Hi, good morning, and thank you for joining the H.C. Wainwright 3rd Annual Kidney Conference. My name is Yi Chen, and I'm a Healthcare Analyst at H.C. Wainwright. Today, we are delighted to have Mr. Jay Hagan and Mr. Preston Klassen from Regulus Therapeutics here to discuss the company's latest development. Welcome. Thank you. Morning. So last month, we know that Regulus reported positive data from the third cohort of the phase I-B MAD study of RGLS8429 in autosomal dominant polycystic kidney disease. Could you please give us a brief overview of the results from that cohort, and what you've learned from any additional analysis since then? Sure. I'll just take the first bit, and then Preston can walk through the details. You know, we were excited because, as you know, when we saw Cohort 2 back in March, we were really intrigued with what looked like a signal on total kidney volume with only three months of dosing, and that was measured by MRI at the end of study compared to the beginning of study, where we saw those with the highest levels of polycystic changes see corresponding reductions in kidney volume. And so to repeat that experiment again here in Cohort 3, we were delighted to see. As any time in science you repeat an experiment, you address whether or not it was a spurious finding, or now you look like you're starting to see consistent results. But Preston, you wanna walk through any of the specifics? Sure. So, with completion of this Cohort 3, we've now wrapped up our three weight-based, placebo-controlled, dose-ranging cohorts. Those are the three cohorts we used to really kind of establish our dose ranging. The main measure in the study is urinary polycystin levels, and we're very pleased to see a nice dose response across all three active doses. The greatest percent change in terms of increase in urinary polycystin was seen at the highest dose, 3 mg / kg, and 3 mg / kg was also statistically significant compared back to placebo. It was generally safe and well-tolerated, so we're really pleased with the mechanistic results overall from the cohort, felt that they met all of our expectations. And as Jay just said, you know, the part that's really exceeded our expectations is we've now repeated a finding of a reduction in the overall mean total kidney volume at 3 mg / kg, something again, as Jay said, we started to show initially at the 2 mg / kg dose level. So I don't think anyone expected that we would be able to have an impact on the average size of the kidneys, given the relatively short treatment duration. It's only a three-month, three months of treatment for each cohort. We've now shown this twice across two separate dosing cohorts. So in my opinion, that does really incrementally de-risk the next study, which will be a phase II trial. Measuring change in total kidney volume is the primary endpoint, and that also has the potential to serve as a single pivotal trial for accelerated approval. So just in terms of a couple of new analyses that we have conducted since our public call, for that, those data, we have conducted analyses of total kidney volume across the baseline Mayo Imaging Classifications, scoring. So patients had to come in with moderate to severe disease, and that is defined by an MIC or Mayo Imaging Class of 1C, 1D, or 1E. And the impact on total kidney volume, although small numbers, but it looks very consistent across each one of those, different classes from moderate all the way up to severe disease. We also did hear some questions after we rolled out the Cohort 3 data as to whether there was a negative impact on renal function, you know, from that at that 3 mg/kg dose, based on a very rudimentary correlation analysis that we showed. So just to be clear, you know, that was not the GFR slope, and as many of you know, GFR bounces around significantly over time and across patients. But in addition to this, the additional analyses I just mentioned about volume, we decided to go ahead and take a look at more specifically at actually eGFR slope over the four months of time, so three months of treatment, one month follow-up. No negative impact was seen. In addition, safety labs that we always use to look at renal function, those include BUN, KIM-1, and a number of others, showed no negative impact. So of course, we do believe that over time, reducing total kidney volume will have a beneficial impact on kidney function, on eGFR, but you would not expect to see anything in terms of benefit in a handful of patients over four months. So if you look at the large clinical trials, tolvaptan's, a phase III program, observational data sets from HALT and CRISP and others, and you look at renal function over time in these patients, the takeaway is that the measures are pretty variable, and you need hundreds of patients over years to detect a significant difference. So the bottom line here, in terms of, you know, this cohort, we're really pleased with our mechanistic dose ranging results based on polycystin. Basically ecstatic that we've now shown reductions in mean total kidney volume twice over two dosing cohorts, even though it's a short treatment duration, and we're just really focused on getting to that next phase II study that we believe can serve as a single pivotal trial for accelerated approval. Got it. That's very helpful. Basically, the Cohort 3 data exceed your expectations in view of the previous data from Cohort 1 and 2, right? Yeah. So what would be the key takeaway message in view of the entire data set available today? Well, I think, I mean, short answer, from my perspective, and Jay can chime in, I think the key takeaway message is we have a drug that's now positioned very nicely for late-stage success in an area of significant clinical unmet need that clearly has an appropriate and attractive market opportunity. Yeah. Good. And could you also comment on, I think maybe you touched upon this, what are the baseline characteristics of the patients in the MAD study? Do they have early-stage or late-stage disease, or does RGLS8429 work equally well in all ADPKD patients? Yeah, so the, the main way that you classify kind of disease severity is that Mayo Imaging Classification. As I mentioned, it starts at 1A, at the mildest, and 1E at the most severe. And typically, it's the moderate to severe, which is 1C, 1D, and 1E, that are recruited and studied, and at least, with tolvaptan, although it wasn't really a Mayo Imaging Classification, but how they used GFR and kidney size essentially maps to that. That's the standard population that does receive treatment. And so as I mentioned, when we did look, again, it's small numbers, but when we did look at total kidney volume, our responses across, those three categories, 1C, 1D, and 1E, we saw, you know, very similar results. And so we're very pleased with that. So essentially, the people we enrolled in this phase I-B with ADPKD are the patients that you want to enroll in the phase II program, are the patients you want to have on drug in the commercial marketplace. Yeah. Good. Thank you. So the study is currently recruiting patients for the fourth cohort, right? With 300 mg fixed dose of 8429. Do you expect to see similar results from Cohort 4 compared to Cohort 3? Yeah, I, I expect to see generally similar results with respect to mechanistic activity. We think we've hit at 3 mg / kg now, kind of that asymptotic or flat part of the curve in terms of target engagement, which is the microRNA miR-17 as a target. And that's reflected in increases in polycystin that's ultimately demonstrated by increases in urinary polycystin. So I think at 300 mg fixed dose, we'll, you know, be a little north of that. And so we'd expect to see kind of continued on that flat part of the curve. We'd love to see continued response in terms of total kidney volume, and obviously, we'll be paying close attention to safety and tolerability. And if all looks good, that's the dose we move forward with into phase II. Yeah. Yeah. Okay. So speaking of the pivotal trial, what is an approvable endpoint in the pivotal trial set from FDA's perspective? Does FDA have any guidance on efficacy and safety required for approval? Yeah, there's not a specific guidance document, but FDA has confirmed on multiple occasions that for this disease, ADPKD, an accelerated approval pathway is possible based on a single trial demonstrating a slowing in the rate of growth in total kidney volume compared to placebo. So that's exactly what we're focused on and will be the primary endpoint for the next phase II trial, and that would support approval under an accelerated pathway. Then you keep going on with investigation, looking at eGFR, and over time, in the post-approval setting, you would be expected to show a benefit, a clinical benefit on eGFR. Okay. Okay. So is 8429 qualified for accelerated approval pathway, I guess, yes? We have discussed this with FDA late last year, just confirmed that accelerated approval pathway would be appropriate for RGLS8429. Again, should the study results show that demonstrate a slowing in the rate of kidney growth, total kidney volume, compared to placebo. Okay. And the efficacy observed so far from Cohort 3 most likely will suggest that 8429 could be approved by FDA standard, right? Yeah, I mean, as I said, I think the thing is this early information on volume, again, something we had not expected to see in just a handful of patients over a three-month treatment period. So the fact that we think we are seeing this now because we repeated it twice, I believe speaks to the mechanism, and so it's certainly de-risking, in terms of, you know, the trial that we will be executing. Okay. Yeah, just add on further, you know, the in preclinical models, you know, this mechanism looks, you know, very effective at addressing, you know, the genetic drivers of the disease and, and the cystogenesis seen across a range of animal models. And others have shown that if you can increase just polycystin alone, that you can halt or even reverse the phenotype of ADPKD in animal models. And so now that we've been able to show we can not only increase polycystin, which is our mechanism of target engagement, but it, itself is anti-cystogenic, that polycystin protein. You couple that with what looks like an ability to arrest the growth of the kidney, 'cause keep in mind, you know, our sort of baseline target product profile is to have tolvaptan-like efficacy, and all that does is slow the growth. So instead of growing at 6% per year, the kidney grows at 3% per year. Now we're talking about could we grow at 0% per year. Yeah. Which would have, you know, obviously a much more significant impact, as it translates into GFR, into, excuse me, in delaying time to dialysis for patients. Got it. Got it. Thank you. So, what are the upcoming catalysts in the next 12 months for Regulus? Yeah. So I think, completion of all our tox work, which we're on track to complete the dosing portion of the chronic and non-human primate tox study here towards the end of this quarter. The mouse chronic tox is complete, I think we've mentioned that, before, and the top dose was the NOAEL. The non-human primate tox studies take longer to complete. And that then is gating to us going to FDA for end of phase I meeting here in late in the fourth quarter. So we've got completion of the tox, and then we have that end of phase I meeting. At the time of that end of phase I meeting, we'll also have an update from the ongoing Cohort 4, which is open label. However, many subjects we have available at that time that we'll incorporate into our discussion materials with FDA. We'll also provide a Regulation FD update with investors on the results of, you know, the number of subjects that we have completed dosing at that point. And then we'll wrap up the remainder portion of Cohort 4 sometime in the first half of next year as we advance towards initiation of the pivotal phase II mid-next year. Okay. Got it. Thank you. Does Regulus plan to have a commercial partner for 8429? We are in discussions with potential interested pharmaceutical companies that recognize the unmet need here. Although, importantly for us, in terms of guiding principles, has to make sense from a value creation and value sharing standpoint. And, for starters, the U.S. marketplace is the kind of marketplace that a small company like Regulus can build, you know, a company and its commercial capabilities around. So our discussions are primarily related to outside of the U.S. rights. Got it. Got it. Got it. Okay. So, you mentioned, tolvaptan's efficacy, which is currently the only approved drug for ADPKD. How well is it utilized in the real world right now? Our market research indicates that given the tolerability challenges, that there's frequent attempts at initiation of therapy, but discontinuations after several months of dosing or dose reductions, just given the tolerability concerns. And I think one of the questions with the dose reduction is, how much efficacy is it at likely even benefiting patients with? So, you know, we see ample opportunity for an agent that's well-tolerated and safe, to be a major new therapy for patients. Yeah. Okay. If you just look at the price point of the drug. Mm-hmm. And the size of the addressable market, it looks like probably, you know, less than 10% at any one time are utilizing the therapy. Got it. Of the addressable population. Got it. And how large is the ADPKD patient population in the U.S., specifically the 1C, 1D, and 1E population you just mentioned? Yep, yep. So the way it breaks down is, you've got about 160,000 diagnosed, of which, you know, roughly 80% have not yet progressed to dialysis. And then from there, you got about two-thirds fall under the category of C, D and E. So we believe the addressable population is just sort of around 100,000 patients or so. Okay. Okay. Of course, you know, there is, there is, s orry, let me just chime in one more. Yeah. Because there hadn't been anything approved until the middle of 2018, and it's not part of your standard sort of genetic, testing, paradigm, especially here in the United States, it's anticipated to actually be significantly underdiagnosed. When you look at some epidemiologic studies that have been done, or through claims data, the incidence might suggest that it could be closer to a 300,000-400,000 or 500,000 patient prevalence. Okay. Got it. So apart from tolvaptan, are there any other therapies, maybe even off-label, that are used for patient management currently? In terms of patient management, you know, I think some of the things that people do to preserve kidney function include diet modification, use of antihypertensive medications. Those are primarily employed. Preston, any other comments in terms of off-label? No. Yeah. I think you covered it. Yeah. Yep. Okay. Good. Mm-hmm. So it appears the unmet medical need is pretty much so. It's significant. Oh, yes. Yeah. Okay. Really not a lot of, not a lot of, you know, options, even in clinical development. There's been a number of molecules that haven't worked, or been discontinued, in clinical development. You know, beyond ours, there's really, there's really only a couple other molecules that are, you know, being tested, one of which is Vertex's compound. I know you, you had a question about that. That appears to work in a subset of patients with a PKD1 mutation, and it's early phase I testing. Okay. Would you be able to comment on drug candidates being developed by other companies for ADPKD, such as 407 from Vertex Pharmaceuticals or 008 from XORTX? Again, I just touched on the Vertex one. What we understand, there isn't a lot that's been disclosed, but what Vertex has shared, and obviously, folks can go follow their company, they, they're working on a type of mutation in PKD1 that represents likely about 10% of the addressable population. So a subset of the total addressable market that we can pursue. And then XORTX, you know, we haven't really heard much from them. And that it's not clear that they have the capital to move forward, although they have confirmed with FDA that accelerated approval on a single phase II is appropriate. Okay. Their approach appears to be a uric acid approach. Got it, got it. Can we talk about the patents, the, you know, IP portfolio for 8429, and when will the patents expire? Sure, yeah. Our intellectual property goes till 2042, and that doesn't include any patent term extensions, you know, due to clinical development for the composition claims. Got it. Got it. And currently, does the company have sufficient capital to fund the operations through the end of the pivotal trial for 8429? No, we, you know, we did that $100 million oversubscribed PIPE at a premium back in March, and that was to give us the capital needed to prepare for the phase II and initiate the phase II. But given we haven't had our end of phase I meeting yet, which we think is prudent, before we, determine the requisite additional capital required, Preston has alluded to in past prepared comments that, you know, based on a target product profile of tolvaptan-like efficacy, that would, necessitate approximately 300 subjects for one year of dosing. And so that trial to slow the rate of the growth of the kidney by about 50% is very different in size, that if FDA agreed, and this is just simple math, that if instead you believed and had conviction that you could just stop the growth of the kidney, meaning overall stopping, you know, that would require as few as 150 subjects over six months. So it's a very different size and duration of a study and cost that comes out of that. So our plan is to, our strategy is to get through that end of phase I meeting, begin that base level planning in terms of site selection and so forth, to initiate a potential 300 subject one-year study. But until we complete that meeting with FDA and align on exactly how the size and duration of the study, will we raise the incremental capital needed. And meanwhile, we continue our BD discussions to see if there's an attractive opportunity to pursue that would mitigate some of the costs, the cash needs. Got it. Okay. So, does Regulus have plans to bring additional candidates into the clinic within the next two years? We don't talk much about what we're doing in our research portfolio, but the common theme is pursuing pathogenic microRNA that directly regulate other haploinsufficiencies, similar to what we have here with miR-17, which is upregulated in the disease, and it controls, among other things, specifically the genes that are involved in proliferation. And so by blocking it, you can stop that proliferative signal. We do disclose that we have other programs in kidney disease, where we know we can deliver to, and oli go delivery to the kidney, as well as in CNS disorders. And there are several interesting genetic epilepsies that we're working in. The most advanced of which could be nominated for a clinical candidate sometime within the next 12 months or so. Got it. Got it. Okay, great. Are there any aspects of the company that you think the investors need to pay attention to? No, just I think that, you know, just looking at, you know, how the market responded to our data, you know, we are excited to be able to repeat the results that we saw. And, you know, believe that we've got a compound right now that's, generally safe and well-tolerated, advancing towards a pivotal phase II in a market size that, is very attractive with, not much competition. And so, we're pleased with the support we have from investors to date, uh, in terms of the broadening of our shareholder base, as well as the continued support of our existing investors. Yeah. Great. We are getting to the end of the chat, and thank you very much for the informative update. So, we do wish you success in your further clinical development going forward, and happy to catch up with you at a later date. Thank you, Jay. See you. Thank you very much.