Good morning, everyone. Welcome to Guggenheim Healthcare Innovation Conference. My name is Yatin Suneja, one of the senior biotech analysts here at the firm. It is my pleasure to welcome our next presenting company, Surrozen. From the company, we have two executives here. We have Craig Parker, who's the Chief Executive Officer, and we have Chuck Williams, who used to be CFO, but he took a new role here. Gentlemen, thank you so much for your time. Craig, why don't you maybe make some opening comments? Tell us about the story of Surrozen, where you are, what you're doing, what are some of the key milestones that we should be focusing on, and then we'll go into the Q&A that I have prepared for you.
Okay, great. I mean, we have an hour, right?
Yes, we'll try.
Thanks, everyone, for being here. Thanks for the invitation to participate in the conference. Surrozen was founded in 2016 by the scientific luminaries in the field of Wnt biology. I'll tell you a little bit more about what that is. The company was started on some breakthroughs that really opened the opportunity to activate this pathway for tissue regeneration with multispecific antibodies. Now, the Wnt pathway, it stands for Wingless and Integrated One Site, is really one of the fundamental pathways in cell biology that's involved with stem cell renewal, cell fate, tissue organization, and importantly, for therapeutics, tissue homeostasis or regeneration or response to injury. This pathway has been known for some time to be potentially a really exciting therapeutic target for a number of reasons we don't have time to go into.
It's been very difficult to drug, but a key breakthrough in some of the structural biology around the pathway and the receptors and ligands led to the formation of the company and this concept of being able to activate the pathway with multispecific antibodies that bind some of the signaling receptors that are involved in the pathway. There are many, many different tissue types where Wnt is known to play a critical role. We're now exclusively in ophthalmology for a number of reasons. One, there's clinical proof of concept that activating the pathway has a large clinical benefit. Merck acquired a molecule that was our one direct competitor several years ago that's had some compelling clinical proof of concept data in diabetic macular edema. Indeed, the magnitude of that benefit activating Wnt signaling is about as large as with VEGF inhibition, like with Eylea.
Really, no other single mechanism has been able to achieve that magnitude of benefit. IL-6 alone, Ang-2 alone, some of these other targets that have been combined do not really do as much as Wnt seems to. We have these multispecific antibodies now that both combine activating this key pathway, Wnt, with inhibiting other pathways that we know are contributors to the pathology of retinopathies like VEGF and IL-6. It is probably worth also highlighting this is one of the few areas in Wnt biology where there is really important genetic evidence of the role of this pathway in disease. There is a set of very rare childhood diseases that are mutations in Wnt signaling where kids are born with, it is very heterogeneous, but some of them are born with actually vision loss and retinas that look like the retina of a 70-year-old with wet AMD.
We know that Frizzled is critical for the retinal vascular function and integrity, which is why we and others have targeted it for retinopathies.
Got it. Very helpful. Thank you for that context. Maybe just on a high level, you mentioned that this is a pathway which is difficult to drug. I think particularly there have been some challenges around safety. What is your approach to addressing some of the challenges of Wnt agonist therapy?
There actually is a Wnt agonist on the market today which is extraordinarily safe. It is a bone-selective Wnt agonist. It is an Amgen molecule called Evenity or Romosozumab. It is approved for postmenopausal osteoporosis. It actually builds bone, so it is an anabolic agent, and it is extraordinarily safe. There have not actually been clinical safety signals with the few Wnt agonists that in this case are either on the market or have been in clinical trials. Merck did not disclose any really notable safety issues with their intravitreal injection of a Wnt agonist. Also, just the fact of giving an intravitreal injection versus a systemic injection is a theoretical way to, if there were systemic liabilities, to manage those liabilities because the drug, while it leaks out of the eye over time, is largely, in terms of the concentration, only high when it is in the eye.
Got it. I mean, we do observe that there is an excitement around Wnt biology, specifically as it relates to retinal disease, as you mentioned, or Merck. Roche is also in the program. Can you maybe contextualize for us at least what we have seen at clinical level and preclinical level from your competitor, and how does that make you either more comfortable or more confident in going into some of these retinal diseases?
Yeah. As I mentioned, I think it really starts in terms of the biology story with the human genetics, that this pathway is critical to the function and structure of the retinal vasculature. What we've seen preclinically, and it's very differentiated from other approaches like VEGF or IL-6 or Ang-2 preclinically, these are mouse models of retinopathy. What we see is not only that you can prevent vessel leakage, which is what VEGF inhibition does, but we can normalize the retinal vessels in parts of the eye that can become ischemic or are missing vessels in these mouse models. If you talk to people in the field today and say, "What's the way to really differentiate a molecule in multiple retinopathies?" people tell you, "It's drying the retina," which is, if you could normalize the vasculature, you shouldn't have any leakage.
It's both directly blocking the leakage that we see preclinically and also potentially this normalization of vessels. That's what we see preclinically. The inventor of the Merck molecule did not publish any data. With that actual molecule, they published with a precursor tool molecule. They did not have nearly the magnitude of effect on those as we've had in preclinical models. Clinically, what we've seen from Merck is what looks to be a VEGF-like clinical benefit in visual acuity and in something called central subfield thickness, which is a measurement of fluid in the retina. It seems to have a VEGF-like benefit on visual acuity, a VEGF-like benefit on drying. I mean, that's in a very small set of diabetic macular edema patients.
Thank you. Maybe going back to the preclinical comment you made, what are these models? Are these the OIR model and the CNV model?
Yes.
How good are they from a translation perspective into human?
I mean, I think you have to be cautious in stating categorically that any animal model is translational or is translatable to human data. What we know is Eylea, for example, works in both these models. I'll tell you a little bit more about the multiple models that we've looked at. Works in those models, works in humans. IL-6, it's difficult to say that because it doesn't cross-react with mouse IL-6, most people's IL-6 antibodies. These are models of either more of a diabetic macular edema phenotype or a wet AMD phenotype. There is something called oxygen-induced retinopathy. You expose the mice to high oxygen concentration, then you lower the oxygen concentration. It creates a diabetic macular edema-like phenotype. It is thought to more closely be translatable to DME.
In this model, we actually see synergy of our molecule, which is combining VEGF inhibition with Wnt agonism, synergy compared to just Eylea alone or just Wnt alone. Something about combining those pathways into a single molecule seems to confer about tenfold greater potency. That is a DME model. We have done multiple versions of that. I will not go into the details where you can treat later, allow the disease in the animal to be more progressed or more damage or more leakage. We still see a large benefit that is greater than you can achieve with Wnt agonism alone or VEGF inhibition alone. There is a model that is more translatable to wet AMD, which, as you mentioned, is a CNV. We have done two versions of that. You can laser the back of the eye. There is actually a spontaneous mouse model that develops CNV, and we have done that.
We have done similar to OIR where you look early, treat early, and then look later, treat later, trying to mimic a more advanced stage of disease or a more progressive stage of disease. In those, we have a larger treatment effect than Eylea alone.
Got it. So one more high-level question, then I'll go into your programs. In terms of the biology for Wnt, the matrix or Wnt agonist, is it more sensitive to one type of a retinal disease, let's say DME versus AMD? Where are you on that? Because I think the data that we are seeing, at least in the clinic, seems to be pointing more towards DME.
Yeah. We still see a large treatment effect in both models. I think the field, and the field right now is us, Merck, and probably Roche, but I think the field has prioritized DME over wet AMD because there is just a clearer line of the biology in retinal vessels than there is in what are called choroidal vessels. If you think about the back of the retina, the retinal vessels are parallel to the back of the retina. The choroidal vessels penetrate down into the layer where the photoreceptors reside. Those choroidal vessels do not actually have their own tight junctions. One of the effects of Wnt biology is to upregulate tight junction proteins like Zo1. We do see an effect in the choroid. It is called the choriocapillaris, but it is probably mediated by other cell types like RPE cells, for example.
The biology is just really, really clear-cut in retinal vessels. That's why the field has prioritized DME. As you probably know, Merck has started a wet AMD study. There's no reason to not pursue wet AMD. The biology is, I would just say, a little maybe one cell type removed from the actual vessel.
Got it. Got it. Very helpful. Now tell us about the assets that you have, your molecule. You have a partnership with Boehringer Ingelheim. I think they are supposed to file an IND relatively soon. What have you done for that molecule? How is that molecule differentiated with the two molecules that you have that you're holding on?
The molecule we licensed to BI, I would say, looks to be a better version of RESTRA, the Merck molecule. The pharmacology is similar. It binds the same receptors. I will not go into the people always ask about the epitopes there. We do not think it really matters much. In vitro, the BI molecule is about twice as potent in activating Wnt signaling as RESTRA. Does that mean it is going to be clinically different? We do not know that. That is the principal difference between what we licensed to BI and RESTRA, potency in activating Wnt signaling. That is just the Wnt business end of our molecule. Our molecule 8141 combines that actual sequence that we licensed to BI with VEGF trap sequences. It is multifunctional. It is inhibiting VEGF and activating Wnt signaling.
It's activating Wnt signaling with the same targets and the same potency as the BI molecule, which again is more than RESTRA and has the VEGF inhibition and has another modification that were there to be any systemic liabilities or toxicities, we would have mitigated because we put a mutation in a portion that's called the FcRn portion that accelerates the clearance from the circulation. Faricimab has the same sequence.
Okay. Good. What work you did on the BI, and where is that partnership? Are you doing any work? I mean, they are your competitor, or you are their competitor now?
Maybe I'll let Chuck address that. Yeah. The initial phase of the collaboration ended when they nominated a lead candidate last year. Now it's just a straight-out license. In terms of where they are and the type of information we get from them, it's pretty limited. We obviously do compete with them. It's not entirely clear when they might initiate a phase one clinical trial.
Got it. Just simplistically looking, Boehringer Ingelheim has basically a better version of Merck molecule. You have what Boehringer Ingelheim have, but added on top of it is the trap and maybe IL-6 and some mutations.
Correct.
Okay.
We have shown preclinically that there is synergy in combining those into one molecule because we get asked, "Why would not a patient potentially just get RESTRA, the Merck molecule, plus an injection of Eylea, for example?" Yeah. We have done that experiment in the mouse. First of all, the patients are not going to want that in multiple injections at the same time. We have done that experiment in the mouse model. We are not sure the mechanism behind this, but doing it all with one molecule is better than giving separate injections in the same mouse eye of Eylea plus 413.
Absolutely. I think you're going after Wnt biology, which is obviously a little bit novel here. VEGF is very well understood, but I think we are seeing a little bit more data on the IL-6 side. Could you put that data in context, what you're seeing, because you do incorporate IL-6 in one of your assets?
Yeah. Yeah. Our next molecule after 8141 is 8143, which is trifunctional. It is Wnt agonism, VEGF inhibition, IL-6 inhibition. The data you're referring to, I think, is the Roche DME data with a combination of IL-6 plus a separate VEGF injection in DME. We can talk about UME separately. In DME, we are really encouraged that there's clearly an additive benefit with multiple mechanisms. I think faricimab was some evidence of that. I think if you look at the data, which you can access on ClinTrials now for that DME study, there's very convincing additive benefit on visual acuity and retinal drying in both treatment experienced and treatment naive DME patients. I think that's our approach is obviously to see that additive benefit with multiple mechanisms. We're really seeing that now come true in the clinic with IL-6.
Now, IL-6 alone doesn't seem to do much. So we're really encouraged that Wnt alone does as much as VEGF alone. VEGF plus IL-6 does more than just VEGF. So it's just sort of first-order logic now. We're obviously hopeful that Wnt, which has VEGF-like monoactivity and VEGF, will have an even greater additive benefit than some other combinations like VEGF and IL-6.
Got it. Got it. Very good. For your two molecules, 8141 and 8143, where exactly are you? Which one is more advanced? When should we expect an IND? What preclinical work do you still need to do in order to facilitate an IND?
8143 is months behind 8141. It's not a year behind, but we haven't given any precise guidance on the interval between those. We've said that we'll file an IND for 8141, Wnt, VEGF in 2026. When we get closer and have a more precise date, we'll update that guidance. We're doing all the typical with 8141, CMC scale-up and toxicology sort of activities right now. We haven't given any more details on the timing of that.
Okay. IND next year, at least for 8141. How should we think about your strategy? What type of patients you will go after first? Would you run a study where you actually end up getting both DME and AMD and also talk about the injection frequency?
Yeah. So I think we would, we'll give more details on the actual protocol and trial design, but I think likely do both DME and wet AMD. We're still discussing with our clinical advisors, do you just do treatment naive patients because it's a little easier to interpret the data because it's pretty well known how they should respond, like to Eylea, for example. You can do a cross-study comparison, but that's still to be determined whether we do maybe some treatment experienced patients in that. It's likely both DME and wet AMD in a phase one B2A, not unlike what others like IBIO have done.
Yeah. I see.
Frequency, we do not know all the PK right now. I'd say we have a pretty good idea that we will not need to be more frequent than every other month. I do not know that there is a benefit ultimately to being like every four months or less frequent because the retinal specialists want to see patients more frequently than that. I think 8-12 weeks is probably the sweet spot. Doing a Vabysmo-like study is probably the right phase three where you give people a range of dosing frequency depending on how dry the retina is, and you get reimbursed for all those, which is key.
Yeah. I think if you can push the efficacy, I think even the eight week would be fine because I think in this disease category, we have just seen the plateau with almost every new mechanism right now. You still get VEGF-like. Okay. In terms of the, so you go into these two areas, but most likely next year, right? We're going to get data from hopefully Merck. They're running two studies, Brunello and Barolo. They're both good wines. Next year, what would be your expectations for?
I'm trying to figure out how you one-up Italian wine names for your study acronym.
There is another company that has, they're running four phase three studies, all are Italian names, but they're by cities. I point, I follow them, Como, Capri, Lugano, Lucia. I don't know why. What's the Italian angle here? I don't know. Yeah. What would be your expectation? Because that for sure will have read-through with the whole Wnt biology space.
Yeah. I mean, maybe first and foremost, we're obviously hopeful that there's really excellent safety with agonizing Wnt in the eye. There didn't seem to be any safety signal in the IBIO phase I/II, but that was a limited experience, something like 30 patients total for a couple of months. The requirement for any intravitreal injection for these diseases is exceptional safety, right? You can't have endophthalmitis or other serious complications or retinal vasculitis. I think having VEGF-like efficacy would be really encouraging. Again, we think there's a good argument for an additive benefit. With Wnt alone, if you can get VEGF-like efficacy, I still think that leaves an opportunity for improvement. It could be the improvement is on drying. It could be that it's on visual acuity.
I think if you ask a retinal specialist, they would say, "Don't have high expectations that you can improve visual acuity anymore," but no one's had any kind of an additive effect yet, so.
What is the frequency of RESTRA?
Monthly.
That'd be monthly.
We think that that's limited by how they can concentrate it. There is just a simple math challenge with intravitreal injections, which is you can only put about 50-70 microliters in the eye without potentially damaging the eye or causing an increase in intraocular pressure. If you calculate what is required for the concentration of your drug, it has to be about 100 ml per ml. If you have like a typical IV injection for an oncology ADC, for example, people are doing like 15 ml per mil. This is like very highly concentrated protein, and not all proteins can be stable at that concentration. We think because we have made RESTRA, that might be one of the limitations that they have experienced is they just cannot concentrate it enough to put more in the eye. They have to give a monthly injection.
Very interesting. What are you hearing from physicians or the expert as it relates to either, as it relates to the Wnt biology? What is the feedback?
I think we have a really great opportunity to convey that we are really the scientific experts in this field. No one's really tried to do that with any of the KOLs yet. We are. We were founded by two scientists who won the Breakthrough Prize in Life Sciences for Wnt biology, a Nobel laureate. I think we've got good cred and chops to be the scientific experts for Wnt. I think there's a great opportunity to reinforce that. There's awareness of the pathway, but not knowledge of the pathway, which I think is also a great opportunity for us to educate people on the role of the pathway in the retina. In terms of the clinical benefit they would like to see from a novel mechanism, I think it's good retinal drying. You'll hear people refer to this as an anatomic effect.
It can be measured by central subfield thickness. It can be measured by a % of patients with no intraretinal or subretinal fluid. That's where faricimab has done well. I think there's still headroom for improvement. I think most retinal specialists would tell you that, that not everyone responds to VEGF inhibition or Ang-2, and you can do better drying the retina. The belief is ultimately that's going to translate to visual acuity benefits or preserving vision, visual function. That's where our mechanism, I think, plays well. What we see preclinically is this normalization of the retinal vasculature, reduction of areas of non-perfusion, no pathologic leaky vessels. Hopefully, that connection will be true in humans.
Yeah. Yeah. One clarification. The IND that you're filing is in the U.S. for next year, or?
Yes.
Okay. Maybe a couple of questions for Chuck. In your new role, what are some of the things that you are thinking about or that you will be doing? If you also can touch on the IP.
Yeah, sure. I think in terms of some of the enterprise strategy, in terms of what indications and how to co-position 8143 and 8141, I mean, one of the things we're thinking about while we haven't finalized these plans for 8143 is do we do an initial indication in MESI? Because one, it's a more streamlined development pathway, and two, it's a shorter endpoint, six months. Presumably you could catch up with 8143. In the context of having seen the Roche data, VEGF, IL-6 combination, it does give us, it's really encouraging to see that the combination of those two is better than VEGF alone. That we have to take into consideration. Your second question around IP. We were issued, so we've been issued a patent in the US, Europe, and Japan that claims multivalent antibodies targeting Frizzled LRP5 or 6.
The reason that's important is it's a fairly broad patent that would actually, where Merck and Roche would be infringing. In fact, post the Merck acquisition, the patent office cited this application at the time of ours as prior art. We have a pretty good intellectual property position as we've been the leaders in the field. We were the first to file. We'll see how that plays out over time with our competitors of Merck and Roche and any others that might be working in this field.
Great. Maybe final question. How is the cash position, burn rate, and the funding?
Sure. So we did a $175 million pipe earlier this year, split into two tranches. The first tranche of about $75 million gets us a couple of quarters post having the IND clearance. The second tranche of approximately $100 million would get us some cushion post having reported out data for both 8141 and 8143 in the phase one B2A studies that we plan to conduct.
Got it. Maybe final question. To the best of your understanding, the RESTRA, Brunello, and Barolo studies are reading out next year.
Yes. We understand that it's probably Q3 is what we've been hearing for the first one.
For the first one. Okay.
Yes. They probably will read out the wet AMD study next year as well because they just initiated that.
Got it. Got it. Very good, gentlemen. Thank you so much.
Thanks for having me.
Appreciate it. Thank you.