STIFEL 2026 HEALTHCARE CONFERENCE - AN2 THERAPEUTICS INC

Stephen Willey, one of the senior biotech analysts here at Stiefel. Glad to be joined in the first session of our annual healthcare conference by CEO of AN2 Therapeutics, Eric Giesem. Eric, thank you for joining us today. Any opening statements you want to make before we jump into Q&A? No, I think this is a big year coming up for AN2 therapeutics. We've got a lot of robust pipeline with our pv program and then two other clinical programs with ntm and jagas and then more behind that with hpp and so there's a lot to talk about and a lot of excitement i think in the company and then in the uh you know in the in the world about where we're headed so yeah look forward to it all right yeah i know you have a lot going on there's a lot of things we're expecting in 2027. So let's kind of jump into it. So you've initiated the phase two development program in polycythemia vera with the petroborol. Can you just talk about the clinical observations which drove this decision and some of the work that you've done to understand the mechanism that underlies this hematocrit control that you're seeing in these patients? Yeah, we have a lot of, that's how we ended up in polycythemia of error, PV, we'll say, is that we have lots of observational data across multiple settings. So from preclinical NHP models in volunteers and most recently in non-PV patients over long periods of time with with ntm patients so we saw a you know just a perfect step change a drop in hematocrit red cell specific effect that the that a petroglyph has and it holds steady there's a compensatory effect and then it returns to baseline when you stop therapy so it seems like this perfect um setting so we're you know we we saw that and and realize that hey there's a real opportunity here in terms of having red cell specific for pd patients that's oral and a different mechanism than all the hepcidin agents that are out there so so i think we decided to go forward with this opportunity and see if we could bring something beneficial to patients who have poor control of hematocrit overall less than 50 control on the biggest risk factor that clinicians and patients are trying to control. So that's where we started and where we're at. So we're launching into the phase two now, and it's starting imminently, and we're excited to start getting data in 2027. Okay. Yeah, I know you just received IND clearance from FDA last week. Yeah. You talked about the phase 2 that you're initiating shortly. Can you just speak to the trial design and some of the key questions that you've tried to address? Yeah, so it's a global trial, So we're running the trial in the U.S., as you mentioned, with the IND clearance from the FDA, but also in Australia and India. And so we're going to start off. We have a sentinel part that's the first 10 patients where we're starting at a sub-therapeutic dose. And that'll be the first ten patients for 28 days. And we'll monitor everything. We've never dosed the PV patients. So we just want to make sure that from a safety point of view, everything looks good. We're not expecting anything, but we just wanna have that. And then we'll roll it straight into a part one that goes over 28 weeks. And there we're basically trying to find where we are on the dosing curve in PV patients. We know what that looks like extensively in non-PV patients over long periods of time. So we'll start at, you know, kind of a 250 milligram once a day oral, very simple. Patients start, these are phlebotomy controlled patients, so they start below 45% hematocrit. And our aim here is just to keep them there. So they're having multiple phlegotomies, you Know, once a month, once every other month. And so basically we want to be able to maintain their hematocrits below 45. So that part is you can start at a dose. If you need a little more, then you can step up after a month to the next higher dose, 500, and then 750 after that. So we think we'll find the dose within that. 250 may be perfectly fine for most patients, or they may need a Little more. We don't know. And then we'll analyze that data. But the main purpose of that part one is just to see, does all these observational data that we see, does that translate into PV? do we have a drug here? And then what's the dose? And that. Then we go into a part two where we randomize patients. They stay on their dose or they go to placebo and see if it returns to baseline. If they're on placebo, we incorporate PROs on how they're feeling when they go off drug. So to just be more convincing data, but not necessary for a phase three design that we have. And then there's an extension, part three, that we would have after that that gives you durability data. So it sounds like these are patients who have hematocrit sub-45, some baseline level of phlebotomies. And so it kind of sounds like this is going to look like a lot of the other proof-of-concept Phase II trials that we've seen in this space. So from an efficacy benchmarking perspective, this should give you a pretty clear answer, correct? Yeah, yeah, I think so. OK. And then how are you thinking just about the cadence of data disclosures that we should expect to see from this trial throughout the course of next year? And then, you know, maybe you can also speak to kind of the amount and the type of data that we Should expect to See with kind of maybe the first couple of disclosions. Yeah. So we're we're planning to start the first patient dose this year. Yeah. So we think that around the first quarter, we should have that first 10 patients sentinel through month one and be able to read that out. But then those same patients are going to start rolling into part one and around mid-year, they will be at the 28-week or so timeframe. And so we think once we have enough patients out long enough that we can say that we're reducing phlebotomies or holding patients hematocrit, it, then we'd have a data cut. So, you know, we look at some of the competitive programs like Respiratide, you now state after seven patients, they had patients between 28 weeks and four weeks. And so we, you it's somewhere in the 10, 15 patient range over a course of time, we'll do a data. You know, want to get this out, out to the markets and to us low, it's an open label trial. So we're going to know what's going on and get these data. And then we'll have just kind of a sequence of data cuts over time, whether we, you know, present at ASH or some of these conferences, things like that. Okay. But mid-year to third quarter, I think we'll start having, like, does this drug work in PV like it's intended? Okay. Yeah, so PV has become a very active development landscape. You mentioned Respiratide that just received FDA approval. There's a number of other hepcidin-modulating therapies that are, I guess, entering late-stage development, one of which was just the focal point of a fairly sizable M&A transaction. So how do you think about the opportunity to establish competitive differentiation with a petroporol relative to some of those other therapies that aren't phase two? Yeah, I think first and foremost, from what we hear back from key opinion leaders and so forth, is Petroboros oral. So all those therapies are injectable, number one. Two is it's a different mechanism of action. So we know, you know, kind of the effect occurs in late-stage erythrocytes, but we think it's on the globin side. And all those agents affect iron starvation and kind of a heme side of the equation. So it's a different MOA, which allows you opportunities to look at combinations or different things to control hematocrit. You know, three is it seems to be exquisitely red blood cell focused. So it doesn't have much effect on platelets. It doesn't Have any effect on white blood cells or precursors. So it seems to be red cell specific, which is highly desirable. So if all those things happen, I think it seems like it's got a very broad use case relative to some of those agents. Yeah, I Think some of the leukocytosis and thrombocytoses we've seen with those drugs is still kind of an interesting. work in progress in terms of what that means clinically. So I guess if everything works out in phase two and, you know, would you expect to be in a position to initiate a registrational development program at 28? And then we've seen a lot of the contemporary trials accommodate background cytoreductive therapy. Would you have to accommodate Ruspertide as background therapy? Yeah, I don't think so. So I think, you know, the current trial is going to allow cytoreductive agents, you know, so hydroxyurea is commonly used, for example. So patients aren't, you know, 25% of patients are controlled by it, roughly. And so patients can be on that therapy. You know, is Is there a case for adding it to resveratide? Yeah, maybe down the road, but I think ideally patients don't want to inject, so they're going to want an oral therapy first. But if they're difficult to control, then you can put two agents, but I Think that's more of a minority case in the future. Okay. So, the petroborol is also in another phase two trial. I think it's an investigator-sponsored study. This is in mycobacterium obsessus. Can you just speak to how this opportunity was informed by the prior trial in NTM-MAC and maybe also talk about how Obsessus clinically differentiates from MAC? Yeah, so we ran a phase 2-3 trial in MAC and what I'd say is probably severely treatment refractory patients on every measure. So we really were following Innsmed's error case that had run a trial in this population. But in terms of years of disease, we had three times the years of diseased, lots of multidrug resistance, and lots of cavitary, fiber cavitary involvement in the patients. And so, you know, in hindsight, I think we realized kind of the post-mortem that that patient population, you know, no single drug added to a failing regimen is going to turn those patients around. So we looked at, and so for our data with abscesses, we have the strongest biological data. It's 250 times more potent than MAC, you Know, Petroboral is. the PKPD, you know, both of them had good PKPD drivers. But sometimes in these severe patients, you get both intercellular and extracellular. It doesn't matter when you're so potent. We have less exposure extracellenular than in macrophages. So we looked at all the PKPB, and we had just a strong scientific case for abscesses. It also happens to be the most unmet of needs. There's no FDA-approved drug. Patients currently have to go on multiple IV daily therapies like amikacin, imipenem. It's like chemotherapy. So it's a daunting task to ask patients to be on that for months and months at a time. And so having an oral therapy to that. So the KOL community that's involved in this study, we have about 15 sites, academic sites that are all the top KOLs. We're super excited about the potential of this drug in abscesses. I also just quickly mentioned that Paratech had a successful study in treatment-naive abscess and, you know, our drug in preclinical models run by the same investigator is CIDL. There's a static, so there's a lot of potential there too. So anyway, we we're very optimistic for that. And you know, in the US it's 15,000 patients and your backbone therapy on all of those could be a very attractive market for us. Okay. So now you're guiding to a top line disclosure from this obsessive study next year, is that correct? Yes, yeah. I know you're looking at a number of clinical endpoints. Is there a threshold improvement either culture conversion or PRO-based symptoms that you either need or want to see in order to be confident about taking that next step and going into registration. And then you talked about the Paratech drug. How do you think about that phase two data as just kind of a clinical efficacy benchmark? Yeah, I mean, they showed, you know, about a 20-point improvement in culture conversion. So we think, you know, this is antibacterial, so we think you've got to clear bacteria from the lungs. That's destroying the lung and, you Know, creating these high five-year mortality rates in these patients. So bacteria culture conversion, we think is super important. To the FDA, it's fields functions and survives. So we, we, we think we're going to need to show an improvement in PRO on fields. So like quality of life, the respiratory scale that's been used. We developed our own macro tube. We're looking at the number of scales in this IIT slash phase two trial, but we'll have some component of that ultimately for a phase three trial, yeah. Would you anticipate having to do any validation work on a PRO prior to initiating a phase 3? Yeah, we validated it in our prior MAC study, but we will run through that same routine for the abscesses. Okay. You mentioned about 15,000 patients in the US. how do you think about the opportunity to potentially harmonize pricing between pv and obsesses and then as you think about pv potentially being kind of a you know a strategically active landscape right now how do you think about the flexibility of having this drug and kind of two disparate separate indications right now yeah i mean it is interesting uh so i think they're both rare orphan diseases. So from a pricing point of view, they're going to end up being very similar, we believe, is precedented by Aracase and Resveratide for that matter. So they're similar in that. I think it's a good, you know, we hope it works in both of these. That's a good problem to have. You know, but ideally, we'll have a partner that could take both forward. But, you know, we'll figure that out. But it's, you Know, to us, it's a good problem to anticipate. Okay. Maybe staying on the anti-infective track here, I know you have another phase two ready asset. This is an anti-parasitic. It's directed against a target that's relevant in the onset of Chagas disease. I think this Chagos story to me actually is kind of pretty fascinating, just given the epidemiological relevance of this, and there's a lot of parallels that you can draw to hepatitis C. Can you just kind of give us the quick elevator pitch on Chagas and why you think investors should be paying attention to this? Yeah, I mean, this is what attracted me. My passion is global health. And there's 10 million patients that have parasites in their heart, and we don't have an effective drug for them. So that bothers me. It probably bothers everybody. And, you know, it happens to be that 300,000-plus live in the United States. And so we have a drug that we have shown to sterilize non-human primates that naturally get infected in the state of Texas by the kissing bug. Same organism, same pathway to infection. They're natural carriers, so we've greatly de-risked this program as much as you could possibly de-risk a program, I think, at this point. And so, you know, we think that there's a dual market. It happens to be, you mentioned hepatitis C. So hepatitisC is a silent killer. There's no symptoms until you start having liver failure and liver cancer and things like that in about 30% of patients. With Chagas, you get the same thing with heart disease. About 30%of patients develop heart failure and so forth, or you drop dead, so they end up in a cardiologist's office. So we think that this is very much like a smaller version of a hepatitis market that we think is as big as $30 billion in the U.S. if you treated every single patient available. So that's a big opportunity. But most importantly, it's an opportunity for us to help patients who've suffered from this. I mean, the millions of patients that do. So that'S the pitch, and we think it's a fairly easy scientific de-risk program. Okay. Is there an active screening program for Chagas in the U.S.? Like a neonate screen or blood banks? Yeah, it is transmitted from mother to child, I mean, which is horrible, but it's not routinely done. It's rarely done screening. There's a few, you know, passionate academics who have screened. There's several physicians in Boston who have screening 25,000 patients, but it's really a passionate group in one area or another. So that will be part of the ultimate implementation is to screen everybody, just like you do with HCV, like you do with HIV. So it's basically test and treat. Okay. And so that top-line phase two data for Chagas, we're expecting that in the second half of next year. What does that disclosure look like? You know, it's based on going to show parasite clearance and what we believe is tested, like a curative profile. So we'll be measuring parasitology, serology, and showing that data. And is there a duration of follow-up? Yeah, so based on all these monkey studies we've done, four months is very predictive. So we think that's fairly doable in a short period of time. We can enroll this trial quickly because we're going to run it in Bolivia where 8% of Bolivians have Chaga. So it's easy to find patients. And so four months, but we'll follow the phase two patients for a year and basically validate that and then just run a larger version of that for phase three. But I guess when you disclose the data, do you want to have four months of follow-up on all patients? That's right. Okay. And so that four months' follow-ups in Chagas, I guess, would be analogous, keeping with the hep C parallel, to like SVR12? Yeah. Okay. so i guess hepatitis c in in kind of keeping with the parallel here right i mean that kind of became the multi-billion dollar opportunity it did because there was a big implementation effort on the diagnostic and awareness front um as you think about like that heavy lift that is necessary to to transform this market Is this a program that kind of at the end of the day is maybe best served or better served by a larger company kind of with the resources and bandwidth to rerun that playbook? Could very well be. I mean, in this space, you know, we've seen Merck had a program. The ISI, the Japanese companies, had programs. J&J has been interested, GSK. So we think there's a number of strategics that are interested in this area. Okay. And this is not the first antiparasitic drug that you've developed. And ironically, I believe this goes after the same target as the prior antiparisitic that you had developed. Maybe you could talk about that a little bit. Yeah, we helped co-discover a drug called a Cozibor, which was approved earlier this year for another trypanosome disease called African sleeping sickness. So it's the same mechanism of action as that drug that was proved to be 96% curative in a phase three pivotal study as a single dose cure for a fatal parasitic disease in the brain. So that's the African trypanosomiasis, and Chagas is the American version of that. It affects a lot more people. So that was approved by the EMA with outstanding efficacy. And it also highlights, I mean, as an aside, you know, our boron chemistry is able to engage targets. CPSF3 has never been in another human drug, and so it shows the potential of our chemistry to hit novel targets. Okay. Okay. You also have an active preclinical pipeline. I know you have dual-track programs targeting ENPP1 for both oncologic and rare disease applications. Can you maybe just talk about the relevancy of this target in both of those disease states? And, you know, how has that informed kind of your tailoring of development candidates for each application specifically? Yeah, so we were interesting. We followed biology. So we were working on viral targets and realized that this EMPP1 was very similar. And it had applications in oncology. It basically turns cold tumors hot, essentially, and allows the immune system to recognize and treat them. So we went after that. We've made, you know, hundreds, like on the order of 800 compounds. Boron is very, it's a perfect target for boron and one of the eight binding modes that we know of. So we were interested in that. And as it turned out then, this rare bone disorder, HPP, application came around. So EMPP1 is directly engaged in hypophosphatation, provides an oral route to target that disease instead of an enzymatic replacement like Lexion AZ's Strenzic that's been highly successful that's injectable. So, you know, we just announced last week that we've developed a candidate for HPP and are advancing that rapidly. it's exciting because BioMorand has bought Alesta and really has put this target on the map as an oral treatment potential for HBP patients. So we're super excited about that. But because boron is a great compound for this target, you know, we made 800 compounds. We really optimized for an exquisitely potent, clean compound. So we were highly selective in doing that versus lots of compounds in the space were developed for oncology quickly. And the bar is different for oncologist than when you're treating small children for a lifetime on an HPP drug. So we Were highly selective, I would say, in terms of finding compounds that had good drug-like properties, PK permeability, off-target effects, minimizing all those, and could be selected. So we think we have a best-in-class profile around HPP. On the oncology side, where we started, we discovered a compound. We've run lots of animal models. It looks great, declared a candidate. But the question there is, it's an unvalidated human target. And there were two companies in front of us in the clinic. So we thought, let's wait, you know, let'S keep our resources on all the other programs and wait and see. But Riva Sciences is one of those companies. And ESMO just announced some very exciting data in colorectal cancer with metastasis in liver. that is showing some pretty promising data in terms of survival out to like 14 months compared to four months for background. So we're super excited that happens. We're sitting in a great position to really move forward. So EMPP1 is just one. We have a PI3K program. We acquired another boron company that came out of Anacor and they had a PI4K. And the more we have learned about that program, there's not really a true pan mutant over wild type PI3K. There's Relay, which is kinase specific, but doesn't really hit helicase. And so Novartis just bought Synovation, which I think is kind of, to us, the third generation compound. And that's more the profile we're going after. So we think there's plenty of room, plenty of buyers that have breast cancer franchises that want one of those. So we have that. And so we've got a lot going on, as you can tell from the conversation. Yeah, I was going to ask you, I guess, on the PI3K front, you know, I think a lot of investors just kind of from like a thousand foot view believe that this is a pretty crowded space. You obviously feel like there's still an opportunity for differentiation. And I think maybe despite some of the BD activity that we've seen, whether it's Novartis Innovation or Lily Scorpion, you get the sense that there's still a lot of strategic appetite here. Lots. So getting anal, again, this is an area that we moved into a little over a year ago. And to be honest, we didn't understand it that well. And there was a lot of deals happening with Loxo and Scorpion and so forth. But as I said, most of those compounds were kinase-specific PI3Ks. And so Relay shows beautifully that you have, they can hit that. But the activity against helicase, which makes up more than half of the patients, is they don't get all the hyperglycemia, so patients can stay on it, but still the survival is low. It's like six, seven months. And so we think with a true pan mutant where you have big separations between the wild type and you hit these mutants much more potently, you can really increase progression-free survival. So, you know, synovation on cure may have a compound. there's not many of them that it's a very difficult thing to do to be able to to bring in a helicase so we you know that's what we're working on okay the other thing I should say is boron also it's a crowded IP space as you say and so so boron is unique so there's no freedom to operate issues or things like that so it's clean from from that which is advantageous so so that's a really good point yeah um should we just kind of talk through a lot of the milestones that you're expecting over the course of the next year so can you just talk about the current cash that you have on hand and kind of what that allows you to execute on going forward yeah so we're a very capital efficient company uh we have 80 million in cash that gets us into 2029 and execute on these programs so so you know we've got three uh phase twos that we're to read out next year so we have cash to to take all those through that uh and then we have our you know pre-clinical programs that we're advancing as well so so we we think there's multiple ways to to add value and win and get us into 2029 and um so so we have plenty of cash to do that okay um anything we didn't talk about that you'd like to quickly highlight before we wrap it up no i mean i i think it's it's uh people are just now learning i think about our pv program and realize that we have you know these other major clinical readouts in the areas that are areas that they may not often think about but but have significant upside opportunity for us and risk mitigation so we now have a really robust pipeline and i i don't think we've ever been stronger as a company now that we've matured and allowed the pipeline to mature. So super excited about this coming year for AN2. All right. Eric, thank you very much. Appreciate it. Thank you, Steve. Thanks, everyone.