Dyne Therapeutics, Inc. (DYN) September 2026 Conference Transcript

All right. Good morning, everyone, and thanks for joining us at the Morgan Stanley Global Healthcare Conference. I'm Mike Olds. We're the biotech analysts here. It's my pleasure to introduce the team from Dyne Therapeutics. To my immediate left, John Cox, President and CEO, and to his left is Eric Lucera, CFO. And just a reminder, the format for today is the Fireside Chat, but if anyone in the audience has a question, you can raise your hand and we'll try and get it addressed during our discussion. But before we get started, I just need to read a quick disclosure. For important disclosures, please see the Morgan Stanley Research Disclosure website at www.morganstanley.com backslash research disclosures. And if you have any questions, please reach out to your Morgan Stanley sales representative. And with that, I'll hand it over to John to make some introductory comments before we jump into Q&A.

Terrific. Thanks, Mike. Well, I'll just mention a little bit about where we are at Dime right now. So it's an incredibly exciting time for us. This company, over the last couple of years, has been preparing for the moment right in front of us, which is to launch a very important medicine in DMD. And that's early next year, followed by DM1 the following year. So we've been building a, I guess I'd describe it as a pure play, neuromuscular, stand-alone, fully integrated biotech. Over the last year and a half, we have built out our leadership team and brought in people that I think other people that know how to build a company like this. They've been part of this type of company in the past, the company we're building for the future. We know how to allocate capital, and we know how to launch products, and we know how to commercialize. So we came here, really, and I came here because we want to launch two really important medicines in neuromuscular diseases where there really is nothing that is helping these patients. So it's an extraordinary time. We've got a PDUFA date in January, and we are working hard to be ready to launch our first product.

Great. Thanks for that introduction. I'm going to switch gears a little bit and start with DM1 because I think there's interest there for obvious reasons. But let's start Z. Basavarsin for DM1, maybe to just set the stage for the discussion, give us a brief background on that program, and highlight some of the key findings so far from the ACHIEVE study.

Well, you know, DM1 is one of those diseases where there is really nothing for patients, and it affects tens of thousands of patients. There's probably 30-plus thousand individuals that suffer from that disease. It shortens their life by about two decades, and they struggle and they suffer. So our company had introduced ZBAS Varsen clinically some time ago in a trial called ACHIEF. And that trial, we presented data that had shown, first of all, that we were getting at the core fundamental biology of the disease, and that's incredibly important. This is what's known as a nuclear spliceopathy disease. So it's in the nucleus. And we had designed our platform, the fourth platform, to deliver broadly and deeply to tissue. But we also had attached to that platform an antisense oligonucleotide. And that antisense oligonucleotide gets to the nucleus. And so what we showed previously, importantly, related to that, was that we saw DMPK knockdown. that's of the mutant DMPK that's at the source of this issue, knockdown of DMPK, we saw, as a result, splicing correction. And I don't think anybody else has been able to show that, where the mis-splicing is corrected. And we showed that in a dose-dependent way. And then what we finally presented at the end of that multi-stating dose study was that we were seeing functional improvement across multiple measures. And that functional improvement was represented by things like five-time sit-to-stand. It also was represented by hand myotonia with VHOT. And we even had shown improvement on patient-reported outcomes known as MD-high on six subscales that are arguably related to the CNS. And that disease has a CNS issue that's very significant. Targeting Moody, which targets TFR1, is an antibody fragment. And that fragment crosses the blood-brain barrier, and it also gets broadly and deeply to muscle. And I think it's got a very unique and differentiated distribution that's allowing us to see that kind of improvement across multiple measures.

And I guess the question on a lot of people's minds is just, you know, what's the read-through from Novartis' recent harbor data? I know there weren't a lot of details there, so it's a little bit difficult to really understand what's happening, but maybe just share your thoughts on that and read through.

Yeah, I mean, that I think everybody knows, but they did not meet their primary endpoint on video end-opening time. We were surprised by that because VHOT tends to be an endpoint that moves very easily, and it moves early. That's what we've seen. So we were surprised by that. But I would still come back to what I mentioned before, biology really matters here. Getting to the core pathobiology of the disease is key. And that particular medicine from Novartis uses an siRNA, which does not get to the nucleus. So I think we have to realize we have two very, very different molecules. So when we start talking about read-through, you need to start with, Even though we're both using TFR1 and going after the same disease, we have a completely different payload, and our FAB behaves very differently than the MAD that they use. So I would start there. Now, when we looked at our data, we had gotten to, in the multi-ascending dose study, to fairly high doses. In fact, we are at a much higher dose of oligonucleotide than the other sponsors using, much higher. And the reason for that is that we found at a low dose, we would move VHOT, but we weren't necessarily moving the other more clinically meaningful measures. And so we kept dose escalating to a much higher dose. And that dose escalation is largely possible because we use a FAB. And with the FAB, we do not get the dose-limiting toxicities of anemia that MABs tend to see. so we could get to a higher dose and we are well above where we think we need to be to move VHOT and even to move measures potentially into the scene.

Maybe just talk about your view towards the different endpoints, like a VHOT versus a five-time sit-the-stand. And I know you've had a lot of discussions with the FDA as well on this, so maybe share that view as well.

Yeah, so listen, we see VHOT and we're using VHOT as an intermediate clinical endpoint. So our clinical development plan has been different than others. We, and I think we have a very robust and fulsome clinical development plan as it's laying out. We're first doing a cellular approval, and we have a registration and expansion cohort in Achieve with 71 patients. And we are using VHOD as an early indicator, in other words, an intermediate clinical endpoint, at six months. and our data previously has shown at six months you move VHOT meaningfully and at later time points and at six months and at later time points it is indicative and predictive of improvement on other endpoints VHOT in our conversations with the FDA and with clinicians is not such a clinically meaningful endpoint It's just about being able to open your hand quicker or slower. There are other more clinically meaningful measures. And so in our phase three, which is now enrolling, we're using what we think to be a very clinically meaningful endpoint of five times sit to stand. We would not use VHOP as a primary endpoint for phase three. We've always said that. It's just not clinically meaningful enough. Something like five times sit to stand followed by other measures is meaningful. We can talk more about that.

Just given with VHOT, do you think that changes how the FDA views VHOT as, like, an intermediate sort of endpoint? Are they less favorable there now, you think?

Well, I would not. Listen, the FDA doesn't talk to us about other sponsors, but if, you know, in my own view, if anything, this makes the case that it's appropriate as an intermediate kind of endpoint, not as a Phase III endpoint. And so I think we feel good and confident about how we've done this, how we've organized the registration and expansion cohort, how we have laid out the statistics around the endpoint. And then, again, we follow it up with a phase three that will be very robust with a much more clinically meaningful endpoint. Understood.

You're going to share some updated data from Achieve at a couple medical meetings here. I think it's World Muscle and AANEM later this month or next month. But just give us a sense of what to expect there and how to think about those updates.

Yeah, so we recently announced that we would introduce 12-month data at AANEM and also at World Muscle. And I tell you, Mike, the reason we organized this 12-month data, We went through some trouble to do that as we were anticipating that Novartis was going to be saying they hit on VHOT and present, and then they would present other functional measures. And we wanted to give people a chance to compare on functional measures that really matter. We're going to go forward and present that. And that will be 25 patients. We captured 25 patients from the ACHIEVE long-term extension study that had been on dose for at least 12 months. And we are also comparing that, we'll be comparing that to baseline, and we'll be comparing that also to natural history where we've done a propensity matching. And we'll be looking, again, at multiple measures. You'll recall that when we had presented before, we had shown at the registration expansion cohort of 6.8 mg per kg that we had moved on QMT, VHOT, QMT, quantitative muscle testing, multiple-time function tests, and also on MDHI and on the CNS subscales. But it was only six patients. And so people were, man, it's great data, but it's six patients. Well, we're going to be presenting now on 25 patients.

We're seeing that, and I guess maybe just to follow the conversation, you'll still have your Achieve registrational cohort data, 1Q, and the primary endpoint there is VHOT at six months. I guess, you know, what are your expectations, you know, for that data set?

Well, that data set we have guided to Q1 of next year. So that will be the registration and expansion cohort. That will be the set of data that we intend to submit to the FDA as part of an accelerated approval package. And so what we would hope to see with that and expect to see with that is that we expect to see that VHOT has responded appropriately, that it is an appropriate intermediate clinical endpoint. And then what we have to provide for accelerated approval is trends across other measures. And that data we showed from the MAD was very clear that there were trends on five times sit to stand, 10-meter walk run, et cetera. So that's what we would hope to see from that data set. And then we will rapidly put that together and submit it as an accelerated approval.

If we just go back to the confirmatory study, the phase three harmonia study, and maybe talk a little bit more about the choice of the endpoint there, the five-time sit-to-stand versus, you know, some other functional endpoints which you could have.

Mike, this disease, I think you're fully aware, has a lot of heterogeneity to it. For some people, it's a balance issue. It's a strength issue. For others, it can be general myotonia, GI issues. for others as CNS issues. So identifying an endpoint, and there's no endpoint that's ever got a drug approved in the field. So establishing for the first time a meaningful endpoint is something we put a tremendous amount of work into, and that is also going back to the natural history data, working with all the top KOLs, and then looking at our own data and talking to the FDA. Five times sit to stand, I think, will become the kind of benchmark, definitive, primary endpoint in this field. It looks at when you have to get up and down from a chair five times, that's telling you about strength. It's telling you about balance. It's telling you about coordination. There are mental aspects to it. It tells you about fatigue. And it's also about core truncal strength. and it relates to and it's been shown in other studies to be correlated with the likelihood of falls which is obviously a very big deal in terms of morbidity so that end point is one that we feel very good about we've looked at our study from the Achieve study we saw that we improved on five times sit to stand and what would be considered an MCID And so we think we've got a really good endpoint, and we think we have obviously a very good shot of hitting that.

Yep, for sure. Can you characterize your just discussions with the FDA around that endpoint and kind of what their?

We've provided the endpoint and the justification and the rationale. And so I think, you know, we're aligned with the FDA and what we're putting forward.

Yep, makes sense. And then just harmonia is ongoing. Can you talk about just the pace of enrollment there versus your expectations, and are there ways to sort of accelerate that at all?

We're moving very quickly on Harmonia. So Harmonia is the Phase III confirmatory trial for the U.S., but it's also a trial that will enable us to go to Europe and Japan. So it's a global trial. It is essentially our global Phase III, and it is enrolling. We had announced that we had initiated it, enrollment is happening. Enrollment, I think, is going quite well. There's a lot of interest in that study. There's always been interest because I think the field has understood that uniquely to our drug, we have the potential to get to the CNS. And with the ability to get to the CNS, when 50% or more of the patients have CNS issues, doctors have been holding patients for this drug and so we're not having any issues in terms of moving on enrollment in fact just the opposite and we're moving aggressively great I guess any risk with the top line results about to enrollment in the study at all well risk to top line

I just mean ability to enroll the study maybe people are less You know, they don't like VHOT for some reason, or there's a question.

Oh, I think, no, not at all. In fact, I think if with the recent news, even with the other drug, people will be encouraged to come to this trial. So we see this as actively enrolling. In fact, at this point, I'll say, Mike, I think we're the only company with an active Phase III trial, and DM1. That's both a registrational expansion court that's about to read out in Q1 and we're the only company with an active Phase 3. So that puts us in a pretty good place, I think, in terms of market introduction. Yep.

Makes sense. Maybe we can shift gears now to Z. Rasta-Dearson. That's your DMD program, Exxon 51, do for date January. So maybe just highlight some of the key learnings there, points of differentiation, et cetera.

Well, Z-Rostedersin is for DMD, and it is for those individuals that are amenable to exon 51 skipping. That's the most prevalent category of mutations or subpopulation within DMD. What's special about our medicine is, again, the delivery. People have known for years that you can skip Exxon 51. The challenge has been getting enough of the oligonucleotide broadly and deeply to the tissue. And as a reminder for people with this disease, it's a devastating disease. There's drugs out there, but nothing is stopping the inevitable outcome and progression. And for these boys, and it's a recessive X-linked mutation, so it's all boys, by the time they're six or seven, they start struggling to get up off the floor. By the time they're 11, 12, 13, they're in a wheelchair. By the time they're in their late 20s or 30s, their heart fails or their diaphragm fails. So getting distribution to all these different tissues, including the heart, the diaphragm, and broadly the muscle is key. And what we have done is take a look at one key measure, many measures, but six functional measures, one being rise from floor velocity. And what we found in our study, which was a registration expansion cohort study, is that we were improving on rise from floor velocity. In other words, they were getting faster. We saw improvement, in fact, on all six key functional measures in DMD. That just isn't done or seen. Now, because of that, I think we're moving really well with the FDA. Everything is about getting this product launched. The community is engaged and excited for it, and we feel a real responsibility to get this to patients.

Can you maybe talk about the surrogate endpoint, which is dystrophin expression, what you've seen there, you know, and how it evolved longer term, which I thought was pretty promising.

Yeah, thanks for raising that. So generally in this disease, people have looked at dystrophin levels in muscle biopsies as a biomarker. And in exon 51 patients, it's likely the most difficult exon to skip. There's a little bit of natural skipping, depending on the mutation. They're virtually at about 0.4 or 0.5% of normal dystrophin if you take a biopsy, so almost none. What we found was that when we adjusted for muscle content at six months, we were at roughly 5, 5.5% dystrophin. We took some biopsies even longer term, four biopsies that were voluntary biopsies that were not part of the original protocol, and we found that we had roughly tripled what you would see in terms of dystrophin levels. And all of that was consistent with what we were seeing longer term. So at six months, just six months, you would not have thought rise from floor velocity would improve at six months. You wouldn't expect stride velocity, 95th centile, to have improved at six months. It's a disease that people would have expected since it's fairly slowly progressed. You would see take time. At six months, we're seeing it, even at those dystrophin levels, which means we're getting broad, deep distributions through the tissue. But longer term, then we presented the last MDA, 18 and 24 months across these measures, and you saw continued improvement, and we even saw stabilization of cardiac function and of lung function, which was really important and we were seeing that across boys that were ambulatory and also non-ambulatory so it really points to you are building dystrophin over time and the important piece is nobody's ever really understood how much dystrophin do you need to start seeing functional improvement and people would always ask us that and we would say you know we're going to be the ones that just might have the answer and now we've seen and even at fairly low dystrophin levels, 4%, 5%, 6% at six months, you're actually seeing functional improvement, not slowing a decline, but functional improvement from baseline. It's remarkable, and we're excited about it, obviously.

And maybe you can just put some of that data you've just shared into the context of the currently available therapy profile, like dosing maybe, touch on that as well.

Well, the current therapy is Exondis, and that drug has been on the market for about 10 years. It was approved by Accelerate Approval. To date, it has not been able to show statistically that it's having functional improvement. So, and it's dosed on a weekly basis. And so there's a lot of, I think, disappointment in that treatment and basically the current state of treatments. And so, you know, we are roughly 10X in terms of distribution from production compared to what they had shown. And our dosing frequency is once a month. So it's an infusion once a month, much more convenient. It's really hard to compare those drugs, honestly. And the reason is our oligonucleotide is attached to an antibody fragment that is delivering broadly and penetrating the tissue.

Can you maybe share what you've heard from some physicians on the profile?

We have met with, we've worked with a lot of the physicians, and we've met with so many. Those who have used the drug in the clinical trials, they see this as a foundational therapy. The notion that they would keep somebody on one of the older therapies like Exondis, they're very clear. We're switching our pensions. And so I think the receptivity among the clinicians, they're sitting up and they're positive about it and they're very excited about it. And then you've got the patient advocacy community as well and they're fully aware and they're in tune and alert to it. So we're feeling very positive about successfully launching this drug next year.

Can you talk a little bit about the phase three sort of confirmatory study and the choice of the endpoint there? You talked a little bit about it earlier and why it makes sense, but maybe just expand on that.

You know, ourselves and other sponsors of DMD clinical trials have all come to the conclusion rise from floor velocity is a meaningful measure. It is something from just in practical terms. as I mentioned when people start when parents first realize their son is struggling to get up off the floor they take them to the doctor and they get diagnosed and then what they monitor is the time it takes for them to get up off the floor and there gets to be a point in time say over 10 seconds where it starts to become very predictive when they hit that sad threshold they're going to be in a wheelchair in a fairly short period of time so there's no question It's a very clinically meaningful measure. So that was selected as the primary. And then we have a number of secondaries. And, you know, dystrophin is not part of that. We've moved past dystrophin, done with biomarker. Now let's talk about efficacy. Rise from floor, stride velocity, 95th centile, NSAA, which is an ambulatory measure, and others. Pulmonary measures, cardiac measures, All of that will be part of, and some patient report outcomes, part of the phase three. It's an 18-month endpoint and placebo-controlled, and it's a global study.

With the upcoming PDUFA date in January, I don't know if you can mention any kind of interaction so far with the FDA, your expectations around an adcom.

We're having the usual interactions that you would have getting to this point. We're not going to comment on those just to keep all of that out of respect to the process for the FDA. When we received the filing acceptance letter from the FDA, it was great. And that letter gave us prior to review, and it also said that they did not expect an outcome. So it was a positive. I like reading that letter.

Obviously, Purdue for a day in January, you could be launching next year, so maybe touch on some of the launch preparations so far.

Well, listen, for launch, launching is, for the first time as a company, I mean, you need people that know how to do it, and they have to be on a mission, and we are. The areas of attention, regulatory execution, obviously, and that's happening. Other areas is manufacturing and supply chain execution. We brought in a team to do that, and we're executing on that and getting our inventories built and ready and scaling our processes. And then the other big part is commercial. And, you know, I mentioned before we brought in Johanna Friedel-Nader to lead our commercial organization. Almost two years ago, she's been building and preparing that organization to launch a rare disease drug, which she and her entire team have done multiple times. So that preparation is in place. We've got the market access team in place. We've got patient services leadership in place. We have our medical affairs team in place. So market access preparations are kind of key at this point, and all that is moving per plan. It's a lot of work. It's a lot of fun, and it's happening.

Can you talk a little bit about the strategy? I know you haven't quite fully gone there yet, but just your early thoughts on the strategy.

Well, listen, I think one of the beautiful things about doing this and being in rare diseases is that you can actually do it in a very capital-efficient way. And I'm going to let this guy to my left say a few words about that.

Yeah, I think when you look at the Dine portfolio, just taking a step back with the Force platform, It is something that is amenable to multiple products. So we have seven products in the clinic with DM1, DMD, the other exons, FSHD. From that, we can scale a commercial organization that's largely seeing the same centers for all of these drugs and the manufacturing. We've got the same fab, same linker. Oligochemistry is pretty much the same, just a few tweaks. So there's a lot of opportunities to scale a business unlike anything I've seen in the 30 years that I've been in biotech. So from a capital and a resource standpoint, it's very capital efficient, and it's something that we think can provide patients and investors a trajectory of growth into the next decade that will be well above our peer average. Makes sense.

For the launch, do you expect sort of a pent-up demand, just given the profile you've seen and the feedback you've gotten on it? Do you anticipate a lot of switching early, or just how do you think that all kind of plays out?

I think the demand is absolutely there. Without question. The unmet need is profound. So the demand is there. I think we're predicting this to be what you often will see in rare diseases in terms of a launch, meaning the first year is gated largely, not so much by demand in this case, but gated more by coverage. You know, it's kind of controlled, the pace is controlled largely by the payers. Now, often a rare disease is the challenge is finding the patients. DMD, the patients are known across the United States. It's about 1,600. They're known. The reimbursement pathways are there. So a lot of those kind of hurdles are not there. But you should see a launch that will be, I think, successful, but it will be a typical kind of rare disease affected by payers for a period of time, which we'll work through, and should have a very good launch.

Makes sense. I wanted to ask you about your other Exxon skippers. You have several in the pipeline. John, you mentioned Exxon 51 is probably the most difficult to skip. You've had very promising data there. So how do we think about the rest of the pipeline, timelines, how fast can you move those forward?

Well, maybe I can let Eric start with how when he first joined the company, the first thing he did was start talking about, we've got to build a franchise in DMD. So let me just comment a little bit.

Yeah, I'd say for me personally, I'm very excited about the DMD franchise. It's something that I noticed was a disconnect in the way the market viewed the stock. It is something that when you take all of the patients that we're targeting, you start with 51, that's 13% of the boys. You get the other four exons, that's 39% of the boys. So, you know, in terms of how we're going to get this to market, obviously we found some money in the budget to get CMC and IND-enabling tox studies this year in advance of any discussions with the FDA. We did not want to lose any time getting these drugs to these boys. It's very important for us. Obviously, the most important thing is to get Exxon 51 approved. Once we get that approved, we will then have discussions with the FDA about finding the appropriate development pathway forward. We think the best approach is to do some kind of a basket trial where you would have four actives and one placebo. I think if you were to try and do these on an individual basis, the incidence and prevalence probably isn't big enough to run randomized trials. You just would run out of patients. So a basket trail seems like a great way for us to get this to all the boys that we can, and we will have those discussions after we get approval, knock on wood, for 51 next first quarter.

Mike, I really believe that we have a chance to be in the field. I think the Exxon 51 is step one and has demonstrated that we actually can see functional improvement in places where people haven't seen it before. We owe it to our shareholders and to the community to make that happen, and we're going to do our very best, and that is expand that franchise as rapidly as possible, and that will put us in a leadership position in DMD, and then right behind that we'll obviously DM1 an even bigger market.

And we'll have some data on preclinical work in a couple weeks with that press release out about two weeks ago.

So looking forward to that. And then maybe, Eric, you could just touch on, you know, that you have this efficient strategy going forward and how far that gets you.

Right now we have $1.3 billion of cash pro forma as of the end of the last quarter. We had a very successful raise, which you guys were instrumental in helping us get that done. So thank you very much. You know, we believe that we have a unique opportunity to capitalize a company to do one build for multiple launches, and we are going to pursue that with the most capital-efficient means possible.

Great. Looks like we're just about out of time, so why don't we end it there. John and Eric, thanks so much. Really appreciate your time today.