Q4 2022 Surrozen Inc Earnings Call
Speaker 2: of the Sir Rosen Corporate Update Conference call. My name is Josh and I will be your manager for this call. I will now turn the call over to Craig Parker, CEO of Sir Rosen, to begin the call.
Speaker 3: Thanks, Josh, and thank all of you for joining us today for this important corporate update. As Josh said, I'm Craig Parker, CEO of Surazan, and with me today is Chuck Williams, the Chief Financial Officer at Surazan.
Speaker 3: We'll be providing corporate and R&D pipeline updates today and will then address questions.
Speaker 4: Slide two.
Speaker 3: I'll be making forward looking statements. Please consult our SEC filings in particular our 2022 annual report on Form 10-K for a full discussion of our risk factors.
Speaker 4: Slide 3.
Speaker 3: As some of you know, Surison is the preeminent innovator in using the Wnt pathway, the body's own physiologic mechanism for tissue repair, to selectively stimulate tissue regeneration in a broad range of diseases.
Speaker 3: We do this through our proprietary platform and technologies that combine an understanding of Wnt pathway biology in specific disease settings with advanced antibody engineering techniques and proprietary antibody technologies.
Speaker 3: Our vision is to design and develop tissue-selective antibodies that have the potential to regenerate tissue in many severe diseases.
Speaker 3: It's this targeted approach to Wnt modulation and the extremely broad potential therapeutic applications that distinguish our approach and our technologies.
Speaker 3: The ultimate clinical promise of our approach is disease-modifying benefit.
Speaker 3: WIMP signaling plays an essential role in regulating many biological processes, including regenerative responses to tissue injury. And we see myriad opportunities to regenerate tissue for clinical benefit.
Speaker 3: We've invented several novel multivalent antibody-based approaches to selectively modulating wind signaling and have advanced two into the clinic.
Speaker 3: We believe that the Wnt pathway's broad physiologic role portends a role for Wnt therapeutics in a wide range of severe and acute diseases.
Speaker 3: Our approach overcomes a significant limitation to most regenerative medicine approaches that are limited by availability of donor tissue or long-term viability.
Speaker 3: We're currently focused on two key clinical areas.
Speaker 3: severe alcoholic hepatitis with our candidate SCN-043, and inflammatory bowel disease with our candidate SCN-1326.
Speaker 3: Today, we'll provide you with corporate and pipeline updates, including anticipated timelines for our lead clinical programs.
Speaker 3: our prioritization efforts for the research pipeline, updates on our partnered program with Behringer Ingelheim, and our expectations around cash runway as we look toward key inflection points in our lead programs.
Speaker 3: We'll also provide an overview of our initial evaluation of the Transaminase elevations observed in the Phase 1a studies and our approach to advancing both LEAD programs.
Speaker 3: In November , we disclosed several adverse events observed in clinical trials that had commenced in 2022.
Speaker 3: One of the studies, the phase one single ascending dose study for SCN 1326, was voluntarily paused, pending further evaluation of grade three transaminase, or liver enzyme, elevations.
Speaker 3: We're excited to be able to update you on progress for both SCN-043 and SCN-1326 Phase I clinical trials.
Speaker 3: Both are currently open to enrollment.
Speaker 3: For SCN 043, we've enrolled our first patient and will provide more information later in the call.
Speaker 3: We've enrolled our first patient and we'll provide more information later in the call. Slide four.
Speaker 3: If Wnt biology is so promising, why has it taken decades to drug this pathway?
Speaker 3: There are many technical impediments.
Speaker 3: when proteins themselves are insoluble, promiscuous, and not manufacturable. So a typical recombinant native protein strategy is just not possible.
Speaker 3: Surasan's platform technologies and strategies have helped us overcome all of these limitations.
Speaker 3: Our candidate molecules are full-length bispecific antibodies that have desirable drug-like properties, such as solubility, stability, and manufacturability. They're also highly targeted to tissue-specific receptors. Importantly, we're mimicking a normal physiologic response.
Speaker 3: So our antibodies in a selective way are able to do what Wnt pathway proteins do in all of our bodies in many tissues, either to maintain the tissue or respond to injury.
Speaker 3: The novelty and breakthrough nature of our work is validated by our strong publication record and high impact peer reviewed journals, including Science.
Speaker 3: Nature, Cell Chemical Biology, Nature Scientific Reports, and Nature Communications.
Speaker 3: We have filed or licensed over 20 patent families related to our key discoveries involving the wind pathway and its modulation.
Speaker 3: We recently received notices of allowance from the United States Patent and Trademark Office for two patent families assigned to Surazan related to the SCN 1326 program.
Speaker 3: We think the breadth of our scientific discoveries and related patent application and claims can establish a dominant position for us in the use of antibody therapeutics to modulate Wnt signaling.
Speaker 3: Slide five. Our proprietary technologies have led to two different LEAD programs that entered the clinic in 2022.
Speaker 3: The licensing of the lead development candidate SCN 413 for treatment of retinal diseases to Beringer-Engelheim in the fourth quarter of 2022. And a focus on two discovery pipeline programs for cornea and lacrimal gland.
Speaker 3: Our research programs focus on indications of high unmet need with no or few available treatments, including a group of ophthalmologic indications that we'll tell you more about.
Speaker 3: We're excited today to provide an update on advancing both of our clinical programs, SCN-043 and SCN-1326.
Speaker 3: Since our announcement in the fourth quarter of 2022 regarding transaminase elevations, we've completed numerous studies to understand the mechanism of transaminase elevation seen in the SCN 1326 programs and also at a lower grade in the SCN 043 program.
Speaker 3: We'll provide you with an overview of our efforts to date and clinical program plans.
Speaker 3: For SCN043, we're really excited we've advanced to the second phase of the study in chronic liver disease patients following completion of dosing at two dose levels in healthy volunteers.
Speaker 3: For SCN 1326, we will progress our Phase 1 single ascending dose study at lower doses.
Speaker 3: pursuing a dosing strategy frequently applied to first-in-class antibodies referred to as a MABL, or minimal anticipated biological effect levels.
Speaker 3: Additionally, we look forward to the opportunity to advance another development candidate in 2023 in collaboration with our partner, Beringer Ingelheim, with the potential to identify the final Frizzle 4 targeted development candidate by year end. A milestone that would trigger a payment to Surazan.
Speaker 3: Finally, we anticipate that our prioritization and restructuring will result in a cash runway into the second half of 2024, allowing us to achieve multiple key milestones and catalysts.
Speaker 3: Finally, we anticipate that our prioritization and restructuring will result in a cash runway into the second half of 2024, allowing us to achieve multiple key milestones and catalysts. Slide 7.
Speaker 3: SCN-043 is our bispecific multivalent antibody that mimics the activity of R-spondin, but importantly is specifically targeted to hepatocytes via its ASGR1 binding.
Speaker 3: SCN-043 specifically activates Wnt signaling in the liver, resulting in hepatocyte proliferation.
Speaker 3: liver regeneration, improvement in liver function, and reduction in fibrosis.
Speaker 3: We think the biological rationale and preclinical data that support the concept of activating when signaling for the treatment of severe liver diseases is compelling.
Speaker 3: We developed a data-driven clinical plan to align the molecules pharmacology with specific disease pathologies and advance into clinical trials in 2022.
Speaker 3: As mentioned, we observed some mild to moderate adverse events in the first two dose cohorts, which we'll describe in more detail.
Speaker 3: Importantly, these observations did not impact our ability to advance into the next stage of the Phase 1 program in liver disease subjects.
Speaker 5: Thank you.
Speaker 3: We'll describe our plan next steps.
Speaker 3: and the significant opportunity in severe alcoholic hepatitis.
Speaker 3: Slide eight. It's important to point out that our SWEETS antibody platform, on which O4-3 is based, allows for cell-specific targeting of the Wnt activating mechanism.
Speaker 3: SCN-043 utilizes a well-characterized hepatocyte-specific receptor, ASGR1, to target O4-3's activity to hepatocytes.
Speaker 3: Our SWEETS technology mimics the activity of a naturally occurring protein R-spondin.
Speaker 3: Our spondens contribution to regeneration is well described, and we focus its activity on hepatocytes with our technology.
Speaker 3: We've confirmed the cell specific wind pathway effects of the molecule and our animal toxicology studies showed no adverse effects up to 125 milligrams per kilogram dose level.
Speaker 3: Let me explain why we think severe alcoholic hepatitis is the right indication for the molecule and for surison.
Speaker 3: Alcoholic hepatitis is a severe clinical entity characterized by acute onset of jaundice and coagulopathy in patients with alcohol use disorder.
Speaker 3: The incidence of alcoholic hepatitis is increasing over recent years.
Speaker 3: Short-term mortality of severe AH remains very high. 20% of patients with AH die within 30 days of admission to the hospital, and 30% die within 90 days due to hepatocyte loss and lack of sufficient regeneration to overcome that loss. The medical management of alcoholic hepatitis has not referenced entirely dots
Speaker 3: Liver transplants often are denied due to alcoholism.
Speaker 3: And even if available, transplants are limited by donor organ availability, cost, and limitations on medical centers with transplant capabilities.
Speaker 3: Hospitalization rates are very high in severe alcohol and hepatitis and represent about 130,000 hospitalizations per year.
Speaker 3: People with severe AH are typically admitted to the ICU, so this is an identifiable population with an extremely high unmet need.
Speaker 3: We're also aware that alcohol consumption increased by over 30% during the pandemic, and hospitalizations also increased during the pandemic for alcoholic hepatitis.
Speaker 3: We think that the critical medical need in this population, the dearth of novel approaches, and alignment of our mechanism with the disease pathophysiology is reinforced by an award to CIRS-N of a several million dollar NIH grant for this program.
Speaker 3: Importantly, hepatocyte regeneration is known to correlate with improved survival.
Speaker 3: Furthermore, we can utilize surrogates for response and survival, such as the LIL and MELD scores, to assess early signs of clinical benefit. Both of these tools are using clinical practice to assess response to treatment, prognosis, and eligibility for transplant. They are objective and are calculated using common laboratory tests.
Speaker 3: like bilirubin. The LIL score at seven days is a well-characterized marker of disease severity that is highly correlated with 90-day survival.
Speaker 3: We expect 90-day survival to be the approvable endpoint in a registration trial.
Speaker 3: Because of the disease severity and unmet medical need, we believe there's an opportunity for favorable regulatory treatment, such as breakthrough therapy designation. And a potentially rapid approval pathway as seen in other grievous diseases.
Speaker 6: Thank you.
Speaker 4: Flight 9
Speaker 3: We've published data from multiple rodent liver injury models demonstrating that SDNO43 rapidly proliferates mature hepatocytes, resulting in functional improvements and a reduction in fibrosis. We've published data from multiple rodent liver injuries, demonstrating that SDNO43
Speaker 3: These publications and abstracts can be found in the investors section of our corporate website.
Speaker 3: The efficacy of SCNO-43 spans injury models specific to our initial indication of alcoholic hepatitis to models of fibrosis.
Speaker 3: that could ultimately provide translation to additional liver indications in the future.
Speaker 3: Slide 10. We're excited to have completed two cohorts of patients in the Phase 1 single ascending dose study in healthy volunteers, and we've enrolled our first patient with chronic liver disease. Following the outcome of the mild to moderate TA elevations in the first cohort...
Speaker 3: that also resolved spontaneously. Following completion of Cohort 2 in the Phase 1 SAD and Healthy Volunteers, we opened enrollment in the Phase 1 SAD in patients with chronic liver disease, and as I said, have enrolled our first patient. We expect to enroll four and think we need to set coursebot hours
Speaker 3: subjects per dose group with an option to expand the cohorts.
Speaker 3: We're proceeding with lower doses as our preclinical data indicates the damaged tissue may be more sensitive to the beneficial hepatocyte proliferation effects of SCN-043.
Speaker 3: Patients in Cohort 1 will be dosed at 0.5 milligrams per kilogram.
Speaker 3: Importantly, we anticipate having data from the phase 1 single ascending dose in chronic liver disease patients by year end 2023.
Speaker 3: Assuming acceptable safety, we anticipate moving into a phase 1B clinical study in severe alcoholic hepatitis patients in 2024 with proof of concept data expected to be available in the second half of 2024.
Speaker 3: In summary, we believe that SCN-043's mechanism and preclinical data are ideally aligned with our initial target indication.
Speaker 3: and that SCN043 has a well-defined clinical development and regulatory pathway.
Speaker 3: We look forward to advancing our understanding of the therapeutic potential of SCN-043 as we initiate treatment of subjects with chronic liver disease and ultimately patients with severe alcoholic hepatitis.
Speaker 3: Slide 12. SCN 1326 is based on our SWAP technology, and we're developing SCN 1326 from moderate to severe inflammatory bowel disease.
Speaker 3: based on a compelling effect in well-established rodent models of colitis, showing near-complete healing of damaged intestinal epithelium.
Speaker 3: including reestablishment of the critical barrier function. Using just one or two doses of SCN1326, we designed a clinical development plan leveraging the extensive experience of other biologic agents in IBD.
Speaker 3: In contrast to other biologics, though, our biology and preclinical data suggests we have an opportunity to directly drive mucosal healing or histologic remission.
Speaker 3: In May 2022, we commenced dosing of SCN 1326 in a healthy volunteer phase 1 single ascending dose study. Several subjects in cohort 1 treated at 25 milligrams.
Speaker 3: experienced asymptomatic liver transaminase elevations, including two subjects with grade three ALT and AST elevations, and two subjects with grade one ALT elevations.
Speaker 3: There were no corresponding increases in total bilirubin, nor any changes in other liver function markers, and no other clinically significant laboratory abnormalities.
Speaker 3: The transaminase elevations resolved spontaneously in all subjects.
Speaker 3: No serious adverse events were observed during the study.
Speaker 3: Although the protocol did not require that we halt the study, we announced a voluntary pause to enrollment in the phase one healthy volunteer portion of the study in November , following this observation, following an observation of a grade three ALT elevation at a lower dose, in order to give us an opportunity to analyze the clinical data.
Speaker 3: We have not observed transaminase elevations or any other adversities at doses up to 125 milligrams per kilogram in pilot or GLP toxicology studies.
Speaker 3: So, these adverse events were unexpected and as such could not be characterized with nonclinical data available at the time of the observed events.
Speaker 3: We've invested significantly in efforts to understand the mechanism of the TA elevations.
Speaker 3: Importantly, a better understanding of the nonclinical data and clinical data combined with a modified dosing strategy allows us now to proceed to dose additional healthy volunteers in the phase 1 SAD portion of the study, which we expect to do in the next few weeks. Our initial rationale for dose.
Speaker 3: the NOAEL or no observed adverse effect level, as well as other indicators of activities such as a therapeutically active dose.
Speaker 3: In light of the TA elevation observations, we're now pursuing a dose level strategy with SCN1326 that, as I said, is commonly employed with agonistic antibodies for first in human studies.
Speaker 3: And that's a MABL, or Minimum Anticipated Biological Effect level.
Speaker 3: Slide 13. So I probably don't need to reinforce for all of you the remaining unmet need in this significant market. Initially we're developing SCN 1326 for alternative colitis.
Speaker 3: Ulcerative colitis is a chronic immune-mediated inflammatory disease of the large intestine that's frequently associated with inflammation of the rectum, but also extends proximally to involve additional areas of the colon.
Speaker 3: Nearly 1 million individuals each in the US and EU are affected.
Speaker 3: Peak incidence occurs between the ages of 15 and 45. Some patients with UC have persistent disease activity despite medical therapy, and 20% will develop at least one episode of acute severe ulcerative colitis requiring hospitalization.
Speaker 3: Importantly, although there are medical therapies on the market in development, there remains a significant unmet need in UC for the following. Rapid induction as current anti-inflammatory biologics can take months to induce clinical remission. Improved efficacy, especially histologic remission.
Speaker 3: as anti-inflammatory biologics achieve clinical remission in less than 50% of patients at 52 weeks and low rates of histologic remission as low as 20%.
Speaker 3: Histologic remission has been associated with a better clinical course.
Speaker 3: Additional mechanisms of action as an additional unmet need as many patients fail first-line anti-inflammatory biologics and subsequently fail second and third-line therapies.
Speaker 3: Slide 14. So, what's the rationale for a windpemetic in inflammatory bowel disease?
Speaker 3: A major component of the pathophysiology of IBD is an impaired epithelial barrier or gut wall, allowing for exposure of gut microbes to the gut's immune system.
Speaker 3: resulting in inflammation. This inflammation further destroys the epithelial barrier.
Speaker 3: SCN 1326 can directly address this epithelial barrier dysfunction.
Speaker 3: It binds to intestinal stem cells in the colon crypt.
Speaker 3: replacing Wnt ligands that in normal circumstances are produced by the stromal cells, but that's disrupted in IBD.
Speaker 3: This binding of 1326 leads to proliferation and differentiation of these cells as they move up and out of the colon crypt, replacing the damaged epithelium and restoring the epithelial barrier. We've shown preclinical that this results in reduced inflammation and reduced disease activity.
Speaker 3: Slide 15. In preclinical studies, we've demonstrated that 1326 restores Wnt signaling in the damaged intestine. See How Kali is
Speaker 3: repairs the damaged colon epithelium, reduces inflammatory cytokines, and reduces disease activity.
Speaker 3: We've also shown that this activity in preclinical models of colitis compares favorably to approved biologics and immunosuppressants. You can find abstracts related to some of this preclinical data on our website.
Speaker 3: We've also shown that this activity in preclinical models of colitis compares favorably to approved biologics and immunosuppressants. You can find abstracts related to some of this preclinical data on our website. Slide 16.
Speaker 3: Over the last several months, we've identified several potential hypotheses for the transaminase elevations we've seen in the clinic and have established a rigorous science-based investigation plan.
Speaker 3: Our in-house expertise and capabilities have proved invaluable in expeditiously analyzing the available data and conducting additional experiments designed to specifically address key questions.
Speaker 3: Let me describe some of these activities, data, and our conclusions. We've established additional in vitro and in vivo systems specifically employing human hepatocytes in order to most closely model human physiology.
Speaker 3: We've observed that our molecules do not have a direct toxic effect on human liver cells in multiple in vitro and in vivo experimental systems.
Speaker 3: We have not observed a direct effect on ALT or AST in vitro.
Speaker 3: And importantly, we have not seen any immune-mediated effects using multiple experimental settings.
Speaker 3: No cell death, no immune activation, no observed hepatocyte killing effect in any of our studies that we've undertaken over the last few months. Although O43 and 1326 employ different receptor systems for activity, the downstream wind pathway effects are shared.
Speaker 3: We think the similarities in the patterns of transaminase elevations between the two molecules in light of their different pharmacokinetics
Speaker 3: is supportive of the hypothesis that activation of Wnt signaling and subsequent hepatocyte-driven liver regeneration is at least partially responsible for the transaminase effects.
Speaker 3: We'll continue to investigate additional models for applicability to understanding the mechanism of these TA elevations.
Speaker 3: I'll also remind you that this seems to be a liver specific effect.
Speaker 3: And many of our molecules would not be expected to affect liver cells based on either receptor targeting or route of administration.
Speaker 3: We'll be commencing dosing of SCN 1326 in the next cohort of healthy volunteers at a dose of 0.04 milligrams or 40 micrograms.
Speaker 3: Assuming acceptable safety in this and subsequent cohorts, we anticipate proceeding to doses up to at least one milligram.
Speaker 3: Following acceptable safety, we anticipate enrolling a proof of concept study in ulcerative colitis patients in 2024, with proof of concept data expected to be available in the second half of 2024.
Speaker 3: Slide 18. We have three research programs in late stages of lead optimization or candidate selection.
Speaker 3: two wholly owned by Surizon, and one partnered with Behringer Ingelheim. As I mentioned, Wnt signaling plays a central role in tissue regeneration and Wnt responses cell types are found in tissues throughout the body. We believe this broad physiologic role portends a role for Wnt therapeutics in a wide range of severe and acute diseases.
Speaker 3: could fill a unique mechanistic role in the treatment of retinopathies.
Speaker 3: by simultaneously addressing vascular leakage and retinal non-perfusion.
Speaker 3: In two different models of retinal injury, we've shown that SCN 413 could reverse multiple manifestations of retinal injury, including vascular leakage. And areas in the areas in the retina that were not adequately vascularized and areas with characteristic pathologic neovascular tufts. This and other data stimulated interest from multiple parties.
Speaker 3: is a disease characterized by corneal swelling and ultimately vision loss and discomfort caused by excessive loss of corneal endothelial cells. The cause of corneal endothelial cell loss is not well understood but has a genetic component.
Speaker 3: Current therapies are limited to endothelial transplant or reception at late stages of the disease.
Speaker 3: there is a significant unmet need for therapies that mitigate disease progression and or improve surgical efficacy.
Speaker 3: Our strategy for treating corneal disease is to specifically activate when signaling in the tissue, regenerate corneal endothelial cells, reduce corneal swelling, and improve vision.
Speaker 3: We've established a cornea research effort, including in vitro and in vivo models, that to date have demonstrated the following. Specific frizzled receptors are expressed in corneal endothelium of both normal and Fuchs human donors and can therefore be used in designing and targeting our SWOT molecules.
Speaker 3: We can observe Wnt activation through specific swaps that enhance proliferation of primary human corneal endothelial cells in vitro. And we've established a corneal cryo injury model.
Speaker 3: to measure the therapeutic effect of activating Wnt signaling in the corneal endothelium. In vivo surizin Wnt activating molecules are efficacious in reducing corneal thickness and improving opacity.
Speaker 3: The next step for our program is to optimize a lead molecule and select a development candidate.
Speaker 3: Slide 20. Let me tell you about another ophthalmologic program that we're excited about. We're pursuing a potential treatment for severe dry eye with our SWAP technology.
Speaker 3: Severe dry eye is characterized by atrophy of the tear-producing glands in the eye and insufficient regeneration. The objective with the Wnt activating approach is to stimulate regeneration of the tear-producing cells in the lacrimal gland.
Speaker 3: restore fluid secretion.
Speaker 3: We've established multiple lacrimal gland injury models in rodents in which tear production is reduced.
Speaker 3: One, using interleukin-1 alpha to promote inflammation-driven injury.
Speaker 3: the other a lacrimal duct ligation model that results in necrosis to the gland. An important first mechanistic step in restoring tear production is to regenerate the tear producing cells in the gland called the acinar cells. We've shown that a single injection of a SWOT molecule results in an increase in the weight of the lacrimal gland and a demonstrable proliferation of these acinar cells.
Speaker 3: So we're having a clear effect at the cellular level of increasing the number of target cells in the gland.
Speaker 3: In the IL-1A induced injury model, we've shown that SWOT molecules activate when signaling in the tissue, which leads to an increase in tear secretion.
Speaker 3: The method for measuring tear secretion in this model is actually the same as that used in clinical trials of agents for dry eye, a phenol red thread.
Speaker 3: In this model, there's a statistically significant increase in tier production with SWOT molecules at days 2, 3, and 4.
Speaker 3: Similarly, in a duct ligation model of lacrimal gland injury, we've shown that treatment with a SWOT molecule restores tear production through activation of Wnt signaling and proliferation of acinar cells. Capture a results factor with
Speaker 3: The next step for the program is to optimize and finalize a lead molecule for development. We expect at least one of these programs to move forward into development in 2023, potentially in collaboration with a corporate partner.
Speaker 3: Both involve local administration of our antibodies to the affected tissue, and therefore would not be expected to have any potential liver exposure liabilities.
Speaker 3: Slide 21, and I'm going to turn the slide over to Chuck.
Speaker 7: Thanks, Craig. As Craig's outlined, we've made significant progress with our programs over the last few months and I wanted to highlight a few.
Speaker 7: As Craig outlined, we've made significant progress with our programs over the last few months. I wanted to highlight a few
Speaker 7: the things that we've accomplished from a corporate and capital structure perspective to establish a stronger foundation for continued future success.
Speaker 7: So first I wanted to highlight we executed a partnership with Boeringer Ingelheim in the fourth quarter of 2022 to develop a WIN agonist, SCN 413, for the treatment of people with retinal diseases. WIND
Speaker 7: We anticipate the potential to identify the lead PRISIL 4 targeted win agonist candidate by year end 2023 would trigger a potential $10 million milestone payment.
Speaker 7: Secondly, we implemented a restructuring in Q1 of this year. Our efforts were focused on maximizing shareholder value by, one, aligning resources on R&D investments for the two lead clinical development programs with a focus on obtaining proof of concept data.
Speaker 7: Two, prioritizing investment in the most advanced discovery preclinical programs, lacrimal and cornea.
Speaker 7: And thirdly, reducing operating expenses with the goal of maintaining a strong balance sheet. Following the corporate prioritization and restructuring activities, we anticipate a reduction in operating expenses, excluding non-cash and non-recurring charges of approximately 15% in 2023 compared to 2022.
Speaker 7: Cash, cash equivalents and marketable securities were approximately 76 million as of the end of 2022. And we expect our cash runway to last into the second half of 2024. Finally, I wanted to highlight in the fourth quarter of 2022, we entered into a securities purchase agreement with continents.
Speaker 7: Given they decided that they were winding down their fund, they were an overhang on our stock, so we entered into an agreement to repurchase approximately 5.4 million shares of our common stock and approximately 1.3 million warrants.
Speaker 7: Given they decided that they were winding down their fund, they were an overhang on our stock, so we entered into an agreement to repurchase approximately 5.4 million shares of our common stock and approximately 1.3 million warrants. For a purchase price of approximately 2.7 million.
Speaker 7: Following the repurchase, Consonant no longer holds any shares of our common stock or warrants to purchase Sarazin common stock. We're excited with the multiple opportunities that lie ahead of Sarazin in 2023 and 2024.
Speaker 7: We've shared some of our key milestones and catalysts through 2024 on this slide. We share our thoughts on cash runway into the second half of 2024 as we think about our key upcoming milestones and catalysts. And I'll briefly highlight a few of these.
Speaker 7: First for SBN 043, as Craig mentioned, we've enrolled the first patient for chronic liver disease and expect to have data by the end of the year and plan to initiate a Phase 1B trial in 2024 with potential proof of concept data in the second half of 2024.
Speaker 7: As it relates to 1326, we've opened enrollment for the phase 1 in healthy volunteers, and we expect to be able to have data by the end of the year, and we'll initiate a phase 1B trial in 2024 in UC patients and expect to have proof of concept data in the second half of 24. Over the far and wide border dharma
Speaker 7: As I've already mentioned with SCM 413, which is partnered with Böhringer Ingelheim, we expect by the end of the year for them to nominate a candidate, which will trigger a $10 million milestone payment. And as it relates to our research programs, we expect to nominate an additional program and or partner that potential.
Speaker 2: for your name to be announced. To withdraw your question, please press star 1-1 again.
Speaker 8: Our first question comes from Deygan Ha with CPL. You may proceed. Good afternoon. Thanks for taking my questions and congrats on all the progress. Good to hear things are back in motion on your side of the table. Maybe I will start with two before I hop back in the queue.
Speaker 8: Can you guys hear me now? Yes.
Speaker 8: Hey Craig, great, so thank you for taking my questions. Congrats on all the progress. I wanted to ask two questions. One was more of a clarification for the 043 plan. Is there a change in the study plans because I thought the phase one next study was in thelit cut comment section below?
Speaker 8: observations and more hepatically impaired patients and then I've got a follow-up.
Speaker 3: Thanks for the question, Dagon. So, yes, you observed a nuance in what we think are the patients likely to be enrolled in the study. So, the general objective of the study, well, the primary objective of the study is unchanged, which is safety.
Speaker 3: We think that, and cirrhotic patients are chronic liver disease patients.
Speaker 3: For many etiologies, like patients with Hep C, for example, cirrhosis is defined by, in part, a fibroscan score or transient elastography score of 7.5. We're taking patients with lower fibroscan scores, so they will certainly have chronic liver disease. They will have fibrosis.
Speaker 3: yet, but they would certainly have fibrosis and have hepatic impairment.
Speaker 8: Got it. And what about the hypotically impaired aspect? How might that be a potential complication for you guys or do you have strategies to mitigate that?
Speaker 3: You know, we have not identified a specific mechanism where, you know, 1 could. Mitigate, for example, by co administering something else.
Speaker 3: And so I think, as I mentioned, we've observed that damaged tissue tends to be more sensitive.
Speaker 3: And so I think this is really going to come down to the dose response in disease tissue versus healthy tissue. So there's no specific mechanistic strategy at this point based on the data that we've generated. But again, it's possible that at...
Speaker 8: your 1326 study, how many more dose cohorts are you going to be exploring? I think I heard you say starting with 0.04, but going up to one milligram dose. Have you clarified how many cohorts that would be and kind of by extension, this notion of higher than expected exposure in humans versus animal studies?
Speaker 3: you know, we're, to dig on, we're not going to disclose all the dosing cohorts, but it's a pretty typical dose level strategy.
Speaker 3: and we can continue to go above one and it's possible for example that we could go up to 2.5 where we've seen one of these events with a different route of administration.
Speaker 3: So, one potential hypothesis, for example, is that C-max may be a contributor. We don't have preclinical data suggesting that, but it's seen with other molecules, and we gave the – we're giving the molecule IV. And we may ultimately want to test whether there's a difference.
Speaker 9: Thank you.
Speaker 2: Our next question comes from Hannah Adioje with J.P. Morgan. You may proceed.
Speaker 10: Hi, this is Hannah on for Eric. Thanks for taking the questions. Just a few from us. Have you commented on the half-life of 1326 before? And if so, are you able to speak to any of the expected dosing regimens or frequency for a multiple ascending dose study based on your preclinical and clinical findings thus far?
Speaker 10: speak to any expected dosing regimens or frequencies for a multiple ascending dose study based on your preclinical and clinical findings thus far. Just trying to see if there's any data points to give you comfort that the AEs that you've observed thus far won't be seen over longer dosing intervals.
Speaker 9: Were you able to get that? One moment, please. The conference will begin momentarily. Before we go, I think we can...
Speaker 9: Go ahead, Hannah.
Speaker 10: Hi, can you guys hear me now? Yes. Hi. Hi. Okay, you can hear me? Okay, great. Justin was asking about the half-life of 1326 and your expected dosing regimens or frequencies for a multiple ascending dose study. The half-life is about 1326.
Speaker 3: biological effects could be longer lasting than what you might anticipate from the half-life of the antibody. And so it's not as straightforward a line, the PK, with the frequency of dosing. So we think this could be an every other week or perhaps even less frequent dosing regimen. We have not.
Speaker 10: Thank you.
Speaker 2: Thank you, and as a reminder, to ask a question you will need to press star 1-1 on your telephone.
Speaker 9: Our next question comes from Yathin Zuneha with Guggenheim. You may proceed. Hey guys. Can you hear me? Can you hear me?
Speaker 9: Yes, you're coming in loud and clear. I can't hear him. Okay, well, we're late. All right. Thank you.
Speaker 9: Yes, you're coming in loud and clear. I can't hear him. Okay, we're late. Can you hear me now?
Speaker 9: Once we get signal from the company, I'll ask a question. Craig, please give us the word when you can hear us.
Speaker 11: I can hear you. I can't hear you. Now?
Speaker 11: I can hear you. I can't hear you. Now? Hello?
Speaker 12: I think we are able to hear the low because my other line is able to hear
Speaker 9: Captain, can you hear us?
Speaker 7: I can hear you. Craig, can you hear? No, you can hear me. Yes.
Speaker 12: Can you translate the question? Why don't we do that? Let me ask a question. Which one of you checks the best in translating?
Speaker 12: So with regard to 043, I think you mentioned that you have confirmed
Speaker 12: With regard to 043, I think you mentioned that you have confirmed target engagement.
Speaker 12: Can you characterize that for us? Was there a dose response? And how do you feed about 0.5 doses that's sufficient to elect Either a clinical or a biological activity? That's one. And maybe a similar question for the other one because I don't think you said
Speaker 7: for 1326 anything on the targeting agent. Yes, so Craig, can you hear me? Yeah. Question is we mentioned that we've confirmed target engagement and there was a dose response.
Speaker 7: So, I think, you know, for John's asking actually for both programs, you know, for 0, 4, 3 specifically, how do we feel about. You know, 0.5 and the biological activity that we might see. And a similar question as it relates to 1326. In.
Speaker 3: at least targeting the ASGR1 receptor through ALP elevation. So these are not adversities. These are ALP elevations that result from blocking ASGR1, which is a scavenger receptor in the liver that takes ALP out of the circulation.
Speaker 3: I think your question is really about, you know, what kind of doses have we seen activity in animal models and are we in the range with 0.5? And while we've typically employed higher doses in animal models,
Speaker 3: you know, we think we're in a range that could be a therapeutically active dose. And then I'll just also make the observation that obviously, given that we had not seen any of these adversities in other species, other species may not be that translatable for predicting the dose response. So we're in the range and...
Speaker 3: I wouldn't be overly concerned or focused on the exact dose in the mouth translating to humans, since the translatability for talks has not been there.
Speaker 3: For 1326, we do not have a target engagement assay. So it will take getting into UC patients and biopsying the tissue to identify whether we've activated Wnt signaling. So in that situation, in that setting, we do not have a target.
Speaker 3: we have an assay for a Wnt target gene called Axon 2, which we'll look for to confirm that we've activated the pathway. Got it.
Speaker 12: One more question, check if you can translate. This is, so I think it seems like at this point we cannot rule out whether this is a, you know, the phenomena that you are seeing at least on the liver related to ease is a target specific. We cannot rule that out.
Speaker 12: However, you are saying that these damaged tissues might be more sensitive. So can you help us understand if there is a, is there any threshold effect, you know, at certain doses you might not see? I'm just curious, like what gives you confidence? Chuck, I can't hear anyone still. Yeah, these damaged tissues are...
Speaker 7: The liver issues are target specific.
Speaker 7: and seeing that the damage might be more sensitive, is there any threshold effect?
Speaker 3: at certain doses that we've seen or might see based on the data we've collected. So to answer the first part of your question, Jatin,
Speaker 3: you know, this does seem to be a liver specific effect, while our SCN 1326.
Speaker 3: is targeting Frizzled 5, which is enriched in the intestinal epithelium and ulcerative colitis patients. It is expressed on hepatocytes. So that would be consistent with an effect that's similar to O4-3, meaning they're both hitting liver.
Speaker 3: be cautious about extrapolating too much from the animal models, you know, as I've emphasized, I think the robust nature of the response in multiple different animal models for both molecules, the consistency of that response.
Speaker 3: across experiments and across different types of injury, I think is very compelling evidence of the pharmacology and the biological rationale, but I wouldn't get...
Speaker 3: you know, to focus on the exact doses that we tested in animals. And I think if this is a Wnt related effect related to regeneration in the healthy liver, it may be, and I don't, we don't have data.
Speaker 3: to support this hypothesis right now, but it may be that the damaged liver, because there is some active regeneration ongoing, will...
Speaker 3: really just display the benefits of regeneration and not these bumps in in Transaminase, but we'll just have to see what you know what the data says in humans. I don't think we have any preclinical data to...
Speaker 12: exactly answer that question. Got it. Very good. Thank you for translating. Thank you for the color. Appreciate it.
Speaker 2: Thank you, and this concludes the Q&A session. I'd now like to turn the call back over to Craig Parker for any closing remarks.
Speaker 3: All right, well, thanks, Josh, and thanks, Sures and team, for joining me, and thank you all for joining the call and for your interest. I apologize that we had a little bit of a phone game for me to be able to hear questions, but thank you again for your participation and look forward to hearing from you in the future. Thank you. This concludes today's conference call. Thank you.
Speaker 1: of theyou by