Yahoo Finance Crinetics Pharmaceuticals, Inc. (NASDAQ:CRNX) Q1 2024 Earnings Call Transcript
Crinetics Pharmaceuticals, Inc. (NASDAQ:CRNX) Q1 2024 Earnings Call Transcript May 11, 2024
Crinetics Pharmaceuticals, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Welcome to the Crinetics Pharmaceuticals First Quarter 2024 Earnings Conference Call. At this time, all participants are in listen-only mode. Following management's prepared remarks, we will hold a question-and-answer session. I will now turn the call over to Corey Davis of LifeSci Advisors. Please go ahead.
Corey Davis: Thank you, Alan. Hello, everyone, and welcome to Crinetics earnings call. Joining me today are Dr. Scott Struthers, Founder and Chief Executive Officer; Dr. Alan Krasner, Chief Endocrinologist; and Marc Wilson, Chief Financial Officer. Also joining us for the Q&A portion of the call are Dr. Dana Pizzuti, Chief Medical and Development Officer; and Jim Hassard, Chief Commercial Officer. A press release announcing the first quarter 2024 financial results was issued today and is also available on the Crinetics corporate website. As a reminder, we'll be making forward-looking statements and I invite you to learn about the risks and uncertainties associated with these statements as disclosed in our SEC filings. Such forward-looking statements are not a guarantee of performance, and the company's actual results could differ materially from those stated or implied in such statements due to risks and uncertainties associated with the company's businesses.
These forward-looking statements are qualified in their entirety by the cautionary statements contained in today's news release, the company's other news releases, and Crinetics SEC filings, including its annual report on Form 10-K. I'd also like to specify that the content of this conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, May 9, 2024. Crinetics takes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call. With that, I'll hand it over to Scott. Go ahead.
Scott Struthers: Thank you, Corey. Good afternoon, everyone, and thank you for joining us on our first quarter 2024 results call. I'll begin by spending a few moments summarizing our recent accomplishments before turning the call over to Dr. Alan Krasner, our Chief Endocrinologist. He will discuss our clinical programs and recently reported data in more detail. Crinetics had an extremely strong start to 2024. Recently, we reported positive results from two late-stage clinical studies for paltusitine in patients with acromegaly and carcinoid syndrome. Behind paltusitine, we've built a remarkably deep pipeline. This includes our second internally discovered clinical-stage compound, CRN04894, which will now be known as Atumelnant.
At the ENDO Conference this June in Boston, we will present five abstracts from our clinical development programs, including four late-breaking abstracts, two poster presentations will highlight initial data in each of the ongoing open-label Phase 2 studies evaluating the safety and efficacy of Atumelnant in patients with CAH and Cushing's disease. We are also hosting an in-person reception to review data from clinical studies of Atumelnant in CAH and ACTH-Dependent Cushing Syndrome at 06:00 p.m. on Monday, June 3 for those attending in person. Data from the entire PATHFNDR Phase 3 acromegaly program will be featured in a science and innovation theater led by Dr. Kevin Yuen of the Barrow Neurological Institute on Saturday, June 1. Three posters from the Paltusotine Acromegaly clinical program will also be presented, highlighting results from PATHFNDR-2, the use of acromegaly symptom diary in PATHFNDR-1, and updates on the long-term safety and efficacy data from the ongoing open-label extension study.
We've also made excellent progress towards new development candidates this quarter in all of our early-stage programs. These include a PTH receptor antagonist for the treatment of hyperparathyroidism, a TSH antagonist for the treatment of Graves' disease, including thyroid eye disease, and our programs for diabetes and obesity. Now let me take a few minutes to dive a little deeper into the progress made with the two Paltusotine indications. We're extremely pleased to have completed our Phase 3 program in acromegaly with a successful readout of PATHFNDR-2 in April. This study evaluated Paltusotine in people with acromegaly, who were not pharmacologically treated and was the second of two pivotal trials. PATHFNDR-2 achieved its primary endpoint of IGF control and met all secondary endpoints with high levels of statistical significance.
Together with the PATHFNDR-1 results we reported last year, we now have data from two Phase 3 studies to support an NDA filing for the treatment of acromegaly in the second half of this year. In anticipation of a potential 2025 launch of Paltusotine, we're continuing to work on important aspects of commercial readiness. We've already held multiple advisory boards and conducted market research with physicians to gather their input on how to optimize the communication of the Paltusotine program. We will continue to educate the medical community with data presentations at medical -- multiple medical conferences in the coming months. We will launch a campaign later this year directed towards healthcare providers to increase awareness of the unmet needs with the current standard of care, including injection site pain, breakthrough symptoms, and the months-long regimens required to identify the appropriate dosage for their patients receiving injectable depots.
An accompanying campaign directed at patients will be launched early next year. Our market access team has also been active dialogue with leading payers to understand the current marketplace and the dynamics for Paltusotine to become a valuable treatment option for patients if approved. PATHFNDR-1 data has already been well received, and we are seeing a similarly enthusiastic response to our early conversations regarding PATHFNDR-2. We're also very pleased with results from the open-label Phase 2 study in carcinoid syndrome patients that's demonstrated meaningful reductions of both frequency and severity of flushing episodes and bowel movements caused by this disease. These effects were rapid, sustained, and consistent with the preliminary data we reported last December.
Overall, we believe the safety and efficacy profile of Paltusotine in this study supports progressing into a Phase 3 study as soon as we can. We plan to discuss these results with the FDA and align on a Phase 3 study design which enable us to begin a Phase 3 study by the end of the year. Finally, we strengthened our balance sheet with a $350 million private placement in February from new and existing equity investors. This additional capital has provided us with sufficient runway to fund operations into 2028, based on current projections for our pipeline of product candidates. In summary, looking to the rest of 2024 and '25, we anticipate multiple upcoming milestones from our clinical candidates and continued advancement of our deep pipeline of emerging candidates that address increasingly higher prevalence indications.
As has been our practice since inception, we continue to invest in our world-class discovery capabilities that provide the roots for our long-term success. With that, I'll hand it over to Dr. Alan Krasner, our Chief Endocrinologist, to talk about our clinical programs.
Alan Krasner: Thank you, Scott. Today, I will provide updates on recently reported clinical programs starting with Paltusotine. As a reminder, the Phase 3 PATHFNDR program was designed to evaluate the safety and efficacy of Paltusotine for the treatment of a broad spectrum of patients with acromegaly. Both PATHFNDR studies met all prespecified primary and secondary efficacy endpoints, and Paltusotine was shown to be generally well tolerated. We therefore intend to seek approval for patients who might switch from injected SRLs to Paltusotine as studied in PATHFNDR-1, and also in those who are not currently treated with medications and might start Paltusotine as a first-line treatment as studied in PATHFNDR-2. We reported most recently the top-line results from the untreated patients in PATHFNDR-2.
Besides meeting all key endpoints, it was notable that IGF-1 was reduced from elevated baselines in 93% of patients treated with Paltusotine. These IGF-1 declines occurred rapidly, with most of the effect occurring in just two weeks to four weeks. These reductions were durably sustained throughout the treatment period. Significant improvements in acromegaly symptom control associated with Paltusotine compared to placebo have now been documented in two major independent control trials. As previously discussed, we are very excited to further explore our rich database into which patients reported their symptoms on a daily basis during the trials. With the database from PATHFINDER-1, we have already been able to perform additional interesting analyses, which we will be reporting at the endocrine society meeting in June.
We have wondered for a long time whether Daily Oral Paltusotine might result in a difference in the frequency of day-to-day symptom exacerbations that plague many patients with acromegaly treated with long-acting injections, and we look forward to reporting on this soon at the meeting. We will also be presenting late-breaking updated data from our long-term open-label extension cohort from the Phase 2 ACROBAT Advance study. A number of the participants in this study have now been treated with Paltusotine for over four years. The overall data set suggests that Paltusotine represents a lot more than just a user-friendly, convenient oral substitute for an injection. Unlike the current first-line agents, Paltusotine has been rigorously demonstrated to control symptoms of acromegaly, as well as biochemical markers of disease activity.
The notably rapid IGF-1 response observed in PATHFINDER-2 could allow patients and physicians to reach the fully effective dose of Paltusotine much faster than is the case for the current standard of care. A simple once-daily oral agent could prevent the pitfalls, pain, and unneeded expense associated with the current standard of care. People already dealing with the burdens of acromegaly might not need to schedule their lives around the next injection and dealing with the side effects that often occur after these injections. With Paltusotine, one would not need to worry if the last injection was administered correctly and whether or not it will last until the next one is due. Nor would one need special equipment or to take a course on how to self-administer acromegaly medication at home.
In short, Paltusotine may represent a completely new paradigm for somatostatin receptor-based therapy. Paltusotine's second target indication, carcinoid syndrome, has also shown promising results. In March, we reported top-line results from the open-label Phase 2 trial. This study enrolled participants with carcinoid syndrome, who experienced one or both of the key symptoms of the disease, diarrhea and flushing. Participants were either naive to standard-of-care treatment or untreated and actively symptomatic or were controlled on SRL therapy and willing to wash out prior to entry. Paltusotine was generally well tolerated at the doses evaluated in this trial, with no severe or serious treatment-related adverse events. In addition, pharmacokinetics in this patient population was consistent with what we expected to see from prior experience.
We observed significant and meaningful reductions in both the frequency and severity of bowel movements and flushing episodes, consistent with the initial results we reported last December. Importantly, the intensity of these symptoms was also reduced by Paltusotine. These reductions occurred quite rapidly and were sustained throughout the eight-week treatment period. We intend to discuss the Phase 2 carcinoid syndrome data with the FDA to align on a Phase 3 study design. We look forward to updating you on the Phase 3 details, including dose, registrational endpoint, and timing, once we've had these discussions. As Scott discussed, our second investigational compound in clinical development is Atumelnant, which is a once-daily oral ACTH receptor antagonist in development for the treatment of both Congenital Adrenal Hyperplasia or CAH, and Cushing's disease.
The adrenal glands are the sole source of excessive steroid that caused the clinical complications in both disease states, and this steroid production is driven by excessive exposure to ACTH. It is natural, therefore, to target the ACTH or MC2 receptor in order to fundamentally interrupt the pathologic progression of these diseases. That is because the receptor is the sole mediator of ACTH signaling, and it is found only in the adrenals. The lead indication for Atumelnant is Classic CAH, a genetic disorder that affects approximately 27,000 patients in the US. These patients lack a critical enzyme in the adrenals responsible for cortisol production. The hypothalamus and pituitary responds to these low cortisol levels by producing high levels of ACTH.
This excess ACTH, in turn, causes overstimulation of the adrenal cortex, resulting in overproduction of cortisol precursors like 17 hydroxyprogesterone and adrenal androgens like androstenedione, also known as A4. The adrenal hyperandrogenemia causes many serious medical complications, beginning in utero, progressing through childhood and into adulthood because CAH patients cannot produce cortisol. Exogenous glucocorticoid replacement is required for life, but replacement doses should be very low, and these low doses should not cause adverse effects. As a result, many physicians find it necessary to use high supraphysiologic doses of glucocorticoids in an attempt to suppress elevated ACTH levels and thereby, lower adrenal androgen production.
These elevated glucocorticoid doses are frequently associated with adverse effects such as weight gain, elevated glucose, edema, bone loss, and a host of other serious medical problems. It is very difficult to find a dose of glucocorticoid, which effectively controls adrenal androgen production without causing these side effects. This highlights the fundamental challenge in treating this disease to strike the right balance between reducing adrenal androgens yet minimizing the effects of excess glucocorticoids. We believe Atumelnant is the right approach to achieve this balance and look forward to showing initial data from our Phase 2 studies in the coming weeks. Atumelnant was designed to reduce or eliminate ACTH stimulation at the level of the adrenal, thereby lowering adrenal androgen output.
Once adrenal hyperandrogenmia is controlled, patients who are taking excessive doses of glucocorticoid should be able to lower their dose and reduce or even avoid steroid therapy-related adverse effects. Remember, the ACTH receptor in the adrenals is the only means by which ACTH drives the pathologic adrenal androgen outputs seen in CAH, and the ACTH receptor is a single choke point at which this overdriven system might be turned off. Our ongoing Phase 2 open-label sequential dose cohort study in CAH is evaluating safety and pharmacokinetics of Atumelnant dosed for three months. In addition, we are evaluating pharmacodynamics and in CAH, this is measured primarily using the androgenic biomarker androstenedione or A4, as well as the cortisol precursor 17 hydroxyprogesterone.
The goal of treatment is to reliably and reproducibly eliminate excessive exposure to adrenal steroids as reflected by these biomarkers. The patients in our study continue their pretrial glucocorticoids at unchanged doses so we can observe the time course and durability of any response to Atumelnant itself. In future studies, we expect to evaluate glucocorticoid dose reduction, once we know that the compound can reduce adrenal androgen output. As Scott mentioned, we will be presenting late-breaking Atumelnant data at the upcoming endocrine society meeting in June. This will not include the full cohort of patients in the CAH study, but will comprise initial data from a subset of the first two dose cohorts. We expect these early results will give us directional information that will help guide developmental plans for Atumelnant in CAH.
Initial data from the Phase 2 single-center trial in Cushing's disease will also be presented at the same meeting. With that, I will now hand it over to Marc to review the financials.
Marc Wilson: Thank you, Alan. Crinetics continues to be in a strong financial position, having ended the first quarter with approximately $900 million in cash and investments. This includes proceeds from the $350 million private placement equity financing we completed in February. Our solid financial foundation is projected to fund our current operating plan into 2028, and this includes plans to commercialize Paltusotine for acromegaly, the initiation of multiple later stage clinical trials in additional indications with Paltusotine and Atumelnant, as well as continued investment in our pipeline. With respect to the financial results, research and development expenses were $53.3 million for the quarter ended March 31, 2024, compared to $38.5 million for the same period in 2023.
The increase was primarily attributable to higher personnel costs and manufacturing and development activities, both of which were driven by the advancement of our clinical programs and the expansion of our preclinical portfolio. For the quarter ended March 31, 2024, general and administrative expenses were $20.8 million, compared to $12.2 million for the same period in 2023. These increases were primarily attributable to higher personnel costs to support the growth of the organization. Net loss for the quarter ended March 31, 2024, was $66.9 million, compared to a net loss of $46 million for the same period in 2023. Revenues were $0.6 million for the quarter ended March 31, 2024, compared to $2.7 million for the same period in 2023. Revenues during the current year's quarter were primarily derived from our Paltusotine licensing arrangement with our Japanese partner SKK, and revenues for the prior year were associated with licensing arrangements for Paltusotine and CRN01941, another somatostatin targeted development candidate.
Net cash used for operating activities for the quarter ended March 31, 2024, was $52.9 million. We continue to expect our cash burn to be approximately $50 million to $60 million per quarter for the remainder of 2024. I will now hand it back to Scott for closing remarks before we begin Q&A.
Scott Struthers: Thank you, Marc. We will continue to build on the strong progress this quarter throughout the rest of the year and beyond. We look forward to sharing Atumelnant data in the coming weeks, as well as providing continued updates as we progress Paltusotine to regulatory submissions and as we make continued advancements in the exciting new programs beginning to emerge from our discovery efforts. Thank you all for your attention. Operator, we are ready to take questions.
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