We're good. All right. Clocks moving, I think we're good. All right. Good afternoon, everyone. I'm Cory Kasimov, one of the senior biotech analysts here at Evercore ISI, and it's my pleasure to host our next discussion with Regulus Therapeutics and the company's CEO, Jay Hagan, and President and Head of R&D, Preston Klassen. So thank you guys for being here with us. Jay, maybe the best place to start is providing a brief overview of Regulus for those less familiar with the story, and then we'll get into some questions. Sure. Thanks, Cory, and thanks for having us. Appreciate the opportunity to come and present today and meet with investors. Much appreciated. Yeah, so Regulus was formed as a joint venture between Ionis and Alnylam back in 2009, where they're exclusive licensee to all their technology and intellectual property to design oligonucleotides directed against microRNA, whereas they retain their respective rights to create oligos directed at mRNA. And based on that foundation, the company has advanced the technology base now, in particular, discovering a motif that preferentially distributes to the kidney. And so while historically we've had programs that targeted the liver with GalNAc or other approaches, we've focused in on the kidney and in particular polycystic kidney disease, where we're in the midst of a study, and I'm sure we'll talk about that. In exchange for those rights, people asked, do they have any opt-in rights or anything related to that? They don't. They owned all the equity in the company when it was formed. They actually never took any venture capital. And subsequent to going public in 2012, they since sold down their equity. We do owe low single-digit royalties for anything that's commercialized coming out of that technology base. But it's just low single digits. Yeah, and the combination of the two is still low single digit. Okay. All right, so maybe let's talk about polycystic kidney disease. Can you talk about kind of the biologic rationale for targeting miR-17 in this? Yeah. Preston, you want to take that? Sure. So autosomal dominant polycystic kidney disease is one of the many diseases where you see upregulation of a particular family of microRNAs. In this case, it's miR-17 that we're focused on. And what's really important when you're thinking about targeting microRNA in a certain disease state is you want to make sure that that upregulation plays a central role in the pathogenesis, either the initiation of disease or the progression of disease. And in this case, that upregulation of miR-17 does seem to do both. The preclinical model is very clear. You can upregulate miR-17 in an otherwise normal mouse, and you actually get the development of PKD without the PKD gene mutation itself. And so it does seem to play a very central role. And so our focus has been on using a small oligonucleotide to bind to miR-17 and essentially inhibit it from attaching onto its target messenger RNA, and so stopping the gene network dysregulation that miR-17 overexpression would otherwise cause. And that has turned out in nonclinical models, and as we'll talk about, we're starting to see those effects in the clinic as well, very clearly ameliorates disease progression. Okay. And what is natural progression? What does it look like for an ADPKD patient, like if it's untreated or if it's inadequately treated? Yeah, so untreated, so first of all, despite the fact that it's a genetic disease, it's not screened for at birth, and so a lot of times folks don't get diagnosed until late 30s or kind of mid-40s, either because of ancillary imaging of, for example, females undergoing an ultrasound for pregnancy. Sometimes there's notice of a big kidney off to the side, and they go investigate that. Sometimes if the kidney gets large enough because there's a development of multiple cysts within the organ, increases the size of the organ, that can actually cause back pain or other pain challenges there, and when that gets investigated, you notice it's a large kidney or you notice it on screening labs, you've got a reduction in your kidney function reflected by estimated GFR, and you go and sort that out and figure out that it's ADPKD. Once you're diagnosed in your late 30s to maybe mid-40s, for PKD1, it's a pretty severe course with a median age of dialysis, so end-stage kidney disease, at 55. It's a little longer for the second type, PKD2, that's in the early 70s, but most of the disease actually is PKD1. 80%-85% of PKD is due to the PKD1 gene mutation. Okay. And how are these patients treated today? The only drug on the market today is tolvaptan, and it's a vasopressin receptor antagonist, and it also has an impact on cyclic AMP, and it has been shown to reduce the growth of the kidney, the growth rate of the kidney, so the kidneys still grow, but they grow at about 50% less of a rate compared to the placebo, and that is also correlated with about a 33-ish% reduction in the decline in GFR, so again, kidney function continues to decline, just at about a third less rapid than placebo, and the real challenge with tolvaptan, it does have a black box warning for fatal liver tox, but probably the bigger problem is actually tolerability because as a vasopressin receptor antagonist, the kidney loses its ability to reabsorb free water, and so there's very frequent urination. It's a BID drug, and so urination all day, all night, and that can be accompanied with dehydration. If you're not careful, you really do need to take in a lot of water just to kind of keep up 6-10 liters of water a day. That's not a fun drug to be on. The tolerability is really the key limiter. So, its utilization. We recently completed an updated market research study as we planned for our pivotal study, which is going to start next year, to just understand the patient journey a bit more and tolvaptan utilization patterns. And based even on the numbers that the manufacturer describes, it's used in less than 7% of the addressable population. There's about 160,000 with a diagnosis code, of which two-thirds, about 100,000, are considered at high risk of disease progression, and that's Mayo classification 1C, 1D, or 1E. And of those, less than 7% or so, two-thirds are at half the dose because of tolerability issues. Wow. Okay. So when you think about, I guess, skipping ahead a minute, and we'll come back and talk about the data and the program, the commercial opportunity here, that 100,000 patients is the target population that you'd be going after. Yeah. Less than 7%, given despite what your prognosis is, your longer-term outlook is one of these patients. It's how bad the significant liabilities of that product are. Yeah. And if you look at some of the key factors in determining sort of what to anticipate from a market standpoint, the feedback from nephrologists is a really high interest in finding innovation that's going to be safe and well tolerated. It doesn't even have to be better efficacy, just something that they can give to patients reliably that they can tolerate. Very, very high response rates there in that market research. You got a concentrated prescriber base, principally because of the challenges of the drug thus far. You haven't seen a significant growth, so it's concentrated within some of those key centers where higher-risk patients traffic. Right. Okay. But good coverage right now, 70% commercial coverage. Okay, so can you talk about the data you've seen to date? Sure. So we've conducted and are conducting a phase 1B multiple ascending dose study where we have had three weight-based cohorts, placebo-controlled weight-based cohorts in low, mid, and high dose, one, two, and three mg per kg. Those cohorts have completed. We've released the data publicly and then we are continuing with a fourth cohort that is a fixed dose to kind of get ready for our next pivotal study, which will utilize a fixed dose, so in the weight-based dosing, one, two, and three mg per kg, we were focused on looking for evidence of biologic activity using a urinary polycystin biomarker, so urinary polycystin 1 and urinary polycystin 2. We demonstrated very clear dose response with what looked to be an asymptotic kind of flattening of the curve in terms of increases in that biomarker at the three mg per kg dose, which was also the most statistically significant. We like three mg per kg, and the safety and tolerability looked good to us as well. From there, we need to move into a fixed dose. You think about, well, how do you want to pick that? Right now, we're focused on 300 milligram as a fixed dose. That's a 2 mL subcutaneous injection because it's formulated at 150 mg per mL. At 300 milligram, based on weight, the vast majority of patients should be at that three mg per kg level or a bit above that. Again, as a competitive inhibitor, if anything, we'd rather overshoot than undershoot because you're really trying to block as much miR-17 as possible as long as it's safely well tolerated. A real key component for this current fixed dose, which happens to be open label as compared to the placebo-controlled cohorts, is just safety and tolerability, and so far things look good. Okay. So what kind of additional work do you have to do around that dose before you start your pivotal study or you settle on that? We're just going to complete it. We've completed enrollment. It's 26 subjects. It's larger. It's about twice as large as our other cohorts. And we'll use that to examine, of course, I mean, the primary endpoint will be that urinary polycystin biomarker. Importantly, across all the weight-based cohorts, and we're doing it now with this fixed dose, we've looked at urinary, sorry, total kidney volume and changes in total kidney volume. That's not a primary endpoint. The study is not powered for that. It's definitely exploratory because it's a small study over a short period of time. But interestingly, in the mid and high or the two mg and three mg per kg weight-based doses, we've seen now, on average, reductions in kidney volume. You would expect over the time period that we examined, it's a three-month dosing, one-month follow-up, so it's four months between baseline and the follow-up MRI. Based on the natural rate of progression in terms of growth of the kidney, you would expect an untreated population to grow at about 2-ish% per four months. And in fact, our placebo group did grow at just over that. So they looked like an untreated population. And at two and three mg per kg, again, we had about a 0.8 to 1% reduction from baseline. And that is kind of unheard of. Tolvaptan, again, as I mentioned, doesn't do that. It just slows the growth. And so if that can be replicated in a larger and longer study, that would, we think, kind of be a game changer in terms of the therapeutic options in the space. Okay. And so you're scheduled to meet with the FDA, correct, before your. We will be meeting before year-end, yeah. Okay, and what are kind of the key objectives you want to get out of that meeting as you look towards the ongoing clinical work you'll have with this starting next year? I'd say the main thing, and Jay can chime in as well, is to get alignment on what that pivotal program needs to look like. We're envisioning it as a single trial. It's very clear that the FDA is allowing total kidney volume to serve as a surrogate endpoint for accelerated approval. And of course, a sponsor would need to then continue work investigation for the clinical endpoint that they'd like to see estimated GFR in the post-approval setting. And so what we're envisioning now is a two-year study where when patients have been treated for one year, you look at volume data, and that could serve as information for an NDA for accelerated approval. The study would continue in the post-approval setting to collect that GFR data up to two years, and then that would go in for a supplemental NDA for full approval. So this would be from the same study, though. It wouldn't be two separate studies. Correct. Okay. Okay. And as part of that submission and the discussion with FDA includes all the safety, tolerability, and preclinical tox data available to support chronic dosing. So getting that all buttoned up, it's really the rate limiter to having a final protocol that you then can begin the process of site initiation and all that other activity. That's the rate limiter. So it usually takes about six months or so from getting that final protocol and getting the first sites up and going. We'll also be getting European advice in the first half of next year. We don't see any significant discordance based on some precedent because certainly in the IgAN space, they've adopted a similar, albeit a different surrogate endpoint, similar type of methodology here. But that's all the work to be able to initiate the study mid next year. Okay. And demographics-wise, this would be a U.S. and European study. Anywhere else you would take this? We're going to focus in terms of our regions across the globe, obviously U.S. and Europe, Australia, New Zealand. We would definitely like to have some representation in Japan as well. Okay, and how big would you anticipate the trial to be? Currently thinking somewhere in the 300-350 patient range. Okay. Again, that's a conversation we'll be having with the FDA. And so once we conclude that conversation with them at the end of this year and get the minutes of the meeting to kind of confirm where we're at, we'll talk more publicly about the specific plans for that pivotal study. Okay. That number is driven by an assumption of a target product profile to being tolvaptan-like efficacy. Right. So that's kind of what we're setting as our hurdle rate for treatment effect size. This would be placebo-controlled or active? Correct. Okay. Okay. And then this may be getting kind of out ahead of myself here a little bit with this, but with that anticipated size of the trial, with that sample size, how long would you anticipate that would take to accrue given the size of this patient population? How long till an approval? No, to accrue the trial. Oh, to enroll the study? Well, if you just look at the benchmarks for rare renal disease, the number of subjects per site per month, that would suggest around 18 months. Now, those include competitive studies where there's competition for patients like in IgAN. Here, we don't have that same phenomenon. So it could be faster, but that's what we're basing our planning on. Okay. And then going back to your market research and combined with what you think the FDA may want to see here, is there any potential disconnect between a regulatory endpoint that you might have of what's required for approval and what physicians want to see to be able to treat these patients? I think we have a conservative assumption with respect to the first year before you get GFR data in the label in terms of initial uptake because there hasn't been a drug approved in the U.S. on total kidney volume alone in the absence of GFR data. Now, importantly, though, because it's a single study, and if you just think about the time from, so if you unblind the data at one year on kidney volume, do your data analysis, submit your NDA in your review cycle, you're right up to the point where GFR data at least is going to be publicly disclosed and published. It'll still take another similar period of time, another year or so before you get it in your supplemental NDA approved. But I think that'll be helpful in the context of thinking about that first year. We hadn't heard in payer feedback too. We didn't hear a lot of significant pushback either, not having the eGFR data initially. Okay. Kind of as we get to the last few minutes here, kind of backing out, looking big picture, I mean, you own this asset, low single-digit royalties you were talking about. How are you thinking about kind of going it alone from a global looking for partners? It kind of feeds into a question I have as well on the balance sheet and your cash runway. But how does all this interplay with each other? Yeah, we're actively in discussions. I mean, obviously, the pharma has grown interested in the renal space, in particular rare genetic renal. You've seen a number of deals there. So we have active dialogue ongoing. And economically, just thinking about it from a dilution standpoint, right? Equity dilution to keep it fully unencumbered, partially encumbering the asset, keeping the U.S. control of the U.S., that's not negotiable. Right. But seeing if there's a hybrid strategy there to mitigate equity dilution is something we'll evaluate. Okay, and then. I think importantly, the opportunity outside the U.S. is still pretty significant here. When you do the pricing work, tolvaptan and uptake in Europe looks interesting, as does the Japanese marketplace. There's good value there. How big is a discount relatively to the U.S.? In terms of total market size, I think we were about 65% U.S., 35% outside the U.S., roughly. Okay. Yeah. All right. Makes sense. So you obviously have this end of phase one, kind of pre-phase three meeting with the FDA. And we'll get the outcome of that, and you'll start this pivotal program. What are some of the other kind of key value drivers you think about as we look ahead to 2025? Yeah. We'll have our fourth cohort data that we'll share, roughly half of it, early next year around the time of getting the meeting minutes, and then we'll wrap up the rest of it, late Q1, early Q2, and have all that data set up and then driving towards first patient in and providing a color on the overall trial design. There's a number of other things too that are in the mix that are more nuanced. We'll wait till we get through the FDA meeting around statistical handling and other creative methodologies that we look forward to be able to discuss. How de-risking will that fourth cohort data be when you get to that relative to what you already know about the asset? Well, our view is that we repeated an experiment with our third cohort data, and it looked a lot like the second cohort data, although even a stronger biomarker response. And so that was very comforting that our understanding, at least from non-clinical dose exposure, miR-17 engagement in the kidney would suggest that around two and a half mgs per kg, you're getting to the flat part of the curve. And so between two and three, we saw a bit better biomarker response and numerically a few more subjects who had regressions in the size of their kidney from baseline. If we repeat it again, the third time's the charm in a way, right? It gives you a lot of confidence that what you're seeing is not noise or something that just happened out of chance. And it's all small sample sizes and natural inherent variability or inherent variability in the disease progression based on mutational status. And so we never thought going into this that volume was going to be something we wouldn't even see. So for us, this has been very encouraging. Okay. Terrific. Well, I see we're down to under 30 seconds here, so I think let's wrap it up there instead of going into the future longer-term outlook for Regulus. But really appreciate you guys being here and look forward to continuing to follow the progress. Thanks, Cory. Thanks a lot. Thanks.