GUGGENHEIM 3RD ANNUAL HEALTHCARE INNOVATION CONFERENCE - SPRUCE BIOSCIENCES INC

Financial Performance:

• Specific revenue, earnings, or cash flow figures for the quarter were not disclosed in this specific dialogue; focus is on the anticipated monetization of a Pediatric Review Voucher (PRV) upon approval.
• PRV proceeds will be retained by Spruce Biosciences to fund U.S. commercialization; a fraction of the voucher value may go to Biomarin.
• Financial obligations to Biomarin include tiered milestone payments (estimated $20–$30 million over the first two years post-approval) and global net sales royalties totaling approximately $130 million.
• The drug utilizes a fixed-dose regimen rather than a weight-based model, contrasting with competitors like Fayuvi (weight-based) and aiming for pricing sensitivity to ensure patient access while commensurate with disease severity.

Guidance and Future Outlook:

• BLA submission to the FDA is scheduled for December 2024.
• Expected FDA acceptance of the BLA in February 2025, with a target approval date in late August or early September 2025.
• Second Process Performance Qualification (PPQ) run for the drug product will be completed by year-end and submitted during the regulatory review cycle, not with the initial BLA filing.
• A confirmatory registration trial is already underway to support potential full approval under the Accelerated Approval pathway; recruitment does not need to be complete at launch.
• European commercialization plans are being revitalized in Q4 2024 via local distributors, partners, or name-patient programs.
• Additional biomarker data (NFL, GM2, GM3) and expanded clinical analyses will be presented at a World Meeting in February 2025.

Business Segments and Product Lines:

• Core focus is on Spruce Biosciences, an ultra-rare disease company targeting pediatric neurology.
• Lead asset: Talcirase alpha, an enzyme replacement therapy for Mucopolysaccharidosis Type III B (MPS III B).
• Product differentiation includes a unique construct with a truncated IGF-2 for neuronal/lysosomal penetration and CSF delivery via a port/myo-reservoir on a weekly or every-other-week schedule.
• Manufacturing has shifted from Germany to Samsung Biologics (South Korea) for the drug product, requiring qualification via the second PPQ run.
• Expanded access program is active to allow patient access prior to commercial launch.

Market and Competitive Landscape:

• Market size estimates for MPS III B range from 250 to 2,000 patients based on incidence; preliminary claims database analysis suggests ~450 diagnosed patients in the U.S.
• Patients are concentrated within ~15 NORD-approved lysosomal storage disease centers of excellence, with 5 specifically dedicated to MPS.
• Direct competitors include Denali's Fayuvi (approved for MPS III A, gene therapy, ~$4M price point) and other MPS III A therapies.
• The FDA has accepted heparan sulfate as a reasonably likely surrogate endpoint, aligning with precedents set by Xeris (Eloctate) and the recent approval of Fayuvi.
• Unique market opportunity to treat older patients to halt disease progression, appealing to caregivers seeking stability even in advanced disease stages.

Risks and Challenges:

• Regulatory risk remains that the FDA could debate functional measures or baseline imbalances in the dataset, despite modeling and propensity score matching efforts.
• Pricing risk exists if the final price point limits patient access or reimbursement approval, particularly given the ultra-rare nature and high cost of similar therapies.
• European market entry faces increasing complexity regarding pricing and market access.
• Disease heterogeneity complicates clinical trial interpretation and natural history comparisons.
• Manufacturing qualification changes (drug product) present execution risks prior to BLA submission.

Management Commentary and Tone:

• Management expresses high confidence ("tight story," "incredibly compelling") in the regulatory pathway and the clinical package.
• CEO Javier Schwarzberg emphasizes strong alignment with the FDA, citing successful pre-BLA meetings and a clear framework for the BLA.
• Tone is optimistic regarding the likelihood of a standard approval without an Advisory Committee (ACOM) meeting, though not guaranteed.
• Management highlights the robustness of their internal natural history study compared to external control arms used by other rare disease companies.

Analyst Questions and Answers:

• Q: PPQ status and inclusion in BLA? A: First PPQ included in BLA; second PPQ (drug product at new site) included during review.
• Q: Regulatory de-risking regarding biomarkers? A: Biomarker provides a clear pathway but is subject to review; clinical data on cognition and adaptive behavior supports the package.
• Q: Confirmatory trial requirements? A: Trial must be underway at BLA submission; FDA agreed not to wait for full recruitment.
• Q: Market size and patient identification? A: ~450 diagnosed patients in the U.S. via claims data; concentration in centers of excellence.
• Q: Pricing strategy? A: Fixed dose vs. competitor weight-based; pricing will aim for accessibility but remain commensurate with value, potentially between $1M and $4M range.
• Q: PRV ownership? A: Spruce retains the PRV for monetization to fund U.S. commercialization.
• Q: Need for an ACOM? A: FDA has not signaled a requirement; management does not anticipate one based on the strength of the data.

Other Key Points:

• The BLA submission will include raw data and model data addressing baseline imbalances through conservative statistical approaches.
• Expanded access is being utilized to serve different patient groups while the confirmatory trial proceeds.
• Management notes that parent/caregiver willingness to treat older patients creates a larger addressable market than previously anticipated.
• No specific ICD-10 code currently exists for MPS III B, which is expected to be assigned post-therapy approval.