S2, E4: Sparrow Pharmaceuticals and tackling the ravaging effects of steroids with founder David Katz and experts Dr Peter Merkel (UPenn), Dr Leon Henderson-MacLennan (InThought)

[00:00:02] Welcome to the Raising Biotech podcast, I'm your host, Surani Fernando and thanks for tuning in.

[00:00:07] This podcast has a mission of exploring biotechs raising impressive funds to develop ambitious medical breakthroughs.

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[00:01:06] Today we are taking a look at Sparrow Pharmaceuticals, a company with a very clear mission to prevent the ravaging effects of steroids

[00:01:15] in patients suffering from a number of different diseases.

[00:01:19] From Cushing Syndrome and Autonomous Cortisol secretion,

[00:01:22] to patients with inflammatory disorders suffering from commonly used steroid medications,

[00:01:27] Sparrow has cast its mission wide on solving a huge yet often forgotten problem for the patient and medical community.

[00:01:36] In this episode I'm joined by founder and current chief scientific officer, David Katz.

[00:01:42] He talks about why he decided to pursue this mission at a time when he should have been retiring.

[00:01:49] The twists and turns in getting the company off the ground and funded,

[00:01:53] how its three clinical trial programs are progressing as well as future financing and R&D plans for the company moving forward.

[00:02:02] I'm also joined by Dr. Peter Merkel, chief of the Division of Rheumatology at the University of Pennsylvania,

[00:02:08] as well as Dr. Leon Henderson McLennan, co-founder of Inthourt Research and Former Medical Internist.

[00:02:15] They'll give us more scientific and clinical context on Sparrow's mission

[00:02:19] and its potential gain-changing impact for millions of forgotten patients.

[00:02:24] I hope you enjoy the episode.

[00:02:26] Hi, David. Thanks for joining the podcast.

[00:02:29] Nice to meet you. Thanks for having me.

[00:02:31] So just to start us off, are you able to briefly explain the sort of foundation of Sparrow and the company thesis

[00:02:40] and what problem Sparrow is actually trying to address?

[00:02:43] Yeah, so Sparrow's goal is to spare patients the ravages of steroids.

[00:02:48] And by steroids we mean not the antibiotics that weight lifters use,

[00:02:54] but the glucocorticoids which include a natural substance cortisol that we all make in our body

[00:03:01] and in some people because they have usually benign tumors that cause secretion of excess cortisol,

[00:03:10] they have health problems.

[00:03:13] Glucocorticoids also include the steroid medicines like prednisone and prednisolone,

[00:03:19] which a lot of people use to control autoimmune diseases and other conditions.

[00:03:26] cortisol is a hormone that many of us are familiar with.

[00:03:29] It's usually a hormone associated with stress and it's also more recently become a big focus in the health and well-being conversation.

[00:03:36] As cortisol imbalances can be linked to things like disrupted metabolism, weight gain,

[00:03:42] and even more fatal events like heart attacks.

[00:03:45] By a logically speaking, it's a finicky natural steroid hormone that serves a lot of physiological functions in the body,

[00:03:52] like regulating the metabolism of sugars and fats, it can help you wake up in the morning,

[00:03:57] regulate your sleep cycle and memory, but can also play a big role in the turnover of bones to keep our bones healthy.

[00:04:05] Too much cortisol means that all of those normal healthy cortisol processes get disrupted

[00:04:11] and can lead to a whole range of health issues.

[00:04:16] So Sparrow isn't trying to solve just general cortisol imbalances that a large majority of people have on a daily basis,

[00:04:23] but rather certain specific conditions where excess levels of these hormones are causing significant amounts of damage to a person's overall health.

[00:04:33] For example, there's a rare disease called Cushing Sizzies which is characterized by a high level of cortisol secretion that's coming from tumours within the body.

[00:04:42] A more common disorder that more people have and aren't aware of is something called autonomous cortisol secretion or ACS for short.

[00:04:51] So these are patients who have an adrenal tumor that secretes cortisol, they do not have the overt features of Cushing Sizz drones,

[00:05:01] but they do have a lot of the same risk of cardiovascular disease of diabetes of fractures.

[00:05:07] There are a lot of people who have autonomous cortisol secretion and almost all of them don't know it.

[00:05:14] So today they're being treated for diabetes or hypertension or the like,

[00:05:19] but they're underlying disease has not been diagnosed.

[00:05:22] Our goal is to prevent the damage that the tumor derived cortisol is doing and restore those patients to more of the physiological relationship with cortisol.

[00:05:33] In addition to tackling natural occurring glucose-corder-coids like cortisol in the body,

[00:05:38] Sparrow also wants to tackle the harmful effects experienced by patients taking commonly used synthetic steroid medications for autoimmune inflammatory diseases,

[00:05:48] which is a long list of conditions, but it includes things like rheumatoid arthritis, inflammatory skin conditions and asthma.

[00:05:56] It's a little bit more complex when people are taking glucocorticoid medicines such as pregnancy alone because then the extra glucocorticoid is actually serving a salientary purpose,

[00:06:11] and that is to control an autoimmune disease.

[00:06:15] So let's take rheumatoid arthritis for example, as that's quite a common condition.

[00:06:20] Now there are a lot of fancy medications out there for these patients, but first line generic affordable and very effective therapies that a lot of patients go on,

[00:06:29] are some steroids called prednisone or prednisolone.

[00:06:32] These medications serve the purpose of preventing inflammation and joint damage, but as a side effect,

[00:06:38] especially with long-term use of these drugs, patients often suffer things like disruptive glucose metabolism leading to diabetes,

[00:06:46] and new changes osteoporosis or bone fractures.

[00:06:50] So in this case, Sparrow's goal would be to keep the good and helpful effects of this long, gold standard and very effective medication,

[00:06:58] but with Sparrow's novel compound use as an ad on therapy, those nasty side effects could be prevented.

[00:07:05] So to tackle this issue, their first studying a disease called polymyelgia rheumatica, a fairly common arthritic syndrome

[00:07:13] the idea being that it can be expanded to a whole host of other autoimmune diseases later down the line.

[00:07:20] What we're doing is trying to help the patients who either have cushing syndrome autonomous cortisol secretion,

[00:07:28] or autoimmune diseases like polymyelgia rheumatica, feel themselves really and not have to worry about the side effects of the steroids.

[00:07:38] So Sparrow has a very targeted goal, tackling a long-standing yet niche problem that has been around for a very, very long time with little focus or success on solving the problem.

[00:07:50] So I asked David to give me a little bit on his background and David comes from a long career within Farmer, specifically Abbey and Abbot as an R&D leader for 18 years.

[00:08:01] It was within his investigational work that he got intrigued by a compound in the pipeline called an HSD1 inhibitor.

[00:08:09] And HSD1 is actually an enzyme that controls the concentration of glucose-cordercoids within cells.

[00:08:16] David had recognized the importance of this enzyme was different across different tissues, and therefore he had the light bulb moment

[00:08:24] that there could be a way to potentially attack this pathway to control the side effects of steroids.

[00:08:31] So that was his interest, but not so much big Farmer's interest who are much more interested in developing these HSD1 inhibitor drugs for much more broader diseases like Alzheimer's disease,

[00:08:43] type 2 diabetes or hypertension. Why? Because they had much more lucrative markets, but David always saw a flaw in that approach.

[00:08:53] So HSD1 inhibitors, for example, can be effective anti-diapetic medications and effective weight loss medications, but not effective enough to be commercially successful.

[00:09:06] And the reason for that is you're giving the drug to a very large populations for some of whom cortisol is an important factor in their disease.

[00:09:15] And others where it's not in the signal just washes out, but we're focusing now with the targeted therapy for people whose health problems are specifically related to cortisol or glucocorticoid medicine.

[00:09:31] And so it's really this idea of having a targeted therapy for conditions of glucocorticoid access, and is what we hope will make Sparrow successful, where a lot of other people developing HSD1 inhibitors had fairly limited success.

[00:09:49] And we've been talking among ourselves, some of the people who were in early to mid-stage drug development.

[00:09:57] And I have it that there are a lot of really good drugs that large Farmer doesn't have the inclination to develop.

[00:10:05] And that if we could acquire one or more of those and develop them, we would really be doing a service to mankind because we would be taking something that wasn't going anywhere that did have potential to improve human health and getting it out to the patients who need it.

[00:10:21] And so I just felt I was in a place where I could do that.

[00:10:25] So David's decision to start this new biotech venture came at a time when he actually wanted to retire.

[00:10:32] Starting an new biotech venture when you're thinking about retiring isn't something you see every day.

[00:10:37] David and I were speaking a little bit about what gave him that extra confidence to take something like this on at this time of his life back in 2013.

[00:10:46] I had been at Abbott long enough that I didn't have to just quit.

[00:10:52] I could keep my long term incentives intact and get a pension from them for the rest of my life,

[00:10:59] which one factor in being able to start a company is that I had a monthly check guarantee coming in that would pay the mortgage.

[00:11:08] And then was still also getting paid out for the three years after I left Abbott.

[00:11:15] So you know, it wasn't like I was just putting my job and doing this and having no income or anything whatsoever.

[00:11:26] But even with that sense of security, it wasn't as simple to get the company up and running as David had initially hurt.

[00:11:33] It took a lot longer than and a lot more work than I thought to get to this stage.

[00:11:40] But you know, ten years in now to the efforts on Sparrow or not only have we acquired the rights to the drugs that were developing.

[00:11:50] But we've gotten the company financed.

[00:11:53] We've built a team.

[00:11:54] We're conducting phase two clinical trials that will hopefully read out this year.

[00:12:01] And so it's all, you know, been a really exciting road.

[00:12:05] Even though David came from within Abbvi Sparrow's HSD one in Hibertadrog doesn't actually come from Abbvi after he tried to get an out licensing deal agreement going with them.

[00:12:16] But the big farmer just wasn't open to that.

[00:12:19] Instead, David found a similar HSD one in Hibertadrog that was in the pipeline of another big farmer.

[00:12:25] This time it was Estella's and so David pursued an out licensing agreement with them instead.

[00:12:32] So Estella still had their compound in active development when I first started.

[00:12:39] And so the first couple of years I was looking at some other potential opportunities that didn't pan out.

[00:12:46] The Estella's compound became available and it actually was from the start of diligence.

[00:12:53] From when we signed a CDA with them until we actually had a final license was almost two years.

[00:13:01] David hired some consultants to help him negotiate the rights to the Molecular Insparis pipeline.

[00:13:06] And those negotiations happened between 2017 and 2019.

[00:13:10] So it took the company six years to successfully get an official drug in its pipeline.

[00:13:16] Now I have to say, when I heard that I really admired David's patience and persistence to find a way to solve this steroid issue,

[00:13:24] particularly as he was around a good age to retire.

[00:13:28] But he said he understood from the beginning how long it could potentially take to negotiate with Big Farber.

[00:13:34] Things just move slowly within those big entities and he knew he had to be persistent.

[00:13:40] He then partnered up with Jeff Drears now the company's VP of program management to put a pitch deck together and take it to venture capitalists and investors.

[00:13:49] Now considering how long it took to secure the rights to the drug getting investors interested and on board was surprisingly quicker, a short 15 months.

[00:13:59] David finally saw the fruits of his efforts with a $50 million series A in 2020 led by well-known biotech investor Orbum Ed with US venture partners and Rida West venture partners also coming on board.

[00:14:12] I was curious to know what the fundraising process was like for David.

[00:14:17] I mean, I think I'd really been laying the groundwork for some time before that.

[00:14:22] So for example, I admit Peter Thompson who's lead partner in the deal for probably five years earlier initially and you know we had sort of kept up meeting JP Morgan or similar conferences once a year or so.

[00:14:38] And just you know letting him know what's going on. So I had already built up a lot of the network that I needed and then got the series A started and so that was really late 2019 and then this little thing happened called a pandemic.

[00:14:58] It's actually silver lining in it for someone like me suddenly because everything was on Zoom.

[00:15:06] We were on equal footing with people that the VCs might meet at Blue Bottle in San Francisco or Tata in Boston because there were no chance encounters and so then it became the network I had built up over the years really started to pay off because people said,

[00:15:27] Okay well, I've been talking to this guy for a couple of years. Let me hear what he has say now and then some of them got excited about it.

[00:15:36] Sparrow finalized its series A in late 2020 early 2021 and established the company that year.

[00:15:42] That milestone allowed David to hire a team at a new CEO and David stepped into his current role as chief scientific officer.

[00:15:50] Robert Jackson who is our CEO has really been leading the company and building the team and making it a real viable business as opposed to, you know, an idea.

[00:16:04] I mean, kind of went from two guys in a molecule to a real a real functioning company which is pretty cool and then the last three plus years we've been operating getting these trials up and running.

[00:16:19] And recruiting patients and waiting for data.

[00:16:23] This isn't business that takes a lot of patients both patients that ends with ENTS and patients that ends with ENCE.

[00:16:32] And so now we're waiting for the time that we can share data.

[00:16:39] So let's now dive into where Sparrow's HSD one inhibitor potentially fits into the treatment paradigm.

[00:16:46] To talk about the drugs potential in the broader inflammatory conditions, I talk to Dr. Peter Merkel, chief of the Division of Rheemotology at the University of Pennsylvania as well as Professor of Medicine and Epidemiology.

[00:16:58] He's also a scientific advisor to Sparrow.

[00:17:01] Dr. David Katz, contact me quite a number of years ago, knowing my expertise in knowing what I do with this idea for this product to help with reducing the burden of glucolotychlytehyl.

[00:17:14] Dr. Merkel has been treating patients with various rheumatological conditions for over 30 years.

[00:17:21] And so has a fair bit of experience with the use of drugs like prednisone and prednisone but slightly different variations of glucolocorticoids steroids.

[00:17:31] So glucolocorticoids, I like to say in rheumatology.

[00:17:34] They're the best drugs we have, they're the worst drugs we have.

[00:17:37] So they work very quickly and effectively to reduce inflammation. So that's very good.

[00:17:44] Dr. Merkel said, because it's so effective, it's used quite routinely to treat inflammatory disorders.

[00:17:50] But at the cost of an endless list of burdensome side effects.

[00:17:54] Not everybody gets all of these side effects, but the side effects include psychosis in somnia, cataracts, glaucoma,

[00:18:01] significant weight gain, osteoporosis, because any of the bones leading to fractures, osteounicrosis, death of bones, diabetes, melodists, hypertension, worsening heart failure,

[00:18:12] and increased risk of infections, sting changes, it can progility and other problems.

[00:18:17] So most patients will have some side effects and some will have many side effects.

[00:18:23] We would use these drugs much more, particularly liberally if they didn't have side effects.

[00:18:28] All drugs are side effects, but the burden to patients with a wide variety of disease is very substantial.

[00:18:35] So we spent a lot of time in the research and rheumatology, so I need to come up with strategies for patients to not have to be on these drugs.

[00:18:45] Either by substituting other drugs or finding out if you can lower them more quickly.

[00:18:50] But we have not been able to not use these drugs, and so there's two big things.

[00:18:56] One is we have a lot of patients with autoimmune inflammatory diseases and other diseases that need to use these drugs still.

[00:19:04] And the second thing is they're very effective, so we could give them without side effects or much less side effects that would be very helpful in patients.

[00:19:14] Beyond polymyelgia rheumatica, which is the disease indication being studied first by Sparrow,

[00:19:20] Dr. Merkel went down a long list of other disorders that commonly use these steroids including basculitis,

[00:19:27] inflammatory arthritis, lupus, muscle inflammation disorders, neurological diseases including multiple sclerosis,

[00:19:35] as well as respiratory conditions like asthma.

[00:19:38] Patients with asthma use a lot of inhaler therapies and other medications now that we use.

[00:19:43] But when they get a flare of asthma, that's bad enough to potentially put them in emergency room with the hospital.

[00:19:50] There's lots of inhaler things, but they're often returned to we still turn to pregnant some of the painsthe long for what could be a couple of weeks.

[00:19:58] When you get that it adds up.

[00:20:00] That toxic adds up over time if you do that several times a year.

[00:20:04] Some patients require a low dose to stay on all the time.

[00:20:07] All of that adds up for benefits.

[00:20:09] So there's a lot of potential use for a safer, less toxic approach to this class of medications.

[00:20:19] Speaking about Sparrow's potential HSD1 inhibitor, Dr. Merkel said the important thing is for the drug to prove successfully that he doesn't cancel out the benefits of any glucocortomol.

[00:20:29] Rather, it's more targeted on blocking the side effects that are triggered by this class of drug.

[00:20:35] So if you think of Crenus Lone as it reduces inflammation, but it does so with X, Y and Z bad effect.

[00:20:43] So it does A which is reducing, but it also does XYZ.

[00:20:47] When using Sparrow's drug in addition to Crenus Lone allows it allows A to still happen, but it starts XYZ from happening.

[00:20:57] The only people that hate Crenus Lone and Prenus Lone more than rheumatologists and certain other positions are our patients.

[00:21:05] Given that Sparrow's potential add on therapy has the potential to be used in a broad range of diseases, I asked Dr. Merkel what he thought about the decision to study polymyelge of rheumatica first.

[00:21:17] There isn't on my mind need presure in polymyelge or matricanolus PMR.

[00:21:22] It's also a disease that allows you to study it thoroughly readily because the statement of choice is in Corker Guys as Prenus Lone were Prenus Lone and you get an answer quickly.

[00:21:37] So from a development standpoint, you want our disease where you can get a readout where you can get a result and it isn't on matneed.

[00:21:45] That's true for that disease and it's a moderate comment.

[00:21:49] That's the tip of the therapeutic iceberg, if you will because there are so many diseases and so many patients who get Crenus Lone either.

[00:21:58] Ronically or intermittently for Slares of Disease.

[00:22:02] To get more context on this, I also spoke with Dr. Leon Henderson, Medclinana, a series regular and founder of Inthorate Research and Forma Medical Internist.

[00:22:12] He has a lot of experience with this patient group and he's just watching Sparrow from the sidelines that seems to be pretty positive that someone is trying to tackle this forgotten, yet very significant problem for patients.

[00:22:24] This is way too common. There's so many situations where patients are overexposed to corticosteroids, you know, you're as a physician trying to manage the benefit risk profile.

[00:22:37] And over time, people are becoming overexposed and it's exciting to see an agent offer or that may offer steroids bearing benefit.

[00:22:47] It was once such a major focus in drug discovery.

[00:22:51] And it's a common cause overexposure to exogenous steroids.

[00:22:56] So people with autoimmune and other inflammatory conditions who are overexposed, they're in tremendous need of relief from these adversities at a cumulative or time.

[00:23:06] And the due progress, I think the SPI 62 month therapy may spare them of these given what we've discussed about its profile.

[00:23:13] The experts were very positive about the drug's hypothetical potential and whilst it sounds great in theory,

[00:23:20] I wanted to clearly understand where exactly a drug like this could fit into the treatment paradigm.

[00:23:26] Where is it being positioned when conductors ideally prescribe it?

[00:23:30] Could this be a first line treatment from the get-go or would it be only given to patients after they're in the same place?

[00:23:35] And patients after taking a glucose corticoid and experiencing those ravaging side effects.

[00:23:41] Why would you wait for someone to get the side effects that you know?

[00:23:45] Well, because it's a treat that.

[00:23:47] That's true.

[00:23:48] That's true.

[00:23:49] So I think for many diseases, you kind of know from the beginning when you make a diagnosis that people are going to be on these drugs for X number of weeks or months or years.

[00:23:58] And you know they're going to get toxicity. So to be fair, there's a difference between about a poison IV in a young, healthy person who might get concordicolids for two weeks.

[00:24:09] And someone who's diagnosed with muscle disease in planetary or become myocitis, who is going to get it for months.

[00:24:17] Yes, they're different.

[00:24:18] But there are a lot of the second case. There are a lot of patients who are going to be destined to get a lot of concordicolids.

[00:24:25] And interestingly, we may use some more often if it's less toxic because it becomes a different risk-denicid ratio.

[00:24:33] Yeah, and I guess it's useful always depend on how it gets priced and things like that, but that's a long way down the road.

[00:24:39] While it might seem premature to be asking these questions when we haven't even seen proof of concept data yet, it does become important from an investment point of view because prednesone is generic and cheap.

[00:24:51] If Sparrow's drug works, they will surely be room for it to have a premium price and be covered.

[00:24:56] But how high is the question? And I'm going to guess that this was a major question from investors.

[00:25:02] As David himself has said that they didn't initially seem too hot on the inflammatory angle when he started pitching it.

[00:25:09] So initially we were pitching the idea of a safer glucocorticoid medicine.

[00:25:16] So better version of trignesolone, which is an enormous market can help millions of patients.

[00:25:24] But it's not either oncology or rare disease or a technology platform, which are three things that are really popular with venture capitalists, or at least were in the 2019-2020.

[00:25:43] So that's what drove David to push Cushing Syndrome instead, which for investors would be a much more attractive indication.

[00:25:51] When David started the company he knew the drug could have potential in Cushing Syndrome.

[00:25:56] He even pitched the idea to Albert back in 2009.

[00:25:59] But at that time there was a lot of competition of drug makers buying for a breakthrough Cushing's drug with many of them heading towards 2020 readouts.

[00:26:07] And if they were successful, there would be little to no room for yet another Cushing's drug on the market.

[00:26:13] One of them, Novada says it's a research got marketed in 2020 and has been relatively successful.

[00:26:19] Another drug Zeros Pharmaceuticals recalls was approved but was a little disappointing on its risk benefit profile.

[00:26:27] And then the third one coming from Corset Therapeutics had a bunch of delays and is still on its quest for an approval.

[00:26:32] So long story short, when David started to pitch the Cushing's indication to investors, he received a lot more interest.

[00:26:39] And the combination of those events meant there was an opening where we could plausibly say, okay, we're going to develop this for the treatment of Cushing Syndrome, where there's unmet medical need.

[00:26:53] And now we have one of the buzzwords and that really changed everything because it went from, well let's talk to this fellow and see what he's got, what he's been doing to hey, this is a new rare disease opportunity.

[00:27:10] This is exciting.

[00:27:12] There's still a reasonable unmet need for Cushing's Syndrome, particularly because current drugs can cause a phenomenon known as adrenal insufficiency, which is where turning off the synthesis of cortisol can go too far and we still need cortisol in our bodies to deal with normal stresses of daily life.

[00:27:30] Given that there are already drugs on the market which Leon has been following, we discussed where Sparrow's drug might fit in the treatment paradigm and how Sparrow should be positioning the drug.

[00:27:40] Leon said that he believes it would be wise for the company to focus on patients not responding to currently approved Cushing's medications, which he estimates is more than half of the Cushing's population.

[00:27:52] Globally, that's around 10 to 15 million people.

[00:27:55] Definitely, if you will low hanging fruit in terms of refractory patients that should be first addressed, the recruitment would not suffer as a matter of fact.

[00:28:07] It should be brisk because those patients are relatively easy to find and you know, you would get an answer in a reasonable amount of time.

[00:28:17] Once it is marketed and revenues are being generated or additional investments are procured, then you aim earlier and earlier in time.

[00:28:30] And then finally with Sparrow's third indication or autonomous cortisol secretion, that gets a little bit more tricky to get through the jaw, given the disease is currently undegined.

[00:28:41] Remember these are patients that have an adrenal tumour that secrete cortisol, but the signs and symptoms are less obvious and often they're mistaken for diabetes or hypertension patients.

[00:28:51] So we think there could be as many as two to three million people in the US who have autonomous cortisol secretion and that 97% of them don't know it.

[00:29:02] And then a big challenge will be to improve awareness, right? Because if patients and their physicians don't know that they have this disease, why would they treat it.

[00:29:13] So coming back to that pricing question with three distinct indications, that's going to be a very nuanced consideration for Sparrow's future.

[00:29:24] What's going to have to be balanced is how to be competitive in cushion disease and at the same time in anticipation of deployment in autoimmune disease, how to manage that difference, right?

[00:29:41] Without getting into the weeds of complex pricing dynamics, Novartis is newly approved cushing drug is priced in the US at over 150,000 per year.

[00:29:51] And that can get much higher depending on the dose.

[00:29:54] Meanwhile, for inflammatory disorders, drugs like prednisone and prednisone are peanuts in comparison, like around a dollar a day.

[00:30:02] But if we think about Sparrow's drug being more for the patients that need chronic anti-inflammatory treatment and our candidates for stronger biologic injectable drugs, those can range from 10,000 up to 500,000 a year,

[00:30:16] and those metrics give Sparrow's combination drug a much more compelling pricing argument.

[00:30:22] When you prove that you have a role in something for which biologic sort of deployed, you know, you can sort of play that.

[00:30:31] There's so many auto inflammatory conditions that are not specifically addressed on label or inadequately addressed by biologics.

[00:30:40] There's significant residual on that need still.

[00:30:43] Other conditions one can think of, or SLV or Lupus nephritis and then other conditions like systemic sclerosis or like implanas, anti-fospholimbut syndrome, autoimmune kidney conditions.

[00:30:55] These, you know, they really are not addressed by biologics.

[00:30:59] So I think there's a lot of opportunity with this exogenous route as well.

[00:31:04] So I think working together, you know, hand in hand and coming out with these opportunities at least close to the same time.

[00:31:12] We'll be very attractive for investors and they're aware certainly that there's a low percentage of folks on biologics even for conditions like psoriasis.

[00:31:22] Currently Sparrow is in a bunch of ongoing trials since 2021 they've initiated three phase two trials wanting cushions, one in ACS and the other for the combo drug in polymyelgia,

[00:31:33] Romatica and the PMR trial is being completed in cohorts that's where they recruit a certain number of patients,

[00:31:40] analyze the results and then decide what to do with the next cohort.

[00:31:44] They've completed three cohorts so far which is a good sign and currently they're running the fourth with results due in the middle to second half of this year, 2024.

[00:31:55] And for the other trials in cushions and ACS those results should be expected by the end of the year which would all be very meaningful indicators of Sparrow's future fate.

[00:32:06] Sparrow will have to raise more funds to continue trials beyond what it's doing now.

[00:32:11] And with all the three tracks requiring various levels of evidence to get approved, how it decides to move forward will very much be a data driven decision.

[00:32:22] So we'll be looking to raise more capital later this year once we have the data in order to support the next stage of clinical trials and we're working out right now exactly how much we think we want to raise in that in a private financing before we pursue the longer terms strategic options.

[00:32:43] That leads us to how is Sparrow going to achieve that and thinking about, you know, do we try to become a public company and do that ourselves?

[00:32:53] Do we partner certain programs? Do we sell the company to a larger pharmaceutical company? All of those options are on the table.

[00:33:02] And we probably won't know which one we're going to pursue until one of them happens.

[00:33:08] We're going to do that.

[00:33:09] We're going to do that.

[00:33:11] We're going to do that.

[00:33:38] I mean, where I'd like to be in five years is seeing one or both forms of this drug getting out to patients.

[00:34:09] Thanks to my guests, Dr. David Katz, Dr. Peter Merkel and Dr. Leon Henderson McClennon for their insight and wisdom.

[00:34:16] Thanks to you for tuning in.

[00:34:18] Remember if you liked the episode, please follow and subscribe right over view, join the LinkedIn group and share it around with friends and colleagues.

[00:34:27] That for now I'm Serani Fernando and see you next time on Raising By a Tech.