All right. Looks like we are live and ready to rock. Hey, everybody, and welcome once again to Barchart. I'm Kinsey Grant Baker. Let's get into today's interview. I am joined once again by David Elsley, President and Chief Executive Officer of Cardiol Therapeutics. Cardiol is a late-stage life sciences company focused on advancing the development of anti-inflammatory and anti-fibrotic therapies for heart disease, which is itself the leading cause of death for men, for women, for people in most racial and ethnic groups, according to the CDC. Companies like Cardiol are developing treatments that could change the reality of heart disease across the globe. Today, we're going to hear a little bit more about Cardiol, the business that it is in. David, welcome to Barchart. How are you today? I'm great. Thanks, Kinsey. It's a pleasure to be here. Thank you. Of course. I'm really happy to have you here and to chat a little bit more about your business, hear about some of the exciting updates that you have going on. I think before we get into all of that, though, because there is a lot to unpack, I would love to start with just some basics. If you don't mind, David, could you tell me a little bit more about what Cardiol does in simple terms? Who are you creating medications for? Can you help me sort of understand the core issue that you're trying to solve as a company? The core issue we're trying to solve at Cardiol is inflammation and how it impacts quality of life and the lives of tens of thousands of people around the world who live with or die from heart disease. Yeah. As I mentioned at the top, that is a significant portion of the folks in our neighborhoods, in our lives, in our families. Getting a little bit more insight into how that work is manifesting, how it is advancing is something I'm really looking forward to doing today. We're going to talk some about your recent year-end update on operations that was recently released. We'll dig into the nitty-gritty of this phase III trial, some more recent results with potentially widespread implications, lots more. To start there, what is maybe the key theme that investors should take away from this recent year-end update on operations, this report? In the big picture, how would you characterize the temperature, the feeling, the vibe at Cardiol in this year-end in maybe a couple sentences? 2023 was really a transformational year for Cardiol Therapeutics, and we could not have been more excited about reporting our year-end 2023 transition the company to a late-stage development effort. We initiated the MAVERIC program, which is a landmark study in recurrent pericarditis, which destroys quality of life for tens of thousands of people. We reported groundbreaking data from the global ARCHER trial, which was one of the largest studies in myocarditis really ever conducted by an organization in decades. We advanced a new novel concept, which we believe is going to be transformational in even broader areas of heart disease, including heart failure. Yeah. Clearly it was a busy year for you, 2023, and I know that tees up a lot of momentum and excitement and ambition heading into 2024. Let's really dig into some of those results. You mentioned the MAVERIC trial. You've already surpassed 50% enrollment in this phase III MAVERIC trial, full enrollment expected this quarter. First off, can you tell me just a little bit more about the importance of this trial for your business? Sure. This is an extremely important study for the company. This study, we had a meeting with the U.S. FDA early last year. The study was sanctioned a pivotal trial, so we're now in a phase III pivotal trial designed to basically demonstrate the impact of our lead drug, CardiolRx, on a miserable condition called recurrent pericarditis that causes chest pain, shortness of breath, really impairs quality of life for thousands of people in their prime of life. Patients can be 45, 50 years of age. They're generally healthy and athletic many times when they develop the condition, generally secondary to viral infection or thought to be secondary to viral infection. When this condition sets in, it can cause dramatic impacts on quality of life and really limits folks' ability to live a normal life. Yeah, absolutely. I would be curious to hear too, for those of us who might not be super familiar with how these trials work, I know they are complicated and by design, but I would love to understand a little bit more about what phase III means in sort of the big picture. What does it take to get to this pivotal phase III moment? It's a journey. Cardiol is very fortunate to be in the most advanced stage of the important journey of developing a new important medicine. This pivotal phase III trial is now enrolling patients at preeminent cardiovascular research centers throughout the United States, very well thought of centers, including Cleveland Clinic, Mayo Clinic, which are the largest pericardial disease centers in the world. We're so fortunate to be working with amazing specialists in developing this drug. This trial is designed to provide the information necessary to support a new drug application, which we believe will provide entry into a market where we can offer a drug that is effective, safe, and accessible, and affordable for patients, thousands of patients, that suffer from this disease that is characterized by very high unmet needs. Yeah. As we're getting to that point where you are offering this drug at an affordable price to a widespread audience, I would love to talk a little bit more about the enrollment in the trial so far. I mentioned before, we surpassed 50% enrollment in this phase III trial, this phase III MAVERIC trial. What would you say that the pace of that enrollment means in terms of maybe interest from physicians, interest from patients? What does that tell you? We couldn't be more encouraged by the participation of now over 20 preeminent cardiovascular research centers in the United States. We are very pleased with enrollment momentum. It's important to understand that typically once a clinical trial reaches that 50% enrollment milestone, which we announced right around the time of the J.P. Morgan conference earlier this year in January, the trial is at maximum throughput capacity. You have your entire clinical infrastructure established, and it's a bit like a ball rolling down a hill. It keeps getting faster and faster. Once you hit 50% enrollment, you're typically very near completion of enrollment because that's the point at which the trial has maximal momentum. We were very pleased to announce that earlier this year. That underscores the enthusiasm. That underscores the fact that the pericarditis community, which involves experts in cardiovascular medicine, and as well as most importantly, patients looking for new, more appropriate, more effective forms of therapeutic intervention that offers safe and accessible medicines for the population. We couldn't be happier with the progress in the study. Yeah, really wonderful. You have this MAVERIC trial focused on pericarditis. There's also the ARCHER trial focused on myocarditis, I understand, and I also understand that this ARCHER trial has shown some pretty meaningful improvements in terms of cardiac structure, had some results published in a leading journal. Tell me a little bit more about how some of those findings kind of strengthen your overall thesis around the treatments that you're creating. What doors might this open? Absolutely. The ARCHER program was really a landmark study in myocarditis. It was one of the largest company-sponsored studies of its time. Myocarditis remains the leading cause of sudden cardiac death in young people under the age of 35. There's no standard of care, so there's no drug with a label for the treatment of myocarditis available today, which is particularly tragic because when this condition becomes persistent, young folks can develop heart failure. In severe cases, it can necessitate requirement for heart transplant, and it leads to mortality. This was obviously an ambitious trial because no drug has ever been shown to show impacts on this condition. When the data was presented at the European Society of Cardiology meeting, late November, and press release by the company on December 1, we couldn't have been happier to have had the Head of the Mayo Clinic and the Founder of the Myocarditis Foundation, Dr. Les Cooper, present the data demonstrating what we believe to be the first demonstration of structural improvement and reduction in swelling and edema in inflamed hearts that is analogous to that what is observed with many blockbuster medications available today in other areas of cardiovascular disease. Yeah, it sounds like a real watershed year for you and the team. There's also, these two trials are related, as I understand, to the CardiolRx treatment. There are also other kind of things in the pipeline that I would love to get your thoughts on and hear a little bit more about, one of which is the CRD-38. You're currently advancing the CRD-38 toward phase I in heart failure, which is, as we have talked about today, a disease that impacts tons of people, lots of significant unmet need. I would love to hear more about how you're thinking about this CRD-38 as a value driver for the company. What's the near-term roadmap for that program, and maybe beyond that, where do you see it going in sort of the longer term? CRD-38 is a reformulation or a new generation of our lead product. Our lead product, CardiolRx, is a twice-daily oral, so it's very convenient for patients, and we see that being really dispensed in sort of the acute phase of disease when patients need a drug for reasonable periods of time. Whereas CRD-38, we've developed it with a more efficient treatment schedule. It offers the potential for a once-monthly therapy, and it potentially is a transformational medicine for the mass markets, including heart failure. Heart failure is an epidemic of sorts. It's really driven by the joint forces of diabetes, obesity, and high blood pressure, which continue to rise. It's creating an impact on millions of people. Heart failure still has a 50% five-year mortality rate. It remains a leading, if not the leading, cause of hospital admission. The key culprit, as in pericarditis and myocarditis, is this inflammatory insult that can occur on the heart muscle itself. We believe CRD-38 offers the potential to manage that inflammatory insult on a chronic basis or a lifelong basis, which would lead to a marked improvement in quality of life for not only tens of thousands of patients in the case of pericarditis and myocarditis, but in the context of heart failure, we'd be looking at millions of patients. Yeah. It's really incredible, and I appreciate you putting the scale into context there. With regard specifically to what you mentioned about the importance of the work being done on inflammation specifically, and how that inflammation leads to heart failure, creates circumstances for heart failure, and how that too kind of factors into some of these clinical results we're talking about here over the long term. I would love to understand better why inflammation, and beyond just the numbers that you have illustrated here today, why inflammation feels like such an important theme for global research this year. In the big picture, beyond just the work that you're doing at Cardiol, can you explain a little bit more what the stakes are, what some of the big trends and themes are when we're talking about this important work in understanding and treating inflammation? Well, in the case of heart disease, or in the case of heart failure syndromes, when inflammation becomes persistent and unmanaged or uncontrolled, it can damage heart cells. It can lead to inflammation, and I think most importantly, it can lead to fibrosis, which causes an inelasticity and an inability for the heart to function normally. The challenge with most anti-inflammatory strategies historically has been they're immune-suppressing, and they have safety profile issues. When you suppress the immune system for prolonged periods of time, you can increase risk for infection and perhaps other medical challenges. Fortunately for Cardiol, we're developing drugs that are not immune-suppressing. They offer an improved safety profile for patients. Our lead drug is oral. A number of the immune suppressants are injectable. We offer a convenience for patients, and certain drugs that are utilized in advanced stages of pericarditis are biologics, and therefore they're very expensive. In fact, one of the drugs has a list price of over CAD 300,000 per year per patient. That challenges the accessibility. It's difficult to get reimbursement for those drugs, and so they're just not broadly accessible. We offer the opportunity for an oral therapy, broadly accessible through standardized distribution systems, and more accessible to patients from a pricing point of view. Yeah. I appreciate you painting the broader picture here of the industry that you're operating and the business that you're building. I think it also brings to mind this idea of perhaps we could kind of veer into the territory here of competition. You recently received a broad U.S. patent covering CardiolRx and CRD-38, giving them protection across a wide range of cardiac conditions, and this applies through 2040. With that in mind, I'm curious to hear more about how IP protections like these play a role in a business like yours. Can you tell me a little bit more about how IP relates to the ideas of commercialization and competition and building long-term business value subsequently from your perspective? Well, you spend many years developing a new important medicine, so it's important that from a business or a commercial perspective, you do have established barriers to competitive entry. Ultimately you can generate returns on the years of investment and research that can help fund new important medicines. Importantly, Cardiol is a drug discovery and development company. That's where our core area of expertise is. We take the drugs from concept or discovery through to demonstrating their clinical utility and ability to influence patients' lives. Ultimately we look to license them to the large dominant commercial players in both big pharma and big biotech that have the established commercial machinery to see those drugs to the patients in the marketing sense. It's vitally important that you establish the key barriers to competitive entry. As you mentioned, we couldn't have been happier with the U.S. Patent Office awarding a patent that is actually much broader than we originally anticipated, covering the entire cardiovascular landscape, essentially. We layer that on top of the already granted orphan designation from the U.S. FDA, which provides for periods of market exclusivity that range seven to nine years post-commercialization, and also speed the development of these drugs. We couldn't be happier with our position from both the barriers to competitive entry perspective and in a competitive landscape given the therapeutic profile of our drug. All right. I appreciate you sharing that. I think it also is a good segue to talk to about not just your own optimism, but some of the perspectives of those in the investing world who might have something to say about Cardiol. Canaccord Genuity recently reiterated its buy rating on Cardiol, set a price target of $8. Can you tell me a little bit more about what this means from your perspective leading the business to have this kind of rating? Can you tell me a little bit more about, yeah, what that entails and what it might mean for the future of Cardiol? I think it really underscores the opportunity for these organizations. I always go back to a classic example. Back in 2017, there was a company called MyoKardia, which was developing a drug for rare forms of cardiac disease, so very analogous to the position that Cardiol is in today. During 2017, that was an undiscovered company that was valued similarly to that of Cardiol today. In 2018, they partnered, which is our intentions as well, to partner commercially, and three years later, they were acquired for $13 billion. I think that underscores the opportunity why investors can be excited and reassured by these analyst targets. Obviously, I'm biased in my perspective. I think Cardiol is deeply undervalued and under-recognized, so we're always thrilled to take opportunities such as the opportunity today to broaden the story, because that informs patients, it informs the cardiology community, and it informs the investor community, which ultimately underpin the development efforts for these new important medicines. Because without those, these medicines don't get developed. I think that's important for everyone to understand. Now with the cash runway into really the end of 2027 or into uncertain, we are funded for a very exciting 2024 and well-positioned to secure the appropriate strategic alliances for the commercialization of our drugs that we couldn't be more excited about. Yeah. Wonderful. David, as we finish today, any other message that you would want to share with potential investors who are just now learning the story of Cardiol? I think what you just mentioned is a great way to start, but is there anything else that you would want to say to those investors who are tuned in today? Just that 2024 is really set up to be an extremely exciting year. I couldn't be more energized about it. I couldn't be happier to be working with the top cardiovascular minds from around the world to try to improve lives for thousands of people that are living with and having their lives threatened by heart disease. All right. Well, David, thank you so much once again for joining us on Barchart today. It's been wonderful to hear more about the year that you had in 2023, and arguably more importantly, what you've got teed up in 2024. Thank you so much for taking the time to share your insights with all of us That's great. Thanks very much, Kinsey, for having us. Of course, and thank you to all of you for tuning in. Once again, I'm Kinsey Grant Baker. This is Barchart Live, and we will see you next time.