Conference Transcript - TTRX 2026-06-04

Justin Weiser, Analyst — Moderator, Jefferies Investment Banking

Good morning, and welcome to the Jefferies Global Health Care Conference in New York. My name is Justin Weiser with the Jefferies Investment Banking Team, and it is my great pleasure to introduce you to Bradley Burnham, CEO of Turn Therapeutics.

Bradley Burnham, CEO

Thank you, Justin. Thank you to everybody who's joining us online and in person. Thank you to my amazing team who's with me, Sasha DeMuni, Zura Shadari, or Family First and Colleague Second. It's an honor to be here, so we appreciate the invitation. So I will jump to our first slide, but simultaneously introduce ourselves as a little bit of the where did these guys come from company. I will admit there's probably a bit of that going on at the moment, but also we're a bit of a different story. So I'm a patient-gone founder. I spent a number of years as a chronic wound patient after getting a hospital-acquired infection from being in the commercial side of the medical world. I spent almost 10 years at Abbott, previously St. Jude Medical, selling pacemakers. So I've got a lot of experience in the commercial space. I've worked with the corporate accounts. I've negotiated the contracts with the big hospital organizations, the HCA's of the world, the Kaisers of the world. So it's a nice amount of insight when I'm developing product because I'm always thinking about the sales rep on the streets, actually talking to the doctors. But being a patient for so long made me very aware of certain amounts of innovation in certain spaces, especially initially in chronic wound care. So the product that we're talking about today, GX03, I developed roughly 10 years ago, a little bit over 10 years ago, actually. It's a bit like a child at this point. And it was developed quite selfishly initially for me. I wanted to have a product that would help me with my chronic wounds that I was dealing with on a six-day-a-week basis and dressing changes. polymicrobial abscesses you know that just kept coming up for years and years after getting this hospital acquired infection and I sourced an API that remains our API to this day in the GXO3 formula and I developed a manner to fuse that API inside of an oil carrier in this case it's a petrolatum carrier without an emulsifier so in a phrase that one could use it is the world's first emulsifier free emulsion but for visual purposes think of blueberries in a bowl of jello the API is suspended permanently inside of those blueberries that are just dispersed throughout this petrolatum bowl of jello and because of the fact that they don't dilute throughout the mixture we can use roughly 20 times less than it typically you know would be needed on an API load so GX03 and this company GX03 the formula like I said initially was developed for wound care. It's been on over 200,000 patients as of this point. It's been FDA cleared in other indications, specifically in chronic wound care. It is not being marketed currently in the chronic wound care space. We're focusing mainly on therapeutics at this point. We have had zero reported adverse events to date on this formula, so an incredible amount of human safety history, a wonderful track record. We've got a very lengthy and robust IP portfolio. We've got 17 issued patents across seven different families, a number of other pending ones that take us through to the late 2040s. We have composition of matter, methods of mixing, methods of use, indications-based patents, and we're very proud of our IP portfolio. So when you take a product out into the world with an idea of what you think as an inventor it's going to do, doctors a lot of times have other clever ideas of what they think it could do as well. And that happened initially when I started sampling in the chronic wound care space and just sort of pounding the street as a bit of a one-man band in the beginning with a family and friends round. Doctors began using this chronic wound care ointment initially in severe eczema. They began using an Antonio fungus and I decided to find some amazing people that we call the oracles now, they've joined our board of directors, I'll speak about them later, who could teach me a bit about how the pharma world works, that therapeutic world works, because these are indications that obviously require a different degree of pursuit. They require clinical trials, they require drug approvals. It's a whole different world than when I was just in the chronic wound care space. And the two pipeline assets that we're working the most on right now are moderate to severe eczema, which we released some data on this week that I'll get into, and tonal fungus. We also have a third that we're currently calling an undisclosed candidate, but I'll talk later about what one of those may be. So GXO3 for atopic dermatitis. So when When the doctor started saying, you know, these patients that we're giving the formula to for severe eczema are feeling better, their skin isn't just healing. I wanted to know why, because I don't like just saying possibly this, maybe that. I've never enjoyed that when I see on a drug insert, you know, may work by doing this. And I totally understand that may sometimes be the case and there's nothing we can do about that. But I was very, very interested in understanding the mechanism of action as to why people were feeling relief, you know, from this formula in eczema. I had a theory that was born of a study at Johns Hopkins by a gentleman named Lloyd Miller in his lab in roughly 2017, where patients with eczema, in his theory, had a great deal of dysbiosis, a lot of bacteria in their skin, a high level of colonization, barrier dysfunction that allowed them to have an, I'll call it, overly normal amount of staph aureus colonization in particular in their skin and the body would react to that almost in the sense like an like an inappropriate but you know exacerbated response to thinking it might be an infection and the first signal in the entire eczema cascade is il-36 it's the alarm bell the body sets off when it's having a problem at the skin barrier based upon his models which we recreated in the in vivo world and we took a couple of steps further we published our first paper about it this past week, we were able to determine that we inhibit both IL-36 and IL-31 quite significantly, not just IL-36-alpha, which is very often considered the, I would say, the primary subtype for eczema, but also IL-36-gamma, which is also associated with eczema, but even more so with psoriasis, over 50% inhibition, which is four days of pretreatment, which is a substantial amount given the amount of application when you're thinking about there. Also almost 70% IL-31 inhibition. The importance of IL-31 cannot go overstated because that is the signal that causes the itching and the scratching that is most associated with eczema. So reducing that cytokine, reducing that signal is directly connected to patient quality of life. Given that we had so much information on this product, including phase one data on safety in the form of an RAPT, we elected to take it to a phase two trial. We had a previous human use. We had a number of doctors telling us how well it was working. We had an incredible amount of safety data. And we said, okay, let's try it in humans. That's what we're supposed to do at this point. We're doing drug development. Now, the way adaptive trials work, which is the way our trial was formatted, it's kind of a staged format. You treat your first 50 patients in the case of our trial, which is up to 200 patients, as a bit of a conversation between the drug and the body. Because in the beginning, the CEO, the statisticians, the dermatologists, we all sit around and we think, okay, this is what we think based upon our hypotheses, based upon how well we know this formula, based upon what we think the physiology will do, that the drug will do when it comes in contact with the body. but the drug and the body don't get a chance to cast their votes at that point so for your first 50 patients you lay out what you think is a good experimental design you let the drug and the body cast their vote you take a look at patient 50 and we just put that data out publicly this past Tuesday the initial design double blind randomized vehicle controlled trial the initial primary endpoint as far as hypothesis was going to be IGA at week eight simply because that's been the precedent usually in topical products. It turns out we are not a typical topical product which is a wonderful thing to learn. And when we unblinded on Tuesday we got some pretty amazing information. As far as the analysis that we're working with, excuse me for sort of standing at an angle here, you will see that the baseline easy is something that we will control in the future. We were a bit liberal, inclusive on our entire full analysis set. IGA of three or four or an EZ of seven, and because a lot more patients came in with smaller patches of moderate to severe eczema, the EZ burden needs to be, I'll call it maintained at probably greater than or equal to 10. And because of that, we gave our vehicle a bit of a head start. I would say that our drug landed kind of where we probably want it to land in the end, roughly a mean EZ of 10. So we think that's an appropriate assumption for where the total trial set will end. But the vehicle you know had a little bit of an easier time which explains a lot of why our vehicle did so well so this is the data that we got we unblinded you can see some of the highlights here you know we had a 92.6% easy 50 index at four weeks which was really a fascinating uncovering oops pardon me really a fascinating piece of data to come in contact with that was actually statistically significant interestingly enough at easy 50 and given that our vehicle is quite literally just USP Petrolatum. This is not some unknown variable. We are all quite aware of the fact that Vaseline is not going to do 65% on moderate to severe eczema. So we're very confident that our inclusion criteria when it's reigned in to be more typical of other moderate to severe eczema products is going to get that vehicle to where it's been in historical literature. Other pretty amazing endpoints, easy 75s, easy 90s. And once we did our analysis of the different subgroups we started to see some trends emerge for what we think will be our stage two trial design so our end points are very likely going to focus on the earlier points in time so what i mean by saying that is we knew that this drug was going to be effective for eczema we knew that it was going to reduce inflammatory burden but we did not expect as such unbelievably, I'll call it extreme and wonderful results in the first four weeks, which has shaped a bit of the future commercial opportunity a bit in terms of the messaging. And we anticipate that our inclusion criteria will be much more akin to traditional modern just severe eczema trials going forward and easy of greater than or equal to 10. And when we look at the subgroups in our trial, we were able to actually, you know, do the data as if stage two of the trial were with this greater than or equal to 10. And these massive separation points emerge. 38.89% at EZ75 at week four is a massive delta for 50 patients. So it's very likely that will become a potential primary endpoint. And the continued deepening of the response into week eight with a delta of nearly 30%, these are numbers no topical has ever hit before. That's something that we all just need to digest for a moment. Topicals traditionally use the IGA index because these are biologic endpoints. EZ75s, EZ90s are things that we might expect with Dupixent and Apogee and products like that. We're a topical. We are achieving, according to the first 50 patient, biologic level relief in the first four to eight weeks. Looking additionally at the subgroup analysis, you can see that on the top when we had the drug versus the vehicle in the high easy threshold groups you can just see in the GXO3 treatment group it's acting as we would expect it to with the proper inflammatory burden on easy 10 and the vehicle on the bottom also acting as we would expect it to this will be stage two of the trial the I would say probably or equally most important thing that we learned from this trial from these first 50 patients is something that we kind of already knew going into it, given the historically, I'll call it, you know, clean safety record. But this is a topical eczema drug that had zero adverse events reported, other than a patient who said he had a pleasurable warming sensation for a few minutes, which I still don't know how to define, is that a treatment related non-adverse event or a treatment related positive event, we had no discontinuation due to adverse events, zero. We had no treatment-related serious adverse events, zero. So you've had thousands of applications across an eight-week period, two to three times per day, with patients who are miserable with eczema, and not a single one of them actually had a complaint that they had an adverse event from this product. And we know that it's very, very atypical in this disease. So market positioning for this product, after we finish our experiment with the design that we feel very comfortable pursuing is in a lot of places. I mean, if you're a doctor and you have a patient show up who's miserable and you've got a therapy that can almost act like a rescue in the first four weeks, you don't have to wait 16 weeks for the systemic to catch up. I mean, and it's not that any one of us is loony enough to say we're going to replace biologics, but there's no reason why we can't be concomitant therapy. There's no reason why people can't use our non-systemic product as a way to simply feel better, you know, within four to eight weeks while the biologics are taking a chance to kick in. Equally important, there are obviously a number of patients who don't want to get on systemic drugs, who don't want to be on long-term steroids, and we could provide that option. With the FDA's blessing at some point in the future, I think there's a huge opportunity in the pediatrics market because there are a number of parents who do not want to put their kids on injectable immunosuppressants. So that is something that I have a huge connection toward pursuing. We, of course, need their blessing to do that. And now I'm going to jump into a slide and just be happy that the people in this room are not eating while I show it. So this is our other indication that we are working on right now, toenail fungus. This is absolutely not something I thought of in the beginning while dealing with a hospital-acquired infection. I will be just very transparent about that. But a brilliant doctor by the name of Dan Davis, who was at the time president of the American Podiatric Association, was thinking about it when using our product in the advanced wound space. He ran a hundred patient trial in his own clinic, including using cultures and sending these nails off to labs to see if they had actually passed the fungal nail requirements. And according to his publication, we had a 70 to 85 percent effectiveness in clearing nails with fungus. Now, these are some examples of actual humans. There were 100 of them from this trial. It is very atypical to be a pharma company that wants to start its human trial on a drug with a human trial that's already been done on its drug. It's a bit like having a cheat sheet into your future trial. So we are very antsy, and I'll call it very much in a hurry to get this trial started as an additional pipeline indication because we know how well it works. Additionally, we know why it works. If you look at the graph on the right, the formula GX03, which has an API that is a cell membrane disruptor. It seems to selectively affect organisms like bacteria, fungus. It's also capable of penetrating the toenail. Now, the reason the products on the left, the current topicals on the market, don't necessarily produce an effectiveness that generates a lot of enthusiasm is it's not magic. They don't penetrate toenails, which isn't something we should even expect a water-based product or a lacquer to do, because when you take a bath, the water doesn't disappear. Your body is not designed to absorb water. But because we're an occlusive lipid-based agent, we can actually pass the API, which is the same API, it's the exact same formula, through the lipid bilayers in the nail, and deliver the API in this in vivo study, which showed that within In just two weeks, almost 18% of fungus, 12 to 18% of fungus was eliminated. We know that the MOA is very simple. We penetrate the toenail, we eliminate the fungus. The total available market of onychomycosis is an interesting one to calculate because only 15% of people that have toenail fungus bother seeking treatment. And why is that? It's because their options are topicals like we saw on the last page, which as I said do not generate a lot of enthusiasm, or because the oral product, terbinafine, otherwise known as lamistone, its original brand name, potentially has a lot of side effects. You know, it's known for liver toxicity, it's known for potentially needing blood tests every month, and there are just a lot of patients who live with this disease, you know, this ailment, because they don't have good options on the market to go after. But in reality, roughly 20% of the world has infected toenails. So it's not just that there's 15% of people who are currently seeking treatment that may not be happy with their current treatments. There's 85% of the world that doesn't know there is a potentially good treatment for it. So we have an opportunity not to just take over an existing market, but to create an entirely new one. Our science. We are the first IL-36 inhibitor. We are a novel mechanism of action in that sense. Other companies have attempted to work on IL-36. There have been IL-36 antagonists and postular psoriasis. It is a very well-studied, very well-known cytokine signal that is sort of the beginning of the inflammatory cascade. It also gives us an opportunity to look into other indications. Hydroadenitis superativa is something that I have a bit of a personal connection with given that I went through a series of inflammatory abscesses with my original infection. Obviously, plaque psoriasis is something that is IL-36-driven. It's something that is on the table. and now 31 is connected to a number of diseases associated with itching so we expect one of these indications to be our next pipeline indication after toenail fungus and it's something we're already rapidly working on as we speak this is the slide I would imagine most of the investors are not used to seeing anything like we are arguably the leanest company that I've seen We burn less than 300K a month as a company. The why haven't I heard of these guys before this conference answer is we only raised $15 million before direct listing on NASDAQ. You know, how many pharma companies burn that lien? We direct listed in October. We already had our phase two trial ongoing. We knew that we had a very large piece of data coming that could potentially give us an opportunity to maybe do a financing at that point. and it's something that of course we're we're strategizing about we do have enough cash runway to finish our trial we are covered all the way through q3 of 2027 we are not in any kind of a need-based situation we are interested in starting on it go but that's conversations that can be ongoing we're very confident in our current atopic derm program when you consider the previous endpoints and subgroup analysis i mentioned the ip before we have a very tightly insider-held cap table that we're currently in the process of discussing institutionalizing. This slide is what I, it's funny because it's not just the science, it's the people that I'm probably the most proud of in this company. When you've not been in the pharma industry before, you know that you need to surround yourself with people that just do this every day. I cold-called a lot of these people, people like Arthur Golden, who's the senior-most M&A counsel, Davis Polk Wardwell, you know, he was the guy who did the Roche transactions, the Anacorn transaction with Pfizer. Andrew Jenjoss was CFO of Terns Pharma, who, as you know, just sold to Merck. Ken Kester is the head of R&D at CEPI. Martin Dewhurst was global head of McKinsey Life Sciences for a decade. We just brought on Dr. Hahn, the former FDA commissioner, who is the one working on this trial design, you know, with the, you know, what will the FDA think of this in mind? It's a bit like we meet with the FDA every day when we talk to him, and he's just an incredibly wonderful, brilliant gentleman. He's been an author on over 220 papers and a number of clinical studies and he has experience in the topical space. We also have Dr. Redfield, former CDC director. We are informed by arguably what I would say is the smartest and kindest people I've ever come in contact with. So we don't make decisions in vacuums. You know, nothing here is made without forethought. Nothing here is made with the presumption that we know everything before we started. You know, even just the concept of doing an adaptive trial design, And it's kind of like having a conversation in the beginning. You know, we can all have an idea of what's going to happen for stage two of the trial. And luckily, we now know exactly what we can expect on stage two of the trial. And we are so excited to finish this study. We still expect it to finish in 2026. As soon as we finalize our sample size, after we talk to our statistician with Dr. Hahn, we will make that public. but you can expect great things from this company in the near future and we look forward to putting out more public press releases and keeping the market informed. So thank you.