FEWER EPISODES OF RECURRENCE, SO WHY EXPAND THIS HEART DRUG TRIAL? | DAVID ELSLEY - CARDIOL - CARDIOL THERAPEUTICS INC

Good afternoon, everyone. Today, we're taking a break from mining and chatting with biotech. I'm joined with David Elsley, president and CEO of Cardiol Therapeutics. CardiOL is developing CardiL-RX, an oral anti-inflammatory therapy for heart disease. And the big news is that their pivotal phase three Maverick trial in recurrent pericarditis has hit its enrollment target ahead of schedule. In today's interview, we discuss why they were recommended to expand the trial, what the road to FDA approval looks like, and what investors should be watching over the next 12 months. All right, everyone, enjoy the show. David, it's nice to see you again. Nice to see You, Steve. Thanks for having us back. So the big news for Cardio in recent weeks is your phase three Maverick trials reaching their enrollment target ahead of schedule. What does this mean for the study? So the news we just announced, we believe, is a landmark development in the trial. We've reached our original enrollment target ahead of schedule. But more importantly, we announced a very important extension to the enrollment of the study where we're adding additional patients because of an interesting observation in the trial where the event rate is not as high as we had originally anticipated. So what this study is designed to do is study the impact of our drug on preventing the return of disease or the return of this illness, recurrent pericarditis, which really destroys quality of life in people in their prime of life, causing severe chest pain, shortness of breath, chest heaviness. The design of the trial is to definitively assess the ability of our drugs to prevent that symptomatology from returning and impacting the quality of life of these patients, and the number of events we're observing in the study is lower than we anticipated for reasons that could be explained by the drug working better than we originally anticipated. The study is still blind. We can't assure you of that, but given that there's been no change in the observation of the event rate observed in the typical placebo population that we use to power the study, that's really the only real explanation we can come up with. And so for those reasons, we're broadening the study to strengthen the statistical power to ensure that we don't miss a treatment effect. But if we're already observing one, that is just going to make the statistics ever more powerful from this trial. Can you speak to the evidence supporting CardioRx's mechanism of action and its potential for the treatment of inflammatory heart disease? Yes. Over the past several years, we've developed an extensive body of evidence through experimental systems, as well as throughout our global clinical program, showing the unique ability of the small molecule we're developing both in an oral formulation, as well as a subcutaneous formulation, importantly, to protect cardiac tissue, to insulate the heart against multiple insults, including the immune insults secondary to viral infection or viral infiltration into cardiac tissue. Importantly, we showed that in the Global Archer Trial, which is now really a landmark study in acute myocarditis, one of the largest studies ever conducted by an organization in the past several decades where our drug was shown to be what we believe the first ever to impact cardiac structure and reduce LV mass, similar to that of many blockbuster drugs utilized in obesity, heart failure, and diabetes. And then we went on to show also in recurrent pericarditis in a phase two trial, which is now published in the Journal of the American Heart Association, that we can impact the key symptoms, lower C-reactive protein or inflammatory levels, and importantly, substantially reduce the recurrence rates or the rate at which the disease and the symptoms return in recurrent pericarditis. And that is what has led us now to our pivotal phase three Maverick trial that we've just announced has met its enrollment target ahead of schedule and has this very important encouraging observation where it appears that the event rate is more modest than we anticipated. And our really only explanation we can come up with is perhaps it is a signal the drug is working better than even we had anticipated. Okay. So Novo Nordisk recently released some results from clinical trials focused on heart failure. Do Novo's results have any relevance to Maverick? I think the real relevance of the Novo Nordisk outcome, which is unfortunate, is that they used an immune suppressing strategy to block a single mechanism called interleukin-6 in both the coronary disease patients and they also looked at it in a heart failure population. Both trials were stopped. Perhaps that's because these conditions are multifactorial. They're complex phenomena, and blocking just a single mechanism does not lead to benefit. They are also using an immune-suppressing strategy, and one of the concerns and observations in the trial was increased infection rates, which is also concerning. we've been saying now for years that we believe a non-immune suppressing disease modifying strategy with a multifactorial mechanism is the better approach to these complex syndromes because if you think about heart failure 50 percent of heart failure patients die of pneumonia so if you add an immune suppressing strategy to that treatment armamentarium you can lower immune surveillance even further and that can lead to poor outcomes because you can exacerbate those infections by blocking the immune system. That may have been what's just observed. It will be some months to fully understand the Zeus trial and the Hermes trial, both of which have been stopped, both that would have yet to be presented and fully published on. I think there'll be a lot to learn from that. If anything, it has cleared the landscape, the competitive landscape for a non-immune suppressing disease modifying strategy that modulates inflammation and heart disease. That's what Cardiol has. That's our lead drug in pivotal phase three trial is designed to show. And we also have a sub-Q once monthly version of that that we plan to develop in heart failure. So I think 2027 is going to be this very important inflection year where we will have definitive evidence from a pivotal phase 3 trial. We'll be entering clinical development with our sub-q and we'll have a pharmaceutical sector never more eager to partner with a therapeutic strategy to fill the voids in their pipelines. Can you walk me through the FDA trial process? You're currently at phase three with Maverick, provided there are some positive results. What happens from here? So the pivotal phase three Mavericks trial is designed to support a new drug application, which we will pursue in earnest, subject to the outcomes of the Maveritt trial, which мы anticipate midway through 2027. we believe subject outcomes of that trial we will have a new drug application pursued expeditiously we do have the orphan drug designation in place that could make our drug eligible for a more fast track regulatory approval cycle because this patient population is has is a very high need population right now for those that don't respond to mild first-line therapy or are intolerant to it, they really only have two options, either steroids, which have toxicity with increasing dose, severe toxicity and resistance issues, or they have the hard-hitting biologics, which we've been discussing in our interaction today. The challenge with them is they're immune suppressing. They have to be injected regularly. They're prohibitively expensive. And once you start on them, it's very difficult to discontinue use because there is a dependency that forms such that without the drug, your disease will relapse in a rate of 75 to 80 percent within three months. So that's the opportunity for a new non-immune suppressing drug that can intervene after the more mild therapies are trialed. And that is a drug that would be addressable to tens of thousands of patients that don't have good treatment options when they don't respond to first-line therapies. When is the trial expected to be concluded? The Maverick trial, we anticipate completing enrollment by the end of this year, and that'll set us up for a top-line readout midway through 2027. So how soon is it before CardioLRx could potentially reach patients? It's premature to discuss that. We just guide the patient community, the cardiology community, and our shareholders to anticipate that we will pursue the fastest path to regulatory clearance possible because our mission, first and foremost, is to bring this drug to market, to give improved quality of life and accessibility to a much-needed medicine for thousands of patients who we believe are underserved today. Okay, so we've talked about this before, but there seems to be a disconnect between Cardio's progress and how the market views it. What is the market not fully appreciating here? We believe there's really substantive confusion between, as you mentioned, Steve, the readout of zeus so the nova nordis trial zeus and hermes both of which were stopped there's a misconception perhaps that the inflammatory thesis is no longer the therapeutic target where it's never been uh there's never Been a stronger rationale to target inflammation in cardiac disease so the it's really there's no debate as to the role of inflammation in the development and progression of heart disease, the strategy Novo Nordisk pursued appears not to have been the correct one. But that story may still have unanswered questions about it because the data, importantly, has not been fully published on, has now been discussed in scientific forms. And I think there's still more information to flow from that, which could immediately change the opinions currently surrounding that, but in the interim, there's been this sort of collateral impact across the cardiac inflammation strategies, and in my view, has created a buying opportunity across the inflammatory cardiac landscape of the likes I've never seen before in my 30-year biotech career. I have never seen an opportunity of this magnitude with these companies all being assumed to be not targeting the right pathway in cardiac inflammation, where I think in the very near future, that'll be turned around. So Cardiol recently brought in $7 million from warrant exercises. When are you now funded through to? We're funded well beyond the top line readout of the pivotal phase three trial with a cash runway extending into Q1 of 2028 in anticipation of our phase three trial, reading out midway through 27, nine months in advance of that. Furthermore, commensurate with that readout, we believe will be the entry into clinical development of our next stage subcutaneous asset targeting heart failure, which is arguably one of the largest medical markets in the world today and one of thee most underserved with heart failure patients having a five-year mortality rate of greater than 50 percent all right well david thanks very much for hopping on here i appreciate the update congratulations on the good news and let's do this again soon that's great thanks for having me back steve all right everybody thank you for watching if you enjoyed this interview do me a favor smash that like button subscribe and ring that notification bell and guys if there's stories you want us to cover or guests you want to have on here let us know in the comments section but also if there's stocks you want my thoughts on i'm doing a weekly mail bag let me know what those stocks are and i'll try to include them in my mail bag all right everybody i'll see y'all tomorrow