Guggenheim 3rd Annual Healthcare Innovation Conference - SPRUCE BIOSCIENCES INC

Financial Performance:

• No specific Q3 revenue, net earnings, or cash flow figures disclosed as the company is pre-commercial and focused on development.
• Projected near-term revenue potential estimated between $20–$30 million in the first two years post-launch, specifically allocated to milestone payments owed to partner Biomarin.
• Anticipates monetizing a Pediatric Rare Disease Priority Review Voucher (PRV) upon approval to fund US commercialization; the full value of the voucher remains with Spruce Biosciences, not Biomarin.
• Financial obligations to Biomarin include tiered sales-based milestones totaling approximately $130 million globally and ongoing royalties on net sales.

Guidance and Future Outlook:

• BLA Timeline: Plans to submit the Biologics License Application (BLA) to the FDA in December 2024; anticipates BLA acceptance in February 2025 and potential approval around August/September 2025.
• Commercial Launch: Aims to begin commercialization in the US by late 2025; European commercialization strategy (including CHMP/PIP engagement) is being revamped in Q4 2024.
• Regulatory Strategy: The confirmatory registration trial is already underway at the time of BLA submission to satisfy FDA requirements for accelerated/full approval pathways.
• Long-term Goal: Secure full approval for tralcinase alpha in MPS3B, potentially matching the precedent set by the recent FDA approval of Favyvi for MPS3A.

Business Segments and Product Lines:

• Lead Asset: Tralcinase alpha, an ultra-rare disease enzyme replacement therapy (ERT) for Mucopolysaccharidosis Type 3B (MPS3B).
• Mechanism: Unique construct utilizing a fission protein tagged with truncated IGF-2 to enable neuronal and lysosomal penetration; delivered intrathecally via a port/reservoir weekly or bi-weekly.
• Manufacturing Status: Completed the first Process Performance Qualification (PPQ) run for drug substance (DS); second PPQ run (including drug product/DP) to be completed by year-end and included in the BLA.
• Supply Chain: Drug product manufacturing site transitioned from Vetter (Germany) to Samsung Biologics (South Korea) and is currently undergoing qualification.
• Pipeline Data: Upcoming data presentation in February (San Diego) on novel biomarkers (NFL, GM2, GM3) and cognitive/structural imaging results.

Market and Competitive Landscape:

• Target Population: Estimated ~450 diagnosed patients in the US with MPS3B derived from claims database analysis; total global prevalence estimates range from 250 to 2,000 patients depending on incidence rates (0.5 to 4 per 100,000 live births).
• Patient Access: Patients are concentrated at ~15 NORD-approved Lysosomal Storage Disease centers of excellence; commercial strategy involves focused sales force and Medical Science Liaisons (MSLs) targeting these centers.
• Competitive Context: No other product is currently approved for MPS3B; primary comparables include Denali's Favyvi (MPS3A) and Avalaya (MPS2), which utilized similar biomarker pathways.
• Market Trends: High demand for life-transforming therapies; parents express willingness to treat patients even at advanced disease stages to halt progression.

Risks and Challenges:

• Regulatory Risk: While the pathway is clear, final FDA acceptance of the primary biomarker endpoint (heparan sulfate) as a reasonable surrogate for clinical benefit remains a review issue.
• Disease Heterogeneity: Variability in patient age, diagnosis stage, and disease progression speed presents challenges for clinical trial design and statistical modeling.
• Pricing & Access: Balancing high pricing commensurate with rare disease value (potential $1M–$4M range) against the need for patient access and reimbursement.
• Manufacturing Risk: Need to successfully qualify the new manufacturing site (Samsung Biologics) and maintain a 4+ year shelf life for the drug substance.
• European Expansion: Commercialization in Europe faces increasing regulatory and reimbursement difficulties.

Management Commentary and Tone:

• Tone: Highly confident and optimistic; CEO Javier Schwarzberg describes the data package as "ultra-rare," "incredibly profound," and "compelling."
• Regulatory Confidence: Management believes the FDA is "compelled" by the data and does not anticipate a need for an Advisory Committee (ADCOM) meeting.
• Strategic Clarity: Emphasizes strong alignment with the FDA on trial design, biomarkers, and manufacturing, describing the story as "tight" and "de-risked."

Analyst Questions and Answers:

• PPQ Timing: Clarified that the second PPQ run will be included in the BLA submission, with the first run (drug substance) already qualified.
• Biomarker Precedent: Confirmed that heparan sulfate has FDA precedent as a "reasonably likely to predict clinical benefit" endpoint, citing the Xeris/Biomarin pathway.
• Natural History Data: Highlighted the advantage of running an internal natural history study rather than relying on external controls, allowing for robust propensity score matching to address baseline imbalances.
• PRV Ownership: Confirmed Spruce retains the Priority Review Voucher proceeds to fund US commercialization.
• Pricing Strategy: Discussed a fixed-dose, bi-weekly regimen as a cost-advantage over weight-based competitors, with pricing expected to fall between $1M and $4M annually.
• ADCOM Requirement: Management stated the FDA has not signaled a need for an external advisory committee review.

Other Key Points:

• Expanded Access: An expanded access program is currently active to allow patient access prior to commercial launch.
• Stakeholder Engagement: Strong partnerships with patient groups and caregivers have been leveraged for educational efforts and community building.
• Data Reveal: Additional biomarker data (NFL, GM2, GM3) will be presented at the World Meeting in San Diego in February.