Crinetics Pharmaceuticals, Inc. Q2 FY2024 Earnings Call

Good day everyone, and welcome to the Crinetics Pharmaceuticals Second Quarter 2024 Earnings Conference Call. Please note this call may be recorded. It is now my pleasure to turn the program over to Gayathri Diwakar.

Thank you, operator. Hello everyone and welcome to Crinetics' earnings call. Joining me today are Dr. Scott Struthers, Founder and Chief Executive Officer; Dr. Dana Pizzuti, Chief Medical and Development Officer; Jim Hassard, Chief Commercial Officer; and Marc Wilson, Chief Financial Officer; also joining us for the Q&A portion of the call is Dr. Alan Krasner, Chief Endocrinologist. A press release announcing the first quarter 2024 financial results was issued today and is also available on our corporate website. We'll be using slides for today's presentation, which can be viewed on the Investor Relations section of Crinetics’ 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 business. 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 filing, including its annual report on Form 10-K. I would also like to specify that the content of this conference call contains time-sensitive information that's accurate only as of the date of this live broadcast August 8th, 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 the call over to Scott.

Thank you, Gayathri. Good afternoon everyone, and thank you for joining us on our second quarter 2024 results call. I'll begin by spending a few moments summarizing our recent accomplishments. The second quarter of 2024 was extremely productive for Crinetics. The Endocrine Society annual meeting in June proved to be an impactful meeting for us. We were thrilled to share highly encouraging initial results from the ongoing Phase 2 studies of our second development candidate Atumelnant in both Congenital Adrenal Hyperplasia and Cushing's disease. These unprecedented data were very well received by the endocrinology community. This reinforced already strong confidence in the potential of Atumelnant to be a best-in-class and first-in-class agent in both indications. Patients need better therapeutic options and we are committed to realizing Atumelnant's full potential as a revolutionary new treatment paradigm for people suffering from CAH and Cushing's disease. Crinetics' team is working hard to move development of Atumelnant in both indications and bring this potential therapy to people around the world. Overall, our 2024 plans remain on track. Our next steps this year include filing the paltusitine NDA for acromegaly, engaging with regulators to align on the initiation of a Phase 3 program in carcinoid syndrome, and transitioning multiple new drug candidates from our discovery efforts into preclinical and IND-enabling development. We've continued to make meaningful progress on our early-stage pipeline...

Thank you, Scott. I'll start with our lead candidate paltusitine. We remain on track to submit our NDA for paltusitine in its first indication, acromegaly this year. As we have discussed, the Phase 3 PATHFINDER program was designed to evaluate the safety and efficacy of paltusitine for the treatment of a broad spectrum of patients with acromegaly. We have laid the foundation to streamline and accelerate the NDA filing. We have held two productive pre-NDA interactions with the FDA to align on clinical, non-clinical, CMC and quality topics. The FDA confirmed that our proposed package supports submission for both the treatment and maintenance of acromegaly. In addition, we are diligently conducting health economics and outcome studies to further demonstrate the value proposition of paltusitine. This work supports the commercial team's efforts as they engage with payers, physicians, and patients. We are also making progress in paltusitine's second indication carcinoid syndrome. We are preparing to discuss the Phase 2 results with the FDA and align on the design of a Phase 3 protocol. We expect to initiate the Phase 3 trial by the end of 2024.

Thank you, Dana. For many years, Crinetics has been a committed member of the endocrinology community. We're now on the verge of filing the paltusitine NDA, an opportunity to establish a new standard of care in the treatment of acromegaly. Our launch preparation activities are laying the foundation of a fully integrated organization that can be leveraged for future indications, including carcinoid syndrome. Our overarching strategy is to disrupt the established acromegaly marketplace, which has not seen any new molecules in over a decade. Our commercial strategy is guided by three underlying pillars: extending Crinetics' partnership with healthcare practitioners, empowering patients, and streamlining access to therapy. The first pillar is extending our partnership with the endocrinology community. Our commercial team has recently launched acromegalytruth.com, our disease awareness campaign for endocrinologists treating patients with acromegaly. We hope this data will help physicians understand the potential transformative impact of paltusitine for their patients.

Thank you, Jim. As Scott mentioned, I will be stepping down from my role as CFO at Crinetics for personal reasons. Crinetics is in very capable hands with its deep bench of leaders across the organization. I'm proud of all we have accomplished during my tenure, and I look forward to the company's continued success as it evolves into a fully integrated endocrinology franchise. Crinetics continues to be in a strong financial position, having ended the second quarter with approximately $863 million in cash and investments. Our solid financial foundation is projected to fund our current operating plan into 2028. With respect to the second quarter financial results, research and development expenses were $58.3 million for the quarter end of June 30th, 2024, compared to $40.6 million for the same period in 2023.

Thank you, Marc. Looking to the rest of 2024 and 2025, we'll continue to build on the strong progress to date. We look forward to upcoming clinical and regulatory milestones from paltusitine and Atumelnant. Crinetics continues to be well-positioned to become the premier, fully integrated, endocrine-focused pharmaceutical company. Thank you all for your attention. Operator, we're ready to take questions for folks on the call.

Good afternoon. Thanks for taking my question. Marc, it's been great working with you over the years. I was wondering how we should think about additional insights we could expect to gain from the Phase 2 updates in CAH and Cushing's coming later this year. And what venue or venues we should look for those at?

We will have final or top line results in CAH and Cushing's disease hopefully. We will be able to continue to support the messages. I believe that we have already communicated. This appears to be a uniquely effective agent in these disease states in terms of biomarker responses. With higher sample sizes, we'll have more patients evaluated.

Marc, we're going to greatly miss you. It's been really a pleasure working with you. Wanted to ask just a question on carcinoid. If you could provide some color around engagement with the agency? Where are you in terms of the sign off?

Yes, we've just completed all the analysis that we needed to do and are essentially ready to start the process of engaging with them. It shouldn't take too long to get that squared away. As we mentioned, we're expecting to get the trial up and running by the end of the year.

Thank you for taking my question, and best wishes to Marc. You mentioned that you may advance your ADPKD program with a partner independently. What would be the deciding factors for Crinetics to go with one strategy versus the other?

One consideration is that we've built a remarkably strong team in the endocrinology area and we would need to start building out our nephrology capabilities to do justice for this program. There may be groups out there that are further advanced than us in the field and could do better justice to this program more rapidly.

Thanks for taking my question. Maybe if I can ask one on Atumelnant, how you're thinking about the pricing strategy once you guys eventually get approved next year if you plan a price at a premium?

Still too early to talk about pricing. We are engaged, as we mentioned, with payers and sharing the value proposition. There has been some encouraging conversations to date.

Thanks very much. Best wishes to Marc. Are specific clinical outcomes being systematically measured in Tucan, or was the observation of two patients who resumed menstruation something that was just noticed?

In addition to our standard endocrine biomarkers to assess disease state in CAH, there's a large number of clinical parameters that are observed as part of any clinical trial. We also look at metabolic control in other ways using various kinds of blood testing. There will be a large number of patient-reported outcomes as well as physician-reported outcomes.

Thank you for taking my question. I wanted to ask more specifically on the carcinoid regulatory feedback. What's your desired base case on primary endpoint confidence that a placebo comparator arm will be viable?

Our intention is to include both previously treated and naive patients. We would rather have the discussions first and then disclose where we're going after we've designed the trial. Our plan is that a placebo trial will be required.

Thanks for taking my question. So just thinking about the profile of paltusitine we've seen so far, do you have any plans to investigate it in the treatment of neuroendocrine tumors in the future?

We are using it to treat neuroendocrine tumors in those patients that experience the symptoms of carcinoid syndrome. We are thinking that as part of our Phase 3, we will be observing tumors both in the Phase 3 study and in open-label extensions.

If I can just ask one about the pipeline again. I'm curious about the role of SST3 agonism in ADPKD. If you can just talk about your decision to go into ADPKD and how this approach might differentiate from earlier studies.

It is fairly remarkable that as we were looking through the literature, we noticed that SST3 is expressed very cleanly in cilia. We've developed animal models in genetically engineered mice. We'll be coming out with more and more data around this.

Could you talk a little bit about how you're thinking about next steps, specifically in CAH? if you think you'd have enough information to move forward to a pivotal trial?

We think that once we have the full complement of patient data, we'll definitely be able to talk to the FDA about the design of Phase 3. We're very focused on evaluating pediatric protocols as well.

Scott, wanted to ask on your thyrotropin receptor program. Just wondering where you may be there? Could we see a clinical candidate nominated in the next few months?

It's always hard to say when you're going to get there. I can tell you we're really close. But whether that's this quarter, next quarter, or early next year, I don't know for sure.

Okay. A question for Jim, since he mentioned that patients often have a very different experience with acromegaly than clinicians realize. So how do you plan to get around that?

What we hear from physicians is if it's not broken, I'm not going to fix it. This is the rationale behind our disease state campaign acromegalytruth.com. It is making sure that physicians are aware of the patient experience.

Congrats on all the progress. Can you help give us a bit of context on how your launch efforts in acromegaly could support a launch in carcinoid syndrome down the line?

We've already started to look at the overlap in the customer base. There is a good deal of overlap in the pituitary treatment centers. This will be a new indication for us to get into and oncologists are going to be a new audience for us. Thank you all for being here and listening to us. Those of you who have such affection for Marc, he's not going anywhere right away. Thank you all for listening.

This does conclude today's Crinetics Pharmaceuticals second quarter 2024 earnings conference call. Thank you for participating.