Conference Transcript - CRDL 2026-08-11

Edward Nash, Analyst — Canaccord Genuity

Hi, good morning, everyone. My name is Edward Nash. I'm a senior analyst here at Canaccord Genuity on the biotech research team. I have the pleasure of welcoming the management team of Cardiol Therapeutics with us today. Joining us from the company is Andrew Hamer, who's the chief medical officer and will be shortly joined by the CEO and president, David Elsley. The company is, We actively cover Cardiol, and the company is really focused on the immunology, cardiology space with their lead drug targeting recurrent pericarditis. I want to thank you, Andrew, for joining us. Maybe to start off, could you just give us a background for our audience on, give us some color on the company itself and your clinical programs?

Andrew Hamer, Other

Thank you. Yes. Cardiotherapeutics developed a formulation for cannabidiol that is fully synthetic and pharmaceutically manufactured. And the reason for that is the intriguing information that was coming forward about its anti-inflammatory characteristics, especially in cardiovascular diseases. And our programs have moved through development. And now our lead program is in recurrent pericarditis, where we're in a pivotal phase three trial. And so it's a very important time for the company, also very exciting. And we are really in that phase of preparing for an NDA. And so it's a great time to talk.

Edward Nash, Analyst — Canaccord Genuity

Thanks very much. So I wanted to maybe jump right in on recurrent pericarditis, since we're really kind of at the event horizon of getting that phase three data readout. So the Maverick trial is enrolling patients who are scheduled to be coming off of the IL-1 trap, Rolanicep. Why was this patient population in the trial design chosen?

Andrew Hamer, Other

Well, in discussions with the FDA and all the experts, everybody understands that the indication we're seeking is for prevention of pericarditis recurrence. We know that the pathophysiology of recurrent pericarditis is the same no matter where you are in the spectrum of the disease. There are numerous unmet needs in the population with recurrent pericarditis, but the most homogeneous population that is the easiest to study and also is an unmet need is patients that are seeking to come off their immunosuppressants, particularly Rolonicet patients who have been on Rolonicept for more than a year, they always trial off Rolonicept because pericarditis is a time-limited disease and should disappear naturally over three to five years. So they trial off their Rolonicept and nothing's been shown to help them get off immunosuppression. CardiolRx is a oral and non-immunosuppressive drug that is shown in our preclinical data and in our phase two trial to have very pleasing results in pericarditis patients. And for phase three, this is the best population to be able to have a known very high recurrence rate in the patients that come into the trial. And so we know our placebo is going to have a high recurrence rate, 75% recurrence within two to three months. And then we have a very nice population to be able to prove benefit of cardiolaryxin preventing those recurrences.

Edward Nash, Analyst — Canaccord Genuity

Great. Thank you. We're joined by David Elsley, the present CEO. Thank you, David, for joining us. So the open-label phase two study focused on pain as the primary endpoint. Does this increase the risk of the phase three readout since the endpoint is different?

Andrew Hamer, Other

We wanted to show that it was safe and apparent effectiveness in patients having an acute episode of pericarditis because that's when people most often start a medication. But really importantly was during the extension phase of the phase three trial, we were monitoring to see how many patients could come right off all other medications, be on monotherapy with CardiolRx and not have any recurrences. And we had 71% recurrence free over that period. And so we then compared that back to before they started treatment with CardiolRx and they were having 5.8 events per year, and then they transformed into monotherapy on Cardiol Rx to 0.9 events per year. And these patients had been on other medications prior to even starting on Cardiol Rx. So they went from other medications, 5.8 events per year, down to monotherapy Cardiol Rx, 0.9 events per year. Obviously, we're looking at historical control there. So of course, in a phase three trial, we're looking at a placebo arm to show proof of benefit.

Edward Nash, Analyst — Canaccord Genuity

So could you remind us of the powering assumptions for the Phase III Maverick trial and what data is out there that gives you confidence that it could be successful based on these assumptions?

Andrew Hamer, Other

Well, 5.8 to 0.9 is obviously a substantial reduction. We've been more conservative in our powering for the Maverick Phase III trial. We've powered for a 40% relative risk reduction. So say a placebo arm gets a 75% event rate, then 40% reduction is that in the active arm you get a 45% recurrence rate. The pilot would suggest we'll get a much lower event rate than that, but that event rate would still be seen as very clinically meaningful. So we've powered for that event rate.

Edward Nash, Analyst — Canaccord Genuity

So if approved, what are you looking for as far as how the label will look? This is something we get asked a lot by clients. And, you know, based on what the phase three design is, that's one of the questions we get is that would that be the limitation of what the label would show for RP? So I just wanted to get your thoughts on what you would be looking to get on the label.

David Elsley, CEO

Yeah, I think an important point to make is really the biology of recurrence is the same, whether it's coming off an IL-1 blocker, whether it's a first episode of recurrent pericarditis, or whether it's non-response to any other therapeutic regimen. As Andrew mentioned, we're really just enriching for event rates, and based on all our dialogue and discussions with regulators, we fully anticipate that subject outcomes of the Phase III trial and at meeting its objectives, we would see a label of prevention of recurrence. So same label as IL-1 blockers are today.

Edward Nash, Analyst — Canaccord Genuity

And then, you know, kind of also leading into this next question is based on that label is your discussion with KOLs, how, you know, and this is another question we get asked a lot, probably this is the second of the two most high priority questions we get asked by investors, is what are physicians thinking and when they would actually use Cardiol Rx in the treatment of RP? Because obviously it's oral, you have a lot of advantages with that alone, so how are they kind of seeing that in the treatment paradigm of RP?

David Elsley, CEO

Our discussions with KOLs have been very reassuring. They're really looking for a new treatment option to intervene post-first-line therapy is ultimately a replacement for steroids and so essentially we see this therapy it's more accessible, it can be dispensed at more points of care, it's non-immune suppressing, it's oral so there's a convenience factor there, so we ultimately see this therapy as the treatment that for those who are either intolerant or non-responsive to either NSAIDs or the generic colchicine, they'd be trialed on our drug first prior to moving on to the more hard-hitting biologics.

Edward Nash, Analyst — Canaccord Genuity

So that's one of the questions I was going to ask is, you know, moving up in the line of therapy, we now know that the IL-2 blockers for the ACC guidelines is now second-line therapy. It's kind of display steroids. So when we're looking now at CardiolRx, one One of the questions we asked Dr. Krimmer, who we just had a call with to talk about this at KOL, one of the questions we asked, and he said, trials still need to be done, but what about the potential of seeing Cardiol X actually replacing colchicine and NSAIDs and maybe being used as a first-line therapy? Do you think that's a possibility, or are we going to still see physicians just naturally gravitating just because it's historically always been the case where you would use colchicine and NSAIDs as first-line?

David Elsley, CEO

I think it is a possibility because a very large percentage of patients don't tolerate colchicine. So for many many patients it makes you unwell. So I think the fact that this is a neural therapy can be dispensed out of specialty pharmacies, it's more accessible, it'd be a logical treatment to trial if patients are, they have a history of GI intolerance for example, they're going to be perhaps more challenged on colchicine, and they may wish to go to a more tolerated oral therapy.

Edward Nash, Analyst — Canaccord Genuity

So, you know, we had the opportunity to talk a little bit about this after the data came out, but just for our audience, Novo Nordisk recently reported their phase three Zeus results from the IL-6 antibody in atherosclerotic cardiovascular disease. The study did not meet its, or didn't show a clinical benefit in preventing MACE, but showed the expected reductions in free IL-6 and high-sensitivity C-reactive protein. Do you believe that these results have any impact or read-through at all on your approach in treating RP?

Andrew Hamer, Other

No, because what we know is recurrent pericarditis and that colchazine is a weak inflammasome inhibitor. We seem to have significantly more effect on the inflammasome than colchazine. and IL-1 blockers have been shown clearly to reduce pericarditis. Pericarditis is a very well-known pathophysiology that is very much based around IL-1. IL-6 was looked at for atherosclerosis because when they did the Cantos trial with canakinumab, which is an IL-1 beta inhibitor, that showed benefit in reducing cardiovascular outcomes. but it was thought that it was a secondary effect on IL-6 that was the actual effect that it had on atherosclerosis because of genetics, mendelium randomizations, and also that it was the most close association in that trial, the reduction in IL-6 with the reduction in cardiovascular events, that it does look like that hypothesis may be incorrect. It's maybe proven wrong by the Zeus trial that actually, you know, an IL-1 beta inhibitor did actually work in Cantos, but an IL-6 inhibitor did not work in the same population. So sort of unfortunate for Novo and the investigators and the patients involved, but doesn't change how we approach pericarditis.

David Elsley, CEO

And I also think some of the other observations in that study are a reminder of the downside of immune suppression therapy because severe infection was a major observation from that study. So to the extent that you can offer a non-immune suppressing drug that has a more multifactorial mechanism or mechanism of action, I think that's going to be the pathway, so more of an immune modulatory approach to heart disease versus an immune suppression approach to heart disease.

Edward Nash, Analyst — Canaccord Genuity

I mean this is kind of an obvious, you know, it's kind of obvious that you would think the increased to serious infection is bad across the board for anything, but specifically, you know, can you talk a little bit about how that's definitely a big negative for any type of inflammatory cardiac condition or indication?

Andrew Hamer, Other

Well, yes, for any indication. For instance, we have a subcutaneous formulation, CRD38, that we've declared. We're looking at heart failure with preserved ejection fraction. There is the HERMES trial ongoing with the IL-6 blocker with Novo, and we're a little unsure about giving immunosuppression to patients with heart failure, especially seeing heart failure patients most often come into hospital with a chest infection that decompensates their heart failure, or they go into bad heart failure and get a chest infection, and those are really the two things that have happened that lead to the patient's death. So we think it's really important that we look towards drugs that don't have an effect, immunosuppression effect, in heart failure patients.

David Elsley, CEO

And I think that's really going to cast a spotlight on our next stage asset, the sub-Q form of the lead molecule, because we'll be reporting the pivotal phase 3 data, which will be the definitive assessment of efficacy of the molecule and a classical inflammatory cardiac indication. And we'll have a potential once-monthly version of that that is also a non-immune suppressant going into the heart failure space right around the same time that we believe there's going to be a lot more interest in immunomodulatory approaches to that indication.

Edward Nash, Analyst — Canaccord Genuity

So, you know, I think it's fair to say that one of the advantages of having your drug development program right now with Maverick, with Cardiol Rx, is the fact that we have an approved drug out there for recurrent pericarditis. So what was needed from a clinical trial standpoint to get approved, and then what the FDA is clearly familiar with the space in the area because they've now approved a drug. So that's giving you a nice roadmap here. But maybe could you talk a little bit, we've touched on some of these points already, but could you talk about the Maverick Phase III trial design and how that compares to the Phase III of the approved drug that's out there now, of the Rhapsody trial for Rolonicept?

Andrew Hamer, Other

Well, you may remember in the Rhapsody trial, they took patients that were having an episode of recurrence and they put all the patients on Rolonicept. And then they got to the point where they were settled down and then they randomized those patients in a blinded manner to come off Rolonicept onto placebo. Everybody had been on three months of treatment or continue on Rolonicept. and that's where they showed the benefit. In our situation, we've waited longer on stable doses of Rolonicet right out to past a year, which most people think is important to try and get total control of the patient's pericarditis. But we know it doesn't matter how long you're on Rolonicet, when you stop it, you have a recurrence rate of 75% at three months. But effectively, we're doing the same thing as what they did. We're saying, as the placebo arm of rhapsodies, we're saying stop the Rolonicept, you'll be on either placebo or cardiol Rx, and our primary endpoint is recurrence of pericarditis during the six months. We have an overlap so that you're on your Rolonicept for at least 10 to 16 days while you have initiated your cardiol Rx or placebo.

David Elsley, CEO

So essentially we're marrying the Runyon phase of rhapsody.

Edward Nash, Analyst — Canaccord Genuity

So, I mean, you talk a lot about this being in a rich patient population. So it does really seem that this is kind of the ideal trial design. I know you guys have spent a lot of time with your SAB to really kind of come up in an advisory group to figure out how to design the best trial to give you the result you want to see. And I guess at the end of the day, because of the way this design is so robust that if it works, we're going to see that, right? If it doesn't work, there's not going to be really ambiguity here.

Andrew Hamer, Other

Yes, because the patients who've been on Rilonosept for more than a year have all failed colchizine in the past and are not on non-steroidal anti-inflammatories, and no one wants them to go back on corticosteroids. When they come into our trial, they're just on Rilonosept, and then they drop off Rilonosept to only on Cardiol Rx or placebo for the treatment of their pericarditis. So it's a very clean population. There's no confounding factors with other medications.

David Elsley, CEO

And it's really putting our drug to the ultimate test because these are the more advanced patients. So I think the cardiology community and patients are going to be reassured with a positive outcome because we've shown the effects in the more severe patient population, which we believe will allow the drug to migrate into the more moderate disease population because of its convenience, oral administration, and non-immune suppressing profile. Got it.

Edward Nash, Analyst — Canaccord Genuity

So your thoughts on pricing have really seemed to have evolved. I know you've done more additional market research here. So, you know, we're one of those situations where we have a drug out there. We know what the price of that drug is. And so we just wanted to maybe kind of understand a little bit or have you talk a bit about the pricing, where that could land and the rationale behind that as it relates to trying to maximize your target market but also trying to obviously avoid the scrutiny of payers.

David Elsley, CEO

We have not set the price at this point. We will await the final data from the phase 3 trial and the outcomes to further that work but we have conducted extensive pricing studies with payers and it's we're very they're more optimistic than we are with respect to the pricing levels that we anticipated for the drug they could be as high as 60% of that of the incumbent medication Rolanus up which would be a very profitable franchise for cardi L especially if you consider it in the second-line category and potentially an off-ramp for long-term IL-1 suppression users. And then to your point, to the extent its convenience allows it to migrate into first-line.

Edward Nash, Analyst — Canaccord Genuity

So given that we're about seven months out from the top-line data readout, this is usually about the time we start to hear companies start talking more about on the details of their commercialization approach in the space. Can you talk to us a little bit about the commercial infrastructure, what that would look like for Cardiol or Exxon on a potential approval?

David Elsley, CEO

I think there are, again, as an oral drug, this lends itself to multiple distribution platforms. Specialty pharmacies would probably be the go-to strategy for this because pericarditis, it's important to note that in Maverick we have really the largest pericardial practices throughout the United States involved in this study and they're typically the first prescribers of a medication and we can use specialty pharmacies to distribute to those points of care for dispensing of the medication so this would lend itself to either other orphan focused companies tactical Salesforce could be a direct to market strategy because the points of care are so distinct. But I think it's important to note that our primary focus now is the continued execution and completion of Maverick. And during the lead up to that data, we'll be intensifying discussions with potential commercial partners, as well as exploring all possible options to make sure this drug is available to patients in need. So I assume once we get the data from Maverick what we should expect in the you guys to start talking a lot more about the commercial opportunity in regards to what you need to do from an infrastructure standpoint to be successful with the drug would that absolutely and I think with IL-1 blocker therapies now generating or being forecasted to exceed a billion in revenues I think that is is just reaffirming this market is growing the availability of a drug with a label for the disease has identified the patient population. It's clearly large, it's clearly high demand, and from all the specialists and patients that we've interacted with, there is a need for an oral option.

Edward Nash, Analyst — Canaccord Genuity

And do you do you feel that you accompany the size of Cardiol has the ability to be able to successfully market a drug in the RP space?

David Elsley, CEO

I think first and foremost...

Edward Nash, Analyst — Canaccord Genuity

I don't expect you're going to say no, but...

David Elsley, CEO

You want me to say no? All things are possible. So we are a drug discovery and development company, that's our area of expertise. We've shown that we can execute orphan drug trials on or ahead of schedule very efficiently in complex geographies around the world. You'll recall the Archer trial was five countries, four major jurisdictions around the world, and it was executed ahead of schedule in a trial very similar in size and scope to that of Maverick. So Archer was 109 patients. Target patient population for Maverick's 110. They're almost identical in size. However, Maverick is U.S. centric. It's focused on the U.S., which is obviously a jurisdiction that we have high confidence in executing on schedule.

Edward Nash, Analyst — Canaccord Genuity

Got it. And then pay or assist program, Is that really central? Is that a really important part of the commercialization process for a drug in RP?

David Elsley, CEO

I believe it will be. I think that's why you're going to need a label. It's why you're going to need a script for this to make this medicine accessible. But I think the upside that is not well appreciated is based on the mechanism of Cardiol Rx. there is the hope that this is a disease-modifying drug. So from a payer perspective right now, when they start a patient on the more expensive biologics, they are faced with potential multi-year reimbursement, and the reimbursement needs to be recertified annually, typically. We have the possibility of being a bridge off of therapy entirely. I think that increases market penetration and increases of the attractiveness of the drug option for payers. They're going to step up much faster for a more affordable medicine that potentially patients can taper off of faster than being dependent on it for long term.

Edward Nash, Analyst — Canaccord Genuity

So the time we have left, the minute we have left, I know we spent most of the time here on Maverick and recurrent pericarditis because that's the most imminent part of the story coming forward. But could you just maybe just end by just talking a little bit about how we should be thinking about acute myocarditis and especially heart failure because of the size of that market, potentially?

David Elsley, CEO

I think the key read-through from Archer is it's the first biological impact ever observed in myocarditis. And that's coming from the Les Coopers of the world, one of the most prominent experts in that who's studied that disease for over 30 years. But importantly, the impact on LVMAS has read-through to heart failure because myocarditis can present as heart failure just in a younger population. It is highly consistent with all of our preclinical research that was published in the Journal of the American College of Cardiology. So really, myocarditis provided a proxy for the potential impact of our sub-Q formulation on heart failure, which is probably one of the largest, if not the largest, medical challenges facing medicine today.

Edward Nash, Analyst — Canaccord Genuity

Well, I think with the valuation of the company versus the only other company that's in the space with the approved drug, there's definitely a massive disconnect here in the story. So definitely think this is exciting times for the company, especially with the Maverick trial reading out soon. So I wanted to thank you very much for taking the time to talk to us today. Thanks very much.