Regulus Therapeutics (RGLS) Management Presents at Bank of America Merrill Lynch 2014 Healthcare Conference (Transcript)

| About: Regulus Therapeutics (RGLS)

Regulus Therapeutics Inc. (NASDAQ:RGLS)

Bank of America Merrill Lynch 2014 Healthcare Conference

May 15, 2014 3:00 p.m. ET


Neil Gibson – Chief Scientific Officer


Colin Bristow – Bank of America Merrill Lynch

Colin Bristow – Bank of America Merrill Lynch

Welcome to Bank of America Healthcare conference. My name is Colin Bristow, I am the US major pharma analyst. It’s my pleasure to introduce Neil Gibson, the chief scientific officer from Regulus Therapeutics.

Neil Gibson

Thank you, Colin and thanks for the organizations for the opportunity to present and I appreciate the audience for being here.

What I'm going to be talking about today is a new therapeutic opportunity associated with targeting microRNA therapeutics. And before I start I would like show the obligatory safe harbor statement. So I will be making forward-looking statement.

So RNA therapeutics in general we believe the time is now and that’s in part based upon the fantastic opportunities that we’re seeing with a number of different companies whether it be focusing on single stranded oligonucleotides like Isis or RNAi therapeutics like Alnylam who were actually both our founders and also playing on the opportunities that RNA therapeutic can get to targets that traditional therapeutic modalities can’t actually target such as some of the small molecules and antibodies so that the opportunity to get to target base has not actually previously been practical. It’s a fantastic opportunity for us.

So microRNAs are small pieces of RNAs that are shown here, apologize with the laser, but in essence these are non-coding pieces of RNA, so they have their own genes, they’re synthesized and ultimately will associate it with a complex called the RISC complex which is the RNA-induced silencing complex and this RISC complex with the microRNA will find target messenger RNAs through complementary sequence matching where the eight nucleotide region within the microRNA called the seed sequence will bind to the 3 prime 1 translated [ph] region all by specific messenger RNA and repress the ability of that messenger RNA to be translated into protein.

So ultimately that’s how microRNAs can influence the functional activity associated with multiple distinct messenger RNAs and each microRNA can recognize up to 50 messenger RNAs through the fact that the same sequence can exist in the three prime 1 translated [ph] region of multiple messenger RNAs to which that microRNA can interact.

Now it turns out the microRNAs can be inappropriately expressed because their expansion can either be increased in disease state or lost in disease state and we’re looking at targeting those microRNAs who expression is inappropriate in any given disease state. And we do that through the use of single strand oligonucleotide that can recognize the microRNA through complementary sequence hybridization and in essence neutralize that microRNA.

I will talk a little bit more about our portfolio in the following slides but we have access to over a thousand patents, some from our founders, Isis and Alnylam as well as new intellectual property that we’ve developed over the last 5 years and very strong strategic alliances with GlaxoSmithKline, AstraZeneca and sanofi all in the therapeutic arena as well as Biogen Idec in the diagnostic biomarker assays. And I will tell you a little bit more about that part of our business.

So here is our portfolio which is a nice blend of partner programs as well as proprietary programs. Our lead program that I will spend a few slides on is targeting a microRNA known as miR 122 which is the most prevalent microRNA at the sites and [indiscernible] microRNA for its own function.

Our second program that we’re advancing into clinical development is to target patients with Alport syndrome and we have identified the clinical candidate and that program is undergoing GLP tox and I will explain the timelines associated with advancing this program. And then that program is partnered with Sanofi and we have multiple oncology programs also with Sanofi.

With AstraZeneca we have a couple of targets, one in oncology and one in metabolic disease and I won't go into those in detail, but just suffice to say that we have a broad portfolio of targeting oncology and orphan diseases and I'll take you through some of the key events that will be happening for these programs over the next 12 to 18 months.

So ultimately I have tried to summarize what we call our clinical map initiative which in essence is an extension of our road to the clinic strategy that we had last year and highlight that we achieved all our goals on the road to the clinic and now we have to really define our initiatives around each of the individual programs and some of the key dates that are coming up over the next few months, start with a pre-IND meeting that we have scheduled with the FDA on June 2 for RG-012 which is a therapy to treat patients with Alport syndrome.

At the same time July timeframe, we will be starting a natural history of disease study in patients with Alport syndrome which will be pivotal to help us understand the clinical endpoints that may be appropriate in the phase 2 proof of concept.

Ultimately in the second half of this year we will be demonstrating human proof of concept in the HCV program with RG-101 and that will be obviously through targeting miR 122. By year-end we will have nominated our third clinical candidate, so giving us the opportunity by the end of 2015 to 3 ongoing clinical programs.

In the first half of 2015 we will be starting the [indiscernible] studies for RG012 in healthy volunteers followed by transitioning into repeat dose study in patients with Alport syndrome.

So let me first take you through a little bit of the rationale for targeting 122 in HCV and ultimately HCV in the internal ribosomal entry site has sequences to which miR-122, the most prevalent microRNA will bind. That interaction of the microRNA with a virus stabilizes the virus and allows the virus to be replicated and translated. So in essence the function of the virus is critically dependent on the stabilization as that’s caused by the interaction with miR 122. So by neutralizing miR 122 you can prevent the virus from being stabilized and prevent the virus from replicating and being served functional and this is all happening in hepatocytes. So ultimately one of the key features for us in targeting HCV was really to try and target hepatocytes that’s been infected with HCV. And we have used the technology which was originally developed by Alnylam, one of the founders to really target hepatocytes using what they call the GalNAc technology and simply put, GalNAc is basically galactosamine residues, ligands for asialoglycoprotein that’s expressed in hepatocyte and when that ligand binds to asialoglycoprotein that receptor is rapidly internalized and rapidly recycled.

So it’s a very efficient way to deliver the oligonucleotide cargo, if you will, to hepatocytes and RG-101 is actually the first therapy that takes advantage of the Alnylam technology for a single-stranded oligonucleotide that also has at 2.5 generation chemistry of modifications in that oligonucleotide that was developed by Isis. So we’re really combining the most recent technologies that both our founders have spent 20 years really developing which is a real strength of our approach.

Ultimately just in this slide showing is that the targeting 122 is pan-genotypic and this is in what we call a humanized liver mouse model, so we can make the mouse to have a humanized liver which allows you to infect with HCV, and whether we infect it with G1 virus or G3 virus, we see a nice viral growth reduction after a single dose of RG-101 to these mice. So that gives us very strong confidence that the mechanism of targeting miR 122 will actually be pan-genotypic in humans as well.

Ultimately through a number of studies we’ve shown RG-101 to be very potent, safe and well tolerated in all our non – or all our GLP toxicology studies, pan-genotypic as I mentioned and also in some of the sort of viral assays that we can do, we can see it also works against the mutants that would be expected to be generated as a means of resistance to some of the oral I direct acting antiviral.

Also to date in any of the viruses that have been sequenced from humans, there has been no evidence that there is any mutation or any events that would result in changing the ability of miR122 to bind to the virus. In fact, when you do that experimentally and you mutate the virus sequence to which 122 will bind the virus can’t function or be replicated. So we think the ability to develop resistance to the specific mechanism will be very low.

So ultimately HCV is very competitive, it’s a very significant global disease. There is over 170 million patients worldwide. When we’ve had discussions with our key opinion leaders, they always highlight the fact that well-controlled clinical trials which are showing fantastic data are exactly that, they are well-controlled clinical studies. In the real life world setting when patients forget to take a medicine or other factors happen that will result in the potential development of resistance forms of the virus, so we’re looking at trying to identify those types of opportunities.

We also know as I mentioned that the oral DAs are not effective against certain genotypes, they are against the genotype one virus, and we think that will also provide some opportunities for us. And ultimately even though the current therapies are moving towards a 12 week standard of care duration of treatment we still think there is the opportunity to reduce that duration of treatment as well as we just feel burdened that this individual has to take and thus actually reduce the economic burden to the patient and the healthcare system.

So ultimately where we are, we’re currently doing our single ascending dose in healthy volunteers. That will lead into a repeat ascending dose study in healthy volunteers and also allow us to initiate a single dose proof of concept study in HCV patients and we anticipate that study to lead out in the second half of 2014. That study has a mix of different genotypes, GT1, GT3s and GT4s, 50% of the patients being recruited into that study will have GT3 virus allowing us to really establish that this mechanism has a very strong effect against the GT3 population.

Like to move to our second program that we’re advancing into clinical development, which is targeting miR 21 to create patients with Alport syndrome. First, miR 21 is actually – has been very well validated target in renal fibrosis and this was through some of the miR 21 knocked out animals which basically are healthy viable and don't show any phenotype and less stress. So when you actually injure the kidney in the miR 21 knockout you get a dramatic reduction in the level of fibrosis that you see when you compare that to wild type littermate and we’ve been able to show that we can pharmacologically inhibit miR 21 and phenol copy [ph] the results that we see in the knockout animals and multiple different models of both -- renal fibrosis.

So we have chosen to move into a syndrome called Alport syndrome and in essence this is a disease in which renal fibrosis plays a very important part but it’s actually genetic disorder caused by mutations in a series of collagen genes, namely the collagen 4A family of genes, 4A3, 4A4, or 4A5 and when you have a mutation in those specific genes that then triggers sequel of events that leads to infiltrating macrophages coming into the kidney, loss of renal function and humans with those mutations end up going into end stage renal disease either in their early 20s or up to their mid-to-late 30s and the difference in the rate of progression towards end-stage renal disease is influenced by the type of mutation that that patient may have.

So ultimately this is a syndrome with a very significant unmet medical need. There are no approved therapies for this disease and it's very important to develop new therapies that will help patients with Alport syndrome.

We're fortunate in that there is a rodent model of Alport syndrome, there is a collagen 4A3 mutant mouse that has the same disease pathogenesis as we see in humans in that you have the collagen mutation, you have increased miR 21 expression which is a consequence of that mutation, that then triggers infiltrating macrophages coming into the kidney leading to loss of renal function and ultimately premature death in those animals. And when we inhibit miR 21 in this animal model system we can actually significant reduce the level of fibrosis as seen in the left panel, we can improve renal function as seen in the middle panel and actually improves survival as seen in the right-hand panel.

And depending upon the mouse strain we can increase the survival of those animals anywhere from 20% to 50%, it’s a very powerful pharmacological effect by blocking miR 21 in a rodent the model that’s directly relevant to human disease population, to which we’re targeting.

So ultimately where we are with this program, we started the GLP toxicology with our clinical candidate. We have a pre-IND meeting with the FDA scheduled for June 2. We will be starting our natural history study which will give us very important information with regards to the clinical endpoints we may use in our phase 2 proof of concept in the second half of this year. And we will as I mentioned earlier be starting the [indiscernible] in healthy volunteers early in 2015 transitioning very quickly into phase two proof of concept in patients with Alport syndrome in the few months after the [sat and the mat] have started. So we’re very excited about the progress that we’re making in this program.

I won’t go into any significant detail on the rest of portfolio other than to say that in oncology there's a number of interesting microRNA targets that have been well validated, miR 21 only plays a role in renal fibrosis but also plays an important role in cancer progression given the fact that it’s stress [ph] activated microRNA. I mentioned we have a miR 19 program with AstraZeneca. miR 19 is an important microRNA in that it is directly activated if you will by make amplification of common genetic lesion in oncology and looking to target that will help us to be able to get tumor types that are driven through make amplification such as lymphoma -- diffuse large B cell lymphoma. So we have multiple programs ongoing within oncology in our portfolio.

Finally I just like to take you through some of the work we've been doing using microRNAs as potential biomarkers. We've developed a very robust technology where we can look at a large number of microRNAs from as little as 100 to 150 µL of fluids whether it be the serum, blood, urine, saliva etc. and really help us understand whether the profile of microRNAs in that fluid is different when you compare a diseased individual with a healthy individual and looking to just continue to develop the technology to see whether it has power as the predictive tool to help us understand which patients may respond best to any given therapy.

This is an example of one of the programs we’ve been working on which is in essence colorectal cancer patients who undergo surgery, there is about 15% to 20% of those patients have a high risk of developing disease recurrence associated with liver metastasis and when we profiled the microRNAs that we can see in the serum of individuals who have undergone surgery for colorectal cancer, we can identify the 10 microRNA signature that will predict for disease recurrence and clearly discriminate the profile you would see in those colorectal cancer patients from healthy volunteers.

So ultimately the opportunity there is after surgery to have a routine test that will allow you to monitor a patient who may progress or who may not progress and be able to get those patients on to the appropriate therapy at the appropriate time.

Ultimately we've been applying the technology as we develop to multiple different opportunities. We have a collaboration as shown with the top row in the table on multiple sclerosis with Biogen Idec and we've already identified a really nice microRNA signature that can discriminate between MS patients from healthy volunteers. So we’re continuing and moving into the second phase of this collaboration with Biogen where we’re looking at their clinical data from their different mechanisms that are being used to treat MS to see if we can identify microRNA signature to help us understand who is most likely to respond to Tysabri or to Taxodera [ph]. So this will be something that we will be developing over the next 12 months with Biden Idec and in support of the development of the technology we’ve also shown that this approach can be very useful in developing signatures in rheumatoid arthritis. And we’re looking to apply to other disease states such some of the diabetic populations or other large populations we really need to get a handle on different potential segments so that we can understand prognosis as well as understand within those segments how they may respond to current therapies or the segments for the development of new therapies.

So ultimately what I hope I've been able to show to you is that we’ve got a very robust portfolio that we are developing. We have a lead clinical program that's ongoing that will show human proof of concept in the second half of this year. Ahead of that we’ve already with our second program started the GLP tox, have the pre-IND meeting scheduled and we will be starting a natural history study and towards the end of this year we will be nominating our third clinical candidate to give us the opportunity to have three clinical programs ongoing at the end of 2015.

So with that, I will stop and then take any questions. Thank you.

Question-and-Answer Session

Colin Bristow – Bank of America Merrill Lynch

Any questions, please be your hand up and we will get to you, but I will kick off with a quick one. I mean clearly the holy grail in HCV is getting that one pill once a day pan genotypic therapy but we’re seeing the big players making steps towards that and I feel like Gilead has a pretty good shot on that toward 2015-17 timeframe, how are you seeing yourself being differentiated from them, acknowledging it’s a big market, they’re a seasoned player.

Neil Gibson

So as I mentioned our key opinion leaders have really taken the due and even if you're seeing 98%, 99% SVR rates in well-controlled clinical trials that you have to adjust that downwards slightly in a real-world setting and they have even talked about a 10% reduction in the SVR rates that you may see in real world. So that could put you in a case where there is 85% to 90% SVRs in those patients regardless of whether it's one pill, two pills or two pills. So that gives us an opportunity to have a mechanism of therapy that could help those patients. And if that reduction in SVR rates is associated with the development of resistance we have a pan genotypic mechanism that could actually prevent the appearance of resistance if that resistance is caused by lack of compliance for instance.

Unidentified Analyst

A couple of them, one is how is the HVC treatment intended to be administered?

Neil Gibson

This is a subcutaneous injection of the GalNAc conjugate that very efficiently gets delivery to hepatocytes.

Unidentified Analyst

And how frequently would that have to be?

Neil Gibson

So we have that scheduled for administration once every 28 days, so four total injections over the course of a 12 week duration of treatment for an HCV patient.

Unidentified Analyst

I am actually quite intrigued by that, the last [indiscernible] the diagnostic perspective. It seems to me there is no small number of mutations where we just don't know if you have a disease or not, we don't know what your course looks like, how aggressive are you guys pursuing that because that seems like something that could be quite differentiated?

Neil Gibson

Yes, I mean one least, small pieces of RNA are very stable, so if you took a blood sample, and put on the table [indiscernible] should get the same result as when you measure it right way, so we recognize that this is a very significant opportunity. We’ve created a division within our company to focus on that and we’ve actually hired an individual to come in and direct that program to make sure that we can advance that as rapidly as we can and maximize the value of this opportunity to the company.

Colin Bristow – Bank of America Merrill Lynch

Can you remind us what specific dates that we’re going to get with regard to the direct [ph] in the second half and what are you going to be paying a particular attention to base on what you know about the mechanism in terms of potential adverse events?

Neil Gibson

Yeah, so the timing of the direct [ph] is in the second half of the year we will be seeing human proof of concept associated with a single dose of the compound. Now we know that we do see viral load reduction in the preclinical models after single dose. So ultimately there could be different decisions made depending upon the level of viral load reduction that we would be very excited if we see up to 3 log viral load reduction after a single dose with our mechanism. The current GLP toxicology data that we’ve generated show that there's basically -- this is very well tolerated safe mechanism. There is a theoretical risk that if you inhibit miR 122 over the long-term, so chronic inhibition such as the knockout in an animal or a mouse model can lead to HCC. There's been other genetic ways to try knockout 122, when you knock it out for six months you don’t see a phenotype but when you knock it out for 12 to 15 months you start to see evidence of HCC but that’s in a mouse whose lifespan is two years or less. So we feel pretty good that when we’re only inhibiting miR 122 for a period of basically 12 weeks, that that’s such an acute inhibition of the target that it will be safe and well tolerated.

Colin Bristow – Bank of America Merrill Lynch

What’s the IP around these therapies?

Neil Gibson

So for lot of IPs, there is composition of matter IP around the therapies, there's method of use IP, so we have a significant IP state from our founders, Isis and Alnylam but we also for instance in the RG 101 program have licensed IP from Stanford University that really helped us from a method of use i.e. treating patients or HCV patients through targeting 122 is quite an extensive patent that Stanford have that we have licensed. So when you add that to the composition of matter opportunity or intellectual property we have around the GalNAc conjugated the single-stranded oligonucleotide with some unique chemistry associated with that, we have a very strong IP position around this program as with the majority of our program.

Colin Bristow – Bank of America Merrill Lynch

And then as you think about [substance] controls is there any concern at all about enrollment given that we will have more efficacious therapies that are marketed, and your much more noble therapy that is variations on currently marketed therapies with components that we already know, are safe and well tolerated.

Neil Gibson

I think this is going to be a regional issue because I think certain regions of the world are not going to be able to afford the current therapies that are being developed. So there will be opportunities to do very creative clinical trials in those regions. So for instance in our – even in our single-dose HCV patients we're already recruiting patients in Europe for the study amidst the background of all the other events that are happening in the HCV space.

Unidentified Analyst

Yes, thanks, in a perfect world, how soon could you be on the market in HCV?

Neil Gibson

So in a perfect world as we were to get positive data from the single-dose HCV and then immediately move into a phase 2 setting and design that in a creative way where we think we might have the basis for registration, that could be in another sort of 15 months to 24 months timeframe. So that would be a perfect world.

Unidentified Analyst

And registration after phase 2?

Neil Gibson

Yes, if you had a very unique and niche population that you could go for but in a more realistic setting, it’d probably be another couple of years after that.

Unidentified Analyst

How much cash do you have on hand at – how much debt and what – if you do have any debt, when is debt coming due?

Neil Gibson

So we actually are very lucky in that we’ve got minimal debt. We only actually have a GSK option or convert which is $5 million I believe and we ended the first quarter of this year with over $110 million in cash which is the end result of going through the IPO as well as the follow-on financing. So we’re in a very good financial position with cash on hand.

Colin Bristow – Bank of America Merrill Lynch

I think we are out of time. Neil, thank you very much and thank you everyone for coming.

Neil Gibson

Yes, thanks everyone for being here. Appreciate it.

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