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Good afternoon, everyone, and thank you for joining the 2026 H.C. Wainwright 28th Annual Global Investment Conference. My name is Dr. Jade Montgomery, an associate research analyst at the firm, and I am happy today to introduce our presenter for this session, Dr. Javier Szwarcberg, CEO of Spruce Biosciences.
Thank you so much, and thank you so much to H.C. Wainwright for having me here. It will be a real pleasure to walk you through our story, to talk to you about Spruce. I will be making some forward-looking statements throughout my presentations and refer you to our SEC filings, our 10-K and other filings for reference as I go along. Spruce Bio is a global neuroendocrine biopharma company. We have a couple assets in our current pipeline, frankly, driven by diseases that are rare or ultra-rare, for which there is a very meaningful market need, intend to be best in class, ideally first in class. Currently working, our flagship product is tralesinidase alfa, enzyme replacement therapy is a drug that we acquired about towards the end of 2024.
It is an enzyme replacement therapy, and it is used to treat a disease called Sanfilippo syndrome type B or MPS IIIB, for which there is no available therapy. Kids suffer from this devastating, terrible disease, super debilitating, that affects not just the kid, but also the caregiver. When we looked at the acid, we realized that the effect size of the enzyme replacement on the surrogate biomarker then deemed to be a difficult path forward for FDA. Later on, over time, the FDA kind of laxed the criteria, ended up accepting heparan sulfate as a viable surrogate endpoint for approvals in the space of neuronopathic MPSs, and that, in many ways, changed the whole story. But we durably normalize or nearly normalize heparan sulfate in nearly all patients.
As I said earlier, the FDA aligned not just with us, but with other companies doing work in neuronopathic MPSs like Ultragenyx, Denali Therapeutics, BioMarin, JCR Pharmaceuticals, on the viability of heparan sulfate as an RLSE, reasonably likely surrogate endpoint of clinical benefit. We've worked since we acquired the asset in demonstrating meaningful clinical benefit throughout the clinical data set that was generated prior to the acquisition of a product. We've done, I think, a really good job at defining what is the clinical benefit that extends beyond cognition. There are a number of endpoints that measure how patients feel and function, which are very critical for FDA approvals, as you know.
Unfortunately, the prior sponsor discontinued the studies, the studies that were actually tracking patients, but we were fortunate to inherit a data set that's five-six years long in duration, which allows us to make meaningful assessments on efficacy and safety. If a drug gets approved, we will qualify for priority review voucher. Luckily, the FDA renewed the PRV regulation last year, extending it for another five years, and have the potential, obviously, to be first to market and IP exclusivity to 2038. This type of orphan drugs tend not to be too much challenged by biosimilars. They're very difficult to make in general. Our drug, in particular, has a very unique construct where the enzyme is actually teamed up through an amino acid linker with a truncated IGF2 molecule that enables the compound to get into cells.
This was kind of the genius from BioMarin, designing a drug that not only just gets to the CSF through the delivery mechanism, bypassing blood-brain barrier, but also penetrating neurons. Often, drugs or ERTs rely on mannose-6 phosphate, which is a residue that lives in the surface of the drug and penetrates the cells. This one has a very unique structure that will make biosimilars or entry of biosimilars much more difficult. In addition to this BLA-ready program, we also have a pre-IND stage monoclonal antibody that leverages our prior experience in CAH, on congenital adrenal hyperplasia. It acts high up in the HPA axis, is a CRH ligand monoclonal that has the potential to have very long half-life and overcome probably the biggest challenge in CAH, which is patients not feeling that they have a disease.
They tend not to be very compliant with treatment and therefore end up not being very controlled with hyperandrogenism and symptoms of hyperandrogenism in females and male patients alike. I will not be speaking about our monoclonal antibody. We're not allocating any cash to its development at the moment, but frankly, seeking to be able to find ways of developing it. Most of our efforts, if not all, are dedicated on TA-ERT. In this slide, you can see the natural history of patients with this bad neurodegenerative disease. Kids fall off very rapidly, the standard kind of perpendicular developmental line. Usually at the ages of 2.5 , three years of age, they start missing developmental milestones. That's when parents start seeking care. They realize that something is going on with their kids.
They end up bouncing from physician to physician, not for too long, because their facies and phenotype are very descriptive of a mucopolysaccharidosis. They have these broad eyebrows and large forehead and micrognathia, so their lower jaws are a little smaller. More importantly, they initially become very hyperactive. They do not sleep at night, which is a major key feature, keeping their parents awake and disrupting the whole family. Then they start missing learning milestones, and they start regressing. Their memory goes away. Their speech loss, the little few words that they had gained, they lose, and that is when they typically get diagnosed, around age 4, which is actually the average age of enrollment in our pivotal trial. They continue to regress, and by age 12, they are usually intubated.
They have a PEG tube, and they usually die in their mid-teenage years with what people refer to as pediatric Alzheimer's. It is a very bad disease, and we think that our drug, if we treat kids early, can probably revert them back to normal or near normal. I will tell you a couple stories momentarily. MPS IIIB is a genetic disease, is a recessive disease. Both parents need to carry the recessive gene, passed to 50% of their children. The enzyme is dysfunctional. There is usually a frameshift mutation that results in an inability to secrete a normal enzyme and degrade heparan sulfate. Heparan sulfate is, think of it as a large sugar. That sugar gets chomped by different enzymes along the way, and if there is a missing enzyme, then that sugar accumulates and builds up.
It is the accumulation of heparan sulfate that results in lysosomal dysfunction, which ultimately leads to neuroinflammation and neurodegeneration. With the advent of enzyme, which you see at the bottom part of this cartoon, the lysosomes are normally functioning, and the neurons regain normal function. The disease starts intrautero. There is some research going on by McKenzie, cannot recall her last name, at UCSF, that does research of children intrautero. There have been a lot of research going on with replacing enzyme intrautero, which we are not doing, obviously. Our clinical development program is comprised of a natural history piece at the very top of this swim lane, these top two boxes. Frankly, very unique. Most companies do not do natural history studies these days. They rely on historical reference. BioMarin originated these 902 and 901 trials. 901 was a feeder study into the treatment trial, 201.
They watched patients for 48 weeks, and then they enrolled them in 201. 201 was a treatment trial, and 201 has a couple of extension studies, 202 and 401. 401 did not really last very long. The prior sponsor discontinued the program because they did not have cash. Let me tell you a little bit about that piece of history. They in-licensed the product from BioMarin in 2019, when the CEO of BioMarin decided to pivot the pipeline into larger indications like achondroplasia and hemophilia A. This drug, along with another two, got out-licensed to Allievex, who tried to push the approval of a compound by FDA and get funded. FDA was very reluctant, as I said earlier, to get these drugs through, up until February of 2024 when they convened a Reagan-Udall Foundation forum where industry, academia, patient groups, and the FDA itself attended.
They deliberated the viability and value of accepting heparan sulfate as a viable surrogate, and there was unanimous consensus. So at that point, the FDA opened up the floodgates, if I may, allowed for companies to actually meet with the FDA, issue good meeting minutes acknowledging the usefulness of a surrogate as a RLSE. But it was too late for Allievex. They ended up discontinuing all of their clinical programs, inclusive of 401. So 401 only enrolled five patients. Tried to revamp, get funding, it was too late. They already laid off all the employees, closed all the programs. So that's when we luckily pick up the program. All of what you see on this slide was already done, with the exception of a 301 study, which we have designed. It was agreed upon by Allievex and the FDA.
We decided not to, frankly, rock the boat too much, and accepted what the FDA had aligned with Allievex in the context of a confirmatory trial for the approval of product. And we've met again with the FDA, and obviously have submitted to the FDA a clinical operations study plan. Timelines are on the 301 confirmatory trial, and aligned with the FDA, along with other things, on how much of the 301 study they need to see ongoing prior to the approval of product. We are currently being reviewed under, or will be reviewed under, accelerated approval. At least that's how we are basing our application. The FDA has the prerogative to approve us fully, if they so choose to. But it is based on the biomarker of HS NRE, non-residual ends, under accelerated approval, followed by a confirmatory trial for full approval.
The effect size that we see on heparan sulfate is unprecedented. Neither Denali's Havlia, other drugs, Ultragenyx's gene therapy, and any other drugs have achieved the effect sizes that we are seeing on heparan sulfate. Granted, our product is given weekly inside the brain, inside the CSF through an Ommaya reservoir. The effect sizes are very profound. We normalize all patients very rapidly, as rapidly as week two, actually. I'm not showing you week two data, but the week two data looks very similar to the week four data presented on that first bucket, and very durable through five years. This is the data on NRE. The effect size on HS, which is the full sugar, is nearly identical, if anything, more profound than what we're seeing with NRE.
This slide summarizes the effect size on what the FDA wants us to measure in the confirmatory trial, which is the effect size on a subdomain. It's called the cognition raw score. It's a subdomain of the Bayley's questionnaire. The Bayley's is a questionnaire that is well-established for neurodegeneration, measures kids typically up to the age of 36 months, so about 3 .5 , 3 years. Maxes out at 91, 92 points. I think it's 92-point score. You can see some of the kids in the trial maxed out by that dotted line. What you see behind is kind of a distribution of individual patients. And presented on this slide is model data using an MMRM model, where we've done a very creative analysis, which is used by most companies.
We've looked at the effect sizes at different age brackets, regardless of when the kids enrolled into the trial. We've looked at the contribution of each child at, let's say, age bracket four-five , and five-six , and six-seven , and seven-eight , and so on. The same for the natural history studies 101 and 102. Being able to derive P-values for different age brackets between active treatment and placebo and standard of care, as well as P-value for the curve. Starting at year six and onward, the P-values for each age bracket separate relative to natural history, as well as the P-values for the curves. I've chosen not to show P-values here, just for scientific integrity. These are post-hoc analyses, and we've done a lot of testing, a lot of post-hoc analyses.
I'll be showing you more efficacy data, most of which was derived post-hoc. Of course, we have analytical plans that we discuss with the FDA that will be included with the BLA. The data on its totality speaks very highly towards a positive clinical benefit. That's very key as one presents to the agency an endpoint that will be used as a surrogate of clinical benefit. I frankly feel the data is very robust and the FDA will have the freedom to choose whether we get approved based on accelerated approval or full approval. In this slide, just a subset of clinical data derived from the Vineland questionnaire. This speaks to the communication and motor subdomains. You can see that on the first two charts at the top are the receptive and expressive communication using raw on model data. There's clear separation on both.
On the far bottom, you can see the gross motor skills and fine motor skills also separating. If we grab kids that were, or chose to present you kids that were treated early, we see improvements in motor and communication and hearing and many other subdomains. We've also done question cluster analyses based on the VABS, much like the package that Ultragenyx put together to the FDA in terms of looking at activities of daily living, like self-feeding, toiletry, and can they toilet themselves, and we have very clear benefit in all of them, and presenting the data using heat maps. A lot of that data will get presented at WORLDSymposium in February of 2027, along with biomarker data, which we haven't presented publicly but will be showcasing at WORLDSymposium, and obviously will be part of our BLA as well.
Data that we've shown before, but the cortical gray matter volume tends to shrink over time in patients with MPS IIIB. This is data directly measured in our study through week 200 and studies through week 240. We did not measure cortical gray matter volume in the natural history studies, and that's why I'm not showing it. There's natural history data using an external cohort showing declines and shrinkage of brain over time. Typically, the brain is maintained early on in disease because of accumulation of substrate. Seemingly, it appears as if the brain would be normal size, but then as the brain degenerates, the brain shrinks. We are not seeing any shrinkage over time, and that's a very good sign. The lymphatics actually allow for CSF turnover, usually about three times a day.
The drug that we administered weekly through the Ommaya reservoir goes into the systemic circulation and clears substrate from liver and spleen. I am sure lung and joints and bone and connective tissue and heart, which is relevant in the context of a drug that is going to be extending life of patients in dealing with the future comorbidities, which we do not yet see, or are not super critical because of the brain as a primary organ being affected, but will matter over time. That is a really good thing. Fairly well tolerated. I think the toxicities we are seeing are primarily related to the device that is being used to administer the product. I would say peripherally, anti-drug antibodies are present for pretty much every ERT.
It is very easy to explain because if a body does not make an enzyme, it reads the externally administered enzyme, although biologically needed, as a foreign substance. So you get anti-drug antibodies, some of which end up being neutralizing, so neutralize the effect of the drug. For our product, anti-drug antibodies are high. The fact that we administer the product inside the brain, high in the periphery, much lower in the brain, and very few of the anti-drug antibodies are neutralizing of the effect of the drug in the brain. We do not have an issue. The drug has shown also an effect size in patients that have received the drug every other week. We are putting forward all that package in the BLA and for the FDA to gauge whether our drug can be administered every other week. We have had a number of interactions with the FDA.
We started meeting with them in January of this year. We have had two pre-BLA meetings, one to discuss CMC matters, the other one to discuss clinical matters. Both went very well, very collegial, collaborative. I think we have rebuilt, in a very positive way, our relationship with the agency. We are very clear about what we need to do from a submission point of view and how to structure the content of a submission. Looking forward to submit the BLA in Q4. If approved, we will qualify for priority review voucher, which will be very meaningful to help us launch the product and allow us to become cash flow positive in a few years post-launch in the U.S. Looking forward to make the product available globally through European submissions and other sensible commercial strategies that are going to be protecting U.S. pricing through MFN. That is it.
I will pause now to see if there are any questions. I think we are right on time.