How he's presenting at 3:40 P.M. today.
Yeah.
Be interesting.
I have a question on that, as you know.
Yeah.
All right. Good morning. Welcome everyone to this fireside chat with Spruce Biosciences. I'm Joe Schwartz, from the Biopharma Equity Research team at Leerink Partners. It's my pleasure to be joined by Javier Szwarcberg. I should be able to say that.
You got. Yes, close to yours.
We're excited to get an update from you at a very exciting time. Thanks for being with us.
My pleasure.
It's been a busy few months for you on the regulatory front. maybe you can start us off by level setting us on your specific interactions with the FDA, your level of confidence with the path forward, and, what the company is working on when it comes to the BLA submission.
We got Breakthrough Therapy designation by FDA back in October of last year. That allowed us to request from the FDA two meetings. We met with them to discuss CMC matters and met with them to discuss clinical matters, both under the auspices of a Type B meeting. FDA has been very consistent, very overall, very positive with our exchanges and dialogues, acknowledging from the outset that they appreciate the severity of this disease and the fact that patients have no other alternatives. They kept their timelines, which was great, and the Division has not meaningfully changed from prior Leave X or prior sponsors days.
The division head. We're reviewed by CDER under the Division of Rare Diseases and Medical Genetics under the office, Office of Rare Diseases. Yeah. We ended up discussing with the FDA matters that related to the viability of the surrogate endpoint that we'll be using for an accelerated approval, whether we had or not the right level of evidence that will be considered substantive to result in a review, discuss with the FDA, you know, around the context of this endpoint, whether the endpoint would be considered reasonably likely, surrogate endpoint, of clinical benefit, and what do we need to show them, you know, in the BLA.
Very importantly, along with the FDA on the key elements for the confirmatory trial, the timing of initiation of the confirmatory trial. They were quite flexible in that regard, allowing us the opportunity to initiate the trial while we're under review.
Mm-hmm.
That was kind of on the clinical side. On the CMC side, I would say that the team was as engaged and as motivated to partner with us. They wanted us to submit which was a key question and the reason why we ended up delaying our BLA submission into the Q4 of this year to be able to include the first PPQ batch from our validation runs, we're in the process of manufacturing actually as we speak.
Great. Regarding the constructive FDA feedback regarding the use of a heparan sulfate non-reducing end as a surrogate endpoint for accelerated approval, how did the FDA's language to you differ from what we saw in the RGNX CRL, which has now been published?
RGNXYeah. The endpoint is a valid endpoint, an endpoint for which there is normative values, an endpoint that has been broadly discussed in the context of scientific papers and, you know, acknowledged as a useful endpoint. Now, we're measuring non-reducing ends, but we're also measuring heparan sulfate as a full molecule, as an endpoint in our studies. We find almost 100% correlation between the levels of heparan sulfate and heparan sulfate non-reducing ends. Non-reducing ends is not a subdomain of the molecule, but is rather one of the terminals of heparan sulfate. It has kind of... It's a polyglycan, right, and it has a residual end and a non-reducing end.
The NAGLU enzyme goes in and cuts starting from the non-reducing end, so it becomes a very useful biomarker of heparan sulfate, perhaps a little bit more specific than heparan sulfate as a full molecule. We have very robust evidence acknowledging in animal models that heparan sulfate is elevated both in CSF and in brain tissue, and upon treatment, we see reductions in both CSF and brain, which is very important. Yeah, I mean, the FDA has signaled that, you know, that it could possibly result in an accelerated approval. We have that language documented in meeting minutes.
I haven't seen the, you know, pre-CRL exchanges that REGENXBIO has had with the FDA, but clearly what's mentioned In the CRL is very different than what we've heard from the FDA. I think the fact that we have normal values, and we normalize or nearly normalized all patients at all time points through six years of follow-up is very important, right? Not just in one year or so follow-up that the REGENXBIO had provided at that time.
Can you review the highlights of that clinical data, that gives confidence that the biomarker changes...
Yeah
... translate to a reliable clinical benefit?
In order to get an approval based on a biomarker, that biomarker needs to, in theory, correlate well and be the pathway of disease. Ideally, one would have demonstrated clinical benefit. The fact that the FDA granted us Breakthrough designation, I think signals that they acknowledge the clinical benefit that we had seen. At that time, we had provided them with a model of efficacy that compared patients on treatment versus patients on natural history. For that model, we've actually bracketed patients between different age groups, right? Say, as an example, three to four to five to six to seven, and so on up until 11th year of age, which is...
which was the extent of our data and compared, through using a least squares mean model, the differences. We would provide them with an overall P value. For the purpose of our Type B meeting, we went one step further and looked at individual data. In addition to the model, we compared through P values differences of each of the different age brackets. Because at baseline, the natural history patients were different than the patients in the active treatment arm, which is very common in most rare diseases. Luckily, the natural history study is a study that BioMarin conducted prior to the prior sponsor acquiring the asset, and that we have very robust and solid data, so really good clinical data. There's no obviously biomarker data in those natural history patients 'cause they didn't have an AAV reservoir implanted.
In addition to the biomarker data, which expands, so they said six years where we normalize or nearly normalize all patients at all time points, we have Bayley raw score data, which the FDA acknowledges as the ultimate endpoint. That's the endpoint they had wanted us to conduct and use for the confirmatory trial, and asked Ultragenyx as an example the same type of to use the same type of endpoint. I believe Denali studying their drug in Hunter syndrome have used Vineland. They have a composite endpoint of biomarker and Vineland. We're collecting Vineland as well in our confirmatory trial. In our primary program, we've seen a fairly robust effect on Vineland, which measures adaptive behavior. Vineland has also a number of sub-domains of communication, and we've looked at receptive and expressive communication.
We've looked at motor skills, fine and gross motor skills. Have looked at socialization, have looked at hearing through audiometry. We have cortical gray matter volume through MRIs, which were done serially during this study compared to some natural history external data. The totality of the evidence, I mean, it's not that we hit on every endpoint to the extent that we would have wanted to, but looked in a holistic way, the totality of the evidence clearly demonstrate a favorable effect of the drug, which I think will be regarded, you know, important as the FDA considers body of evidence, right, supporting us over here.
Right. Great. I guess at the WORLDSymposium, you recently reported, sibling analysis showing a divergence in their cognitive and functional ability, between those that were treated and untreated. How much did this data weigh in to, you know, the FDA's impression of TA-ERT's effect?
We haven't really discussed this data with the FDA, will be included in module five of the BLA, as a publication. I think it's an external control data is an N of one. These are two patients that have the same genotype. We happen to have also, two siblings, participating in our treatment trial. They share the same genotype. One was treated, when the child was, three years of age. Started at three years of age. The other one was a little younger, I think two and a half. There's a very discrete separation between how the young girl did relative to the older brother. Those for sure will be featured in the BLA, and they actually continue to be treated.
Those are the only two kids for which, they're not getting therapy weekly, but rather, every month and a half, and they're still demonstrating, clinical benefit.
Great, great. One more regulatory question. There are a lot these days. With Denali's PDUFA for their Hunter syndrome product set for April fifth, are there any learnings that you're hoping to gain from the label or anything else with that product?
We think based on public information that there are some commonalities between the two programs. You know, if and when Denali's product is approved, you know, it could be approved under the accelerated pathway, which I think was a pathway they have chosen to file under. The FDA always has the option to grant any sponsor's drug, you know, a traditional approval, which could very well be the case in Denali's, and it was kind of the case or the feedback that Ultragenyx received as they were under review. I think that there could be very meaningful read-throughs in the context of how the FDA views heparan sulfate as a RLSE, as well as how the FDA construes their clinical data and what type of labeling they end up getting.
Their data package, I would say, is relatively similar to ours, where they saw a profound effect on heparan sulfate as well as clinical benefit, much like the extent that we have seen. Their confirmatory trial is underway. I don't believe their confirmatory trial data was part of the initial submission. FDA requested some additional preclinical data which extended their PDUFA date by a few months. Yeah, frankly, yearly, you know, awaiting to see the outcome of that, of that review.
That's helpful.
Yeah.
Okay. How are you thinking about designing a confirmatory trial?
You know, in many ways, the design of the confirmatory t-trial was in place when we acquired the asset. The FDA has discussed with Alnylam the initial designs, the key elements of the design, and we ended up meeting with the FDA and discussing in great detail, a few modifications. Primarily, we worked around the rescue of patients that were to be randomized, or that are to be randomized to the standard of care arm. Wanting to make sure that we're not waiting too long before they get rescued, but don't rescue them too early so that we can at least demonstrate treatment effect. The agency was very much engaged with, you know, our proposals around the confirmatory trial.
We're in the midst of submitting the full protocol along with the feasibility assessment, which is required for the FDA to buy in to a protocol and which become kind of binding elements for the approval later on. We'll be telling that feasibility assessment, number of sites, you know, when do we expect to enroll the first patient, the timing of enrollment and the regions for enrollment and propose to the FDA a timeline around when will we have 5-year data. There'll be no interim analyses based on this study. We're just gonna provide it all the way through five years. Currently projecting about 18 months for enrollment, and the FDA was actually very graceful and granted us the opportunity to initiate a confirmatory trial while we're under review.
Great. What have you seen in the extension studies for TA-ERT to date that informs how it might perform in a confirmatory trial over that kind of a timeframe?
I mean, the effect seems to be very durable. The beauty about ERT that gets administered through the brain... I mean, ERTs always suffer from this notion of immunogenicity and anti-drug antibodies. I mean, that's very natural to expect because patients tend to be null to the enzyme. You know, upon receiving an external enzyme through either gene therapy or traditional ERT intravenously, patients will develop anti-drug antibodies which are usually neutralizing. You know, they tend to attenuate the effect of the drug, and patients end up needing much more therapy. Aside from the fact that they usually gain weight and when they Well, they're getting older, right? When you gain older, you grow and gain weight, and that they'll require more and more drug.
Our product gets administered directly into the brain, which tends to be kind of a sanctuary for antibodies. They do penetrate slightly, so we do have some anti-drug antibodies happening in the periphery, some of which are neutralizing, not neutralizing enough to actually obliterate the effect of therapy in the periphery 'cause we have liver and spleen being monitored through the MRI scans that we've done to all of our patients in our extension studies, and the organs remain small and, I mean, with normalized liver and nearly normalized spleen long term. So I mean, patients do take holidays sometimes related to side effects or pleocytosis or, you know, any other holiday, and they don't result in heparan sulfate bumping up too quickly.
We have a number of patients that have actually taken drug holidays and done quite well. Overall, I would say the drug is relatively well-tolerated in the long run. Patients do their best and families do their best to keep their children on therapy because of its potential life-saving nature, and they tolerate, you know, the method of administration quite well and side effects quite well.
Okay. Great. Let's shift to CMC, and can you talk about the specific requirements that the FDA has that shifted the timeline of the filing to the Q4?
Yeah. It's not unusual for sponsors to be aggressive and to ask the FDA for flexibility in the context of CMC. We're now faced with a, you know, leaner, perhaps overworked FDA, and when we went on and asked them about their willingness to allow us to submit the first PPQ validation run while the product was under review, they came back and said they would like to see it along with the BLA. The second PPQ batch, they'll be okay if we submit it around the mid-cycle meeting, and the third PPQ batch will be a PMC, a post-marketing commitment. They still want the three batches. We based our ask on prior products. I mean, all the COVID vaccines didn't have PPQ batches at the time of approval.
Mepsevii, the FDA was very flexible, which is also an ERT for MPS VII. SPINRAZA, they were very flexible as well for SMA. There was some precedent, but it's really up to the FDA, up to the division, and we felt that I'd rather not push the envelope here. They gave us other passes in the context of CMC of when they wanted to see things. All in all, a very collegial meeting, and I think that the delay is all right. I mean, we'll be able to manage.
Great. Okay. Besides the PPQ requirement, are there any other manufacturing hurdles that you foresee that might impact your ability to address the whole MPS IIIB market?
I don't think so. I mean, I visited Samsung Biologics about two, three weeks ago and, you know, went through their experts and, you know, Were making our drug substance, or drug product, and their leadership team. Not only that I feel that they have the right people and the right processes in place, but the right leadership who's very aware and in tune to the fact that patients are waiting and that, you know, they're being really good partners so far. They have made, you know, a number of DS batches in the past. When we acquired the product, we transferred drug product manufacturing from Vetter in Germany to Samsung Biologics.
They have made drug product as part of registrational batches, which are currently on stability, and they will be making drug product again using the newly to-be-manufactured drug substance.
Mm-hmm
... which are gonna serve for the validation batches. Those are gonna be the batches that we use for launch, for commercial launch.
Okay, great. Let's talk about that. Oftentimes, you know, we think of NAGLU deficiency, MPS IIIB in the context of other MPSs, like type A. How does the commercial effort that you're preparing to deploy, in order to address the IIIB population, compare to, you know, what we might think of for some of these other efforts?
Yeah. That's a good question. I mean, we've, I want to announce publicly that today we press released the fact that we've hired a new Chief Commercial Officer. His name is Dale Hooks. Dale has incredible experience in rare diseases, and we're really honored to have him join Spruce. You know, we think before Jeff, before Dale, we've also partnered with Jeff Ajer. Jeff used to be the Chief Commercial Officer of BioMarin, whom I knew well since I worked at BioMarin before. Before joining the company he's at the moment, he helped us kind of outline the, in brushstrokes, the key elements for our commercial strategy.
I think, you know, we've advanced pretty much this three-prong approach, which is, you know, putting together efforts to outline how are we going to be identifying patients. Secondly, building a proper medical affairs plan, publication plan to educate the community or to re-educate the community about the potential attributes of our molecule. The last time, frankly, that our drug was discussed at World, as an example, which is a very important MPS forum, was in February of 2024, right? You know, we put together a plan, then announced some data in 2025 at World, and we'll be attending a few conferences, you know, in 2026 and into 2027. And thirdly, the whole element around pricing and market access, which is gonna be very important.
I mean, usually payers tend to be less price sensitive in the context of ultra-rare diseases. Just get it right, making sure that we ensure patient access, not only in the US, but globally, will be very, very important. Finding the right distributors, the right partners to be able to commercialize. The commercial effort is likely to be more contrived. Relative to other large diseases, lysosomal storage diseases are cured for by lysosomal storage centers, and there are 15 of those in America, 5 of which are MPS Centers of Excellence.
I believe that, you know, probably a few MSLs, some therapeutic liaisons that can actually help facilitate the navigation of a patient through paperwork and the referral of a patient into a patient hub, which should provide kind of a white glove service to help the patient eventually overcome the hurdles of getting insurance coverage and all that. Yeah, I mean, a tight distribution center, a nice 3PL center. It shouldn't be that burdensome to actually build a tight cohesive. Patient ID is gonna be important. I mean, we're waiting to see what happens at the HHS level in terms of the ROSC is no longer in existence. In exchange, our current head of HHS is kind of granting recommendations to the states around newborn screening coverage. RFK Jr.
has granted recommendations around, I believe, Duchenne's and I think Huntington's disease in the past month or two.
Right.
I'm not sure how they're gonna be handled moving forward, but that's TBD. That's another important element to ensure that patients get picked up early.
Right. How many patients are diagnosed today, and how many are in an age range that they can be expected to benefit in some way?
There are about 160 cases, prevalent cases. I'm sure I'm underestimating. The epidemiology of rare diseases and ultra-rare diseases in particular is almost always wrong. Through claims databases, there's currently no ICD-9 or 10 code for the subtypes of MPS III. When you look at the incidence, it's based on, or at least the current knowledge of incidence is based on a single registry coming from Minnesota, assumed to be 1 in 200,000 patients. It's probably much larger than that. It's not too dissimilar to what for MPS II Hunter syndrome.
Mm-hmm.
ELAPRASE has done very well.
Mm-hmm.
Hunter syndrome is about 1 in 160,000 as an incidence rate.
Mm.
A subset of those are neuropathic, so it's even smaller probably from a you know, from a Denali opportunity. I mean, you look at the trajectory of MPS I, MPS IV, or Morquio type A, MPS VI, MPS VII, they all grow over time and not only is because market penetration, but also is because the epidemiology is usually much larger than initially estimated. There's one study in Taiwan for which it's a country for which there's no founders effect, no consanguinity of happening. They conducted a newborn screening of approximately 75,000 patients, and they detected three new cases of MPS IIIB. If you extrapolate, that'll be four out of 100,000. That's way larger than the numbers that we are estimating of one out of 200,000 in the US
I think that, you know, time will tell what is the actual, the right epidemiology, but it's probably larger than the numbers we're estimating.
Yeah.
We think that, based on our commercial forecast, with patients living longer, and incident cases living longer, we probably would end up having a peak around 500 patients in the US and probably around 500 patients globally.
Mm-hmm. Makes sense. Great. To wrap up, I think you have cash just under $50 million as of the end of 2025. Guidance is that that will sustain you into 2027. Given the BLA submission in late 2026, how are you thinking about the runway? I know you have access to some debt tranches.
Right.
Can you walk us through your thoughts on that front?
We finished the year with approximately $50 million, not taking into account the $50 million that we grew from the first tranche of the debt facility. The debt facility allows us for another three tranches, which are linked to regulatory milestones, which we think we'll hit. In addition to that, we're looking at strategic options in other regions as sources of non-dilutive cash. We may be about a quarter short in terms of being able to have enough cash to hit the PDUFA date. I think through those two options, we ought to be able to bridge that gap.
If approved, and we're counting on it, we would be eligible for a priority review voucher and, you know, that obviously could be monetized, if granted.
Yeah
... which will allow us to launch the product and think about the future life cycle and all those things.
Great. Well, thank you for the update and keep up the great work.
Thank you. Much appreciated.