents. This year, we decided to expand our portfolio of assets into a new product that we just acquired in autosomal dominant polycystic kidney disease, and we're focusing in the rare disease severity spaces.
Really critical milestones that we are anticipating to come in the next 18 months is really we are wrapping up two phase I studies, one with the product SCY-770 in ADPKD. We're doing a phase I study that is wrapping up this quarter, actually. We're also wrapping up a phase I study with an intravenous formulation of one of our antifungal agents.
We're planning to initiate the phase II study in ADPKD by the end of this year, and we're anticipating to have an interim readout of efficacy of SCY-770 in the phase II study in ADPKD by the second half of next year. Those are probably the most significant milestones or catalysts that we're anticipating to come in the next months.
All right. The story of the company has sort of evolved considerably within the last year with the acquisition of SCY-770. How are you characterizing the company and its sort of strategy today? You have two very different assets in hand. Are you a rare kidney disease-focused company, an antimicrobial company, or a combo?
Well, I would say that there is, at this point, very common elements in the two assets that we have. Both of them are addressing orphan conditions. What I will characterize the company as, we're focusing on developing products in areas of very high unmet medical need, orphan conditions, so rare diseases, and those diseases that are severe and have very significant impact in the life of the patient.
So one of them is in the antimicrobial space, but also the indications that we're seeking for that product, invasive candidiasis, is an orphan condition, typically less than 100,000 a year in the U.S. In ADPKD, about 140,000 patients reported living with that particular condition.
That's really our focus has been in rare disease space and really the capabilities that we have developed over the years in developing products in those particular areas in which you really need to go into particular hospitals or the healthcare centers that are specialized in those particular conditions, really are very much applicable to both of these conditions.
All right. When you were evaluating the different opportunities, what stood out to you and convinced you SCY-770 would be a meaningful addition to the company's pipeline?
Yeah. We certainly did an intended look into other assets to be able to expand our pipeline. When we identified SCY-770, we were really impressed by several elements. Number one, the space. ADPKD is an area that still has a very significant unmet medical need. It really impacts the lives of many people in a very severe way.
As you may know, many patients really end up having end-stage renal failure, and there is only one treatment available for that indication. It's not extraordinarily well-tolerated and has some safety limitations. So the space itself was really, really compelling to us if we can provide an advantage in that disease. The other is the asset.
The mechanism of action of the asset, of SCY-770, is a mechanism of action as an AMPK activator that has been, I would say, gravely advocated by the scientific community as being able to have a significant impact in ADPKD patients. That mechanism of action was extraordinarily attractive. The fact that the asset was already sufficiently developed. They already had, at the time that we acquired, seven phase I studies completed, one phase II study in another indication completed.
The product was sufficiently advanced for us to be able to initiate a phase II study very rapidly and to really be able to create meaningful milestones and catalysts in the near term. Obviously, then we had the opportunity to really get into a very comfortable agreement with the selling company in the way that we were able to acquire the asset. There were several elements there that really fit together very nicely.
Can you disclose the deal's terms?
Sure. We paid $8 million upfront, and then we have another $8 million in development milestones, of which we need to pay $2 million upon initiation of the phase II study, an additional $6 million upon initiation of the phase III. Then we have up to $180 million in the commercial milestones. The majority of those $180 million, about $125 if I'm not mistaken, are really with sales that are at $1 billion or above.
Right. And IP around this molecule?
Say that again.
IP.
The IP. Well, the product is covered by several patents. The basic composition of matter patent runs until 2033. However, we also have another composition of matter patent that is related to the salt that we are specifically using in the oral formulation, and that runs up to 2042. Then we have other patents associated with the molecule, which is the method of use in ADPKD specifically.
That goes up to 2041. So in general, all these are not considering any potential patent term extensions. And we need to remember as well, this is an orphan product. It's an orphan disease, so even beyond patent, the market exclusivity as well is suspected to be extended because this is an orphan condition.
All right. So switching gears a little bit, ADPKD, just a very brief two minute, one minute overview of the underlying driver of disease, but also, what happens to these patients ultimately?
Yeah. It's a devastating condition, unfortunately, and it's an inherited condition, so it's an autosomal dominant disease, which means that parents have good chances to really pass it into their kids. What happens is that the cells, the particular epithelial cells of the tubular, of the nephrons, they are lacking one gene, PKD1 gene or PKD2 gene, and that results in the lack of production of particular proteins that are called polycystin-1 and polycystin-2.
The lack of these two proteins really disrupts the function of the tubular epithelium. And those cells start to replicate abnormally and start to kind of form, I would say that a little bit of bubbles, and then those bubbles form into cysts.
Those cysts can really start growing and growing over time to the point that they get to occupy the majority of the space in the kidney, and they compress the normal part of the kidney. The normal part of the kidney stops functioning to the point that by age of 60, about 50% of the patients will require either a kidney transplant or dialysis.
So the kidneys stop functioning by some age. And there are other symptoms associated. You can have blood in the urine, you have hypertension, and obviously progressive decline in your kidney function. And there is only one treatment available to really try to slow down the disease, which does work in slowing down the disease. However, it is very poorly tolerated, as I was mentioning to you.
All right. Can you just help us understand the market opportunity? How many patients are in the U.S.?
Yeah. It's actually one of the most common kidney inherited diseases, and it is an estimated about 140,000 patients in the United States only that have this disease, and several other multiple hundred thousand patients globally. And, well, that is really the opportunity to impact these patients. Unfortunately, because of really the poor tolerability of the currently available therapies, only about 10% of them are currently receiving active therapy.
Yeah.
There is a great opportunity to expand that with modifications and potentially better tolerated drugs.
There is the approved agent, tolvaptan. The KDIGO guidelines basically say start treatment, if the patient is Class 1C to 1E or has an eGFR decline greater than 3 mL/min per year. Do you know the rationale for not intervening earlier with this drug, and is there an open opportunity for earlier intervention?
Yeah, I think that there is clearly an opportunity to really intervene earlier. Let me just provide a little bit of the background why tolvaptan is right now indicated in adult patients in those categories. Those categories, just for everyone to have an understanding, there is a category in patients with the different ADPKD that goes from 1A, B, C, D, and E.
The patients in the C, D, and E are considered to be the ones that have the greatest chances to progress rapidly, so that you're going to see the kidneys to grow much faster year over year, and then you will see that the decline in the kidney function is much faster year over year. The higher that you are in that particular scale, the much more rapid progression that the patients are demonstrated to have.
The phase III trials or the studies that were done to obtain the approval of tolvaptan were focused in patients who have the opportunity for rapid progression, for a very good reason. Because it's the patients in which you can demonstrate in a reasonable timeframe that you're able to slow that progression.
If you have a patient that is only progressing very slow at early stages of your life, it may take you multiple years and many more patients to be able to demonstrate the benefit. Having said that's the reason why obviously the label reflects what was the population that was studied with tolvaptan, that were those rapid progressors. Is there an opportunity to intervene earlier and really try to really have even more meaningful impact in delaying the progression of the disease?
In our opinion, there is why probably has not occurred in that way with tolvaptan, although they have done some clinical studies in pediatric population, that they have been able to demonstrate that there was a beneficial effect there. However, we need to understand that this is a risk-benefit ratio.
Yeah.
With a product that has a potential liabilities of kidney toxicities, and also has very poor tolerability, the risk-benefit ratio probably is not there to start too early.
Okay. Turning to the biology and sort of the central hypothesis of SCY-770, is that it's an AMPK activator, sits upstream of several pathways involved in cyst formation expansion. Just explain the role of AMPK in normal kidney biology, but then the pathophysiology of ADPKD.
That's great. Yes. As I mentioned to you, the AMPK as playing a critical role in ADPKD, certainly has been already published and is studied by the scientific community for the past 10, 15 years. AMPK is a heterotrimer molecule that is responsible for orchestrating the metabolic and the energy sensing, and existing basically in all our cells.
Specifically, in tubular cells, they really are implicated in the regulation and suppression of cyclic AMP, the mTOR pathways, and some inflammatory pathways as well. Specifically in ADPKD, it's well-described that really the activity of the AMPK heterotrimer enzyme seems to be reduced, and that is resulting as well in increase in cyclic AMP that is well-known to stimulate cell proliferation. And once these cells start proliferating is when they really start forming this cyst.
And there is another implication as well, when the AMPK activation is reducing the cells, you see a corresponding increase in the mTOR pathway, and the mTOR pathway also stimulates cells proliferation. So the activation of an AMPK in the cell that is affected by the lack of polycystin-1 or polycystin-2 is expected to have multiple effects, is expected to reduce cyclic AMP, which is the primary mechanism of action that also tolvaptan works on, reduce the mTOR pathway, which then in turn will reduce cell proliferation, reduce the fluid secretion via chloride channels, and really normalize the glycolysis of the cells, and also reduce the inflammatory pathways.
So that's very attractive about this mechanism of action in the disease, because it has multiple opportunities to impact the disease and cyst formation. So that's what we found really very intriguing and obviously very interesting about this molecule in the new MOA.
Preclinical data, you have shown fairly striking results in a PKD1 mouse model. Just walk us through that model and why you think it's relevant for human ADPKD, and sort of what are the key data that increase your confidence in SCY-770?
Yeah, that's quite interesting. Obviously, we try to, as much as we can, to understand what are the reasons to believe that a product could be effective in humans, and we resource to preclinical models to do so. In this particular case, the data that was generated in the preclinical model is a mice model in which they are actually, their PKD1 gene that is responsible for the production of polycystin gets nullified entirely.
So it is a genetically modified mice, and at some point in their life early on, they are administered tamoxifen, and that really removes some of the exons of the gene, and that nullifies their opportunity to produce polycystin-1. And so the mice start producing cysts very rapidly. And then you start with an intervention.
In this particular case, SCY-770 was given, and then you measure in this particular mice how the kidney function works, how much the cysts were growing. And then we were able to as well measure the other pathways like the mTOR pathway, inflammatory process, cell proliferations. So all these elements will say that we're pointing in the right direction in this particular mouse model.
There is not only one mouse model, there are several, but in this particular one, this is quite relevant because it nullifies entirely the activity of polycystin-1 in it at the same time, so the cysts develop very rapidly. So it's a very severe model.
The mice ended up dying, having impact and increasing survival, which was a very important element, but also normalizing almost kidney function or maintaining kidney function very close to the normal controls, and reducing cyst formation in that particular model were key elements that were very striking to us to understand that there were very good reasons to believe from the preclinical standpoint, that the same effects could be observed in humans. We decided to move ahead and to initiate our phase II study in patients with ADPKD very soon.
All right. We'll get to that in a second. But SCY-770 has been in phase II study for NAFLD, so there are human data with that molecule. What's known about the PK/PD and sort of safety profile of this molecule prior to the acquisition?
Yeah, you're right. This particular molecule has been already in eight, right now nine, because we just run a phase I study, clinical trials already. So it's a molecule that it is, I would say, adequately advanced in its development. The previous company that we licensed this product for, they had as their primary intended indication, non-alcoholic fatty liver disease. That fit better with what was their profile of products that they were developing.
They were developing products for diabetes and metabolic conditions. So they run a phase II-A study in patients with non-alcoholic fatty liver disease in that particular study, and they were able to demonstrate evidence of activity of the product in reducing liver fat content. The product was administered in these patients for 12 weeks, and we learned a lot from that particular study.
Number one was a clear indication of target engagement in a human setting, because they were truly able to demonstrate a difference between the placebo patients and the treated patients in terms of liver fat content. Then the safety profile of the drug was also very nicely characterized up to 12 weeks of therapy, which is very well tolerated. The magnitude of effect that they observed there, so in certain subgroup of population, they were able to see up to almost 26% reduction in liver fat content.
The expectation at that point for that company was that they wanted to see at least 30% fat content reduction or greater. So if you read that particular paper, they say that they were not able to really see what they were hoping for in the phase II study. However, it was a clear evidence of target engagement there.
There is another thing that it should be mentioned. The AMPK heterotrimers have different versions in the different tissues that you have, some versions in the liver, some versions in the kidney. This particular molecule, SCY-770, has a very, very high sensitivity to really being able to activate the heterotrimers that are present in the kidney at much more lower concentrations than the heterotrimers that are present in the liver.
Everything in general was positive in that study, at least from our standpoint, in regards to indicating the safety profile. We were able to gather additional information in the pharmacokinetics of the drug, and also as an evidence of target engagement in humans.
Okay, so you are conducting a phase I again, started in the end of June, data expected this quarter. Why run another phase I?
Yeah, we identified that certainly the doses that the previous company have explored the most was the 500 mg given once a day, which was one of the doses that they evaluated in the phase II study. However, there were no safety or tolerability limitations, and when evaluating or planning our phase II study in ADPKD, we wanted to explore the possibility to give him a higher dosage than that one. There was not too much PK information for doses higher than that one.
That is the reason why we decided that while at the same time that we were doing all the technology transfer, getting ready for open IND, et cetera, we run this study, which was very efficiently set up, and we are evaluating in that study two additional doses, 750 mg given once a day and 500 mg given BID. With that information, plus the previous information that we have for the 500 mg once a day dose, we will be making the decision regarding which doses to put in our phase II study.
Okay. Let's go to the phase II study, proof of concept phase. It is going to initiate in 4Q. Just walk us through the design, but then also, as you just mentioned, what exactly is going to drive dose selection?
Yeah, dose selection at this point, obviously, is based on pharmacokinetic data. We know what is the exposure in which the mice, in the mice study, what was the exposure that these mice had when they were able to really achieve these effects. We are aiming in humans to achieve that exposure or higher. That is really the intention.
A dose that maintains the majority of the patients that are receiving the drug, to maintain either the exposure that was given in the mice or higher than that, because that will maximize our opportunities to really see efficacy. That is really the driver for dose selection. Obviously, will be tolerability, but we do not anticipate any tolerability limitations, and it is going to be mostly pharmacokinetic. The phase II study is planned to have two active doses.
We are planning to have two groups receiving one dose, second dose, and then we are planning to have a placebo group. The treatment duration for that particular study is going to be a year. Also, we are planning to have an interim readout of efficacy at some point in the middle, in the way that we are aiming to evaluate the progression in TKV, actually, which is a surrogate marker of how a product may be impacting these particular patients with ADPKD.
Sorry, just briefly explain what TKV is.
Okay, great. The way that this disease, when I was explaining about the pathophysiology of the disease, one thing is that the cysts start growing, that makes the kidney starts growing, and it compresses the normal tissue, and then you start getting lower in your function of your kidney function. TKV is total kidney volume, so it is actually the measurement of the kidney size, and you measure that via MRIs.
In patients that are rapid progressors, it is really well documented that they, depending on which stage they are, their kidneys will be growing about from 3%-6% per year. Then you are able to really measure the kidney was this size at baseline, then three or four or five, six months later, it is at this size. You are able to really see if you are able to stop the progression, or at least to slow down the progression of the kidney volume.
What do you expect to see, like magnitude and timing of effect? You are going to take a look at 16 weeks, and then again at 48 weeks. Any expectation of seeing anything at 16 weeks?
Yeah. First, let me just clarify. Certainly, with the preliminary design of the phase II study that we disclosed when we were doing the initial evaluation is exactly as you mentioned, to have an interim readout at 16 weeks, and then to have the final readout at the year timeframe. At this point that we have assembled our clinical advisory board, we are evaluating if the optimal readout should be at 16 weeks or a little bit later, 20, 24 weeks.
We are deciding that with our advisors at this point, but the concept is the same. What we are anticipating to see, or the magnitude of difference that we are anticipating to see, is based on the background information from the tolvaptan studies, which is the only ones that have run that long, and that have demonstrated effect. You typically see about a 5% increase in total kidney volume in a year timeframe.
Okay.
Tolvaptan was able to reduce that from 5% increase to only 2.5% increase approximately. So 50% relative reduction in the kidney growth. That, to us, is really a great indicator. If we are able to observe that, it is evidence that the product has a great opportunity to provide a clinically meaningful effect. In your interim readout, what you are expecting to see is that those lines between the placebo growth and your treatment growth are starting to separate.
The final separation, you will see it at the one year. So we are giving these patients a full year treatment to be able to have both assessments. But at the preliminary, you would expect to see that really approximately a 50% relative reduction in kidney growth versus a placebo is what could be considered a positive outcome.
Okay. David, we are running out of time here. I would like to thank you for participating in the Cantor Healthcare Conference, and looking forward to the progress over the coming year.
Thank you very much for the interest, Pete, and obviously we are very excited moving this asset forward. At this point, we have two very nicely and differentiated development programs moving forward, and then sufficient cash runway to really get us to meaningful milestones in the future. We look forward to continue discussing our progress with you.
All right.
Thank you, Pete.
Thank you.
Thank you.