All right. Good morning, and thank you for joining Guggenheim's 3rd Annual Healthcare Innovation Conference. I'm Debjit, and my privilege to welcome Javier Szwarcberg. Did I get that right?
Perfectly pronounced.
CEO of Spruce Biosciences. Thank you for making time for us, Javier. I don't think people still appreciate the story as much, so maybe just give us a very quick intro, then we can dive into the TA-ERT program for MPS.
Yeah. We're an ultra-rare disease company focused on pediatric neurology. Our lead asset is tralesinidase alfa, which is an enzyme replacement therapy that is very unique in its construct. It's a fusion protein that is tagged with a truncated IGF-2 that allows for neuronal and lysosomal penetration.
The drug is delivered straight into the CSF through a port and an Ommaya reservoir, weekly or every other week. The effect sizes that we've seen in the context of patients with MPS IIIB on the approval endpoint, heparan sulfate, are incredibly profound, and we also have super strong clinical data on efficacy and safety that supports the product. There's no other product being approved for this indication.
The field is really clamoring a life-transforming therapy like ours, and we think that the package that we have put together, which we plan to submit to the FDA in December for BLA review, meets the regulatory standards for a proper package.
We have had a number of interactions with the FDA, including two pre-BLA meetings, one on CMC and one on clinical, whereby we ask 10 questions on CMC and 10 on clinical to allow us to really discuss with the FDA what to include, the framework, the structure of the BLA.
All in all, from our point of view, a very tight story. We have been partnering with our key stakeholders, like patient groups, engaging with caregivers on educational efforts, obviously with the overall community, and it has been a very nourishing experience and a very strong partnership.
Got it. With your quarterly update, which just came out, the most important update from our side was the second PPQ run, which should be completed by the end of the year. Is that getting rolled into the BLA, or that is going to get submitted after you submit the BLA?
We aligned with the FDA to include the first PPQ batch, both drug substance and drug product, with the BLA. The second PPQ will get included and submitted during review. FDA wanted to see the analytical report for the DS and the DP included prior, submitted to the BLA prior to the mid-cycle meeting, and we are well on track to do that.
We already completed the drug substance piece of that PPQ, although the drug substance PPQ batches have already been qualified, and we have over four years of shelf life on the DS. It is the DP that changed manufacturing sites from Vetter in Germany to Samsung Biologics in South Korea, which need to be qualified.
Got it. You touched upon the biomarker data, which are very, very compelling, and there is a precedent in the market for approval with the same biomarker. Do you think that completely de-risks any FDA or regulatory headwinds there?
Well, I wouldn't say completely de-risks, but it certainly creates a very clear pathway to approval, and it sets a regulatory precedence to an approval. Each disease, the FDA defined, when they looked at our biomarker data, they told us that we have an endpoint that is reasonably likely to predict clinical benefit.
Obviously, the acceptance of the biomarker as an RLSE becomes a review issue. I think that the body of evidence in the context of heparan sulfate, the body of evidence that supports heparan sulfate non-reducing ends, which is the biomarker that we're using as a primary endpoint for the approval, the AA approval, the data is incredibly robust.
We've also done, since we've acquired the asset, a whole body of work to look at endpoints, clinical endpoints that relate to cognition as well as adaptive behavior through different questionnaires.
We've looked at structural imaging using cortical gray matter volume, looking at peripheral efficacy, looking at MRI liver and spleen size. Lately, I've measured a number of biomarkers which we haven't yet made public. We'll be sharing them to the world during the WORLD meeting in February in San Diego.
We'll be discussing the impact that we've had on NfL and GM2 and GM3 and other biomarkers at that time. But the whole clinical package is incredibly compelling. So, we are proceeding. Our approval is based on the AA approval pathway, and obviously, the FDA, just like it happened for FAYUVI, the drug that was recently approved by the FDA for MPS IIIA, the gene therapy product from Ultragenyx. They received a full approval for it. So, we're putting all of our cards on the table and letting the FDA decide.
Yeah, and you also have aligned with the FDA on what a potential registration study is going to look like. So there are no secrets there.
Yeah, I mean, we've aligned with the FDA on the fact that the confirmatory trial needed to be underway at the time of the BLA submission, which was a very important piece and a big win on our end, at least from a point of view of not needing the trial to be fully recruited by the time of launch.
We provided to the FDA a very clear plan to operationalize that study and what countries we would go to and how do we get it done to ensure the FDA that we can make it happen. We have initiated that trial, along with the expanded access program, which kind of covered different patient groups, and both serving different purposes.
The expanded access primarily to allow patients to access the product between now and hopefully commercial availability, and the confirmatory trial to ensure full approval should our approval be under the AA pathway.
Do you think the FDA is going to debate any of the functional measures that you've sort of highlighted, especially comparisons with longitudinal studies where there's some potential imbalance between the ages of patients?
Yeah, we're presenting our BLA raw data as well as model data. The primary endpoint that we're using for our confirmatory study is the Bayley's cognitive scoring, the raw score, the subdomain of the Bayley's that measures cognition.
We've done a whole array of analyses, including sub-analyses and sensitivity analyses using different ways of analyzing the data. The model that we are presenting to the FDA, we feel is quite robust and takes into account baseline imbalances, which are not unexpected, especially if one is to compare.
These diseases are very heterogeneous, and they tend to capture patients at different stages, and different patients have different speed of declines, and there's, of course, an overall range, and we typically report on, through natural history studies, what is the median change and when do patients are typically diagnosed, but there is often variability.
It is not surprising that natural history studies tend to capture patients at different stages. We have taken a number of approaches, the most conservative one being doing propensity score matching, and matching patients one-to-one to the treated versus the natural history patients, matching primarily on age and on cognitive raw score at baseline, or DQ at baseline.
There are ways through modeling to take into account baseline imbalances. What we have done for our Breakthrough Designation, which has been presented at WORLD last year, was looking at different age bands and comparing the efficacy of the product relative to natural history for kids that were four to five to six to eight, and so on. We see a very clear separation at each of the age brackets, starting pretty much around age of five.
Modeling makes that analysis, confirms that analysis, and enables you to have a p-value. We are being very sensitive to imbalances. The beauty about our natural history study, Debjit, is that we actually run it as opposed to using an external control arm, which is often used in the context of rare diseases because companies do not have the ability and, frankly, the cash to run a proper natural history study. Our program was initiated by BioMarin, and that natural history program was completed by the time we acquired the product.
Got it. Let us talk about the commercial opportunity here first, both in terms of number of patients and where these patients are housed and what percentage of the market do you think are fully diagnosed?
When you look at, initially, as we were trying to map out the commercial opportunity and get our hands around how many patients could be out there, we based our initial forecasting on reported natural history studies, and thereby defined, perhaps through incidence, what is likely to be the prevalence.
Through that analysis, we knew that, I mean, they typically underrepresent the reality, and you see that happening in all of the LSDs, so lysosomal storage diseases, drug launches in the past. Looking purely at the incidence numbers, the numbers are quite wide. They could be as small as 0.5 per 100,000 live births, and that will give us about 250 patients, to as high as four patients per 100,000, which will give us an 8x to 250, so around 2,000 patients.
We've done recently a bunch of work, which is still preliminary, but looking at claims databases, there's currently no ICD-10 code for MPS IIIB. You usually get an ICD-10 code once there's a therapy approved. Through that analysis, we've identified about 1,400 patients with MPS III, of which a fraction will be MPS IIIB. So probably roughly diagnosed around 450. It's kind of our current idea in the U.S..
Are these patients concentrated in, say, 20, 30 centers, or how should we think about where you need to go before you find these?
They tend to be concentrated, or they tend to having been seen by a center of excellence at some point during their tenure. Usually, when you look at the kind of patient flow here in this disease, kids unfortunately start missing developmental milestones, and the first one that becomes noticeable is their ability to speak.
They don't speak in full sentences. They don't develop their first words at the speed that it would be expected for a child their age, and they get referred to a neurologist. Hyperactivity is another symptom, inability to sleep at night.
They have an incredibly disrupted sleep schedule, which also affects the parents. They get referred to a neurologist who typically makes a diagnosis and either sees the patient and/or refers them to a center of excellence. Most of the times, they are seen by a center of excellence.
There are usually 15 NORD-approved lysosomal storage disease center of excellence in the U.S., five of which are MPS centers of excellence. By going through the center of excellence databases, we will have more clarity as to the universe of patients in addition to what we're doing with claims analyses. We think that a very concentrated focus, sales force, and a sales team would allow us to tap into the existing patient pool.
Got it. The BLA submission is planned for December. That puts PDUFA roughly around the August timeframe, back end of August, early September?
Right.
Right. There is obviously a PRV associated with the approval. Does Spruce get to keep the PRV, or does that go to BioMarin?
No, Spruce gets to keep the PRV. If you look at the cadence, we plan to submit in December. We plan to get accepted, if everything goes well, in February, and then an approval around the August timeframe. At that time, with the approval, we would qualify for a PRV voucher, given that we have Rare Pediatric Disease Designation.
At that time, we will most likely monetize and use those proceeds to fund the commercialization of the asset in the U.S.. At the moment, we are looking at different frameworks to commercialize the product in Europe.
Europe is becoming more difficult. We are planning in getting an approval in Europe. This program has already initiated an engagement prior to us picking up the asset with the CHMP and the PIP and all that stuff.
We are revamping that initiative starting in Q4 of this year, and we look forward to finding ways either ourselves, through local distributors, partners, or named patient program or named patient sales in Europe to make the product available globally.
Got it. You sort of mentioned about 450 patients who have probably been identified from the claims database work, right? How many of these could be potentially treated? Because some may be too advanced, right? May not benefit. How would you break that down?
Yeah. It is interesting. I mean, the more we learn about this disease, the more we realize that parents are frankly very willing to meet their child or their young adult, depending on where they are, even if advanced, and very willing to take care of a young adult that is disabled, and so long the disease wouldn't progress, right?
The more we talk to those parents and caregivers, we realize that there is a real opportunity to not just treat the kids that are very young, but also maybe kids that are older, where we can hold progression of disease, which is what this drug will likely do.
When you look at the biomarker data, our biomarker data follows pretty much a similar curve that from what you see with Avlayah, which is the drug that Denali got approved for in March for MPS II, where over time, there is improvement in biomarkers, which reflects neuronal stability and hopefully stabilization of cognitive and adaptive behavior.
Got it. Now, with the deal with BioMarin, there are still substantial milestones that Spruce owes to BioMarin, and also royalty on net sales. Could you just sort of outline how you plan to tackle those?
Yeah, there is a small fraction of a PRV that they will get. The payments to BioMarin are small royalty payment and then some payments based on sales that are tiered.
Isn't there like $130 million or something from milestones on net sales?
Yeah, total, and those are global, depending on, and they are region-specific, so it is broken down by three regions.
Okay. For the first two years from net to BioMarin, we were modeling anywhere between $20 million- $30 million. Is that reasonable?
That is reasonable.
Got it.
Yeah.
Given how rare and uncommon this disease is, where do you think the pricing will finally land up?
I mean, our product, the beauty of our product is that it is not weight-based. We have a fixed dose. Our package to the FDA will propose an every other week dosing schedule, primarily. The range is actually quite broad. Rare diseases like ours command a pretty high price.
FAYUVI, gene therapy for MPS IIIA, was priced close to $4 million. Denali's compound is close to $1 million, but that's weight-based. So some patients that end up having an adult weight of, say, 80 kg will probably be commanding a price of $2.8 million per patient per year.
We want to be sensible about how we price the product to ensure that there is proper patient access, but also charge appropriately for and commensurate to the disease state and the severity of illness and the value proposition that we bring to patients and caregivers and families with MPS IIIB. So, anywhere between that range is kind of where we think we will fall.
Got it. One last question before we wrap here. With the BLA submission, during your dialogue with the FDA, during BLA meetings and stuff, has the concept of AdCom come up at all? Or this is very clear-cut and it's not a gene therapy that would need an AdCom?
Yeah, we have not discussed with the FDA the requirement of an AdCom, nor the FDA has ever signaled that an AdCom will be needed for our compound. I really think, I personally feel that the FDA has seen more and more of our data, and they seem more and more compelled to our story based on the tenor and nature of the meetings that we've had with them.
Based on my experience in rare and ultra-rare diseases spanning through Horizon and Ultragenyx and BioMarin, the clinical package in addition to the biomarker data that we're putting together is super compelling with a safety profile that is incredibly reasonable for a compound that gets delivered through a port.
Got it. All righty. Looking forward to the BLA submission and all the good stuff that could happen next year.
Thank you so much.
Appreciate the time. Thank you for making time for us.
Likewise.
Thank you.