GUGGENHEIM 3RD ANNUAL HEALTHCARE INNOVATION CONFERENCE - REZOLUTE INC

All right, good morning, and thank you for joining Guggenheim's third annual Healthcare Innovations Conference. I am Deb Chitt, and joining us today are Nevin Elam, founder and CEO of Resolute, and Sunil Karnavat, its chief commercial officer. Thank you, and good morning both of you. Nevin, let me start it off with you. If there are new folks to the story, could you give a real brief introduction, and then we'll kick it off? Sure. Happy to do so, Devjit. Thanks again for having us. I think the brief introduction to our story is that we are a late-stage ultra-rare disease company in the metabolic space focused on treating refractory hypoglycemia associated with hyperinsulinism. And in that space, we have two programs, one for congenital hyperinsulism and the other for tumor-associated hyperinsulanism. Our therapy is a fully human monoclonal antibody that is designed as the first therapy to treat all forms of hyperinsulinism. So while we're focused initially on tumor and on congenital forms of hypersensitivism, we believe that our antibody is effective across the range and spectrum of all forms of refractory hypoglycemia associated with hyperinsulism, and that includes things like post-surgery, GI surgery, and really happy and excited that we've completed phase three for the congenital indication, and that we are now on the cusp of actually announcing top-line results for phase three for the tumor indication. Well, thank you for that, and since we have Dr. K on the stage, I'm going to get to the commercial side a little later, but let's talk about the two sort of regulatory questions that we field all the time. Number one being, do you think uplift a single arm open label study would be sufficient for the FDA to approve on the THI indication? Absolutely. The short answer is, and I think this is goes speaks volumes to, we can talk a lot about the FDA and talk a lot about public health and talk about rare disease. For the tumor indication to level set for everyone, especially those who are new to the story, we're talking about often patients who are suffering with malignant tumors and who have entered and exited the hospital multiple times because of their hypoglycemia, because their tumor is overstimulating the insulin receptor and their hypoglycemia prevents their ability to take radioactive label therapies like Lutathera. They've been either surgery eligible or non-surgery eligible and unfortunately as their hypoglycemia progresses it can often lead to a state where nothing can be done for weeks or months other than an IV glucose drip and then eventually hospice. So what we've seen, as we've been treating patients now for three years through our expanded access program, is we have worked with the FDA because every single time an investigator, whether they're in Florida, New York, or in Oregon, they have to ask the FDA for permission to get our drug, and then we provide the drug. And every single day, we've had a single time we've seeing a profound change in outcomes for these individuals' lives. The FDA been witness to that as well. So if we just back up 14 months ago the FDA changed our phase three study design in concert with us of course to streamline it so that we could have a very simple study to have a single arm open label to expedite the actual regulatory pathway because if as long as we can replicate what we've all seen in the real world then this drug should be approved. And the FDA has been very clear about the need, the unmet need, which we all know. No one wants to see someone who is suffering with cancer have to have hypoglycemia of this state and then pass away. So the question is, is it approvable with a single arm study? Absolutely, because that's exactly what the FDA wants because of this massive unmet need. On the CHI topic, FDA is sort of aligned with you guys asking now for a pre-BLA meeting. Could you provide some more insights into what happened behind the scenes over there? And why did you choose to wait for the uplift study before scheduling that meeting, which I think is going to happen early next year? Happy to do so. So on the congenital side, to bring back some hard memories for you, Devjit, and for all them. You know, a year ago we were very surprised with a placebo response that we saw in our Sunrise study in Phase 3, which was completely a confounder. Fortunately, the FDA agreed with us last March. They recognized that our primary endpoint, which, was finger stick, so self-monitored blood glucose, that that endpoint itself was a confounding and that human behavior from parents and caregivers can significantly influence what study results may look like. And fortunately, the FDA said, we hear you, we understand, can you provide us the CGM data? So with those snapshots every couple of minutes, 24 hours a day, that detailed data was very, when you mine that data, it's very compelling, we believe, what you see, which is a 50 to 75% difference at worst case scenario between placebo and each of the treatment arms. So we provided 500 tables, all of the raw data to the agency over the summer, they review that data and then about a month ago they came back and said, we understand, we're not telling you that drugs are provable, but what we are telling you is you should move forward with your BLA process. And that is, we believe, very compelling, because we believe that the agency recognizes that one, the unmet need in this patient population, like tumor, is massive for the children and their families. And two, we belief they see what we see, which is there's clearly signs of, strong signs of efficacy. And we all know the history of the drug. We've been treating children now for more than, again, three years. Some children have been on their maintenance dose every month now for an extended period of time. out of the Sunrise study where we have open label extension for some of the children that's been several years they take their monthly maintenance dose some of the children are completely managing their hypoglycemia purely by using our drug or so so all of that body of evidence and this is where we get to the point of responsible drug development and when a sponsor and the agency work together and I think we're seeing movement now within FDA recognizing this rare disease, where when the evidence gives you an indication of what the path forward should be, we should take it. And this is a perfect example of being able to do that. So we're very emboldened, very embolden now to be prepared to file a BLA next year for congenital. And the latter part of your question of why would we wait to request the meeting is that this is an unusual setup. you know, I've been doing this for 30 plus years and I haven't quite ever had a fact pattern like this, where planning for success, if our tumor study is successful and we walk in to the agency and want to discuss the path forward from the regulatory landscape, what do we do for both indications? Clearly it will be supportive on the tumor side all the way around in terms of mechanistic understanding of the drug. We want to file and get the congenital indication approved first. We went to PRV but also it's in the public interest not to delay the approvability for the tumor indication. So we think it's going to be a really rich conversation with the agency the first part of next year. Will you choose to wait for the minutes before you disclose the outcome of the meeting or if it is completely unambiguous you'll have a disclosure relatively soon well I think since it's football season what I'd say is it will be a game time decision in terms of depending upon the outcome of the meeting and I we've always viewed it that way sometimes as you know by our history in the last couple years it's very clear when the agency told us get rid of the placebo arm in your tumor study we didn't wait for minutes we announced similarly we didn't wait earlier this year when we met with the agency and they said guys we recognize that there is an issue with a placebo effect we announced so we'll see I can't tell you today got it and one last question on the uplift study as of now you have seven out of eight who have responded you need two more very unlikely uplift is not going to work but what's the best case that you want to take to the FDA 56 percent or you know as close to 100 percent as possible. Well I think it's really interesting to note that the agency agreed with us to really lower the bar from what we saw and what we've all observed in our EAP where we treated more than a dozen patients in the U.S. and in Europe and over those last few years the pretty remarkable change that patients have experienced and their ability to get out of the hospital to control their hypoglycemia, to get back on their cancer therapies, and to resume normal life activities. So our objective is to make sure that we at least hit the endpoint, which is 50% of patients need to have a 50% reduction in glucose infusion requirements. But of course, we would expect and hope that we can do better. But that's the endpoint. Now, I think to the extent we do better than that, and the results actually match what we've seen in the EAP, I think that'll be very powerful. And I think it very much underscores what we like to call internally the sledgehammer effect of ERSO being able to knock down refractory hypoglycemia. So we have to hit the end point, first and foremost. Beyond that, I thinks it's all upside. Got it. So, Sunil, you've been with Resolute for about a year and a half at this point. Yep. obviously you have had time to think about what the true epi looks like both for THI and CHI maybe we can start talking about what that number looks like for you guys assuming you know ERSO is broadly approved next year yeah sure thanks for the question so I'll start with CHI first in terms of CHI when we looked at the claims analysis we think that definitely there are 1500 pediatric patients available right now that are disoxide non-responsive but we also think that the patient that are actually responding to diazoxide at least 40% should have a repeated hypoglycemia and we think most of those patients will migrate to a surrogate upon launch so right now we are thinking for congenital the total address will market will be about 2,000 patients for that indication then let's talk about the THR numbers and then I I can get back into- Yeah, so for TH I'll break it down between the two indications, insulinoma and NICTH. So we did the same work for insulinoma. We looked at the claims database and we made sure that we are picking the patients that are having the specific ICD-10 core C25-4, repeated hypoglycemia, hospitalization, emergency visit, as well as treated with a disoxide and SSAs. When we looked at the data, what we find is that currently in the marketplace, there are about 2,500 patients that are having a repeated hypoglycemia, refractory hypoglysemia, along with the hospitalization. So we think the TAM for insulinoma is about 2.500 patients in the market, if we sort of launch today. And then for NICTH, we went to the similar exercise. Now, for NICH, there is no specific code. So we looked the 16 tumor. types that typically throw this IGF-2. And we looked at the hypoglycemia. And as you know, that there is no treatment for this patient. Dioxide doesn't work here. So we looked at the steroids hospitalization. And we think there is about 1,500 patients in the market this right now as a prevalent population for NICTH. So if you sum it up, about 4,000 for tumor indication, addressable market, and about 2,000 for congenital. about 6,000 total population for both the indications. So let's start on the tumor side. What are your assumptions right now for durability of our duration of treatment? Yeah, so I think this is the one that we are assuming based on our EAP experience that some patients are actually on the program for more than two years. So insulinoma, we think that could have a little bit of a longer duration than NICTH. And the assumption is really based on the EAP Because in the real world, we really don't know how that looks in the claims database. We can only go with what we know from EAP experience. So if you can unpack that from a durability of treatment, one of the pushbacks that we've sort of heard on this is, well, it's taken a fairly long time for the uplift study to enroll. How many patients are truly available for therapy? In the real word, will this go in earlier? And if it goes in earlier, what do you think about pricing? So maybe I'll take the first part of that, if I can, Dr. K. A clinical study is a clinical study, and that's not reflective, especially in ultra-rare disease, of what a patient population. I think our Sunrise experience is very informative of needing to be careful. Even when you're extremely careful, you can still have confounders. In the Rise study, I'm sorry, in the Uplift study for a tumor, we wanted to make sure we enrolled the right patient population to really reflect the efficacy of the drug. But in any ultra-rare disease where you're studying less than 100 patients, that doesn't necessarily reflect what the overall patient population is, clearly. And I think the work that Sunil and his team have done is fantastic because it's so much deeper. And this is something we couldn't do 20, 30, 40 years ago. With machine learning, our ability to actually penetrate and understand down to the physician and where they are in Minnesota, in Iowa, in San Diego, And the number of patients that they're specifically seeing that meet our validated ideal patient, for example, for insulinoma, that we can now do. And so it's very, very powerful. We just met with a variety of physicians who treat these individuals last week. And they're all recognizing the unmet need and the numberof patients that are out there. So this is just typical rare disease, not reflective. With respect to pricing, I'll let you comment on that. Yeah, I mean, I think it's ultra-rare disease pricing. And as you know, this is going to be a weight-based indication. So naturally, as we price for qi, you are going to see the reflection for the tumor, given that the tumor population is at least two to three times of the weight of the qi population. Qi, 1,500 patients. Tumor, 4,000 patients. It's a super ultra- rare disease. If you look at the impact on the payer's budget, it's going to minimal. You're going to have one or two patients per payer. So we should be able to get the ultra-rare pricing for both tumor as well as for qi. And again, it is going to be a linear scale from qi to tumor. So when you add that all up, just to sum it up, we believe that our total adjustable market opportunity is well north of $5 billion. So that has, it's a very compelling, we think, market opportunity. Are there examples that you can use in the tumor setting which would support call it a high 100,000, hundreds of thousands price point? Yeah, I launched the product. I've been in this rare disease space for the last almost 10, 15 years. And I was fortunate to launch a product at Ultragenyx called Crisvita, which follows a very similar path as Irsadatug. It started with the pediatric indication for XLH, and then over the time, it got expanded to add tumor indication. As you know, it was a weight-based dosing, very similar to what we have for ISTRA-TUG, and the tumor indication was definitely expensive because it was the linear pricing. I can think of that as an analog where pairs have definitely paid for both the indications. Got it. Now when you sort of alluded to this with machine learning, you can pinpoint exactly where these patients are. So talk about the commercial organization and what do you need to have in place for a successful launch? Yeah, I'll take that one. So it's pretty lean team. You better take that. Yeah. So if we look at the population and where these patients are treated for congenital, it's a very concentrated audience. So about 80-90 pediatric hospitals treat 80 percent of the patients and about 500 pediatric endocrinologists, So we can have a very targeted effort along with the machine learning, the insight we get, we can actually go to the institutions where the patients are. So we think that a commercial team, a small commercial team in the field, 10 to 15 salespeople should be able to get us there. And of course, we'll have the supporting infrastructure to make sure that we have a patient support services, market access team, commercial operations, supporting these patient find activities, as well as getting the patient onto the reimbursed drug. So fairly small commercial team for congenital indication. We may have a separate team for tumor indication given that it is treated by the adult endos versus the pediatric endos. And again, if you look at the insulinoma and NICTH, it's fairly concentrated. Insulinoma, 300 institutions, about 1,000 adult endo's treating about 60% of the patients, same for NICTh. And there is a very strong overlap between the two. As you know, this is a really severe condition, Nevan talked about that. Most of these patients are getting treated either at the academic medical center or at the National Cancer Institute. So it's a very, if you look at the 65 NCIs and 200 academic medical centers, that for congenital it is a fairly concentrated market and so is for tumor. We could have a separate sales team in the field to do the patient find and also the reimbursement support. But again, because these are very concentrated patient population as well as the doctor that we are going to be talking to them. We think that the commercial footprint will be very optimal in the marketplace. And something like as a rare disease company, we can launch the product. Because with the machine learning, we know exactly where the patients are. And we can talk to the HCPs. But the other thing is obviously the BLS submission timelines. Assuming that the FDA green lights the submission in CHI and uplift is positive. Could you walk us through the cadence? Because obviously there's a PRB component associated with one and not the other. So we actually are planning, and this Neil ramps up his organization right now as we're preparing for success. We already know we have a pathway for the congenital indication, to your point. And we are planning to be in a position in the middle of next year to file a BLA. The question is exactly what will that cadence look like between indications? If we take the conservative path, which is probably prudent, we would assume that we would look for a Q1 pedofidate for congenital in 2028, as then nine months or so later, a pedofadate for the tumor indication under an SBLI. So that's a lot for a small company with this massive market opportunity to launch sequentially two indications with the same drug. And it's great. So, Sunil, we have the time now. We're looking at the calendar a little over a year away from potentially being in a position to launch. And as a result, we're ramping up internally and doing everything that a commercial organization needs to do to make sure that our launch is successful. We're also emboldened not just by Sunil's experience. I mean, he's a master of launching drugs and rare disease with his experience in biotech. But we've also seen analogs of small companies in the last couple of years that have done a great job of launching their drugs, which historically we haven't seen if you go back 10 or 15 years. But in the past five years, there have been small companies that have had really successful launches in the rare disease space. So we're going to make sure that we're also following in their footsteps and we'll be prepared. So given the tumor indication is more of an end-of-life situation, why another nine months for that? That's a great question. And we don't know the answer today. It's not until we engage with the agency. Because we know the agency is keenly focused on the tumor indication and it's unmet need I described. So maybe it'll be truncated, but we don' know. We don't' know until we actually have the conversation with the agency. The traditional path is the path that we all know, is one indication gets approved and then you have a supplemental VLA. There are instances within the last 20 years where drugs that have a massive unmet need, they're accelerated in terms of the timeline for an SBLA, but we'll see. Not until we engage with the agency, we just don't know. Got it. And given where your balance sheet is, assuming a positive BLA meeting or pre-BLA meeting next year, where do you think the investment needs to be and how are you positioned for We are positioned, we're fortunate to still, with about $90 million in cash today, be in a very healthy position to operate the company and to grow as we need to. But clearly we're not positioned to launch into indications. So we'll be thoughtful about how we address our balance sheet and our cash needs and to make sure that we're prepared. And I think with our story, I think there will be a significant investor interest in what we're doing. So we're excited. All right, we have exactly a minute left. You talked about a $5 billion potential TAM, but your market cap is sub $500 million. What's the disconnect between the TAM versus what the investor perception is? I think there's several things that probably lead to the disconnect, and I think you're right about the disconnect. there are often dislocations in markets, and in particular in biotech. And we've all seen this over and over again. Where a company's true value is not realized until finally the lights are fully on and everyone can see, and we may be part of that. But I think it's also fair to say that with the placebo effect that we saw in our Sunrise study last year, which was a disappointment, we're still recovering from that. And what you typically don't see is a company that has an event like that coming out of phase three recover in six months or nine months back to where we already are. And the only reason why is, I think, because we all know the drug, we believe, is powerful. And we have two indications. So I think that disconnect will, that gap will close. Appreciate the time. Thank you so much. And looking forward to a productive 2027 at this point. Thanks, Devjit. Appreciate it always. Thank you. Thank you.