Helus Pharma Inc. (HELP) September 2026 Conference Transcript

Well, good morning, everyone. Thank you for joining me today for this fireside chat with the CEO of Helis Pharma, Michael Holstead. Let me quickly read the Morgan Stanley Research Disclaimer. So for important disclosures, please see the Morgan Stanley Research Disclosure website at www.morgansanley.com forward slash research disclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. Michael, thank you very much for joining us this early in the morning. Before we get into the details, perhaps you can you give us a bit of background on Healus Pharma and where the company is today?

Sure, and thank you, Rebecca. Thank you, everyone, for joining us today. I'm certainly excited to talk about Healus Pharma. I'm Michael Halstead, the new CEO of Healus. I joined in early August. Healus Pharma is developing treatments for several mental health indications. We're developing novel serotonergic agonist. Our lead program, our first phase three readout expected in the fourth quarter of this year is the molecule is deuterated psilocin. It is in development for the treatment of adjunctive major depressive disorder, MDD. Very excited about that program, that indication in particular. In particular, hopefully we'll get into that as we progress. Mid-stage program we have as well is our OO4 program. That is deuterated DMT, the molecule, and that is for the treatment of generalized anxiety disorder, a very important indication there with a real unmet need. in the beginning of this year, completed a Phase II signal finding study. We've told everyone that we're finalizing the clinical trial design for the next study in that program this quarter, and we'll be rolling details of that out very soon. And then the earlier stage program in the platform, and I like to emphasize this is a platform, late-stage, mid-stage, and early-stage, is our 005 program, which is a library of compounds, preclinical, but I think have real potential in a number of mental health-related indications. We're going to be expecting to move the lead molecule in that program forward in 2027. So a lot going on, obviously a big near-term catalyst with the expected Phase III data in Q4, but just really excited about the potential that the company has to make a real positive impact in the treatment of mental health.

And so you mentioned you joined in early August, not that long ago. What was it that drew you to Heal-A-Sharma?

Sure, sure, and I've been in and around industry for about 25 years. Most recently I was with Intercellular Therapies. CNS-focused company had developed antipsychotics for a treatment of adjunctive MDD that was acquired by Johnson & Johnson in 2025. So I was in the fortunate position then of having the opportunity to be very thoughtful, selective about what it was I wanted to do next. I saw the opportunity with Helis to make an impact in, again, a very, very important area, right? Mental health, all the real unmet need, and the company is doing just some really great work. I did, I would say, a very similar diligence exercise to what investors do when they look at a company. So I looked at the potential of these assets, the likelihood of success. Obviously, you can have the greatest assets, but if you can't get them to the finish line, then you can't do our real mission, what we really want to do, make that real patient impact, provide that patient benefit, and then looked at the quality of the team that we have at Helis. All of those things checked out for me, and especially as I look at the Phase III program and Adjunctive MDD, and really the platform that the company has, the strong IP underneath to support long-term development, long-term commercialization. I just think that there's real potential with the company, and so I decided this was a place to devote my time, my energy.

And so you've had a month to get your feet under the table and get acquainted with the company. What are your priorities now going forward?

Three words, and they're all the same. Execution, execution, execution. Obviously, we need to read our data out in Q4 with our late-stage Phase III program in Adjunctive MDD, but then continuing with that focus on execution both from the clinical development perspective, not only with our OO3 program but then the other programs I referenced in the platform, and then also in parallel with that, all of the infrastructure building at an appropriate scalable pace so that we are prepared as we hopefully achieve these various clinical milestones to then support ultimately, you know, successful commercial launch.

That makes sense. So HLP-003, it's being advanced and tested as an adjunctive MDD treatment. What's the rationale for going after the adjunctive route? And, you know, why not go after a bigger indication like TRD, for example?

Well, actually, adjunctive MDD is the broadest indication. And I should have said it up front as I was evaluating the company. You know, I really liked the choice that they made, obviously predated me, of focusing on the adjunctive MDD space. So if you think about the major depressive disorder population, there's approximately 23 million people suffering from MDD in the United States. Of that 23 million, approximately 70% are on standard of care. So that's your SSRIs, your SNRIs. Of that 70%, approximately two-thirds aren't getting optimal benefit from standard of care, yes, and very high numbers. And the way in terms of how clinicians approach treating depressed patients, adjunctively you have the option. So you have someone, they're not getting optimal benefit on standard of care, but hopefully they may be getting some benefit, right? And so you have the opportunity adjunctively to add a therapy on. You don't have to wash the patient off of their off of drug as you would if you restarted with a monotherapy. And that's a four to six week process. And then you're giving them a monotherapy. Different patients react differently. So really starting over adjunctively, you continue on that path to remission. You're adding on to standard of care. hopefully providing that incremental benefit that the patient needs to get them to remission and you're getting them importantly before they get to treatment resistant depression which is the end of the spectrum that's multiple failures on other therapies. That population is about 3 million or so patients. So we're really focused on that broad swath and really helping these patients continue that journey towards remission. I think it's a great indication you're able to access that broad patient population and, again, really help them continue that journey to remission, hopefully.

So capturing them a little bit early and actually keeping them functional and living their community life.

Absolutely. And it really fits with how clinicians approach treating these patients in the real world and in their practices.

Makes a lot of sense. Perhaps you could spend a couple of minutes just walking us through the design of the HLP-003 paradigm study.

And a paradigm program, I was probably the right way to characterize it. And it is a full phase three program, as you would expect. We have the two pivotal trials. The one that I was referencing that we anticipate we'll read out in the fourth quarter of this year is our approach trial. We recently, end of July, announced completion of enrollment. So that's 223 patients, if I remember the number correctly. It's a two-arm study, 16 mgs of deuterated silicin and then placebo. The primary endpoint is at six weeks. Patients get two doses of the active, one at study start, one at week three. Then you measure efficacy at week six. This is on the Madras, the applicable depression scale. Then as a secondary endpoint, you're measuring, again, at week 12 to show your durability of effect. And then there's also our then second phase three, second pivotal. That is our EMBRACE study. That is a three-arm study, a target of 330 patients. that is 16 mg, an intermediate dose of 8 mg, and then placebo as well. And then, of course, we have the long-term extension study, studying these patients have the opportunity to roll over from the two pivotals. You get long-term safety efficacy data over the course of the year. So that full package that you would expect to support an NDA filing, We've guided to anticipated NDA filing in 2028. We have breakthrough therapy designation from FDA for this molecule. And so then with the rolling submission process, we would also then anticipate, if all goes well, approval then in 2028 as well.

And so 003 and MDD, the company is developing it as an adjunctive therapy rather than a moral therapy. you really touched on some of the reasons why, like, you know, not having to have that long washout period, making sure patients don't start to go into remission. But as a fresh pair of eyes coming into the company, do you think that's the right strategy?

Absolutely. And so, you know, I spoke to the treatment paradigm that your ability then adjunctively to access this broad patient population continuum on that, hopefully on that journey towards remission. But really, if you look at then the product characteristics of OO3. Now, we completed a Phase II, really saw incredible data when I first saw growing up in the antipsychotic world where those are prescribed adjunctively, do provide some benefit, but also obviously there's the side effect burden that is pretty well known that's associated with the antipsychotics. If you look at O3 and the data that we saw in the Phase II, which obviously has to translate to the Phase III, We all know that clinical path, but if you look at the starting point, really, really just impressive efficacy data saw 13 to 14 points of improvement off of one dose, and that was the primary endpoint at three weeks, and then added a second dose as an extension, saw another five points of improvement on a raw basis. So in terms of potential efficacy, great starting point, great signal, right? And then durability of this treatment off of those two doses saw durability out to a year. So the remission, the responder rates, 100% responders to the treatment, showing the requisite improvement on the matter scale, and then north of 70% remission. I mean, people really, really benefiting from the therapy over that long term. And then a very favorable safety and tolerability profile. Adverse events were mild to moderate, transitory really on the day of treatment, and no SAE, severe adverse events associated with the drug. So you put that profile together in this indication of adjunctive MDD, as I said before, or it's just a really promising approach.

And so you've touched a little bit on kind of the clinical results that you've seen so far based on the efficacy but also the durability of the drug. What do you think is a clinically meaningful kind of major difference in the upcoming trial?

Sure, and again, I would represent. So what are clinicians using now? And on an adjunctive basis, they're prescribing the antipsychotics that are indicated for the adjunctive treatment of MDD. There, drugs that have seen two to four points of improvement on the MADRAS scale, absolutely approvable. Clinicians are using those drugs, and commercially they're doing quite well. If you see four to five points of improvement on the MADRAS scale, that's a strong drug candidate. My prior company, Kaplyta, We saw four to five points there, again, as an antipsychotic with that side effect profile, and, again, very, very, very strong product. So if you think from a clinician's perspective, let's say that four to five points, certainly that's viewed as a strong efficacy position. Then together with the other, you know, two key characteristics, right, that durability that I referenced before, as well as the safety profile, I think from a clinical perspective, I'd be very excited about those product characteristics if that's what plays out as we go forward. And obviously, if you end up with more than that four to five points, you're in rarefied air. That's really, really amazing. And so we'll have to see our phase three. But again, as I said, I really like the point we're starting from.

And so what is going to be, to the extent you can talk about, what is going to be disclosed in 4Q around the approach trial?

Sure. And I think it will be the standard top-line data readout that people would expect. Obviously, we'll disclose the data around the primary endpoint, the key secondary, which I referenced, out to 12 weeks. And then we will also, of course, disclose the usual safety data as well in that top-line readout. And then, you know, as we get more data from the trial, then that will then be communicated out at various medical conferences as we progress. So people will get the full picture here.

Great. So moving on from 003, let's touch on 004 in generalized anxiety disorder. What can we expect next? You already mentioned, you know, in process of phase three, but what do you see as the next kind of market?

So it is a phase two program. As I said, we did have a phase two signal finding study that was completed in the early part of this year. The company has also done a number of earlier studies characterize the molecule, the potential benefits, and chose the generalized anxiety disorder indication, again, an indication that there is an incredible unmet need here. You haven't seen really any innovation with respect to that indication in a very, very long time, and standard of care, there's just really an unmet need. that patient population, depending on what figures you look at, around 20 million patients in the U.S. So, again, another one of these very significant, important mental health areas. Really glad that we're focusing there. And based on all the work the company has done, as well as the most recent signal finding study, definitely believe that this program has promise from a patient benefit perspective that it's worthy of our investment, of our focus. And as I say, stay tuned. We will roll out details on the design for the next clinical trial very soon and look forward to having a more fulsome discussion on that because I do think it's a great program.

Super. So there's obviously been a number of acquisitions recently in the CNS space and within the neuropsych space. What do you think large pharma is seeing now that it wasn't previously willing to underwrite?

Sure. And look, I think obviously the CNS space has been a focus of large pharma for quite some time. In terms of our space, the psychedelic space, you're now seeing, you know, most recently Lily acquiring a tie. You've also seen, you know, various other large pharma focus in different ways in this space. I think this is representative of a number of things. Obviously, we've had great positive developments, the work that we're doing, the work that our peers are doing, to really validate that these drugs have potential to make a real positive patient impact. You have FDA recently came out with guidelines to clear paths to what the expectations are towards approval. And then you have the lilies of the world coming in. They're very measured. They do their diligence. Obviously, they came to the conclusion that there's a very real patient benefit here, that there is a pathway to approval for this class of drugs, and potential clinician acceptance, and then a commercial model that works, both from an infrastructure perspective, from a reimbursement perspective, that it was worthy of their time, their investment. And I think that that, again, just great validation of the space furthers this momentum, this growing recognition of the potential patient benefit here. So I think it's all good for the space overall.

Any questions from the audience? Michael, you were clearly obviously very super clear and very comprehensive. So thank you very much for your time today in joining us here at the Morgan Stanley Healthcare Conference. I think it goes without saying that it's an exciting couple of months ahead for the company, and I'm definitely looking forward to seeing what is probably one of the most highly anticipated Phase 3 readouts remaining in 2026, so best of luck.

Thank you very much. We're obviously very excited about it. Look forward to sharing more, and thank you, everyone, for your time.

Thank you.