Conference Transcript - PBLS 2026-09-16

Speaker 1

Thank you, everyone.

Speaker 2

I'm very happy to be joined by Matai Maiman, the CEO and Chairman of Parabolus. Thank you for joining us on day three of the Morgan Stanley Health Care Conference. Thanks for being with us, Matai.

Speaker 1

Of course. I appreciate it.

Speaker 2

Just a quick disclaimer. Please visit morgansanley.com slash research disclosures for important disclosures relating to our conference. So let's start with the Parabolus story at a high level. Maybe you can take us back to the founding of the company and the original insight behind the Helicon platform. What problem in drug discovery were you trying to solve that conventional small molecules and antibodies couldn't address?

Speaker 1

Yeah, thanks for that question. The company was founded by a Harvard professor called Greg Verdine, who was the same professor behind Warp Drive that got folded into Revolution Medicine. That's the basis of their product now. and Warp Drive and other companies as well. The problem he had been thinking about for a long time is one of drugability, undrugability, that most proteins inside cells lack small molecule binding pockets. Pockets are required for any kind of small molecule or version of a small molecule we have today from degraders to covalence to anything. So what to do then, because 80% or so of proteins inside cells lack these. And yet, the genetics and phenotypic screening efforts that abound in the industry now, they often point to one of those 80% as causes of various diseases. So if that's a cause, you're kind of out of luck. So the principle that he pushed then was, well, you know, nature enables helical peptides to sit inside membranes, and perhaps that will allow us to put a protein, effectively a peptide, into a cell and function like an antibody might that binds flat epitopes. So need for pockets is unnecessary, was his hypothesis. And what he did with that was evolve a peptide platform that we call now the helicon platform that's comprised of stabilizing entities that hold this peptide as a helix, as an alpha helix. So it's constrained to be that way. And once it's constrained, you can go kind of crazy on the side chains. You can use whatever side chains you want. You don't have to stay within the 20 canonical amino acids. So we use now over 2,000 different amino acids. So it's an astronomical diversity of peptides that we can create. And what we found, subsequent to the founding, is through creation of very large data sets, how to predict compositions that both enter cells and engage proteins that are otherwise undruggable. So that's the fundamental problem that we've solved.

Speaker 2

So your program, Zolocatatide, is really the first major clinical test of this platform. If the drug continues to demonstrate activity across different genetically distinct diseases, how much does that validate the Helicon concept you just walked through as a broader drug discovery modality?

Speaker 1

I think very much so. It should provide great confidence that this platform is not only validated biologically, not only validated through non-clinical tox studies, but now clinically, that this molecule that you're putting into the human is able to go and find its target that's inside a cell, so therefore get into a cell, and adhere to it and engage it and keep it from having function and adequately dealing with side effects and kinetics and manufacturing and all the things that need to be true to get to that point. So we feel really good about the validity of the platform as illustrated through Zolucatatide.

Speaker 2

And as we get into this program further and we think about beta-catenin as your target, why has this been so difficult historically to drug and what allowed Parabolus to finally directly inhibit the beta-catenin interaction?

Speaker 1

That is the question. So first of all, why beta-catenin? Why was it tackled in the first place? It's been on the table forever, like since, not forever, But since 1990, when Burke Bogelstein first described it and its relationship to cancer, it was recognized alongside P53 and MYC as major elements of why a cancer is a cancer. Like, you want to be able to do something about those proteins. And right now, it's only beta-catenin through parabolas where that's been possible. So why have we been able to do that? Why has it been difficult in the first place? Beta-catenin interacts with a key transcription factor, the family of them called TCFs, and it's that interaction that the Broad depth map and other ways of pointing to causality points right at that node. That node is undruggable. It lacks a pocket. It's a flat protein interacting with another flat protein. There's nothing there for a molecule to bind to. So it's been, therefore, very, very, very challenging. It's actually been impossible. It's actually an interesting anecdote that both J&J and Merck, when I ran research at Merck and R&D at J&J, we tried very hard to drug that note. And I feel like I have personal experience failing twice on that. So that was a not fun experience. It also provides some personal motivation and satisfaction for me.

Speaker 2

Never failing, just learning.

Speaker 1

That's right. That's the right way to look at it.

Speaker 2

So you often describe Zolokatatide as a pipeline in a product, and I want to dig into the different indications you're targeting in greater detail. But what gives you confidence that inhibiting the same central node can actually produce meaningful clinical benefit across diseases that are as different as desmoid tumors, FAP, ACP, et cetera?

Speaker 1

So if this is the case, actually, often in cancer, that something goes wrong in a critical system, in this case beta-catenin, either that protein beta-catenin itself is mutated or the protein that it is constantly, almost always bound to, APC, is mutated. A mutation in either of those two proteins results in a common biology where lots of beta-catenin then floods the system, engages with TCF, and drives a tumor program. If that happens to happen in a connective tissue that arises sarcoma and it's called a desmoid, then it's a desmoid tumor. If it happens to rise in a cell in the pituitary stock, it's ACP. If you're born with an APC mutation like in FAP patients and you pick up a second APC mutation during your life, it results in polyps, so that's FAP. So depending on the tissue, the cell that an APC or beta-catenin mutation arises in, these have different names, like these are different diagnoses, but in my mind, they're all the same disease. They're the same exact biological problem and should be dealt with the same way, and that's a beta-catenin TCO4 inhibitor.

Speaker 2

That's really great framing as we sort of get into the different indications here, and maybe let's start with desmoid tumors. Maybe you can just spend a few minutes framing the disease burden and the treatment landscape that we see today in desmoids.

Speaker 1

As best we know, in the United States, there's around 25,000 or 30,000 patients that have desmoid tumors. What we know is that about 10,000 or 11,000 of those patients are going to their physicians and saying, please help me, and they're actively seeking treatment for their desmoid tumors. and we know that there's now a category called a gamma-secretase inhibitor, oxibio, and the coming varagastastat as potential treatments. What is the disease? It is a soft tissue sarcoma that arises in various parts of the body, often in the abdomen or neck or one of the major joints. And it just relentlessly grows in place. And there's not a lot you can do about it. Like radiation doesn't seem to do anything. Chemotherapy, wildly difficult to take and does not do that much. Surgery is very difficult because they're very asymmetric and they kind of plug into different parts of the body. So it's extremely difficult to get margins. You know, if it rises in your neck, we have a patient where it just squeezes this poor gentleman's trachea and where the physician, until it's treated with our drug, was considering intubation as chronically, which is terrible. So there's a level of morbidity that's profound living with this condition. If it's in the abdomen, it's extraordinarily painful, typically, because it's squeezing all your organs. And it can squeeze up against your heart and spleen, and so all these things are happening that feel extraordinarily painful. So it's a big unmet need. We think the gamma-secretase inhibitors, they've been pioneers, and they offered the first-ever treatment to these patients. So we're very happy about that. That is something extremely good. But those drugs are difficult to take because of the side effect profile that only allows maybe 2,000, 3,000 of these 30,000 people to ultimately be treated. And so we think the unmet need remains very large.

Speaker 2

And then in terms of what you've actually demonstrated to date in this program, can you review a bit of the data and specifically what you view as sort of the most important takeaways?

Speaker 1

So we've been recruiting patients for over two years right now into both a Phase I, II study and more recently a dose optimization study as we prepare for Phase III. We've had, in the last couple months, a disclosure through our S1 of 38 patients, and in those 38 patients, we've seen a response rate of 74%. As a context, though, it's very important. Most of those were from the dose escalation arm, and they had a maturity about them that was pretty significant. So the median treatment time in those patients was nine months. So about four scans or four and a half scans on average that they've seen. We are about now, we just announced that at ESMO coming up, and then again at CTOS, we will be able to substantially lift up that data set. And they will offer up consistency of safety data, or you will be able to assess consistency of safety data, consistency of efficacy data, with the caveat that this is obviously a less mature data set as we've just recently fully enrolled the study. This is the data set, very important to us, though, because this is the data set we're using, the dose optimization arms, to select a dose and dose schedule for phase three. So we wanted to be able to communicate this to the investment community, to the medical community, to give confidence that we picked correctly the dose and schedule that we will end up using in phase three. And we remain on track to start that study in the first half of next year.

Speaker 2

When we think about the ESMO data that's coming, what should investors be most focused on in terms of the actual endpoints and data you're going to share?

Speaker 1

So you should look for consistency in a time-adjusted sense, meaning when you have two scans, four scans, six scans, like are the data sets consistent that we're reporting now from what we've reported in the prior time. You should be looking for safety. We've said that really the only on-target safety that we've made note of in the past is a very minor effect on bone. We see no changes in DEXA scan, but we have seen at high doses sometimes a stress fracture or two that is dealt with by just skipping a dose and putting like a little splint on your finger or toe and then it goes away. Nothing notable. But you should be looking that there are no new safety effects. There's a new mechanism. So, you know, we'd always worry about that until like we have way more data. So if you're looking for that, and you should be looking for consistency of efficacy, like I said. So I would just look for all those numbers. One of the, not at ESMO, but potentially at CTOS, We'll start to hopefully collect some patient-reported outcome and volumetric data. And there, it would be very exciting for you to look at the consistency or relationship between symptomatic changes, volume, and resist changes. I can tell you from, and we've talked about this a lot from the original data set, that symptomatic changes happen well before you see resist changes. And the reason for that is these are mass-based symptoms. So the mass of this desmoid tumor is pushing against something that's causing, say, pain. And as soon as you relax that and shrink that volume by even a small amount, like 10%, 20%, you're relieving the pressure that's causing the pain. And so you see that kick in very quickly. And then you see volumetric changes follow. Then you see resist changes, because resist is just the longest axis. And, you know, all leadership, I think, complains about resist, but here with desmoid, given the asymmetric shape of these tumors, it's particularly problematic. You can have these long, skinny, like, hot dog-shaped tumors that just get to be thinner hot dogs, but the length is comparable. So the resist change is not necessarily big, but the volumetric changes are very significant, and the PRO changes are very significant. So we'll do our best as a company in the presentation to provide proper context, but you're asking, so I'm just saying, like, these are things you might watch for.

Speaker 2

Want to pay attention to, for sure. And then as you get through those Q4 updates, you said you're planning to engage the FDA and initiate a registrational Phase III study in the first half of 27. What are the major questions you still need to align with on the FDA, and then what does the ideal Phase III design look like?

Speaker 1

Yeah, where we've talked to FDA already, and we've aligned on the study population, so it'll be a versus placebo, zolucatatide versus placebo study design. We've talked about sizing of it very similar to the other studies of around 150 patients, which, by the way, for our efficacy is massively overpowered, but we didn't want to arrive at an approval with a smaller safety database than other compounds that have been approved before us, So we're still going to size it that way. That seems fine. The main question is the dose and schedule. Hence, we did this whole optimization study, and we're taking to them a maintenance dose and an induction dose. And for both, they should rightly ask, why is that dose not higher? Why is that dose not lower? And we should have good answers to that. So when we feel, we do. So those are the questions we will discuss and align on. The endpoints are another topic of conversation. Technically, you don't need to align on your endpoints or statistical analysis plan at the beginning of the phase three, but we'd like to. And we're going to discuss whether the old PFS endpoint that they used prior is the right endpoint to use or whether a dual endpoint, meaning A or B, one or the either, endpoint of ORR and PFS is the more appropriate endpoint. We feel, let's say there were no approvals ever before us, there was no precedent, we would take ORR as a primary endpoint here because tumor shrinkage is the name of the game, like we just described with mass effects and all that. It's not about, in other kinds of cancers, ORR is a surrogate of PFS, which is a surrogate of OS. In this case, ORR is the clinical benefit. However, since there's regulatory precedence with PFS, we think a reasonable compromise is an either-or situation. It won't make a lot of difference to us either way, but we'd slightly prefer the ORR-PFS dual as we could probably read that result out even sooner.

Speaker 2

Okay. I'm just going to ask one more question on Desmoid before we move on to the rest of the pipeline. But from a commercial perspective, Desmoid tumors have been a relatively small market historically. So do you think a better tolerated, a more effective treatment could expand the actual addressable population here?

Speaker 1

We do. We think that's the real opportunity. We think that this happens, you know, in history. You'll be aware, I'll be aware of many situations where a first product was able to carve out a very small amount of the total addressable population because of some liabilities or inadequate efficacy of that product. But then another product comes along, and it's a much bigger deal. Like Bosentan and PAH versus the new endothelial receptor antagonists and other treatments is like an order of magnitude difference. Tigriso is obviously a lot bigger than compounds that came before it. So we feel similarly about this. There are lots of patients. Like I tell you an anecdote that we sometimes tell investors, there was a woman that came to visit our company that was intolerant of a gamut secretase inhibitor. She would never take that. As a woman, especially, and the majority of desmoid patients are women, the ovarian toxicity is very problematic. And there's only partial reversibility of that ovarian toxicity even after drug discontinuation. So this is an issue. plus the slow response and the needing to be patient with significant rash and diarrhea for a long time waiting for your tumor to get a little smaller, those are barriers. I still go back to what I said, like, you know, it's hard to be a pioneer, and so I always take my hat off to any pioneering medicine, so wonderful, but we think that that leaves so much unmet need on the table. So there's a woman that came in to our company with a desmoid tumor that wrapped around her jejunum that couldn't take a gamma-structose inhibitor. So the need wasn't so acute that she needed to suffer through all these different liabilities, like I said. But every few months, she would have these horrible pains because her jejunum would get squeezed off by the desmoid tumor. She'd have a small bowel obstruction, go into the hospital, get worked up, and all of this was a horrible chronic condition that she can look forward to for 40 more years. So it's like a terrible situation and she's unmedicated for many such patients.

Speaker 2

All right, let's transition to FAP, the sort of second area that you're exploring your program in. Can you frame what you view as sort of the unmet need and what would a meaningfully medical therapy need to accomplish to really change the treatment paradigm in that disease today?

Speaker 1

Yeah. So FAP, and by the way, I'm glad you're calling it FAP because I'm getting accustomed to that versus FAP. And the KOLs all refer to it as FAP. So thank you for that. So familial adenobinous polyposis is a condition that you're born with. It's a germline mutation in APC. That's one of the two mutations we treat with a beta-catenin and TCF4 inhibitor. So fundamentally, we get at the root cause of whatever issues come up in such patients, including all the polyposis and subsequent cancer. What happens typically in a patient, maybe I can describe one of the patients we've already treated. So she would be typical. She was a young woman that was 15 years old. when her polyp burden in her colons and GI tract became so bad, like they were so numerous, that the gastroenterologist could no longer feel confident that he or she could snip out enough polyps to have control. And because in these patients, typically, it goes from dozens to hundreds of thousands of polyps. So you can no longer feel confident that you've taken out potentially cancerous polyps. And at 15 years old, she lost her colon. So surgically removed, colostomy bag pretty bad, like she enters high school. And then she lives in fear after that, that even after her colectomy, the polyps start to fill up her duodenum. So duodenum in other places, but the duodenum seems to be the place where most are focused on because that's where the cancer comes from. So that has a scale associated with it, a risk scale called the Spiegelman staging, one to four. And when we saw her, she was at stage four. So if you look at her duodenum, it's just a carpet of polyps. You can't see any normal tissue there. And so she lives with this mental anguish that she's going to get cancer at any time. Her option, once she reached Spiegelman stage four, which is when we saw her, is to further remove, she's already lost rectum, further remove duodenum, maybe part of her stomach. And so she loses a huge part of her GI tract. And at that point, life becomes very tough because your nutrition is compromised. You may need parenteral nutrition, and you live a very different life than probably most of you in this room. And so that's the unmet need. If you talk to a surgeon right now, the risk is they may say, we've got this, we can just keep removing GI tissue. But clearly from a patient perspective, that's not so good. So our ideal medicine would prevent all of that. Our ideal medicine is a way to so radically change the polyp burden that it's either gone or you can just excise the two or three polyps or you can easily control it through endoscopies. So that's our treatment objective is complete control of the disease so that mentally you don't have to worry about getting cancer and you don't have to worry about having parts of your GI tract removed.

Speaker 2

The girl you described was the one patient that you treated in your desmoid study?

Speaker 1

Yeah, there were a couple of patients. A couple of patients, but she was one of them. She went from 11 weeks, Spiegelman stage 4, to 0, to normal tissue. The other patient we treated went from Spiegelman stage 2 to 1. So in both cases, I would call that a dramatic effect, like a profound effect.

Speaker 2

So I know you're planning to initiate a dedicated FAP cohort in the second half of the year with additional data expected Q1. So what are the key objectives of that cohort, and what would be an encouraging result?

Speaker 1

So we reported already that we now have 12 patients that are receiving zolacatatide, that have FAP with a desmoid tumor. So they happen to be part of our desmoid study because 10% of desmoid patients actually have underlying FAP. It's a predisposition to getting a desmoid tumor. So we're going to have like that. We treat that as bonus data, and some portion of those, and I can't say how many right now, will have scope data that we'll be able to talk about in Q1. That will be the majority of the patients we'll be able to talk about in Q1. They will be semi-quantitative, let's say, because the pre on those, because these are desmoid studies, they didn't come into our study as FAP patients. They came in as desmoid patients, so sometimes the scopes and the quantitation, the extent of imaging done prior is not what we would do in a clinical trial. But certainly, if we're having dramatic effects like we've talked about, we'll know that. Like if we're effectively having big effects on duodenal polyposis, we should be able to visually see that. So that's what we'll hopefully, fingers crossed, be looking for in Q1. We'll have started the dedicated FAP study, like you alluded to, and we'll press release this, like when we do, but we'll probably just be getting our first patient or two in Q1, so it'll be minority that. But as the year goes on, as 2027 goes on, then that cohort will probably eclipse the FAP-desmoid cohort and will be much more like a clinical trial of FAP with pre and post and all the right quantitation.

Speaker 2

Got it. Okay, that's helpful. Let's talk a little bit about ACP, the third indication in your pipeline. This is a rare but potentially devastating disease, and to my knowledge, no approved therapies there today.

Speaker 1

That's correct.

Speaker 2

Why is this disease well-suited to direct beta-catenin inhibition? Yeah.

Speaker 1

So like the other diseases we've talked about, desmoid FAP, this is driven entirely by beta-catenin. So this is a beta-catenin mutation that gives rise to a pituitary stock tumor. And this tumor, it's behind your eyes in your pituitary fossa, and it just grows relentlessly in place in the middle of your head. And so everything you can imagine going wrong goes wrong when that happens. And so we have vision disturbances, headaches, ultimately other kinds of cognitive effects, pituitary effects, obviously it's your pituitary gland. So a lot goes wrong. This tumor type is all beta-catenin, so it's well-suited. It is also a strangely shaped tumor. It has cystic components and solid tumor and finger-like projections into the brain, a bit like a glioblastoma, and it is a horrible disease as it just grows into your brain. It's chemorefractory and relatively radiation refractory, and radiation is bad at a young age when it's typically diagnosed. And so one needs to just do serial surgeries. You're serially going in and cutting out pieces of your brain to manage this condition. And so there's no treatments right now except surgery.

Speaker 2

Okay. You've already disclosed initial observations in ACP and expect data in the first half of next year. So what have the early patients taught you? What have you observed?

Speaker 1

So we presented in an oral presentation at the Society of Neuro-Oncology meeting, the SNOW meeting in December of last year, our first three patients. And there were two formal PRs and one formal stable disease. But when you look at these scans, most of the tumor is gone in all three patients, and the patients feel much, much better. So we felt incredibly good about where we were, and part of the use of proceeds from the IPO is to lean in there and recruit heavily in ACP as we are in FAP, as we are in HCC as well, which we can talk about. But leaning into ACP is a major priority. We have more probably medical pull on ACP than we do on other things that we work on. Like it's a huge amount of advocacy that we get from the neurosurgical community to get going. And we're trying our hardest to move as fast as we can here.

Speaker 2

And you just mentioned HCC, and I know you're looking at that disease. You're looking at colorectal cancer and rational combinations. Anything you want to mention about your earlier pipeline and what you might be pursuing?

Speaker 1

Yeah, so Zolucatatide, I mean, you said it earlier, like it is very much a pipeline and a product. There are dozens and dozens of indications that we could go after. What we're trying to do is also be efficient about it as a business. And what we think is that we'll define a dose-in-dose schedule, hopefully common, to be able to do a tumor agnostic study and to be able to go after endometroid and pancreatic SPN and amyloblastoma and all these different tumor types that we can look at together. There are a couple other discrete ones, big ones, that we will look at as discrete tumors, and one is HCC and one is CRC. HCC, we've already showed you a little bit of data on some profound effects on the portion of patients with hepatocellular carcinoma that are beta-catenin-driven. That's a big portion. That's about a third of all HCC patients don't have much going on genetically except a beta-catenin mutation and a couple other mutations sometimes that are in the same pathway. So this, to us, is a potential big deal. And by the first half of next year, we'll be able to show you more HTC data and convince ourselves, too, whether it should be graduated into that top three, the three indications we already talked about, whether it should be a fourth. And colorectal cancer, We've already generated a lot of data on that and show that in these fourth and fifth and sixth line patients, there's a stabilization of the disease, but there's not overt responses. We believe that there were pretty profound tumor effects, though, with cavitation, shutting down of ctDNA, zeroing out of ctDNA, stopping the tumor growth, that the key going forward will be combinations. And so at some point, we will show you certain combinations in CRC, and that we may treat as a discrete tumor as well. Beyond that, there's lots of stuff going on.

Speaker 2

Pre-clinical work going on. I was going to ask you, I know you're in the early phases of developing a beta-catenin degrader. Maybe you can just spend a moment on what you're trying to accomplish with degradation, and could this further expand the franchise?

Speaker 1

It has already. So what we can uniquely do at Parabolus is engage proteins other people can't engage. So once we do that, the compound like zolucatetide can prevent another protein from binding, but we can also just append an E3-ligase ligand to that like a VHL or cereblon and degrade the protein that we are uniquely engaging. And that's what we've done with beta-catenin. And so these are very interesting compounds right now, and we imagine a second-gen, and maybe even a third gen is in there somewhere as we can go deeper into other pools of beta-catenin. So it's a bit like what RedMed's done with our MO55 where there's a follow-on type compound that's gotten even more profound activity, dialed out whatever effects they didn't want in the first lead compound. So we're going to keep going because we consider ourselves like beta-catenin leaders and we want to just keep going and do as much as we can within that world. And then there's two very exciting prostate cancer programs in ERG and ARON, where we bind an allosteric site on androgen receptor to degrade AR in a way that's independent of amplified, the amplification status or the mutation status, which is almost everyone that fails AR therapy has either amplified or mutated AR, and we can deal with it all, we think. So these are extraordinary and, like all our parabolis programs, unique in the ecosystem, and we don't see other compounds like it.

Speaker 2

Natai, you recently entered a collaboration with Regeneron to develop antibody helicon conjugates. Can you just spend one minute on the scientific rationale for combining an antibody with a helicon? Yeah.

Speaker 1

So where we're excited by that is in some cases, we want to be able to engage, functionally inhibit, degrade some protein in some cell because it's the cause of a disease, but we don't want it to go to every single cell in the body. We want to direct it. So we thought a while back about putting our compounds on an antibody to direct it to a particular cell target, but we don't have that expertise. Regeneron are kings of antibodies, and they're the original humanized antibody company. They also are one of the two companies alongside Amgen that work extensively on genetic validation of new biology. So to us, they're a perfect partner for what we would like to do. And for them, we are a perfect partner because it allows them a new chapter. It allows them a new kind of modality, which is a helicon antibody conjugate that builds on their historical antibody expertise. So it's an extremely good marriage. Both leadership teams are very enthusiastic about seeing what we can do. All the work is outside oncology. I didn't want to sign a deal within oncology here because those are things we might want to do. But we're not going to work outside oncology anytime soon.

Speaker 2

Okay, just one final question. You guys had a very successful IPO earlier this year, so congratulations on that, and you now have $1.1 billion in cash and runway into 2030. So you guys have really set yourself up for a lot of success and a lot of future investment. So as you think about the next 12 months, what should investors be focused on? What should they be most excited for?

Speaker 1

I think the proceeds from the IPO, So they're appreciated because it allows us to lean into the full potential of zolucatatide. So we've talked through desmoid phase three. We've talked about expansion with FAP expansion, ACP expansion, and HCC, exploring colorectal, exploring a tumor agnostic. Those are all resource-intensive activities, and we'll do them all to create as much value over the next year, year and a half as possible, as fast as possible, as much as possible. We have now the resources to take forward our preclinical pipeline, and we have additional molecules that we're working on that we have not disclosed publicly that are for other additional indications that are just as compelling as beta-catenin and others that we've talked about. So this is the totality of what we'll do in the next year, year and a half, is make progress on Zolucatatide's full potential and the pipeline, and we'll announce probably another couple of new projects. Great.

Speaker 2

A lot of exciting updates to come. Thank you for joining me, Mattai, for being here.

Speaker 1

Great conversation.