Guggenheim 3rd Annual Healthcare Innovation Conference - SPRUCE BIOSCIENCES INC

All right, good morning, and thank you for joining Guggenheim's third Annual Healthcare Innovations Conference. I'm Debjit, and my privilege to welcome Javier Schwarzberg. Did I get that right? Perfectly pronounced. CEO of Spruce Biosciences. Thank you for making time for us, Javier. And I don't think people still appreciate the story as much, so maybe just give us a very quick intro, and then we can dive into the ERT program for MPS. Yeah, we're an ultra-rare disease company focused on pediatric neurology. Our lead acid is tralcinase alpha, which is an enzyme replacement therapy that is very unique in its construct. There's a fission protein that is tagged with a truncated IGF-2 that allows for neuronal and lysosomal penetration. The drug is delivered straight into the CSF through a port and a myo-reservoir weekly or every other week. And the effect sizes that we've seen in the context of patients with MPS3B on the approval endpoint, heparin sulfate, are incredibly profound, and we also have super strong clinical data on efficacy and safety that supports the product. There's no other product being approved for this indication. The field is really clamoring a life-transforming therapy like ours, and we think that, you know, the package that we've put together, which we plan to submit to the FDA in December for BLA review is, you know, meets the regulatory standards for a proper package. We've had a number of interactions with the FDA, including two pre-BLA meetings, one on CMC and one on clinical, whereby we ask 10 questions on CMC, and 10 on clinical to allow us to really discuss with the FTA what to include, the framework, the structure of the BLA. So all in all, from our point of view, a very tight story. We've been partnering with our key stakeholders, like patient groups, engaging with caregivers on educational efforts, obviously with the overall community, and it's been a very nourishing experience and a very strong partnership. Got it. And with your quarterly update, which just came out, the most important update from our side was the second PPQ run, which should be completed by the end of the year. Is that getting rolled into the BLA, or that's going to get submitted after you submit the BLA? So we align with the FDA to include the first PPQ badge, both drug substance and drug product, with the BLE. second PPQ will get included and submitted during review. FDA wanted to see the analytical report for the DS and the DP included prior, submitted to the BLA prior to the mid-cycle meeting and we are well on track to do that. We already completed the drug substance piece of that PPQ, although the drug substance PPQ batches have already been you know qualified and we have over four years of shelf life on the ds it is a dp that's uh that that changed manufacturing sites from veteran germany to samsung biologics in south korea which which need to be qualified got it and um you touched upon the biomarker data which are very very compelling and there is a precedent in the market for approval with the same biomarkers do you think that completely de-risks any FDA or regulatory advance there? Well, I think I wouldn't say completely new risks, but it certainly creates a very clear pathway to approval, and he sets a regulatory precedence to an approval. Each disease, I mean, the FDA defined, when they looked at our biomarker data, And they told us that we have an endpoint that is reasonably likely to predict clinical benefit, but obviously the acceptance of the biomarker as an RLSE becomes a review issue. So I think that the body of evidence in the context of heparin sulfate, the body evidence that supports heparin sulfate non-residual ANTS, which is the biomarker that we're using as a primary endpoint for the approval, the XERA approval. The data is incredibly robust. We've also done, since we've acquired the ACID, a whole body of work to look at endpoints, clinical endpoints that relate to cognition as well as adaptive behavior. Through different questionnaires, We've looked at structural imaging using cortical gray matter volume. Looking at peripheral efficacy, looking at MRI liver and spleen size. And lately, I've measured a number of biomarkers, which we haven't yet made public. We'll be sharing them to the world during the world meeting in February in San Diego. We'll be discussing the impact that we've had on NFL and GM2 and GM3 and other biomarkers at that time, but the whole clinical package is incredibly compelling. So we are proceeding. Our approval is based on the XR approval pathway, and obviously the FDA, just like it happened for Fayuvi, the drug that was recently approved by the FDA for MPS3A, the gene therapy product for multigenics, they received a full approval for it. So we're putting all of our cards on the table and letting the FDA decide. Yeah. And you also have a line with the FDA on what a potential registration study is going to look like. So there are no secrets there. Yeah. I mean, we've aligned with the FTA on the fact that the registration trial, the sorry, the confirmatory trial needed to be underway at the time of the BLA submission, mission, which was a very important piece and a big win on our end, at least from a point of view of not needing the trial to be fully recruited. By the time of launch, we provided to the FDA a very clear plan to operationalize that study and what countries we would go to and how do we get it done to ensure the FDA that we can make it happen. We have initiated that trial, and along with the expanded access program, which kind of covered different patient groups in both serving different purposes. The expanded access primarily to allow patients to access the product between now and hopefully commercial availability, and the confirmatory trial to ensure full approval should our approval be under the A pathway. And do you think the FDA is going to debate any of the functional measures that you've sort of highlighted, especially comparisons with longitudinal studies where there's some potential imbalance between the ages of patients? Yeah, we're presenting our BLA raw data as well as model data. The primary endpoint that we're using for our confirmatory study is the Bayley's cognitive scoring the raw score the subdomain of the Bailey's at measures cognition we've done a whole array of analyses including sub analyses and sensitivity analyses using different ways of analyzing the data the model that we are presented to the FDA we feel is quite robust and takes into account baseline imbalances which are not unexpected especially if one is to compare you know I mean this diseases are very heterogeneous and they tend to capture patients of different stages and different patients have different speed of declines and there's over of course a you know an overall range and we typically report on you through natural history studies, what is the median change and when do patients are typically diagnosed, but there is often variability. So it's not surprising that natural history studies tend to capture patients at different stages. So we've done a number of, have taken a number approaches, the most conservative one being doing propensity score matching and matching patients one-to-one to the treated versus the natural history patients matching primarily on age and on cognitive raw score at baseline, or DQ at baseline. There are ways through modeling to take into account baseline imbalances. What we've done for our breakthrough designation, which has been presented at World last year, was looking at different age bands and comparing the efficacy of the product relative to natural history for kids that were four to five, five to six, six to eight, and so on, and we see a very clear separation at each of the age brackets, starting pretty much around age of five. Modeling makes that analysis, confirms that analysis and enables you to have a p-value. So anyhow, so we're being very sensitive to imbalances, and the beauty about our natural history study, Devjit, is that we actually run it as opposed to using an external control arm, which is often used in the context of rare diseases because companies don't have the ability and, frankly, the cash to run a proper natural history study. Our program was initiated by Biomarin, and that natural history program was completed by the time we acquired the product. Got it. And let's talk about the commercial opportunity here first, both in terms of number of patients and where these patients are housed and what percentage of the market. And do you are fully diagnosed? So when you look at initially as we were trying to map out the commercial opportunity and get our hands around how many patients could be out there we based our initial forecasting on reported natural history studies and thereby defined perhaps through incidence what is likely to be the prevalence and through that analyses we we knew that I mean they typically under-represent the reality and you see that happening in all of the LSD so life-slam storage diseases diseases drug launches in the past but looking purely at had the incidence numbers the numbers are quite wide I mean you know they could be as small as 0.5 per 100,000 live births, and that will give us about 250 patients to as high as four patients per 100,000, which will give as, you know, an 8X to 250, so, you know, around 2,000 patients. We've done recently a bunch of work, which is still preliminary, but looking at claims databases that there's currently no ICD-10 code for MPS3B. You usually get an ICD 10 code once there's a therapy approved. And through that analysis, we've identified about 1,400 patients with MPS III, of which a fraction will be MPS 3B, so probably roughly diagnosed around 450. It's kind of our current idea in the US. And are these patients concentrated in, say, 20, 30 centers? Or how should we think about, you know, where do you need to go before you find these? They tend to be concentrated or they tend to having been seen by a center of excellence at some point during their tenure. So usually the way when you look at the patient flow here in this disease, kids unfortunately start missing developmental milestones and the first one that becomes noticeable is their ability to speak. They don't speak in full sentences, they don't develop their first world words at the speed that it would be expected for a child their age, and they get referred to a neurologist. Hyperactivity is another symptom, inability to sleep at night. They have an incredibly disrupted sleep schedule, which also affects the parents. and they get referred to a neurologist who typically makes a diagnosis and either sees a patient or refers them to a center of excellence. Most of the times they are seen by a center of excellence, they're usually 15 NORD approved lysostomal storage disease center of excellence in the U.S., five of which are MPS centers of excellence so you know by going through the center of excellence databases, we will have more clarity as to the universe of patients in addition to what we're doing with claims analyses. So we think that a very concentrated focus, Salesforce, MSL's team would allow us to tap into the existing patient pool. Got it. And the BLS submission is planned for December. That puts Bidu for roughly around the August timeframe, back end of August, early September, there is obviously a PRV associated with the approval. Does Spruce get to keep the PRV, or does that go to Biomirate? No, Spruce gets to keep PRV. If you look at the cadence, we plan to submit in December, we planned to get accepted if everything goes well in February, and then an approval around the all this timeframe. At that time, with the approval, we would qualify for a peer review voucher, given that we have rare pediatric disease designation, and at that time we will most likely monetize and use those proceeds to fund the commercialization of the asset in the U.S. At the moment, we're looking at different frameworks to commercialize a product in Europe. Europe is becoming more difficult. We are planning on getting an approval in Europe, this program has already initiated and engagement prior to us picking up the acid with the CHMP and the PIP and all that stuff. So we're revamping that initiative starting in Q4 of this year. And we look forward to finding ways, either ourselves through local distributors, partners, or name patient program or namepatient sales in Europe to make the product available globally. Got it. And you sort of mentioned about 450 patients who have probably been identified from the claims database work, right? How many of these could be potentially treated? Because some may be too advanced, right, may not benefit. So how would you break that down? Yeah, it's interesting. I mean, the more we learn about this disease, the more we realize that parents are, frankly, very willing to meet their child or their young adult, depending on, you know, where they are, even if advanced, and very willing to take care of a kid's dad, a young adult that's disabled, and so long the disease wouldn't progress, right? So, the more we talk to those parents and caregivers, we realize that there's a real opportunity to not just treat the kids that are very young, but also maybe kids that are older, where we can hold progression of disease, which is what this drug will likely do. When you look at the biomarker data, you know, our biomarkers data follows pretty much a similar curve that from what you see with avalaya which is a drug that denali um approved got approved for in in march uh for mps2 where there's over time there's improvement in biomarkers which reflects neuronal stability and hopefully stabilization of cognitive and adaptive behavior Got it. Now, with the deal with Biomarin, there are still substantial milestones that Spruce owes to Biomarins and also royalty on net sales. Could you just sort of outline how do you plan to tackle those? Yeah, there's a small fraction of the PRV that they'll get. The payments to Biomerins are small royalty payment and then some payments based on sales that are tiered. Isn't it like $130 million or something from milestones on net sales? Yeah, total. And those are global, depending on their region specific. So it's broken down by three regions. So for the first two years from a net to Biomarin, we were sort of modeling anywhere between $20 to $30 million. Is that reasonable? That's reasonable. Got it. Yeah. And given how rare and uncommon this disease is, where do you think the pricing will finally land up? I mean, our product, the beauty of our product is that it is not weight-based. We have a fixed dose. Our package to the FDA will propose an every-other-week dosing schedule, primarily. The range is actually quite broad. Rare diseases like ours command a pretty high price. Fayuvi's gene therapy for MPS3A was priced close to $4 million. Denali's compound is close to a million, but that's weight-based. So some patients that end up having an adult weight of, say, 80 kilos will probably be commanding a price of $2.8 million per patient per year. So we want to be sensible about how we price the product to ensure that there is proper patient access, but also, you know, charge appropriately in commensurate to the disease state and the severity of illness and the value proposition that we bring to patients and caregivers and families with MPSRB. So, you now, anywhere between that range is kind of where we think we will fall. Got it. And my last question before we wrap here, but with the BLA submission, during your dialogue with the FDA, you know, BLA meetings and stuff, has the concept of ADCOM come up at all? Or this is very clear-cut and it's not a gene therapy that would need an ADCOM? Yeah, we have not discussed with the FDA the requirement of an adcom, nor the FDA has ever signaled that an adcon will be needed for a compound. I really think, I personally feel that the FDA, has seen more and more of our data and they seem more and compelled to our story based on the tenor and nature of the meetings that we've had with them. And I, you know, based on my experience in rare and ultra-rare diseases spanning through Horizon and Ultragenyx and Biomarin, the clinical package, in addition to the biomarker data that we're putting together, is super compelling with a safety profile that is incredibly reasonable for a compound that gets delivered through a port. Got it. Alrighty. Looking forward to the BLS submission and all the good stuff that could happen next year. Thank you so much. Appreciate the time. Thank you for making time for us. Likewise. Thank you.