Regulus Therapeutics Inc. (NASDAQ:RGLS) Q3 2022 Earnings Call Transcript

Regulus Therapeutics Inc. (NASDAQ:RGLS) Q3 2022 Earnings Call Transcript November 10, 2022

Regulus Therapeutics Inc. misses on earnings expectations. Reported EPS is $-0.5 EPS, expectations were $-0.49.

Operator: Hello, and welcome to the Regulus Therapeutics Inc. Q3 2022 Earnings Conference Call. . I would now like to turn the conference over to Chief Financial Officer, Cris Calsada. Please go ahead.

Crispina Calsada: Thank you, and good afternoon, and thank you for joining us to discuss Regulus Therapeutics Third quarter 2022 financial results and corporate highlights. . Joining me on today’s call is Jay Hagan, President and Chief Executive Officer; and Dr. Denis Drygin, Chief Scientific Officer. Jay will provide opening remarks and share progress on our ADPKD program, and I will review the financial results before we open the line for questions. Before we begin, I’d like to remind you that this call will contain forward-looking statements concerning Regulus Therapeutics future expectations, plans, prospects, corporate strategy and performance, which constitute forward-looking statements for the purposes of the safe harbor provision under the Private Securities Litigation Reform Act of 1995.

Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in our filings with the SEC. In addition, any forward-looking statements represent our views only as of the date of this webcast and should not be relied upon as representing our views as of any subsequent date. We specifically disclaim any obligations to update such statements. I will now turn the call over to Jay.

Jay Hagan: Thanks, Cris, and welcome, everyone, to our third quarter earnings call and business update. I’ll begin with a general update on our ADPKD program. We continue to make progress in the clinic with RGLS8429. In September, we announced positive top line safety and PK data from our Phase I single ascending dose, or SAD, clinical trial of RGLS8429. RGLS8429 was well tolerated with no serious adverse events reported. Among the 32 subjects treated with RGLSA429 or placebo, there were only 9 adverse events, all of which were mild, except one, a sinus infection, which was graded moderate in severity. In addition, importantly, preliminary results suggest that plasma exposure is approximately linear across the 4 dose levels tested and is similar to the PK data from the first generation compound RGLS4326.

Last week, we announced the dosing of our first patient in our Phase Ib multiple ascending dose or MAD study of RGLS8429. Since then, we’ve enrolled the second patient and have several more in screening at the 6 sites that are now currently active. The study is a double-blind, placebo-controlled, multiple ascending dose study to assess safety, tolerability and pharmacokinetics of RGLS8429 in adult patients with ADPKD. The study will evaluate the safety and efficacy of treatment with 4329 — excuse me, 8429 across 3 different dose levels, including measuring changes in Polysystems, cystic kidney volume or high adjusted total kidney volume and overall kidney function. The first cohort is being dosed at 1 milligram per kilogram of RGLSA429 or placebo every other week for 3 months.

Top line data from the first cohort of patients are now anticipated in mid-2023. Switching gears, during the 3 months ended September 30, 2022, we sold and settled approximately 2.2 million shares for net proceeds of $4.5 million under our ATM facility. Almost all the shares were sold to a new institutional investor. With the completion of this transaction, we believe our cash, cash equivalents and short-term investments will now fund current planned activities through 2023. Last week, we presented data at the American Society of Nephrology Kidney Week meeting in Orlando. The poster presentation was titled Discovery of next-generation anti-miR-17 oligonucleotide RG-429 for the treatment of autosomadominant polycystic kidney disease, and it highlighted data supporting the potential of A429 in this important disease.

We are excited about our progress as well as the attention RGLS8429 receives in the marketplace, which helps validate the effort our team is putting forth each day to advance this therapy and its potential to improve the current standard of care. With that, I will turn the call back over to Cris for an update on our financials. Cris?

Crispina Calsada : Thanks, Jay. Turning to our financial results. As of September 30, 2022, our cash, cash equivalents and short-term investments totaled approximately $45.3 million. We expect our cash runway to extend through 2023. Research and development expenses for the third quarter of 2022 totaled $5.3 million compared to $5.9 million in the same period in 2021. These amounts reflect the internal and external costs associated with advancing our ADPKD program and other research efforts within our pipeline. General and administrative expenses for the third quarter of 2022 totaled $2.3 million compared to $2.5 million for the same period in 2021. These amounts reflect related and ongoing general business operating costs. Net loss for the third quarter of 2022 was $7.6 million compared to a net loss of $8.6 million for the same period in 2021.

Basic and diluted net loss per share for the third quarter of 2022 was $0.50 per share compared to basic and diluted net loss of $0.99 per share for the same period in 2021. With that, I will turn the call back over to Jay.

Jay Hagan: Thanks, Cris. At this time, we’d be happy to take any questions. Operator, please open the line. .

Q&A Session

Operator: . Our first question today comes from with Canaccord.

Unidentified Analyst: The question I have, I guess, is around expectations headed into the data mid next year. Can you remind us what you saw in animal studies with slightly extended dosing? I know the 3 months of dosing here versus a slightly shorter course in the first-gen compound. So curious what you saw with longer dosing in animal studies, and if you think there’s read through there to what we should be expecting from the clinical data readout next year.

Jay Hagan: Yes. Maybe I’ll touch on the clinical part, and I ask Denis to comment on dosing duration in a variety of animal models, which depending on the animal model some are more rapid than others offering less opportunity to dose for extended periods. But just to remind folks that at the 1 milligram per kilogram dose level that we’re testing currently with our next-gen compound we saw a statistically significant increase in both Polysystem 1 and Polysystem 2 from baseline of approximately 60% and 40% increases in those at that dose level. And as I mentioned earlier, the PK between the molecules is very similar. So we anticipate with this next-gen compound to see similar types of effects. And if you recall, the trajectory of the change from baseline would suggest that with continued dosing, higher levels of Polysystem could be achieved prior to it plateauing once we reach steady state in the kidney.

So that’s what we’ll be looking for in the clinic. And Denis, I don’t know if you want to comment on duration of dosing in animals.

Denis Drygin: Thank you, Jay. Indeed, as Jay mentioned earlier, the majority of the models for ADPKD are quite aggressive and do not allow extended period of treatment. However, we did test first generation molecule in a longer (inaudible) model where the treatment was for 7 weeks. And with longer treatment, there was more and more evidence of the incubation of expansion and growth.

Operator: . The next question comes from Yanan Zhu with Wells Fargo Securities.

Yanan Zhu: I mainly have a question about enrollment and time line for the data from different cohorts. So I think the — previously, the data expectation for the first dose cohort might have been first half ’23, please correct me if I’m wrong, and this time, we hear midyear. Could you elaborate on this might be a small change first half versus midyear, but any changes in your expectations for enrollment, speed or any other factors? And also for the additional cohorts, do you have any suggestion on potential time line for the data from those cohorts?

Jay Hagan: Sure. So the guidance that we provided for data from the first cohort in the first half of ’23 dates back to when we did our financing in October, November last year, outlining at that time, our expectation for both initiation of the SAD and then initiation to MAD. And as often the case, as you work through these processes, sometimes things take a little bit longer to get up and going. So we chose to update our guidance in terms of when we would have data. Now that the MAD is actually initiated, we’re a year after that initial guidance was provided, where we’re taking a look at what — how quickly we think we’re going to enroll the study. And I think guidance of mid ’23 is more accurate than the first half which includes the first quarter.

So effectively, we’re saying in the first quarter is likely out, we’d have to be done enrollment this month probably to hit the first quarter. And enrollment is obviously a forward-looking statement. Actual results may differ. We’re pleased with the progress the team is making thus far in getting now 6 sites up and a good pipeline of patients in screening and 2 now in the study of the total 12 that we’re targeting for the first cohort. And so guidance for mid ’23 feels more appropriate and accurate with how we project enrollment is going to go. When the last patient is initiated, we know quite clearly the time it will take them to complete that. They’re going to have 3 months of dosing and 1 month of follow-up after which we’ve got the analytical work that’s needed.

So that is formed the basis of the overall time line for the first cohort. As far as the subsequent cohorts, I mentioned earlier that we have 6 sites up. We’re targeting up to 25 total sites currently. And so as more sites come up, then obviously more potential patients will come into the queue geographically and otherwise. And so while it’s premature to estimate the time of enrollment of subsequent cohorts, one can anticipate that it could go more quickly than the first cohort just given more sites up and active. So what we’ve guided to for data from the second cohort is the second half of ’23.

Yanan Zhu: Congrats on the progress.

Operator: . Seeing no further questions, I would like to turn the conference back over to Jay Hagan for any closing remarks.

Jay Hagan: Great. Thank you, operator, and thanks, everyone, for joining us today and for your support of Regulus. We look forward to providing you with future updates as the program advances. Take care. .

Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.