Cardiol Therapeutics Phase III MAVERIC Trial. Why Fewer Recurrences Led to More Patients - CARDIOL THERAPEUTICS INC

CardiolRx is targeting inflammation importantly in a non-immune suppressing way with really an extraordinary safety profile. For developing a new drug that is accessible to the masses that are affected by the disease, that allows for education, awareness, and definitive diagnosis. What if you could have the symptoms of a heart attack, go to the emergency room, find out it isn't a heart, attack and then have the same chest pain come back again and again. That is the reality for people living with recurrent pericarditis. Pericarditus is inflammation of the sac surrounding the heart and recurrent pericartitis can become a year-long cycle of severe chest pain, shortness of breath, fatigue, emergency room visits and repeated treatment. However, one company is taking aim at that very cycle. Cardio Therapeutics is a Canadian life science company developing therapies designed to target inflammation and fibrosis in heart disease. Its lead investigational therapy, CardioRx, is now in a pivotal phase 3 trial called Maverick, testing whether it can reduce the risk of another recurrence. The thinking behind the drug is straightforward. If inflammation is driving the disease, can you interrupt that inflammatory cycle before it drives the next recurrence? And that question has now taken Cardiol to a pivotal point in its development. The company reached its original 110 patient enrollment target to Maverick ahead of schedule. A subsequent blinded review showed fewer pericarditis recurrences than anticipated, leading the steering committee to recommend expanded enrollment to as many as 150 patients. The expected top-line readout also moved from the first quarter of 2027 to mid-2027, and the data remained blinded. So what exactly did Cardio learn from that review? Why add patients when there are fewer recurrences? And what can investors legitimately conclude from what the company knows today. That's what we're going to unpack. And joining me here in New York is the man leading cardio through the pivotal clinical stage, David Elsley, President and CEO of Cardio Therapeutics. David, it is so great to have you here. My goodness, right here in new york, there is a lot going on for you. My gosh. Okay, so let's actually start right there. There are quite a few of our audience members that are still getting to know this company. So why don't we just start from the beginning, who you are, what you're doing, what your projects are. Certainly. First and foremost, thanks for having us, having me here today. It's a pleasure to discuss the work of Cardio and the work we're doing in heart disease. Our focus is on developing therapies, as you mentioned, that address a root cause of the development and progression of heart diseases, which remain the leading cause of death and disability throughout the developed world. And that's really inflammation. So inflammation causes damage to cardiac tissue when it reaches inappropriate levels. It can cause tissue damage, which leads to symptoms in the heart and the cardiovascular system, which can destroy quality of life for tens of thousands of people around the world. Our lead drug, as you mentioned, CardioLRX, is targeting inflammation, importantly, in a non-immune suppressing way with really an extraordinary safety profile. And I think that's the key differentiating factor. Yeah, yeah, absolutely. Well, I know, you know, the first place you're taking that science is really recurrent pericarditis, you Know, and I'm probably saying the word wrong, but, you know, we're going to go with there. We know pericrditis involves inflammation around the heart, like you said. What does recurrent pericarditis actually look like for the patient living through repeated episodes? So about 5% of hospital admissions with chest pain are pericardiitis. So that's, you know, very severe chest pain. As you mentioned, it can feel like you're having a heart attack. You'll present at a hospital. And for the lucky patients, that's one year you have interventional medicine, you're discharged, and you never experience that again. But for about 25% of the 160,000 cases of pericarditis each year, those patients suffer a recurring form that can go on for hours, days, weeks, where they suffer severe chest pain, chest heaviness. The disease can last many years and destroy quality of life for patients in their prime of life. A typical recurrent pericarditis patient would be 35 to 50 years of age, generally healthy. Many of them are athletic when they develop it, most likely secondary to a viral infection. And then they start down a care pathway that can be complicated and faced with different challenges. So for patients that don't respond to first-line therapies like non-steroidals or ibuprofen or the generic colchicine. They may have to go on steroids, which have toxicity and resistance, or very hard-hitting biologics, which require injection or immune suppressing can increase risk for infection and are prohibitively expensive at approximately $300,000 per patient per year. So that's really what patients face. And I think the opportunity for cardiol is to intervene with a non-immune suppressing drug that's oral from a convenience point of view, more accessible from a price point of view and has an extraordinary safety profile that in our phase two trial we showed we could significantly impact or have a marked impact on the pain threshold patients were feeling, their inflammatory markers came down and the number of episodes they were experienced or the number of recurrent episodes was markedly reduced in that study. And that led to the now Maverick program that we are fast approaching the conclusion of. I want to just step back for one second because some of the symptoms that do come out of this, many people go, they'll go and they'll say, am I having all these symptoms? I think it's, I'm having a heart attack. And then they get diagnosed with a panic attack or anxiety or something. So how many of those cases actually go untreated before something like this is actually found, where it's not a heart attack, it's non-panic attacks, it's none of those things. We're now talking about something that's a little bit more deeper. It is possible that patients can be bounced around from emergency room to emergency room before they get a definitive diagnosis or are referred to a specialist that will definitively diagnose the condition and then intervenes with the appropriate treatments. that's possible but when new treatments become available that are more accessible remarkably diagnosis becomes more precise because awareness then they're then built yeah so i think the opportunity for it's wonderful to be playing a role in this but the opportunity for developing a new drug that is accessible to the masses that are affected by the disease that allows for education, awareness, and definitive diagnosis. In the absence of that, in the absence of an effective treatment, awareness just doesn't occur. It really doesn't. And that's the thing is education is so key for sure. Let's move through this. You know, patients already, they do have the treatments available, like you mentioned here. The challenge is what happens when those treatments, they're really just not enough and aren't tolerated by the body or whatever else happens and that disease comes back. Where does CardioRx fit into the existing treatment path right now? Because of the safety profile of CardioLRx and the impact that we've observed subject to outcomes in the phase three trial, we believe this would be a new second line therapy. So for those patients that don't respond to first-line therapies such as aspirin and colchicine or don't tolerate it with long-term use, and those medications do cause side effects in a high percentage of patients, that's where our drug would be introduced. Prior to going on to the more potent medications like steroids that introduce the toxicity issues or the biologics which suppress the immune system and are associated with increased infection risk. And that's really the last thing somebody in the prime of life wants to be exposed to for long term. No, definitely not. So let's talk then about the clinical trial. That could really determine whether CardioRx actually changes that treatment landscape altogether. So what is Maverick designed to prove? You know, you're in the phase three right now. There's, you know, randomized testing as well. There's double blindness going on. But tell us, what is Maverick really designed to prove here? So Mavericks is designed to definitively assess the ability of our drug to prevent recurrence. So we're bringing into the study a patient population who have a very high relapse rate. A typical relapse rate in this patient population when you withdraw their background medication, which are the immune suppressants, is about a 75% recurrence rate, typically within three months. We're looking to utilize that high recurrence rate to definitively demonstrate the ability of our drug to prevent relapse because the gold standard or the goal for a new therapeutic intervention in this condition is to keep patients relapse free. So once the disease is managed once it's under control prevent the pain syndrome the chest heaviness the debilitating quality the quality of life issues that are so impactful in these folks lives from returning so this study is enrolling patients who are at high risk for recurrence we're randomizing them to either receive our drug or placebo in a one-to-one so half the patients receive our drug half receive a placebo we then follow them for 24 weeks and we look at the difference in the relapse rate we fully anticipate placebo will have a 75 percent relapse rate or perhaps higher and based on our phase two program and the data and all of the observations to date, we had hoped to reduce it by 40% or greater. And that's what the trial was powered to achieve. And, that created the anticipated total number of recurrences in the trial. However, what we've just recently announced, which I think has been completely misinterpreted by the market and creates an opportunity, is the relapse rate we're observing in the trial is more modest than we anticipated. Now there can be two reasons for that. The placebo group could be having a relapse rate lower than we expected, but there's nothing in clinical practice, nothing throughout the expert centers that are involved, the top pericarditis centers in the world, including the renowned Cleveland Clinic, Mayo Clinic, the two largest in the entire world, there's Nothing in the care pathway that would suggest that is the case. The other explanation could be the drug is showing higher or greater efficacy than we had originally anticipated. Because the study is still blinded, we don't know which one there is. So therefore, we are enrolling an additional 40 patients, which is a nominal extension in time. Cardio has been developing this drug for many, many years. So a three-month extension in the grand scheme of things is really a trivial extension in terms of timeline. and it's a nominal addition in cost it's adding about two percent of the cost for the trial so for that short extension in time and that nominal increase in cost we're ensuring the statistical power of the study to not miss a treatment effect and if what we're already seeing which we don't know but if what мы're already seeing is a drug effect that will only strengthen the statistics around that to make the study all the more important in the eyes of the FDA than we will ultimately be seeking regulatory approval from. Right. So, you know, it actually does make sense. You saw something that you maybe were not quite expecting. Why wouldn't you go back and test it another time just to be sure? That seems like a very reasonable thing to do. Is that out of the norm usually? Is that why, you knows, there was a misunderstanding? Why do you think there was a misunderstanding in that release? I think the misunderstanding is really just the delay, the modest delay in timeline. Typically, delays in research of any kind are perceived as a problem. And in this case, it should be perceived as an opportunity. Absolutely. Because for example, to have observed the number of event rates anticipated or more than that would be concerning in our view. What we're actually observing is an inexplicably low recurrence rate. And what gives us encouragement is that that could be because the drug is showing the effectiveness we've designed to show and we hope that it shows. And that can offer patients great hope for the future. Well, as a patient, I would hope that you would double check and triple check your data to make sure that whatever i'm going to put in my body is going to you know have a higher rate or a better rate on where i'm at at that point so you know i actually applaud you guys for actually just not rushing anything through but just stopping and saying let's double check our data here and this is what's in this is based on the council of the world experts in pericardial disease it's been this decision was made in consultation with the food and drug administration. So it's in the best interest of the cardiology community, the patient community, and most certainly our shareholders. I love that for you. Okay, so this is where the story can get very counterintuitive as well. You saw fewer events, like you said, yet you decided to add patients, like You said. What does a lower recurrence rate create a reason to expand the trial? Let's push that just a little bit further here. Tell me more about that. I mean, fewer events means less statistical information, of course. Additional patients means an increase in time and all of that. But is there something more that maybe would make you look as though it's a negative thing? Or is it something that we can push a little bit further to what you said, something more positive? I believe there's either a neutral observation or a positive observation there. So if we go down the neutral observation, starting with the most conservative first. We anticipated a 75% recurrence rate or relapse rate in placebo. The study is powered to show with 90% confidence, a 40% reduction in risk. So if you reduce 75 by 40%, that's 45. Then the center point between those two numbers is 60. So that's sort of the blended relapse rate we would have expected from the totality or from all from the trial in totality. We're seeing less than that. Now, had we just seen the 60%, the trial would have concluded, and then we would have finished it off and completed the follow-up on all patients, and the study would have revealed its finding. Instead, we're seeing a more modest effect. So in order to continue the statistical power or ensure we have the statisticalpower, we still need the number of events the statistics were built around. So the way you can ensure you get that number of events is add some more patients to the study who are at risk of events. That will get us to our event count. If the underpinnings of the observation are a drug effect already, that will just fortify the statistical power because there'll be more data input into the statistics fair enough okay if the placebo effect if you take the neutral scenario if the placebo effect is less than we had forecast less than the experts less than all real world evidence suggested which we have no reason to expect it is but if that's the case we'll still have the sufficient number of events to show the treatment or the effect of our drug and the benefit of it okay that absolutely makes Let's stay right here for one more point here, because I think most important for investors to understand is that the data remain blinded. So you don't know whether the lower recurrence rate is coming from CardioRx quite yet. Tell me, how far into this next test are you? And, you know, when do you see those data results coming out from this next one? well so our guidance is instead of completing enrollment at the 110 mark yeah we've now moved that to the end of the year to hit the 150 okay we've used the terminology up to 150 so we will enroll up to 250 patients we anticipate that by the end of the which shifts the original timeline by a quarter into the future okay so our original guidance was end of Q3 to complete enrollment, end of Q1 for top line data. Now we have end of year for completion of enrollment with the extra patients and mid-2027 for the top line readout. And I think that is a very important distinction that you're making is finding, letting the investors know too, your timeline on where things are going, where you're sitting now and that you are staying on target and I think sometimes the market goes, oh my goodness, we don't know what's going on and you know they panic a little bit so it's great that you've come back and you've said let's readdress this let's clarify where we're at and you're on target for sure and it was critically important to demonstrate to the market that we could reach the original enrollment target on schedule if not ahead of schedule which it was yeah and this is not the first time this company's we did it in another trial a global study in acute myocarditis where our drug was the first to show a structural improvement in this life-threatening condition that takes young, healthy lives, people under the age of 35 unnecessarily. We enrolled that trial in very complex geographies around the world ahead of schedule. One of the toughest cardiac trials to enroll, we enrolled that trail ahead of scheduled. And that's about the similar size to that of Maverick. That trial was 109 patients, Mavericks 110. So we've now shown twice that we can enroll programs either on schedule or ahead of schedule. We had to demonstrate that so that when we said we're going to bring another 40 patients in, you'll have confidence that we'll do that on schedule as well. Okay. Now I know that in this space, there is some controversial topics that have come up and I want to really address that with you on what's happening in the space and there's a lot of you know talk around suppressants and things like that but that's not really what you do at all actually so let's clarify and clear the air on what happening in that space right now and how it's actually you know giving you guys a bit of a boost as well let's let's start there there there has been substantial news in the cardiac space recently with Novo Nordisk, I believe the second largest pharmaceutical company in the world, was doing a trial in thousands of patients with coronary disease and also thousands of patients with heart failure. They were studying an immune suppressant, which is an anti-IL-6 drug, which suppresses the immune system with a view to modulating inflammation and improving outcomes in these patient populations. Those trials were stopped. One was stopped because of no observed effect, and the other was stopped for reasons, I believe, increased risks of infections, which is not surprising, because when you suppress the immune system, you shut down surveillance, you make patients more prone to infection. But this in no way has dissuaded the pharmaceutical industry from targeting inflammation in cardiac disease. And if anything, for cardiol, this has, I believe, put a spotlight on the opportunity cardiol offers because we're a non-immune suppressant. We're potentially disease modifying. So we're addressing cardiac inflammation in a different way with a different drug in a certain population where inflammation is known to be the culprit in the case of recurrent pericarditis, as well as heart failure, which is our next generation drug. And if anything, I think this is going to increase the pharmaceuticals' interest and attention in non-immune suppressing strategies for heart disease. And that's exactly where cardio fits in. Absolutely. That's very, very important to note that you aren't just doing a band-aid solution here you are legitimately going to the root cause and taking that root cause to fix the problem here not just a bandage solution um so across the board my gosh i'm so impressed by your story for sure what's next i mean you're going to do this trial you're gonna get your daddy and all of those things what's so what's next is one of the greatest medical challenges uh facing medicine today which is heart failure Yeah. So heart failure, a leading cause of death, one of the, if not the leading cause of hospital admission or readmission, a five-year prognosis for a diagnosis of heart failure is over 50% mortality rate, which puts it in line with many advanced forms of cancer. Yet for reasons not fully understood, it doesn't strike the same emotional chord, but it has similar mortality rates, similar morbidity rates, and certainly impacts quality of life. My gosh. Inflammation is the culprit in that. Our lead small molecule drug in pericarditis is an oral form. We also have a once-monthly version of that that'll be delivered subcutaneously. We have ambitions to develop that for heart failure. We believe that drug is really the crown jewel of cardio. It's not well appreciated. That will go into clinical development in 2027. Right around the time that we are announcing the top-line data from our phase three trial, which with which subject outcomes, we certainly hope they'll show the definitive impact of the lead drug on inflammation. We'll have then a more efficient way to deliver it in a market that is an order of magnitude larger in opportunity. And I think that will be the catalyst for strategics to approach cardio for joint development to address this epidemic of our failure. Absolutely. Okay, so we're going to sit down here one year from now. What do you want the headline to be that we're talking about? The one headline. I'm not so great with headlines, but I would say if one year from now we have shown that our drug can improve the lives of patients with pericarditis and these thousands and thousands of patients that either have to go on toxic steroids or immune suppressants that increase infection risk in their prime of life when they'd rather just take a drug for one to two years, modify the disease, and then get back to the life they used to have, if we can deliver that drug, we'll be thrilled. And in the same context, showing that in this poorly served population also garners attention on a next stage asset that we have for the epidemic of heart failure, which is driven by the three forces of diabetes, high blood pressure and obesity throughout the developed world. And there's no change in those factors contributing. That will be a big win for society and for our company and certainly for our shareholders. Well, I think that we just scratched the surface of a much larger a larger iceberg and i am so grateful that we got a chance to sit down really clear the air on a lot of misunderstandings and and really get clear on your goals where you're at where your targets are and moving forward so i'm looking forward to sitting down with you for many more updates to come that's great thanks for having me today absolutely again that was david elsley president and ceo of cardiotherapeutics trading on the nasdaq as well as the tsx under the ticker symbol CRDL. A company working to change the way inflammatory heart disease is treated with Cardio RX, now in a pivotal phase 3 trial that could determine whether that science translates into a meaningful new treatment option for patients living with recurrent periocarditis. And that's what I'm going to leave you with. In biotech, the market often wants the answer before science is ready to give it. Right now, Cardio doesn't have that answer. The trial is still blinded. What it does have is a larger patient population, more opportunity to capture the recurrence events the study was designed to measure, and a very clear question waiting at the other end of that process. When that blind finally comes off, will the data give investors a reason to get in or a reason to stay on the sidelines that's the question i'm your host lindsey melchik this has been your market front lines stay tuned stay subscribed and we'll see you back here very soon