Good morning, everyone. Thank you for joining the 24th Annual Needham Healthcare Conference. My name is Joey Stringer, and I'm one of the biotech analysts at Needham & Company. It's my pleasure to introduce our next presenting company, Stoke Therapeutics. Joining us today from Stoke is Interim CEO Ian Smith. For those of you joining on the webcast, if you would like to ask a question, please do so at any time. You can submit a question using the chat box at the bottom of your screen. With that, we'll get started. Ian, thank you so much for joining us today.
Good morning, Joey. Thank you.
Ian, you've been involved with Stoke for more than two years now as a consultant and also a board member, and now you're part of a leadership change at the company. Can you talk about your first impressions stepping into the CEO role, what the opportunity for the lead asset, zorevunersen, is, and what have you been talking about with investors?
Yeah, maybe I'll start by saying this is my first time that I've done an investor conference call by using Zoom and doing it virtually. I'm getting used to this. Pardon me as I find my way here, Joey, although, as most people know, it's not my first time talking to investors. You're right. I've been working with Stoke now for two years, and I've been on the board for nearly two years. When I say I've been working with them, it's beyond that board role. It's actually been as an advisor to Ed Kaye, the former CEO, and the management team.
I worked with the company since the summer of 2023 when it got its first data in its 70 mg cohort of patients, then through to completing that cohort in early 2024, and frankly, through to financing, breakthrough designation, the design of the phase III , and then most recently, the Biogen collaboration. I work closely on all those parts of the business with Ed and the team. We chose as a board to make a transition following the Biogen deal, but before the start of the phase III. I'm here in this interim position and looking for the future CEO, future long-term CEO of the company. We did not want to make that transition in the middle of a phase III. I'm here. A couple of reasons I'm here specifically is the board did ask me.
What I see here, there are a lot of similar patterns here to Vertex Pharmaceuticals. You know I was at Vertex for 20 years. A lot of the medicine here is late- stage. It is going into phase III . The phase II data is profound in terms of reductions in seizures and then also the cognition and behavior improvements. The data like this has never been seen before in Dravet syndrome. Heading into a phase III with a globally aligned regulatory plan, I'm looking forward to getting the phase III started, should start in the second quarter, so momentarily, maybe. The company's well-financed. It does need to access the capital markets for money. The Biogen collaboration really gave us a strong balance sheet, and yet we retained all North American rights.
The patient population is significant, and we have a disease-modifying therapy. I am looking forward to the progress of the company over the next few years and bringing this medicine to these kids that really need a change in the future of their lives. As I say, very similar to how I thought about cystic fibrosis probably back in the mid-teens, 2013, 2014, 2015, and how you change the course of the life of a child by having a disease-modifying therapy. Really excited. Happy to talk about anything about the company, Joey. Over to you.
Sure. Great. Just to level set everyone, lead asset zorevunersen, in development for Dravet syndrome. Ian, what are some of the key efficacy takeaways from the clinical data to date? What seizure reductions are you seeing?
Yeah, I'll work in reverse, Joey. We'll probably touch at some point on the design of the phase III. The design of the phase III, obviously, is based off the data that we gathered in the phase II, and notably the 70 mg dosing group in phase II. Seizure reductions were 75%-80% in excess of that. There were actually seizure-free patients as well in our study in terms of a result. Again, something that has never been seen before. That was the seizure reduction. What we also saw in the phase II, as early as nine months, actually, we started to see patients improve their cognition and behavior, something that hasn't been seen before. You're probably familiar with Dravet in that a child may progress normally to around two years of age.
Once achieving two years of age, they start to see more significant seizures. Unfortunately, they do not progress developmentally with cognition and behavior. What our phase II data showed is that we did reduce the seizures by 75%-80% on top of every standard of care medicine for seizures. We reduced seizures 75%-80% on top of the standard of care medicines. We also showed improvement of cognition and behavior. What I mean by that is not a flat line, but actually an uptick in terms of how they improve. The measurement of cognition and behavior improvements is through a questionnaire. It is known as Vineland-3, and I am sure we will talk about it later on the call. That data is truly stunning.
It gathered us breakthrough designation in the latter part of 2024 and afforded us a very nice phase III design that has been approved now in the U.S. with the FDA, in Europe, and also in Japan. The global authorities have all approved the phase III design back late 2024, early 2025. We anticipate starting that study in the second quarter, which we're now in.
Got it. A couple more questions on the clinical data today, and then we'll jump into the phase III. Safety tolerability, obviously important. Can you summarize the data today? In particular, you've seen some elevated CSF levels in both the phase 1/2a , and the OLE. Just wondering if you could explain these in more detail and how should investors think about potential risk heading into phase III.
Yeah, so I'll go straight to the CSF, Joey. Yes, we have seen some elevated CSF and some protein elevation, but no clinical manifestation. Frankly, when you're doing intrathecal injection, lumbar puncture, it is known that you do see elevated proteins in the CSF. No clinical manifestations. Basically, the data today, we've got 300 patients that have 300 doses that have been dosed over a period of nearly three years now. We're heading into phase III with a drug that's generally well tolerated and no specific safety concerns.
Ian, you mentioned touched on it a little bit earlier. It's not just seizures. You mentioned improvement in cognition, behavior. How about the disease-modifying aspects of this drug? Where do you see quantitatively in terms of cognition, behavior improvements?
I'll first of all help people understand what Vineland-3 is, which is it's a questionnaire, and it's actually administered by a neuropsych doctor. It is an evaluation based on expressive communication, receptive communication, large motor function, and overall quality of life. It is a questionnaire that does a patient express themselves? Do they respond to somebody asking their name? In terms of motor function, can they write letters? Can they do buttons on their shirt? Things like that. You go through a questionnaire, and you give each of these questions a score, zero through two, frankly, and then add it all up to see whether there has been any change in behaviors. That's Vineland-3, and that's what we're using for the phase III study.
I would also say, because it may sound subjective, and obviously, we're reliant on these neuropsych MDs, sorry, doctors to do the evaluation. I wanted to, coming to the company recently, I found this very interesting in terms of gathering my own confidence and certainty to this evaluation. We have four, only four neuropsychs that actually do the evaluation for every patient. They do it at baseline. They do it kind of mid-study, and they do it a couple of more times towards the end of the study. You are able to plot baseline scores throughout the duration of this study. The phase III is a 12-month study. We will be able to plot and potentially see the improvement of cognition and behavior based on this scoring of Vineland and done with the consistency of four neuropsych doctors.
I think that's very important to understand in terms of how that questionnaire is actually administered. What we've seen so far is we've seen improvement in cognition and behavior as early as nine months on our drug, potentially earlier with some patients. As we continue to dose the drug, and as you know, not only have we done a phase 1/2a with the drug, but we've pushed 90% of the patients rolled over into an OLE study. We continue to monitor the cognition and behavior in that OLE study. Three years in, we've seen this consistent improvement of cognition and behavior over that long duration of time now, something that's never been seen before. These patients stabilize at around two, unfortunately, and don't progress. We're starting to see progression now over a three-year period.
Our study has been designed based on all of that data.
Got it. It's very helpful. You mentioned the phase III, plan to start it second quarter. Can you provide an overview of that trial design?
Yeah, sure. It is a global design study. What I mean by global, it's applicable to North America, Europe, and Japan. It's 150 patients, ages 2 through 18 years old. Primary endpoint is seizure reduction at week 28. Secondary endpoint, seizure reduction at week 52. Then cognition and behavior as measured by Vineland-3 at week 52. We do actually measure the Vineland throughout the study, as I mentioned earlier, because we want to see the plot or the curve in terms of that gradual improvement rather than a specific at point. That's the major design of the study. We started in the second quarter. Probably take maybe a year to enroll, maybe less. We're hearing a lot from KOLs and families and advocacy groups because of the excitement of the data that we continue to publish.
We will see how enrollment goes, and we will keep you updated. Maybe a year or less to recruit with data coming in because it is a one-year study, data coming in the second half of 2027.
Can you provide any details on the statistical analysis plan for the seizure primary endpoint in the phase III? Maybe as a follow-up question to that, what placebo response and treatment effect are you assuming, and how is the trial powered on this endpoint?
The seizure endpoint, as I said before, we're seeing seizure reductions in excess of 75%-80%. The powering on the seizure endpoint is significant, like overly powered, significant, as you can imagine. In terms of placebo response, these patients are already on the standard of care. We've actually planned for a 25% placebo response despite them already being on the standard of care. That placebo response generally doesn't stay for a duration of 12 months. I think it is going to be much lower. I don't think we'll see much of a placebo response, to be honest. However, given that we're already reducing seizures by more than 75%-80%, and even some patients being seizure-free, I think that we're significantly overpowered in the seizure frequency.
Can you talk about the rationale and the pros and cons? We're going with the sham control as opposed to placebo control in the phase III trial. I guess, is there any risk to trial integrity or that the results perhaps may not be viewed as favorably by payers relative to a true placebo-controlled trial?
Yeah, good question, Joey. I would start by just saying that the sham control is the purest way to do a controlled trial. The reason why I say it's the purest way is because, unfortunately, you may not find it ethical. It is ethical. The challenge is you are actually still doing a lumbar puncture, but without drugs. There are questions that have been raised, mainly in Europe, seriously, mainly in Europe, about sham control. In the U.S., there is no issue with it. People do view it as the purest measure of a controlled trial. The reason for that is because sometimes there are safety events that are noted or AEs that are noted that relate to actually the injection and the injection site. You'll probably see that those even out because we're doing a sham.
That is why I say it's the purest way to do the trial. As I said earlier on this call, all the global regulatory authorities are aligned with the trial design.
Got it. Makes sense. Ian, you touched on the Vineland-3 a bit earlier. It's going to be a key component in your trial. Can you walk us through the components of the Vineland-3? I know you talked about how it's measured, but just kind of refresh us on that.
Yeah. In terms of how it's measured, I assume, Joey, what you're referring to is how is it measured as a secondary endpoint in the phase III.
Correct. That's correct, yeah.
We're actually looking at it two ways. We're looking at it as a composite score, which means that you look at all of the components of Vineland-3 and kind of mush them together and look at it as a compilation of an outcome. We're also looking at it as individual scores. Investors and yourself may be familiar with when you look at it as individual scores, there's a certain hierarchy that you have to achieve, statistical hierarchy. We're looking at it that way as well. The key measures within Vineland are expressive communication. Can I express myself? Can I say my name? Can I talk to you? It's receptive communication. Do I listen to you? Do I look at you when you call my name? Then motor skills. As I said earlier, it's about being able to do buttons.
It's about moving arms and legs. Frankly, writing is another part of the study. Then overall quality of life. We're going to look at it all different ways, just out of interest for everybody. Europe prefers the composite endpoint, whereas the U.S. prefers the hierarchical assessment. In terms of our hierarchy, we've weighted it based on where we've seen the most improvement.
Got it. The importance of the Vineland-3, you mentioned from a regulatory perspective what's important between the two agencies. I guess from a commercial perspective, are there any components that are more important or considered key for you that you would need to be successful from a commercial point of view?
Yeah. Closely, thank you for taking this to the patient now because I look at the trial design and say the seizure reduction is significantly overpowered. Probably one of the more important readouts from the phase three is the cognition and behavior, which will establish this as a disease-modifying therapy. Just like in cystic fibrosis that I referred to earlier, if we can start to treat a two-year-old or a three-year-old and cause them to develop more normally, which is as proved and shown by the phase three with the cognition and behavior, the Vineland score, this is truly a disease-modifying therapy, which these kids should be on as early as possible. Once diagnosed, once screened and diagnosed, they should go on to the medicine.
If it's a disease-modifying therapy, which we believe it is, which is also based on the mechanisms in action, it's not just the, hey, seizure reductions and cognition and behavior benefits, but it's actually the mode of action. As you know, Dravet is a haploinsufficiency disease, and we put the protein back in the brain so the brain operates more normally and therefore allows the child to develop more normally. When moving with a disease-modifying therapy with the FDA and other regulatory authorities, you do actually need to start with the basic science in terms of the pathology of the disease, the cause of the disease, and then move through in terms of how your drug replaces that protein or maintains a protein to then actually see these clinical benefits.
When you put that whole story together, you have a disease-modifying therapy, which therefore there will be an absolute demand for a therapy in these children. I would also say, Joey, that what's important with these kinds of medicines is when you're running the phase III trial, you want to ensure that you cover most of the treating centers because by the time the medicine has the data and is approved, the physicians and the treating centers are already aware of the medicine. When you talk about the commercial aspect of a medicine of this manner or even in cystic fibrosis, the patient runs to the medicine as opposed to a sales and marketing event of another medicine.
The Vineland is really important to kind of just close out that last piece of the story all the way from mechanism of action, clinical data, and Vineland, treating in all the centers around the country. You will have a very successful launch and a high-value medicine, frankly, because it's disease-modifying. It's the only disease-modifying medicine for Dravet syndrome.
On the Vineland-3, can you disclose any more detail on the statistical analysis plan for that? You mentioned that there are two measures and I think two listed on clinicaltrials.gov. One's the multi-component score, and then two's the subdomain score. Which one of those is more important? I guess, how do you think regulators will view what is considered "a success" on those?
Success, frankly, it's as straightforward as getting statistical significance. When you take the two, if I separate the two now and you describe them appropriately, in the U.S., the hierarchical scoring is more important. The way a hierarchical scoring works is you have to check off each one. The moment that you don't hit statistical significance on each one, you actually stop there. We have ordered the hierarchy as appropriately based on our clinical data. We actually start with expressive communication up at the top, which is where we do see significant improvement over the duration of the therapy. In Europe, they're putting more weighting towards a composite score, which is kind of a mixed endpoint analysis. You still have to achieve statistical significance with a mixed endpoint analysis.
Got it. Where do you stand on the long-term safety and exposure requirements for the drug? Do you need to do additional work to satisfy those requirements? Would you do this in parallel to the phase III?
No additional work required. We're into phase III. We expect to start this quarter. I'll give you a couple of markers, Joey, in terms of the safety of this drug. I'm going to say the patient demand for it. 90% of our patients in our phase 1/2a studies rolled over to the OLE. There was a six-month washout period from each of the phase 1/2a studies. They went into the OLE. 90% of our patients have done that. I've always viewed OLEs as a really remarkable way of tracking your patient long-term, gathering longitudinal data. It's also a really important measure.
When asked about things like intrathecal injections, what's the safety profile, what's the access to this drug going to be like, I can point to 90% of the patients, even after a six-month washout, saying, "Please, can I go back into that study?" Greater than 90% did. No additional work. Safety profile is generally well tolerated. Patients have rolled over, and we continue to follow them. In terms of numbers, my understanding is patients have been on drug for, I think, it's over three years now. I think there's been over 300 doses. If you understand that this is dosed every three or four months, it helps you understand how long we've had patients on drug now.
Got it. That is a helpful discussion on the lead asset in Dravet. I do want to touch on a few of your other programs. What is the latest update on the ADOA Ocular Program and the preclinical collaboration you have with KDN SYNGAP1 syndrome and also Rett syndrome?
Firstly, I'd say those are the two follow-on programs that are most forward heading towards the clinic. ADOA, which is optical atrophy, we're working preclinically on that. There's been a lot of discussion from the company. I would say, as we go through this year, we'll probably bring some more data to you and a rationale to proceed or not to proceed. It's a really interesting disease given data that we are collecting, both safety and efficacy side, and the potential to slow the progression of the loss of eyesight, potentially stabilize it with a safe disease-modifying therapy again. Plus, what we're also trying to do in the preclinical work is identify a biomarker as well as safety efficacy models. If we can identify a biomarker, then going into the clinic may afford us different development pathways.
As you probably know, Joey, part of the challenge with these progressive diseases, you need to dose the patient. It could be a long-duration study because you've got to see the change from natural history. If we can identify a biomarker and correlate that to safety, then there's pathways that are much quicker with a regulatory strategy to advancing this medicine. We're working on those kinds of things before coming back to you. I hope to be back to you soon. That's at ADOA. In Syngap, Syngap is actually the target. Just like it's another haploinsufficiency disease, and we're trying to increase the functional protein in the brain, very similar to Dravet in that seizure-related. We want to, again, cause the direction of this disease to change. I would say that's a little further behind than ADOA.
When you look at the Dravet results, Dravet is truly a proof of concept of how to address haploinsufficiency, lack of protein in the brain, and changing the course of the disease, similar to ADOA, which is a neuropathy. We are looking forward to progressing the pipeline. You asked about those two disease areas. I would say that I've been in the seat here for, I think it's three weeks, although working with the company. A lot of my time, actually, in these last three weeks has actually been spent with the CSO of the company and founder, frankly, talking about what other disease areas may we be able to go into, given this proof of concept in Dravet of how we deliver more protein. I find it really interesting.
If you think back in this industry, companies like Alnylam is one that comes to mind immediately. Do you have a platform of how to deliver, identify the disease, figure out whether there is an unmet medical need there, and also go beyond the organ of the brain? Maybe there are aspects of this platform that can go towards kidney and, I don't know, heart, liver. I have been spending a lot of time to try and kind of unlock maybe the platform value here of delivery of functional protein.
Got it. Very interesting. Last couple of questions from us. In current cash position, where do you stand there? What are your expectations on cash runway?
We are financed all the way through to launch readiness. That is all the way through to mid-2028. We are in great financial position. I would like to explain how we got there. I think in today's, I'm going to say, period of time in biotech, it is a unique time for us to be financed basically three years out into launch readiness mode. We got there with a balance sheet that was already strong. We had just over $200 million of cash at December 31, 2023. We closed the Biogen deal in late January, early February. That provided $165 million upfront. It provided 30% R&D cost share. It has a development milestone that is based on the phase III success. That collaboration brings in immediately $165 million on top of our $240 million, I think it is. All in all, we have over $400 million.
We are two years away from phase III data. We are financed beyond there all the way through to the following year anyway. We are in great financial position. Yes, I talk about the Biogen deal as being wonderful for the company from a financial aspect. It is also the right partner for us. Biogen, as you know, is very well with Spinraza. It is very strong outside the U.S. with Spinraza. We went through a competitive process at the company of identifying the right partner as well as the right financial terms. The deal ended up being a wonderful transaction, both with the right partner to sell our medicine outside the U.S. We still receive a significant royalty. It is also bringing in capital today, which the company needed. We are very happy about it all.
Great. Last question from us. The stock's been under sustained pressure since mid-last year. I guess, what do you think investors are missing about the Stoke story? What's the biggest disconnect for investors in your view?
I don't think there's a disconnect, Joey. I think I honestly empathize with what's going on in the investment world today in biotech, these broader markets. It's tough to figure out where you go with such market uncertainty. Yes, the stock's traded down, which simply means there's been more sellers than buyers. I don't mean to diminish that. We need more stability in our environment. We're a sector that is always demanding capital to progress our medicines and innovate around medicines for the patients. Where I think this goes, I mean, I think companies like Stoke that are well financed, as I just described, we have a late-stage de-risk medicine with a significant market ahead of us.
I think what happens as we come through this period of time, because we always do, as we come through this period of time, I think it's a stock pickers market. I think we at Stoke are ideally placed with a de-risk phase III asset, high value in a patient population of tens of thousands of patients. We're going to keep having these conference calls and talking to investors because we believe there is light at the end of the tunnel. We think that we're in a good position.
Great. Well said. Ian, thank you so much for participating. It was a very helpful discussion.
Okay. Thank you. Thank you to all to listen.
Thanks, everyone, for joining us on the webcast. Have a good day and a good rest of the conference.