Great. I think we can officially say now, good afternoon, everybody. Welcome to day one of the Citizens Life Sciences Conference. My name is John Walvin, Senior Analyst here, and I'm pleased to have Spruce Biosciences and CEO Javier Szwarcberg to talk us through a really exciting story that we flagged this year as, I think, a very de-risked rare disease path to approval that the market hasn't quite appreciated. It's gonna be a busy 2026. You got a lot of things to do, but Javier, thanks for joining us today. Of course. My real pleasure to be here. We started covering the story many years ago now, and it's transformed and evolved. You guys brought in a really interesting asset last year, TA-ERT for MPS IIIB. Talk us a little bit about how, you know, what's the current strategy at Spruce and what you're working on. Yeah. Our flagship asset is Tralesinidase alfa. It's an enzyme replacement therapy. Like many other enzyme replacement therapies, you're replacing the missing enzyme. Fairly straightforward from that mechanistic point of view. A product that was initially developed by BioMarin, out-licensed to a prior sponsor who frankly couldn't really get the FDA to agree on the. It wasn't just that sponsor. It was the name of the drug company was Allievex. The whole field was kinda stuck because the FDA wasn't allowing them to proceed with regulatory pathways that will enable them to get approved under using a surrogate endpoint. The whole academic field and patient community field felt that heparan sulfate, which is a toxic substrate that accumulates in the brains and peripheral tissues of children with this type of neuropathic and sometimes non-neuropathic MPSs, wasn't deemed by the FDA to meet kind of the regulatory standard as a reasonably likely surrogate endpoint. You know, under the auspices of the FDA and Peter Marks, the FDA convened like a multidisciplinary forum back in February of 2024 that included industry and academics and patient groups and the FDA itself. The overall consensus was that heparan sulfate was a reliable surrogate. From that moment on, many companies, including Allievex, approached the FDA and tried to, you know, met with them typically through a Type C meeting and found path forwards to advance their neuropathic MPS products. What are we seeing now in the context of this field? REGENXBIO recently received a complete response letter. In that response letter, which has been published by the FDA through their transparency kind of new approach, which we definitely welcome, highlighted a few issues, including the effect size they had seen on the surrogate endpoint. The fact that the surrogate endpoint did not have a really well-established validated and baseline and, you know, a number of other factors highlighting the patient population enrolled in the trial and other things that, you know, highlight specific issues that relate to their compound as opposed to the way we see it, meaningful read-throughs, lack of meaningful read-throughs to where we're at. You know, the effect sizes that we have seen in our clinical program are very profound. We reduce heparan sulfate and heparan sulfate non-reducing ends in a very meaningful way in almost all patients at all time points, and we have follow-up through about 5, 6 years. We also have profound effect sizes on clinical endpoints that further validate the effect sizes seen on the surrogate. Those are cognitive endpoints, adaptive behavior endpoints, you know, motor strength, fine and gross motor strength. We also talked about communication, expressive and receptive communication being improved with the drug, acknowledging kind of a very broad and profound effect, right? We've also seen that the early we treat patients, the better the effect size. The later we catch them, we typically see stability of disease, which is a big win in this disease. Mm-hmm. You know, progressive decline in neurodegeneration. Yeah. It's gonna be a very interesting conversation because we can use the Spruce story development program as a lens to think macro about FDA and rare disease and learnings that you're able to take from other programs. You know, it was just maybe last week, The Wall Street Journal had an article saying, you know, terrible news for rare disease companies at FDA. It's gonna be an interesting time for you guys to get there. Like I said earlier, we think you guys have a very good, clear path to approval. Taking a step back, can you tell us about MPS IIIB? You talk about, you know, progressive nature, stabilization would be a great outcome, but what, you know, what is the disease? How many patients? We can jump off from there. Yeah. It's like I said earlier. It's an autosomal recessive disease where they suffer from a genetic mutation of on the NAGLU gene, which results in a deficiency. Most patients are actually null on the NAGLU enzyme. The NAGLU enzyme is a debranching enzyme that actually chops down glycans. The glycan that accumulates the most for which the enzyme which is a substrate of the enzyme is heparan sulfate. Children with MPS III B have this devastating disease where this glycan builds up in lysosomes of all organs, primarily the brain, though. Results in what most people acknowledge as pediatric Alzheimer's. Their brain structure's never fully developed. When they do develop, they develop they become inflamed and there's neurodegeneration. They typically get picked up around age, I don't know, 2.5-3. Mm-hmm. With missing developmental milestones. They bounce around for a little bit. They are typically diagnosed with attention deficit because their children are hyperactive. They don't sleep well at night. Huge impact on the families. They kind of peak cognitively around age 4. They stabilize for about a year. They have a kind of a stable cognitive function, you know, for another year, and then they start declining. Declining means losing function, right? If they were able to walk, they lose that ability. If they were able to do fine motor stuff, they lose that ability. They also have some hearing issues in addition to what's going on in their brains. They have GI issues. They lose the ability to toilet for themselves. Eventually they become wheelchair-bound, unable to ambulate, to feed themselves. They need feeding tubes and tracheostomy tubes, and they die usually in the late teens. It's a very devastating course. The community is very tight. There's a very active patient advocacy group. We've been fortunate to be able to re-engage with them in earnest and Mm-hmm Form a good relationship, working relationship and understanding very much the unmet need has been very important as a company that works in this type of diseases, right? You mentioned some of the clinical data you guys have. Can you talk us through, you know, what you guys have produced and why you have confidence in that supporting, you know, potential approval? Yeah. We recently presented our data in a WORLDSymposium in San Diego, usually held in February, beginning of February each year. The company didn't have a presence in 2025, but some preliminary data was presented in 2024. In San Diego, we pretty much kind of updated on where we were with our cognitive data, presented long-term data related to heparan sulfate reductions. We clearly see a separation between the natural history studies that BioMarin had conducted and under the auspices of this Sanfilippo type B program, where we actually did, you know, a number of analyses. We've done MMRM modeling, looking at you know, an overall P value that separates between on the Bayley Scale score, which is the ultimate endpoint that the FDA is currently considering for our confirmatory trial. As a proof of clinical benefit, we saw a very nice separation between the curves which formed the basis for our breakthrough designation, I believe. I mean, we submitted data in addition to that. Mm Including heparan sulfate as well as cortical gray matter volume for BTD. It was cognition, CGMV, and heparan sulfate levels. Mm-hmm ... which were profoundly reduced. Going back to the WORLDSymposium, we showed data on heparan sulfate. We discussed cognitive data. But in addition to the model data which we already showed, we showed data on individual patients comparing different age brackets. We allowed the natural history patients to actually meet the treatment patients at different age brackets, and we compared cognitive development as well as adaptive behavior, communication- Mm-hmm Motor skills. Do you see a greater benefit with earlier treatment or younger age, or what did you see? We do. I can't recall how much exactly we showed during the WORLDSymposium in terms of the breakdown, but we've done internal analyses, and there is a very clear separation whereby kids that were treated early, and early I mean usually younger than at 3 years of age. Mm-hmm Tend to see improvements in the functions that I just acknowledged. Yeah Relative to kids that are treated later, after the age of 3, where we see primarily stability of disease. You're showing. I'm not to say that that's not considered beneficial. No. In a disease like that, if you can just be at a level. Stay the course. know what's gonna happen in the next month or year, that's got to be a great peace of mind for the family. You're showing reductions in heparan sulfate, which is the proposed surrogate endpoint, changes in actually brain anatomy, and then also cognitive outcomes. Mm-hmm. It seems like a pretty clear picture here. Well, I think that, you know, under the framework of an accelerated approval, the data package that we would be submitting to the FDA in Q4 feels to me as being quite robust. Mm-hmm More than adequate to result in hopefully an approval in this disease for which there is currently no treatment. What about on the safety side of things? Can you talk a little bit risk-benefit? Yeah. I mean, the drug is very well tolerated. It gets given into the patients through an Ommaya reservoir. The route of administration is called intracerebroventricular, so it's ICV, so straight into the brain. The beauty about delivering the drug in the brain is that we have predictable brain concentrations, and we can actually knock down very rapidly heparan sulfate levels. Mm-hmm. Modify the disease outcome. I mean, we believe that this drug is indeed disease modifying. Some therapies that get given in the brain have the usual toxicities related to brain infused therapies like nausea and headaches, are not uncommon after delivery. Given the severity of disease, we haven't had discontinuations related to those adverse events. What's the dosing schedule? It's 300 milligrams, given through the ICV route weekly. Okay. Go into an infusion center or your physician's office to get those. Correct. Unlike Brineura, which is another product developed by BioMarin for CLN2. Mm-hmm Which is type of Batten disease, this product does not need a slow infusion. I think it's a 5- to 10-minute infusion. The infusion center staff will draw 10 mL of CSF slowly over 10 minutes and then administer the compound. Mm-hmm Our drug over 10 minutes, slow infusion through a single syringe. You guys have follow-up, I think, up to 6 years, right? Feel really confident about long-term safety as well. Correct. I mean, we've looked at safety overall, and it's very interesting to see that most patients were able to tolerate the AEs. I mean, it's a long trial in a disease that invariably results in neurodegeneration, right? It typically takes a little time for the brain to reset. Mm-hmm To reset the brain to become stable again. After the initial removal of substrate, kind of, I mean, and this is all speculative, but the neurons kind of adjust and establish new connections. Mm-hmm Hopefully become healthy again. That's when we start seeing stability in older patients and ongoing improvement in younger. We've seen the data in aggregate on the population basis, but when we're talking about small numbers in a rare disease trial, have you been able to associate the heparan sulfate reductions with the functional benefits as well? Is the story that clear? We actually plummet heparan sulfate right away. The first assessment on heparan sulfate levels was done at 6 months in our clinical program. Therefore, we can't really establish a relationship because of the huge effect size being so profound on heparan sulfate. Mm-hmm. Many people have actually tried to also establish a correlation between heparan sulfate levels at baseline. Mm-hmm Cognitive function or adaptive behavior, and there's no correlation. You know, the drug just the heparan sulfate, the substrate just builds up in the brain, leaks into the CSF. I think based on this kind of unique molecule design by BioMarin by virtue of it being a fusion protein with IGF-II bound to it, we actually have significant uptake into the neurons and enhance the mechanism of action, right? Mm-hmm. FDA currently has, you know, a number of innovative mechanisms or biological possibility is one of them. Mm-hmm. I think this drug kind of fits squarely into that kind of approach. Enzyme replacements are nice mechanisms. Yeah ...study. Speaking of FDA, you guys recently put out an announcement that you had some takeaways from your Type B meetings. Walk us through kind of what you learned and the path forward. Yeah. We've had 2 Type B meetings, one to discuss clinical, and the other one to discuss manufacturing. I mean, both meetings went very well. We're currently reviewed under CDER, under the division of the DRDMG, Division of Rare Diseases and Medical Genetics under the Office of Rare Diseases. FDA has been super collaborative, prompt, timely, and very constructive in their feedback, acknowledging from the get-go the severity of disease and the importance of, you know, partnering with us to hopefully bring this therapy to patients. We discuss, you know, our program in the context of it supporting an adequate and well-controlled trial, including our natural history data through our 901 and 902 studies. We discussed with the FDA also the ability of heparan sulfate and heparan sulfate NRE to constitute a reasonably likely surrogate endpoint that correlates with clinical benefit. Lastly, discussed with them the confirmatory trial, the nature of the trial, the timing of initiation of a study. Mm-hmm Which we've disclosed publicly that the FDA concurred with, that study being underway, during the review of the molecule of TA-ERT. All in all, a very positive meeting. We're in the process of finalizing a write-up and submitting to the FDA as well a feasibility assessment done by our CRO. Mm-hmm Around the study timelines and, you know, by when we can achieve the different milestones of enrollment and reporting of data. It's gonna be a 5-year trial with 14 patients, 7 per treatment arm, with very clear rescue criteria for patients randomized to standard of care. Yeah. That's gonna be tricky to keep the patients in, I would think. This is gonna be a global study. I see. Intent is to enroll it in areas where the product isn't yet commercially available. Mm-hmm. To try to your point, maximize enrollment and make a trial as an appealing option. Got it. Really interesting time to be tracking this space and the MPS disorders more broadly. You mentioned REGENXBIO earlier. You know, you guys are coming with a submission later this year, but we had REGENXBIO have a CRL. Ultragenyx have a CRL due to manufacturing, but then also them changing strategy a little bit. Denali getting an extension, which I think was more like an FDA Christmas extension. Mm-hmm. That we see every December. All these have hit kind of roadblocks or hiccups, and you guys are a few months behind watching this all unfold. Why are you guys? What have you learned, and how is your program gonna, you know, navigate the path without having any of these roadblocks as well? I mean, first of all, and again, to close the loop on the other Type B meeting, the CMC Type B meeting, I think that was also a very constructive meeting with the FDA. FDA was asking us to submit the first PPQ validation batch with the BLA, and that is the reason why we've had to push out our submission of the BLA. All in all, a very constructive meeting and, you know, a very de-risking meeting in many ways. I think that going back to the question you've asked me around the other programs and other hiccups with other programs, I mean, we've gotten very clear feedback from the FDA. The division hasn't changed. The division director, the office director, the review team, have all been super stable. Feedback that we've gotten from the FDA is very consistent with the feedback that Allievex had gotten in the past, through the regulatory engagements, especially the one they had in March of 2024. Mm-hmm. I don't feel that the issues raised by the REGENXBIO CRL relate in any way or form to kind of the issues that we're seeing, and we will be well prepared to address them in our BLA. Mm-hmm. Denali, in many ways, has a path forward that resembles the path forward that we're attempting to pursue. I think their PDUFA will be quite informative of you know, kind of where we are and what is the likelihood- Mm-hmm. for our program. Ultragenyx, the reason for their CRL isn't, or at least seemingly doesn't appear to be related to clinical matters, but solely to manufacturing matters. We're staying, you know, true to our story. I believe in the type of product we have. The biomarker data and the clinical data are quite positive and I think that they, in this disease state for which there's currently no treatment, you know, we kind of meet that benefit/risk ratio. The other, nice kind of regulatory tailwind is the reauthorization of the Priority Review Voucher Program. Mm-hmm. You guys should be eligible for that as well, correct? Correct, yeah. We got it a while back where we had disease designation, so we'd qualify for it if approved. We talked about unmet need, disease progression, but you know, as far as market opportunities, some of these MPS drugs historically have done well, some have done poorly. When you guys just brought on a new head of commercial that you announced yesterday. Talk to us a little bit about the opportunity and how you plan on maximizing this opportunity for an ultra-rare disease. Yeah, probably start by saying that, you know, the epidemiology of this disease is usually very poorly understood. A lot of assumptions being made. We had to make assumptions, too, in order to kind of model the commercial opportunity as well. Same here. Like I've seen with other MPSs, for MPS-I, MPS-IV, MPS-VI, MPS-VII, I mean, all of the Pompe disease drugs, Fabry disease drugs, I mean, early days Gaucher drugs, you know, on the subtypes. It's really of no surprise that, you know, upon having a product approved and a product launched, the epi becomes more clear and there's more clarity on, you know, what's the prevalence and what is the incidence patient population. So, unclear at this stage, you know, but we think that probably there are between 150 and 200 eligible patients in the U.S. Mm-hmm. Globally, the numbers, or ex-U.S., the numbers are probably around that same sort, maybe larger. Mm-hmm. opportunity elsewhere. You know, we think that this disease wouldn't require a very large sales force to launch the product effectively. A group of MSLs, some therapeutic liaisons, and a very strong patient hub to enable patient access, you know, are gonna be really foundational. This disease is diagnosed through genetic testing, so providing, you know, being part of a genetic panel. I was gonna ask, so part of newborn screening today? Newborn screening has actually changed. No, we're not part of newborn screening. Neither are. In the U.S., you have to have a product in the market. Yeah. The RUSP, you know. Do you see that with the other MPSs, if there's a drug approved, it becomes part of the screening panel? Yes. Yes. Okay. That has been the case. Currently, the RUSP is no longer active under the current HHS. Mm-hmm. Most recently, head of HHS, Robert F. Kennedy Jr., has recently approved or recommended that Duchenne's and I believe Hunter's get added to newborn screening. Hmm. I think it's just, you know, a matter of getting a product approved and. Yeah You know, it doesn't preclude states to actually test for newborn screening, but typically they used to follow the RUSP recommendations. It's one of these cases where I think when a drug's approved, awareness, diagnosis should grow and find more patients. Correct. I mean, sibling testing, cross-family testing, usually patients that are kind of lingering and not being properly diagnosed get brought back and, you know, this type of genetic panels are currently part of the, like, there is a pediatric epilepsy panel. Mm-hmm There is a pediatric MPS panel. Companies like Ultragenyx and BioMarin and Sanofi and Takeda and Alexion, they have these panels and that's how patients are typically picked up and diagnosed. We have you guys working on regulatory, prepping for commercial. We got a BLA submission later this year, Q4 is the target. Mm-hmm. Mm-hmm. Can you remind us of kind of cash position and where you guys are in the balance sheet? We announced the Q4 closure with $50 million, not accounting for the $15 million that we pulled through our debt facility with Avenue Capital Group. That was at the beginning of the year. The current cash should allow us to run operations until the early part of 2027. I think you guys announced a $75 million ATM yesterday as well? Correct. Okay, ability there also. Yeah ... bring us- We also have the ability to draw on tranche number 2 from the Avenue Capital Group debt facility. We're looking at, you know, other type of strategic regional partnerships primarily in Asia. Mm-hmm Just as another, you know, potential angle here. Yeah, that's something that we'll sort over time. Between those different avenues, expectation to be able to get through an approval with the access to capital you have? Correct. Got it. Okay, perfect. Well, it's On the back end, you know, like you've mentioned earlier. Prior review. You can get approved. Yeah, exactly. The PRV could potentially be monetized and Which have been selling for closer to $200 million these days. Perfect. It's going to be. We got also the Denali PDUFA in April, which we should have some positive read-through to you guys if it goes through. We'll have your BLA submission later this year and then start learning more about the commercial opportunity as you guys progress along. Javier, it's gonna be a busy time for you guys, and we're looking forward to tracking it. Thank you so much. Thanks again for joining us. Appreciate it.