Disc Medicine, Inc. (IRON) September 2026 Conference Transcript

Good morning, everyone. My name's Sean Larmann. I'm the head of SMIDCAP Biotech Equity Research here at Morgan Stanley, and welcome to our Global Healthcare Conference. Before we begin, just to make you aware of some important disclosures, please see the Morgan Stanley Research Disclosure website at www.morganstanley.com forward slash researchdisclosures. And if you do have any questions, please reach out to your Morgan Stanley sales representative. For this session, we have the pleasure of welcoming from Disc Medicine, their CEO, John Quistle. Thank you for your time today, John. A pleasure to host you.

Great to be here.

Thank you. Maybe just some macro considerations to start with, and we're doing this for all our companies, but how is the rise of China origin innovation, if at all, changing your competitive positioning and your R&D and business development playbook, if at all?

It's a great question. And, you know, I think we are fortunately unaffected so far. We don't see anyone else developing GLI-T1 inhibitors for our lead indication in porphyria. And similarly, that's true in the second indication in myelofibrosis anemia. We haven't really identified any competition from that sphere at this point. And as you know, these are all now, our pipeline programs are all transitioning towards Phase 3, and the lead program has Phase 3 readout and hopefully a commercial transition shortly. So I think we've managed to kind of get beyond that competitive wave, at least at disk.

Okay, and what about AI and its adoption? Are you adopting AI within your business and what sort of impact do you think it can have?

Yeah, we are working on that. It's still early days. I think it runs from the menial to the really, you know, well, even the menial is quite important, actually. And but as you know, in a rare disease setting, one of the most important factors in driving towards peak revenue is literally, if you have a good therapy, being able to identify where the patients and their treating physicians are located. And I think that's an area where there's a lot of interesting new tools being developed.

Sure. And last question before we dig into the meat of DISC, but maybe it is quite high on your Which policy variable, is it FDA, Medicare negotiations, MFN tariffs, global pricing, which policy variable do you think will have the most impact?

I mean, we do think a lot about MFN pricing. It impacts the perceived value of overseas markets, which itself impacts ideas about whether you might partner or develop on your own an asset, you know, such as Vita Burden, right? We are clearly committed to building in the U.S. market on our own, but, you know, strategy is still evolving in terms of overseas markets, and MFN has an impact on that. Sure.

Thank you. Right, now to get into this specifically, thank you for doing that, but, you know, a bit of pertinent EPP and looking... I've got a couple of questions here in the Apollo readout and the regulatory path, but I guess sort of following the June type A meeting, Can you share any more detail about the feedback you received during that meeting in terms of what the FDA is looking for?

I mean, I think, broadly speaking, we and they are both focused on the Apollo Phase III trial and, I think, broad alignment around the endpoints. That's really about all there is to it. I think we're just in a position now where we need to deliver what's hopefully fantastic data from the Phase III trial.

Thank you. And on the powering, we understand that Apollo is designed to detect roughly an 11-hour time in sunlight difference. Can you walk us through how you arrived at that powering assumption? What gives you confidence that the placebo-adjusted delta holds up in a larger, more geographically diverse study?

Yeah, I mean, the objective of the drug is to reduce the protophorphyr-9 and give these patients the freedom to spend time in light if they choose to do that. And that endpoint is designed to detect the time that they choose to spend. And I'm using the word choose to emphasize that it's a voluntary endpoint, right? And what we saw in Phase 2 is that, by and large, over time, patients who are on the active arm tend to choose to spend more time in light. And we see that trending upward. You know, the placebo-controlled trial in the U.S., the Aurora trial, was four months. In the last month of that, you see an upward trend. When you look at the six-month open-label trial in Australia, you see that continues. And when we look now at snapshots of data from the long-term extension trial, where, to be honest, the data quality starts to erode a little bit on these diaries. But nonetheless, what you see is patients with just spending vastly more time and light. So it appears it's kind of what you would expect. The drug gives people the biochemical ability to spend time and light. within a matter of weeks, but then for patients who've spent their entire life avoiding sunlight and often designed their entire lifestyle around that, having that newfound freedom takes a while to adjust to. So back to which month do we, you know, so we're using the last month, this month six, because we think it's a good place where you get beyond the placebo effects, but also you give patients time to adjust their behavior to detect the difference of the drug therapy. But what we chose to use for our projected effect size, we didn't use the last month of the phase 2 trial. What we did is we basically took months 2, 3, and 4 where you're still just starting to separate from the placebo group and use that as our projected effect size. So essentially, as long as the patients behave like any of months two through four, or at least an average of months two through four from phase two, then our powering calculation should be robust to that. And if they're doing what we expect was actually spending more time and separating further from placebo when you get out to month six, then we should be in an advantageous situation.

Sure, thank you, John. On seasonality, U.S. patients exit at all times of the year, but the majority of ex-U.S. patients are expected to complete in spring and summer. and if you noted roughly half the geographies that weren't in Aurora now synced up, you know, given more patients completing the higher daylight match, how are you thinking about the seasonality impact?

Yeah, we think it's well represented in the Phase II data. So that placebo-controlled trial conducted in the U.S., 75 patients running from, you know, Seattle, Boston, down to Miami and Texas. So I think representing a lot of different seasons, a lot of different geographies, a lot of different light intensities. So all of that, I think, is already represented in the Phase II data that we used. We also know that the seasons didn't have a dramatic effect. We can detect a difference with the drug both in the winter and in the summer. I think our intuition is that, and the data bears this out, is that the Delta is larger in the summer. And so I think it's what we see here in the way the enrollment played out is that the U.S. patients are a pretty broad smear across the seasons. And like you mentioned, through the accident of very rapid enrollment, the European patients ended up concentrated as completers across the summer. And I think we don't know for sure, but our guess is that should be favorable to detecting a drug effect.

Sure. Thank you, John. And on the clinical meaningfulness language that we observed, in the CRL. Can you share about what this means for the Apollo readout, and would it be achieving that SIG on the time-in-sunlight endpoint?

Yeah, I mean the key here is that exactly. The co-primary endpoints are PP9, which would be shocking if we missed that, and then the sunlight endpoint, which is where we really powered the study and in doing so, of course, overpower the PP9. Hitting those two co-primary endpoints, p-value less than 0.05, that's the key.

And I guess given the pro work, essentially every patient felt better, how much does the patient experience in real-world advocacy that builds up after the CRL reinforce the case regardless of how the primary endpoint reads?

Well, right. I mean, so with the CRL, I think that really activated the patient group's deep frustration around that result. And so you see a lot of media reports now with patients coming forward and telling their story about the disease. I think they're trying to make sure that, you know, the seriousness of what they're living with is made more public, perhaps, than it has been before. And then many of them are even choosing to talk about their experiences on vitipertin, and those have been remarkably positive stories. And I guess what we take in from all of that is that, you know, there is a meaningful impact here with the drug, and the challenge we have really is just detecting it with our endpoints, right? That's converting that patient experience into clinical output. But I would argue that's a vastly better place to be than if you don't really know what your drug's really doing, right? I feel like we have very good insight into what it's doing for many of these patients, and gives us a lot of confidence that the math we've put into designing the FEAS-3 trial will work out correctly. Sure.

Thank you. And thinking about the Helios B study, the extension study, how much is there a way to think about that in terms of de-risking some of the data that we might observe from Apollo?

Yeah, well, it's certainly helpful to see, for example, the protoporphyrin-9 suppression continues essentially uninterrupted for apparently years on end, and that, as I mentioned before, people tend to increase the time they spend in life the more time they're on therapy, which I think is evidence of perhaps people adjusting their lifestyles in a way that is very meaningful. So those things are all very encouraging. And simply the rate at which people choose to go into that long-term extension. You know, we've talked about in Phase 2, We had about 86 out of 100 patients choose to roll over onto the long-term extension. We've talked about the enthusiasm there was in the rapid enrollment in the Phase III trial, such that now we know the last patient, last visit is in this month. And so at this point, we start to have insight into the rate at which patients have chosen to roll into the long-term extension out of Phase III. And it's literally only two patients have chosen not to, right? which out of 180-plus eligible patients, I think shows an astonishing level of enthusiasm and interest in receiving this therapy.

Okay, thank you, John. I've got a couple of questions here on the commercial opportunity for Biddo-Pertin and the competition. But assuming approval, how do you think about sizing the US EPP opportunity and the number of patients you'd realistically target at launch? Is it patients on SNES or treatment-naive patients?

Well, patients on SNES is, in our view, a pretty small number. It's not easy to estimate, but I would say on a year-to-year basis, it's probably no more than we have already in our clinical trial neighborhood. And then, so obviously that is a group that we'll want to offer fit of pertinent to in a launch situation. But I think what's more interesting is the patients that we see at centers of excellence. I think we've reported something like 600 patients at the top 10, 15 centers, and that's been validated by our field force, so validated on the ground, not purely based on claims data. So that's an excellent place to think about launch potential. That doesn't get you, of course, to the kind of peak sales that we're hoping to achieve here, but it certainly gives you a place to start from. And then we're continuing to kind of engage with accounts using the claims data as our guide, right, going to the physicians who are reported to have a decent number of patients and working down that list. And, you know, we see a decent correlation between the two. It's not perfect. The claims that is never exact to the current real-world situation, but I think directionally it looks like it's going in a good direction.

Sure, thank you. And what does the cost structure of the launch look like? Should we expect a ramp ahead of the approval?

Should we expect that? I'm sorry.

Sorry, the cost structure of the launch as you're thinking about commercial infrastructure, et cetera, et cetera.

I mean, you know, our cash runway is into 2029. We assume no revenues in that model, but we have fully loaded in commercial expenses. And some of those commercial expenses are going on right now as we speak, you know, around disease education, physician engagement. And then as we get across the data, assuming everything looks good, then those activities will continue to ramp as we head towards launch.

Wonderful. And how do you think about scaling that if, you know, the PV and MF opportunities? How do you think about scaling that infrastructure?

Well, I think some of the home office infrastructure scales very well. I'd say the field force infrastructure will probably be different. We'll, you know, as originally planned, 24 reps to focus on the porphyria population. I think when we get to myelofibrosis and polycythemia vera, those two indications are directly overlapping in terms of physicians. So that's one sales force to address those two patient groups. but that's probably a different sales force specialized in the hemoic space versus the porphyria space.

Sure, thank you. And just on the competitive dynamic, just emerging competition in EPP space, how do you frame that for investors?

Yeah, so we all know about Synes, the surgically implanted drug, the only approved product today. There's Dersimelgon, which works by a similar mechanism, essentially an oral version of Synes. failed in initial phase three, had a successful second phase three product was acquired by a company this summer called Leopharma. We're probably on roughly the same time frame of getting to launch sometime in the first half of next year. We think we're unique in the sense that we reduce protophorphrine 9. We think it gets to the root cause of the disease. And then behind us, there's one additional product that's targeting, I guess, a novel period of targeting the plasma compartment of protoporfin 9 versus the whole blood, which is what we go after.

Okay, thank you, John. And maybe moving on to 0974 in MF anemia, can you remind us what the most recent cut of data that you've shown to date has shown?

Yeah, it's been a remarkable developing data set. We designed a Phase III trial with three, four cohorts initially to just look across the whole survey of anemic myelofibrosis patients. And these patients range in profile from newly diagnosed patient who's never received any therapy, just simply had an anemia, which turned out to be myelofibrosis, all the way through to patients who are getting as many as six units of blood on a 12-week basis, so very intensely transfused patients. And what we see across that spectrum is generally the same overall response rate of around, if you look at what's called the major response, which is what the FDA is going to key in on, it's around 50% to 60%. And then if you look at what's called the minor response rate, which is probably what the clinicians look at, you're up to 70%, 80%. So remarkable response rate, but even more remarkable is the way that this, fairly heterogeneous disease population, we get roughly the same degree of response across all of them. And that kind of common response is probably driven by a common mechanism, which is we're stimulating hemoglobin formation, and that fundamentally gets to whether you're a responder for hemoglobin or a responder for transfusion.

Okay. On competition with that one, Momolotnib establishes anemia sparing and mutant cal-R targeting antibodies emerging. How do you see 0974 fitting?

Yeah, well, we've learned about momolotin. Up to your point, it's anemia sparing, but it doesn't... We saw, at least as a trial experience, we created a special cohort to allow some of these new JAK inhibitors to come in, and we saw quite a few momolotin patients. And, in fact, many of them, you couldn't get into a trial unless you were anemic already. So patients who were receiving momolotinib remained anemic and responded very well to our therapy. So I think momolotinib, my view, is just part of the background therapy forest, right? There's Jackify, there's momolotinib, there's picritinib. There may be some new agents coming even, palabrasib, who knows what. And our expectation is, you know, our mechanism by mobilizing iron is just kind of orthogonal to all of those and should prove to be effective on top of really any background therapy. So I don't view that really as a competitive dynamic there.

Sure, thank you. And what signposts, whether it's the data, what signposts can we expect from 0974 over the next sort of 6, 12, 18 months and just your general alignment with the FDA on clinical endpoints?

Well, that's the big signpost. So we've seen enough from an efficacy safety point of view. we believe this drug should progress to Phase III. We will share one more data cut from that later in this year, and that will be the same data cut that we use as the basis for end of Phase II meeting with the FDA. So before the end of the year, we hope to provide the public community with insight into that last data cut, which probably will be about the same as data we've seen before, but also now kind of what we hope will be an aligned Phase III trial design with the U.S. regulators. And, of course, we'll talk to European regulators as well.

And on other indications for 0974, the Rally IBD trial started earlier this year. And how do you compare the opportunities in MF and IBD?

Well, yes, the Rally IBD, we remain excited about this kind of broad anemia of inflammation concept. So that'll be a trial probing that specific question in the setting of IBD patients. there are a lot more IBD patients in this country than MF patients. And even if you take the anemic subset of IBD patients, it's measured in hundreds of thousands. So by target population, it's a very large, or it's a large indication. And, you know, to that point, while we're using 974 as our signal-seeking study agent, And we may well choose to use our second-generation product with the longer serum half-life, which may be better for those patients who see their doctors less frequently. That may be where we actually continue that development once we find, you know, validated signal in the anemia of inflammation population.

Sure. Thank you, John. Maybe moving on to 3405. So you presented the RestorePV data at SOHO last week. Can you give us a recap of the data and how you believe the antibody performed.

Yeah, yeah, really exciting data set. We were, you know, overwhelmed by the enthusiasm for our Phase II program, and so we were able to move our first data release up into SOHO rather than conference later in the year, although we probably still will have yet an additional data cut before the end of the year. So we took our first cohort, right? There's two cohorts here, the first one, Cohort A, which involves a little bit of dose escalation and then settling in at a Q2-weeks 300-milligram dose level. And then cohort B is a steady 300-milligrams Q4-weeks dose level. So very similar dose ranges, and the data were great. Really pleased with what we saw, you know, the measures of efficacy where you're looking at reduction in phlebotomy, a stable hematocrit at around 45%. Those look really good, and pretty much right on with, you know, as we know it's a competitive field with other agents in the field. So on efficacy, I think we're meeting the standard. And I think one of the places we're hoping to distinguish in the long run is by having a product that's more tolerable to patients. So we're keeping an eye on some safety and tolerability aspects like whether patients become anemic on therapy, whether patients have injection site reactions. And so far, early days still, but both the rates of those events appear to be quite low. And possibly, you know, we'll see, but maybe allowing us to, in the long run, claim to have one of the better product profiles in the space.

So it seems in the data so far, you're seeing what you need to see on phlebotomy and hematocrit control. When do you get to a level of confidence to bring it forward into Phase 3?

Oh, I think if we replicate that same data in Cohort B, we'll be able to choose a dose and progress. So that's kind of slated for next year as our end of Phase II meeting on that program as well as the presumed Phase III trial start, which time-wise puts us right in the mix with the other TEMPRA-S6 targeted agents.

Yeah, so maybe give us sort of your view on the comparative dynamic when we think about what we've observed so far from silence and also the recent launch of Rasputide. So, you know, what should we really be looking at? You know, phlebotomy, hematocrit, you know, injection site reactions. Right, right.

Yeah, well, like I said, I think you see all these agents collecting around the same degree of phlebotomy-free rate, which has emerged, I guess, as kind of the, it's what, it's the endpoint that Rasputide used to support approval as primary. So you see Rusfertide, you see Divezeran, you see R-Program, you see Ono, Saffa-Blursen, all performing in the same range. Everyone has different mass of data, right? Obviously, Rusfertide has the largest, most rigorous data set. And then those of us in phase two have smaller data sets. But assuming that all proves out, on that front, everyone will be pretty similar. And then the differentiation probably comes from tolerability, safety, convenience, ease of use, all of that.

Sure. Thank you. And it's still on 3405, so we've got the Phase 1B data coming up in sickle cell disease. So what should investors expect there?

Yeah, yeah. So by the end of the year, I think we will have a little bit of data from that trial. It's a novel approach to sickle cell, and we're taking it slowly because safety is paramount in that population. And so I think we'll have, you know, think of it as single-digit patient information, so essentially almost case reports. And we're able to look in a very detailed way at the way the mechanism works. And the goal would be to see restriction of iron manifested in reduced concentration of hemoglobin inside the red cells. And then if things are going great, that could convert into a reduction in evidence of cellular damage, sickling, which can all be measured through a variety of different biomarkers. The big question in the end is, can you reduce important clinical adverse events like vaso-occlusive crises, retinal damage, kidney damage? That is something we're not going to see for quite a while in this study, but really just trying to look at the physiological and scientific underpinnings that predict whether those clinical endpoints might be worth pursuing in a larger trial.

Sure, sure. I've got this financial question. It was one of my last questions. You've kind of already answered it, but seeing I get so much inbound on it, I'll ask it again. But before I do that, there's a lot of the inbound I get on bitter pert. I don't get so much on PV and so much on MF, But just your view on how you think investors may be underappreciating those assets, you know, relative to Bitter-Purton, and how would you sequence them in terms of value?

Yeah, well, interestingly, Bitter-Purton is, of course, a totally novel financial proposition, right? It's the first potentially disease-modifying therapy into this rare disease where there's not a lot of experience. So we're building that story with various pieces of evidence and the value proposition around that. The other two indications, there's tremendous numbers of pure case studies that provide value indexes. There have been numerous companies with phase 3 myelofibrosis programs, and I would argue our program may have the broadest applicability of any of these molecules across these patients. And so I think you can look at other, there's been a whole series of phase three myelofibrosis programs that have been acquired at value points, and quick AI search would give you a sense of what the value ought to be for that product. The same could be said now for polycythemia vera. Now we have several different peer companies, some of whom are essentially single-asset Tempor S6 agent valuation, and that gives a very good kind of basis for thinking of a value for our TEMPRA S6 program. And I would say if you put those things together with our cash, which as of last quarter sitting above $700 million, it would tell you that if you wanted, this is not how the market's viewing it, but I would argue you could almost see the entire value of the company embedded in its pipeline plus cash.

Sure, sure. Last question, but you have kind of answered it We have answered already, but just to double down the $718 million on cash on balance to the end of Q2. But there is a lot going on at the company, and just sort of you're confident that we're going to get to your long-term trajectory. We're not going to see a blowout on costs either way.

Oh, no. I mean, our guidance is cash into 2029. It's quite conservative in the sense that it does not include any potential revenue from Bitterburton. And so, you know, you can kind of straight line the projected burn if you want, and I would imagine that that will be the trajectory.

Awesome. And is there anything that I didn't ask that I should have today?

No, no, no, I don't think so. I think we're just super excited to be coming into the end of the year. First evidence that our TEMPRA S6 program is looking good, looking like it's on a path to phase three. We'll have our Apollo trial data in Q4, which will answer the question about where beta-pertin is headed. And then we'll have, hopefully, the end of Phase II readout from myelofibrosis, which will show the path for that to Phase III. So I think an incredible transitional moment here for the company at the end of this year.

For sure. I agree. Pretty exciting.

But thanks for your time today, John.

We'll call a close, but thank you, everyone, for listening. Much appreciated. Thank you.