Welcome, guys. Before we start, I'm just going to read a brief disclaimer. For important disclosures, please see the Morgan Stanley research disclosure website at morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. With that, Mike, Charlotte, and Alina, it's been quite a year from successfully completing your IPO to announcing initial clinical data on two programs, which we'll get into in a little bit. Maybe just to start us off, perhaps you can provide just a brief introduction on Shihab Kuran, for those who may not be as familiar with you.
Yeah, great. Ben, thank you very much, and thanks Morgan Stanley for inviting us today. It's a pleasure to be with you, and thanks everybody for joining today. I'm Mike Koonin, I'm the CEO. Just a quick background on Shihab Kuran, for those of you who don't know. We are focused on cystic fibrosis. We have a very unique opportunity that we're going after, a target called NBD1, which I'm sure we'll talk about later in the discussion today. With that target and with our approach that we're doing around combination therapy, most specifically a dual combination, our goal is to transform the standard of care in CF and to get more patients to normal CFTR function, which we'll talk more about, the unmet need and how that plays in today's market.
It's also important, not only given what our mission is and what we have, the opportunity to think back of where this story originated. We spun out of Sanofi back in 2019, but the science goes all the way back to Genzyme. This is a 15-year-in-the-making program research and development effort, and we wouldn't be where we are today hitting this very challenging target without the level of investment and the commitment that was made over that 15 years. The reason I say that is we often get asked, how did Shihab crack this target? It wasn't just Shihab, right? It was the level of investment, the perseverance, the strategy that took place between really three companies. As you said, we're in a very fortunate position with a lot of exciting things that have happened and are on the horizon in the next 6 to 12 months. Excited to share the rest of the story today.
Thank you, Mike. The long-tenured investment is obviously starting to pay dividends, so that's great. You mentioned it briefly, but maybe you can just talk a little bit more about the opportunity you see in targeting NBD1 in CF patients.
Yeah, so let's start maybe just with the size and what the unmet need is. The size of this market, as many people know, CF is dominated by one player, Vertex. They've done a very good job, obviously, developing medicines to help patients, but we see an opportunity to solve some of the unmet need that continues to exist in CF. You can define that by quality of life, life expectancy. One of the things that we are very focused on, as I mentioned, is getting more patients to normal CFTR function, normal protein function. Only one-third of patients today that are on the standard of care get to normal CFTR function. That leaves two-thirds not at normal, where there really is an opportunity to drive more of them there. Charlotte can talk maybe later about what that actually means, getting more patients to normal CFTR function.
One of the key parts of our strategy is focusing on NBD1. This is not a new target. This is a target that has been studied for many years. The biology is well understood. NBD1 is a region or a domain of the CFTR protein that has not previously been targeted in terms of hitting that target. Why NBD1 is so important biologically, it is the number one genetic mutation that causes CF is F508del. Approximately 85% of patients have a form of F508del. That mutation resides within the NBD1 region or domain of the protein. What the mutation does is it causes NBD1 to irreversibly unfold at body temperature. It's creating this instability in the NBD1 region, therefore crippling the folding of the protein, the trafficking to the cell surface, and its overall functionality. NBD1 is critical to a fully functioning CFTR protein and a normal CFTR protein.
We have the opportunity with our two stabilizers, SION-451 and SION-719, to do something very, very different. We know that if you can stabilize NBD1, you can drive significant improvement in CFTR function. For us, if you can stabilize NBD1 and then just correct one other part of the protein, you have the ability to deliver wild-type levels of CFTR function.
Got it. No, yeah, tremendous opportunity. I think you mentioned kind of one-third, two-thirds. I mean, how many patients is that actually in terms of number?
Yeah, Charlotte, you want to talk about patients?
Yeah, worldwide, there's over 100,000 patients with CF, although it is a rare disease. It's a large rare disease in the U.S. That's upwards of 35,000 patients. You do the math, 80%, 90%, 85%, 90% of them have at least one F508del. It's a substantial number.
No, definitely a large patient population, especially for rare disease and a well-defined one at that. You briefly mentioned it, Mike, about the combinations and your multiple programs. Maybe you can just talk about the different strategies you have to improve the outcome of CF patients.
Yeah, so we saw one of the most recent announcements we had a couple of months ago was we were going to advance both SION-719 and SION-451, our two NBD1 stabilizers. We were very pleased with that phase one beta because both compounds exceeded our profile that we had set going into the phase one. That profile was defined by PK or exposure targets that are derived from our CF HBE assay, which we may get into a little bit later, and also the tolerability. Both compounds were very well tolerated. We had this unique opportunity with two advanceable compounds to determine the strategy that would make the most sense for us, that could leverage the differentiated profile of each compound, but that would also best support the development plan. Our prioritized path, as I mentioned before, is a proprietary dual combination, right?
The standard of care today is a triple combination. Trikafta is a triple combination, three drugs that come together. We are going after a double, so two compounds that could end up driving more clinical benefit than the standard of care. NBD1 is the foundation of that dual proprietary combination that I'm talking about. In this case, we're going to advance SION-451 as the anchor to that dual combination. We're going to leverage SION-719 as our add-on to standard of care proof-of-concept compound. Charlotte will get into that in a minute in terms of what that proof-of-concept is designed to do. We have two different compounds advancing in two different directions. SION-719 is the add-on standard of care proof-of-concept study. SION-451 is the anchor to the dual combination. It really provides a lot of strategic optionality for us, right?
Our prioritized path, the one that we are funding, is the dual combination. We will be data-driven when we get the output of that proof-of-concept study as to what we would do with the add-on. It really does enable us to have strategic optionality.
No, definitely. It's definitely an interesting decision to progress both and something that we've seen before in other trials and other companies as well. It makes a lot of sense. You mentioned it briefly, but I guess in the phase one trials, how did the PK data that you observe translate to or demonstrate what you anticipated with your preclinical assays? Yeah, Charlotte?
Yeah, as you probably know, we run this cystic fibrosis HBE assay, which has been very predictive. Certainly, in Vertex's hands, and we run it in a way that's very, very similar, according to all the published data from Vertex. When we track back in our CF HBE assay, we track back to where we would predict the exposure would be, the threshold or the zone of exposure would be targeted to exceed the CFTR function and hence, the lung function and clinical benefit. That is the zone that we're targeting either, as Mike said, in the 719 add-on scenario and then in the 451 dual combination scenario. We have hit and exceeded both of those targets for both 719 and 451. That is the zone either in the dual combination or in that proof-of-concept that we're zeroed in on.
We've seen that in the first parts of the phase one, and that's what we're targeting.
Got it. No, nice as Mike Koonin noted to have the optionality with both programs. Kudos to you guys. Maybe we can drill into a little bit on the trial design for SION-719 in your phase 2a. If you could just provide additional detail there.
Yeah, so the proof-of-concept study will be taking patients, enrolling patients who are already stable on physician-prescribed Trikafta, and then in a two-way crossover design, which allows us to be super efficient, we'll give them two weeks, each of those patients, two weeks of both 719, and then they'll get the other placebo. We'll have a comparison of the sweat chloride, which is the clinical biomarker of CFTR function. We'll have the comparison of their sweat chloride when they're not, when they're just on Trikafta versus when they're on Trikafta plus 719. We intend to demonstrate quite clearly the unique mechanism of NBD1. We know from our preclinical assays that NBD1 does something, as Mike said, very different, in addition to and from the standard of care. We'll be looking at that change in sweat chloride or expected improvement in sweat chloride.
It also will allow us then to be able to correlate back to our CF HBE assay predictions. We also expect to demonstrate that when patients are stable on Trikafta, there's still a lot of room to go in terms of improving CFTR function. It hits a lot of the proof points for us.
Got it.
Maybe then just the one thing to elaborate on, Charlotte, is why that's so important, that proof of biology, right? As you go back to NBD1 and its role, none of the approved modulators today from Vertex Pharmaceuticals stabilize NBD1 directly, right? The way they're solving the protein is they're partially correcting the protein. We're trying to get to full correction of the CFTR protein. As Charlotte said, by showing that sweat chloride improvement and improvement in CFTR function, it's going to demonstrate that NBD1 is synergistic with, but different from, the components of Trikafta.
Got it. Makes a lot of sense. I guess maybe a follow-up question to that on maybe just the trial design and in my head on this, but I noticed there's a washout period in the trial, which I found particularly interesting. If you could just maybe talk about that and maybe that's going to help with some of the measurements that this includes.
Yes, the washout is just because this is a two-way crossover study. Each patient enrolled in the trial will get both the placebo and the 719. In order to, you know, they're going to be randomized to either get one of those or the other first. They stay on their Trikafta throughout the entire trial. Whichever thing they get first, be it placebo or 719, then we have a period where they're washed out from whatever that, obviously, the placebo doesn't really require a washout, but they don't know it. We want to make sure that whatever change in sweat chloride has occurred really from the 719 portion is back to baseline by the time we do the second period. It's a very common design element in the two-way crossovers for the trial.
Got it. Makes sense. Thank you. You mentioned the sweat chloride measurements. I guess what other data points can we expect to see from the trial?
We will be looking definitely at safety and tolerability as well as PK. Yeah, those are really going to be the suite of this.
Maybe we can talk about, and we had asked a lot about FEV1, right? Why not FEV1 in this study? It's not designed for that. Maybe, Charlotte, just explain why it's not FEV1 in this.
Right. Because we can leverage sweat chloride and the efficiency and the speed of sweat chloride change, we can do a very small study with less than 20 patients in this, and also leveraging the two-way crossover study design. That really is just not powered at all for demonstrating an impact on FEV1. We'll be assessing it as a safety endpoint. In order to really do an FEV1-based study, which certainly for the dual combination, and if we were to go forward with the add-on, we would be doing that in the later phase two.
Got it. We do believe NBD1 in our programs will drive FEV1 improvements, right? We're focused on sweat chloride, and that's the design of this proof-of-concept study. When you think about dose ranging, phase three parts of the clinical strategy, FEV1 will absolutely be part of that. We believe we will improve FEV1 with NBD1.
Got it. Makes sense. I guess maybe just the last question on the trial, I guess when should we expect to see data?
Yeah, Alina, you want to take that one?
We'll have data from the study mid-2025 to mid-next year.
Got it. Great. Thank you. Obviously, I don't want to forget about SION-451. Maybe we'll have a similar conversation about it. We'd just love to hear, you touched on it, but just the decision to combine SION-451 with your proprietary program.
Yeah, maybe we didn't get into this yet. It's probably worth stepping back with the phase one data. What specifically drove us to this path of 719 one way and 451 the other? As Charlotte said, both compounds exceeded both of the targets we had set, the add-on target and the dual combination target. We could have picked either one of these compounds to advance. When we looked at it, there were actually some unique PK profile differences between 719 and 451. Specifically with 451, since we're segueing there, 451 achieved higher levels of exposure than 719 at the highest doses we tested. They weren't apples to apples doses of 451 and 719, but at the highest doses tested for each compound, 451 got higher in exposure. That's important when we think about the dual combination because with the dual combination, it is what it sounds like.
It's two compounds coming together, one of which is NBD1, and then we're going to be testing that with two of our complementary mechanisms, SION-109, which is an ICO4 corrector, and galicaftor (SION-2222), which is a TMD1 corrector. That higher exposure that we're achieving at the higher doses enables us to drive, as per the HBE assay, higher levels of clinical benefit. That's really important, right? In our own combination, now we're trying to drive improvement above the standard of care. We're not having the benefit of adding it to the standard of care. We're going directly against the standard of care. To achieve superiority, the higher exposure we can achieve with the NBD1 compound, the better able we'll be able to deliver that efficacy that we seek. That makes sense?
Yeah.
I'll let Charlotte describe what we're going to do now in terms of the Healthy Volunteer combination.
Yeah, so we've tested both, actually, we're taking two, SION-451 together with two complementary modulators, two interface domain correctors, galicaftor (SION-2222), which we obtained from AbbVie, which had already actually been in phase two, and then our own internally developed SION-109. Galicaftor (SION-2222) is a TMD1 focused corrector. SION-109 is an ICO4 corrector. An ICO4 has been through a full phase one study of its own, single agent, as has SION-451. We have solid, you know, for one up to phase two data, but solid phase, at least phase one data for all of them.
Now we're going to take SION-451 and galicaftor (SION-2222) and SION-451 and SION-109, and we're going to put them together in sequential cohorts of healthy volunteers to look for safety, tolerability, and really zone in on those PK zones that we talked about from the CFHBE assay that we clearly hit in the single agent studies. We just want to confirm that we're in the same place together and that the safety and tolerability is as we expect also from the single agent studies and then decide from then which of these we'll take forward into phase two in patients.
Got it. Makes sense.
We did announce just over a week ago that study has started. The Healthy Volunteer study has started.
Congrats on that. They're a nice achievement for you guys. I know they're well-known targets and mechanisms, but if you could maybe just talk about a little bit more on the rationale or role of ICO4 and TMD1 and the rationale for that combination. You want to talk about how they work together?
If you can picture the CFTR protein with its multi-domain and NBD1 kind of in the corner, as Mike said, what F508 deletion actually does is not only cripple and unfold NBD1, but it also disrupts the interface domain. The whole protein as a whole doesn't assemble and then traffic and work correctly. ICO4 and TMD1 are both each two different interface domains. Correcting, we know from even data before there were modulators, that correcting just one of those interface domains together with NBD1 modulation or correction can achieve potentially wild-type CFTR function.
There isn't, you know, from a target perspective, when you look at TMD1 versus ICO4, either one of them combines really well with NBD1 and can get to that wild-type level of CFTR function that Charlotte's saying. We're sort of agnostic, you know, to whichever target to go after. It's more of the compound, right? So galicaftor (SION-2222) is TMD1, SION-109 is the ICO4. It's really going to be the performance of those compounds, not the target per se that we would select to combine with NBD1.
Got it. Maybe just following up on that, what will you look for in the phase 2a that will drive the decision of, you know, moving one versus the other?
It will be the phase one Healthy Volunteer study that we're going to be doing, the phase two A, so SION-719.
We’ll be looking for actually all the things that we were looking for in the earlier phase one. We’ll be looking for safety, tolerability, and we had a very high ceiling for all of these compounds in that. Also, just where we can get in terms of the target concentration zones together in combination.
Makes sense. I think we touched on it a little bit, but we mentioned that the ability or the potential to achieve wild-type function, I guess, why is that just so much more important than, let's call it, lung function?
Yeah, it is lung function. You know, you'll hear others in the field talking about achieving better CFTR function. There really hasn't been a tool to date before the NBD1 to, at least based on the in vitro assays, really drive into those substantial zones of normal. If you look at the waves of improved CFTR modulators so far, they've moved patients sequentially to better and better CFTR function to the point where a third of them now are in the normal range, but two-thirds of them aren't. Over those waves, as the CFTR function has gotten better, the outcomes have gotten better, both short-term in terms of FEV1 and quality of life, but also long-term, as Mike was alluding to, long-term outcomes, rejection and transplant, lifespan, survival.
That's sort of pointing an arrow right towards, if there hasn't really been a tool to get us to that, but if you can, that shows us what you can potentially do.
Definitely. I mean, we were talking about the patient populations earlier, so that would be pretty tremendous. I guess last question on this trial, but I guess when can we expect to see data from this as well?
We'll have data from this study also mid-next year.
Got it. Two trials reading out in mid-2026, is that right?
Yeah.
Yeah, maybe you'll also talk about just what the next news will be, like what will be the next announcement. We have that data mid-2026, but what do we expect?
Yeah, as we discussed, we've already initiated this combination phase one Healthy Volunteer study that supports the dual combination. That data will report out mid-next year, and then the next step with the dual combination will be to go into a phase two B dose ranging study in patients with CF. On the add-on to standard-of-care, as we talked about, we'll have data from that study mid-next year, and that study will initiate in the second half of this year.
Got it. Great. It sounds like a lot going on. Maybe just a question on kind of current cash position and cash runway.
Yeah, we ended the second quarter with $337 million in cash, which will take us into 2028. This extends us way beyond these next set of data milestones, 18 months plus post after data.
Got it. Great. I mean, fortunate to be in a cash position and kudos again on the IPO earlier this year that helped enable that. That's great. I know we have a little bit of time left, but, you know, Mike, I don't know, or Charlotte, Alina, is there anything else maybe you'd like to flag?
Yeah, maybe just a couple of things. One is we're very excited about where we are. Great question from you, Ben, in terms of the progress of the company and the progress we've executed at a very high level to put ourselves in this position, right? This unique first-in-class mechanism, NBD1, two different compounds progressing in two different directions, data catalysts coming within 12 months, as Alina said, in mid-2026. The one thing we didn't spend maybe a second on was just, we talked about the size in terms of the patient population, right? The 100,000 patients, but the size of this market, right? And how meaningful this could be to patients to have a new option with a new mechanism that could potentially be differentiated and maybe even best in class, right? For us, this is an $11 billion market today, right?
As we know that Vertex owns and dominates, it is growing to $15 billion in the near term. What we know is, as we go back to that unmet need of two-thirds of patients not being at normal, our focus has been on how do we deliver new, potentially more efficacious options for patients, drive more of them into the normal CFTR function range. We think that could be transformational for patients, but also a significant commercial opportunity for Sionna Therapeutics. We think about that $11 billion going to $15 billion market with a single player.
Sure. Yeah, definitely a large opportunity, especially potential for best-in-class. There has always been a second player, second entrance over the incumbent. A lot of opportunity and potential there.
Agreed.
Thank you for the time.
Thank you, Ben.
Yeah, thanks for taking our conference here.
Pleasure.
Looking forward to catching up.
Thank you, Ben.
See you guys.