S2, E5: Cerevance and a new approach to Parkinson's disease with CEO Craig Thompson and CNS expert Prof Karl Kieburtz (URMC, Clintrex)

[00:00:00] Welcome to the Raising Biotech podcast, I'm your host, Surani Fernando and thanks for tuning in. This podcast has a mission of exploring biotech's raising impressive funds to develop ambitious medical breakthroughs. I speak with CEOs and founders to get origin stories, missions, and future visions for

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[00:01:09] Today we're diving into the complex world of the central nervous system with Sarah Vance, a company focusing on developing therapeutics for neurodegenerative conditions such as Parkinson's disease and Alzheimer's. This secret source is the Netsyclut form which combines AI with an extensive and growing

[00:01:28] collection of 14,000 human brain tissue samples to unveil next-generation targets and precision medicines for these underserved patients. Joining me on the podcast is CEO Craig Thompson who talks about why he decided to join the company during its growth phase, what has been like to bring on new investors and

[00:01:48] navigate the company's lead programming Parkinson's disease as well as future plans for the company including a potential near-term IPO. I'm also joined by experienced CNS industry advisor and neurology professor at the University of Rochester, Carl Kiewicz.

[00:02:07] He discusses the broader Parkinson's disease landscape and where Sarah Vance has a unique edge to differentiate from prior failures in the space and what challenges they'll have to carefully navigate in as somewhat complex path to market. I hope you enjoy the episode.

[00:02:24] Hi Craig, thanks for joining the podcast. Great, super excited to share the Sarah Vance story with you and I'll talk a little like setting the professor right now in your generation. While Sarah Vance is working on a number of different CNS indications, as mentioned earlier

[00:02:38] in this episode we're going to focus on its lead program in Parkinson's disease which is a fairly well known disease characterized by loss of motor function and tremors with well-known sufferers of the disease including legendary boxer Muhammad Ali and Hollywood star one

[00:02:55] of my childhood favorites, Michael J. Foxch. There's around 10 million patients suffering from Parkinson's disease worldwide and in the US alone around 90,000 patients are diagnosed each year and it's the fastest growing CNS disorder. Now there are bunch of medications already on the market for Parkinson's disease.

[00:03:18] The most commonly used drug out there is called lever dopa stemming from some noble prize-winning signs from the 60s. It's a treatment that replaces missing dopamine in the brain to help patients move better and other drugs on the market also have some effect on the brain's dopamine pathway

[00:03:36] to do more or less of the same thing to control those motor symptoms. There are some limitations though with these drugs that they can have a very short half life, something that has patients oscillating between on time where their symptoms are controlled,

[00:03:52] versus off time when their symptoms come back and various CNS players have really tried to focus on reducing the number of hours patients are on off time in a day. Long-term use of drugs like lever dopa can also lead to unwanted side effects one of

[00:04:08] which is disconnecteer characterized by involuntary and uncontrolled movements. So coming back to Sarah Vance, there were an omission to take a different approach to traditional drugs acting on the dopamine pathway. They're using their specialty proprietary platform called NEXT SEAK to deeply analyze how

[00:04:27] genes are changing in specific brain cell types as the disease progresses so that they can create a more personalized and targeted therapeutic for Parkinson's patients. Really what Nancy allows us to do is to deeply sequence individual cells.

[00:04:42] What we've been able to do so far is to curate a really robust collection of over 16,000 most important human brain tissue. This includes our donors from age of eight to 104 years of age.

[00:04:54] About half of the samples are from patients who did not die with CNS disease and then the other half our patients who have died with a particular CNS disease that were interested in. So together with being able to look at 60 different cell types,

[00:05:11] I'll begin with about 12,000 genes for cell which sequence about 60 trillion base pairs. So with this data the company uses machine learning and different AI tools and a technique called pseudo-time analysis to piece together how the disease progresses over time.

[00:05:29] This enables them to see which genes are more or less active in different cell types as the disease develops and can generate some potential drug leads for further testing. So when we're looking at Parkinson's, this has been a lot of Parkinson's medications that have

[00:05:44] been launched. I'll provide about an hour improvement and off time. As Sarah Vance looked to further reduce off-time for patients they were inspired by some of what is achieved by deep brain stimulation which works by inserting probes into the brain to target

[00:05:59] brain circuits and stimulate brain cells. Sarah Vance explored various signaling pathways and discovered a unique receptor called GPR6. This receptor is found only in a specific type of brain cell involved in controlling movement. That cell is called the medium-spiny neuron of the indirect

[00:06:21] pathway and a laboratory named what appears to be a pretty critical brain cell. Normally this GPR6 receptor tells the body to stop moving like applying a break. So by blocking this GPR6 receptor, that break can be released to help patients move more freely

[00:06:40] reducing their off-time and by only targeting one specific type of brain cell that medium-spiny neuron there's also minimal side effects. So we're super excited about this program. I think starts to validate what we're working on from a netic platform and how it translates into

[00:06:59] potential treatments for patients. Kray came into the picture two years ago as CEO but going back to Sarah Vance's origins, the company started off as just an idea by a original CEO and current Sarah Vance chair Brad Marges. Brad tapped into the science

[00:07:17] brains of Dr Nathaniel Hines and his postdoc Shao Zu from the Rockefeller University to create net seek. At that time Brad was already a serial biotech entrepreneur this was his third biotech venture and through the power of networking tapping some key contacts at Big Farmer to Kada,

[00:07:36] the company was born. In December 2016 Sarah Vance was launched by Takada and Lightstone Ventures with $36 million and Takada also jumped started the company by providing a 25-person neuroscience research team from its Cambridge UK office. A pretty nifty and incredibly resourceful

[00:07:57] startup story. A original series 8 really set the company up to build up the platform and expand the platform and help us acquire additional samples so we are now working with over 60 different brain-being partners in the U.S. Continental Europe and the UK. So that original funding really

[00:08:17] helped us set ourselves up as a platform company if you will. Then in April 2020 the company closed a $45 million series B from new investors including Google Ventures, Bill Gates and Forsyte Capital but that was later expanded to 65 million three months later in July with UPMC

[00:08:35] and surprises a cast-in capital and Dolby Family Ventures also joining the company's investor base. The expansion demonstrating a strong enthusiasm from investors. The series B which was done in 2020 was really the beginning of the transitional accompanied from a platform company into development

[00:08:54] stage company so that allowed us to complete these days one for CBN44 or Parkinson's Lassat as well as do some initial work on CBN76 are highly selected for Ruxtone or Tiger Muts for Psychiatric Conditions. Craig joined the company in 2022 and we talked a little bit

[00:09:12] about his own professional journey and what spurred him to join Sarah Vance when he did. So I joined the company about two years ago when I was looking at different opportunities I was actually helping out one of the venture capital terms that was looking at doing an

[00:09:28] investment and the company and they were asking me to help out with their diligence which I was doing at that point but now I was going through the diligence came aware that Brad Marguercy was

[00:09:38] the founder and CEO was actually looking to move up to a chairman role because company was moving beyond a platform company into a true development stage company and most my background has been in development. I spent the past 10 years per and various biotechs all in the phase two

[00:09:58] through phase three area and then prior to that was at Pfizer for 10 years and then prior that was at Merck for 12 years and through that period spent most by time working on products that were

[00:10:11] in that phase one through pre-launch phase really making sure that clinical trials are designed correctly that they were going to serve a patient need getting really the products ready for potential launch. I was particularly intrigued with Sarah Vance because of the precision medicine that it could

[00:10:28] to see an astacease but also intrigued because they had three programs that were in clinical development. So Craig died straight into it in his first year in February 2023 the company again expanded its series B with an additional $51 million which brought its series B to a total of

[00:10:47] 116 million then finally more recently in April of this year 2024 Sarah Vance announced yet another $47 million financing bringing its total series B to 163 million each of those finance things was based on the need to complete ongoing trials and initiating new trials both for

[00:11:09] its Parkinson's asset and its other pipeline assets and while we'll get into the clinical trial programs a little later in the episode I was curious as to why all the series B extensions

[00:11:20] instead of say a new financing round like a series C part of the reason we went for an extension versus a new fund was the market dynamics in biotech were not particularly open to new rounds at that point so we had over 30% of the public biotech's training below

[00:11:39] enterprise valued so there is a lot of investor interest more on the public markets versus some of the private companies. So Sarah Vance was monitoring the markets and keeping in touch with investors to keep the company's momentum with financing extensions as needed

[00:11:55] with the last round the so-called series B one extension they took a slightly different approach we wanted this predominantly funded binding investors so we worked with agent capital double point ventures and bio-lumination ventures for together a term sheet so it felt more like a series C

[00:12:15] although we did call a series B one extension and those three co-lids were also invested with mqb partners out of New Zealand as well as others and we did ask our investing investors to

[00:12:27] more or less sit on the sidelines which we can expand the number of investors that were supporting the company from nine up to 14 to 15. Sarah Vance has been particularly strategic with its financing rounds and its investors syndicate because it eventually wants to pull the trigger on an IPO

[00:12:44] now we also get into more detailed IPO talk and potential inflection points later in the episode but I spoke with Craig about the general investor appetite to back Sarah Vance. Cns has always been a tricky space for investors it often cycles through phases of being

[00:13:02] a super hot space to invest in where everyone wants to get involved to it often being a scary sort of farmer bermuda triangle given all the failures in this space. Parkinson's disease is one of those diseases that once saw a lot of groundbreaking

[00:13:18] development in the form of liver dopa in the 60s but everything since then has been either lack lustre or a complete failure. I think a lot of investors know Parkinson's but when they look at

[00:13:30] the recent launches most of them have been underwhelming and part of the reason they've been underwhelming is the primary measure use in this austtime so when a patient is unable to move Sarah stuck in a position and most of the launches have had a better now we're improvement

[00:13:46] in austtime that are oral. That off time gets a little better with infusions to around 1.8 to 2 hours of off time and then there's even better efficacy with more invasive approaches like deep brain stimulation but to getting investors interested in Sarah Vance's new oral drug

[00:14:05] they had to show that they could do a lot better than one hour of improvement and reduce adverse events so the company embarked on a short and very aggressive 27 day phase

[00:14:16] two study which it's been taking to its investors. What we saw in that 27 days was almost a 1.6 hour improvement in austtime so starting to get a little bit closer to what we see with the infusions

[00:14:31] and we're able to great confidence say that it was only hitting GPR6 in the medium-squay neuron and dandruff pathway and not working sure the dopamine pathway so we had relatively low rates of adverse events. In fact, the only adverse event we had to more than one patient was

[00:14:48] nausea-emphombing headache which was recorded in two patients and only at the highest dose so very well tolerated getting theoretically great receptor occupancy and seeing efficacy close to what we would expect to see with some of the intuition products and then in addition just

[00:15:04] get in the mechanism of GPR6 and how it works through the stradum as we also saw some impacts on some of the non-mutter symptoms. We saw quite a dramatic improvement in quality life measures as well as we saw the patients were actually more alert when they were taking 144

[00:15:21] cartridge what you see with other Parkinson's medications which still with patients get sleep years to take additional medications so that's been the story we've been telling investors certain investors you know particularly like the differentiation there's still some skepticism

[00:15:35] and just given them a number of products that have launched that haven't done well whether this is a big enough improvement to really change the market. To talk about the Parkinson's disease landscape the severe unmet need for patients and where serivances technology could really make a

[00:15:51] difference. I spoke with Carl Cuebert the founder of Clint Tracks where he advises many companies in the CNS space and he's also a neurology professor at the University of Rochester. We spoke about why so many companies have failed to produce the game-changing therapeutic over recent decades.

[00:16:10] So Parkinson's disease is very complex disorder recognized for over 200 years but it's complex in the sense that it has a lot of different faces sort of speak. There's a lot of heterogeneity in the features that individuals with Parkinson's disease experience we largely

[00:16:28] think of it as a problem with motor control where people have stiffness and slowness and tremor but there's a lot of heterogeneity of those features and there's also a lot of non-motor features. He spoke about the groundbreaking observations by scientists in the 60s that led to the

[00:16:44] breakthrough of current mainstage drug leave adopa which has really been the most significant step of it made in the Parkinson's field. People could walk who weren't able to walk before other tremors decreased, etc. So it's really one of the unbelievable stories and modern medicine

[00:17:00] resulted in Nobel Prize. What's been interesting is that the treatment of Parkinson's disease over the last 60 years has largely focused on just that increasing dope amenergic neurotransmission. So everybody gets leave adopa who has Parkinson's disease everyone goes on it eventually

[00:17:16] and all the other adjuncted treatments we've developed don't mean receptor agonists, COMT inhibitors, MEOB inhibitors, they'll enhance dope amenergic neurotransmission. This basically 95% of our therapeutic armamentarium and Parkinson's disease does that. Colx claimed that while the dopamine-ergic pathway is important it's just one part of a

[00:17:43] complex circuit in the human brain. Our brain contains a whole area that functions a little like a real stat on a light. It's not the power going through the light but it's the control over that intensity of transmission which matters. There's this circuitry in the brain that helps

[00:18:01] control that and therapeutic interventions have not really been targeted at that circuitry. At least far more collogically, deep brain stimulation for example does target the other parts of the circuit. The drug that sermons is developing specifically targets another part of the circuit

[00:18:20] as so-called medium spiny neurons in the indirect pathway. It sounds very arcane but I think it's just easy to think of it. It's another lag in that circuit and it functions to shut down a lag in that

[00:18:35] circuit that is overactive because of the loss of dope amenergic neurotransmission. So rather than trying to just keep pushing on the dopamine arctic arm of the circuit, the intervention works in another part of the circuit. So why is working on another part of

[00:18:54] the circuit so important? Colx claimed that while enhancing the dopamine-ergic system is effective, you can only do it so much because of accumulating side effects and unwanted problems like discon easier, mood problems and motor fluctuations. It's a complex pathway. You can't

[00:19:10] simply make the circuit work better by only forcing one aspect of it. It's better to manipulate multiple aspects of it. Today we largely done that surgically through DBS deep brain stimulation but this is a chance to do it pharmacologically. We spoke about the thesis behind

[00:19:29] Sarah Vance's unique platform at approach and how that might possibly aid them to success where others have failed. Yeah, I'm a detective taking this interesting approach using this technique called Netsake to look for expression of genes in specific cell types in the brain

[00:19:49] and then understanding what that gene expression might have to do with specific diseases and correlating the gene expression with specific neuroanotomical sites to identify targets that could be precisely addressed. In a context of Parkinson's disease, their compound 424 specifically addresses this GPR-6 receptor which is expressed

[00:20:16] basically only in the brain and not only only in the brain only in a specific cell type and not only in a specific cell type, in a specific cell type that has a particular pharmacologic classification. So it's really very precise kind of switch or target identification

[00:20:38] and I think that's quite unusual. There have been some other attempts to develop drugs that don't target the dopamineurgic pathway. One of them is a drug class called Adenosine A2 antagonists. But these drugs have been a little disappointing from a risk benefit profile,

[00:20:54] especially when pushed to higher doses because the targeted receptor is found not just in the brain circuitry but all over the body therefore bringing unwanted side effects. So they're only modestly effective and this again is one of the Sarah Vance advantages in contrast. The GPR-6

[00:21:16] is expressed only in the brain and only in that area so you have a better ability to manipulate that pathway. But aside from H.A. antagonists, there is no historical attempt to do this sort of circuitry management. I'll put it that way. Moving on to the company's

[00:21:35] clinical trial endeavors, Craig said the company is trying its lead drug into setting as a monotherapy for newly diagnosed patients and as a combination therapy for patients already on standard of care. So we're currently in a phase two model therapy study.

[00:21:54] So this study will be a 12 week study versus placebo so looking at early untreated patients. So desperately think about this is a patient that's been diagnosed with Parkinson's for year and a half to years thinking about starting a Parkinson's medication,

[00:22:09] that would be the ideal Parkinson's patient to enroll in the study. We'll use as a primary end point, a tool called the unified Parkinson's disease rating scale short-form EPDRS looking at part two which is a patient reported outcome and then part three which is

[00:22:25] the latest additional assessment of the patient. We should have data from that study end of this year and then on the junk decides or adding on to standard of care or going to initiate a longer study of 12 weeks. I don't have 330 patients that remain on

[00:22:43] standard of care or best medical management and then get randomized to either receive placebo alo dos, the CVN-44 of 75 milligrams or a high dose of CVN-44 of 150 milligrams treated for 12 weeks and then we'll look at the improvement of not only their off-time but also the

[00:23:02] improvement of their good-on-time. That study we anticipate get first patient enrolled in Q3 of this year and we anticipate enrollment to take roughly 12 to 14 months. So data from the monotherapy study will come out at the end of this year, 2024 and if that's

[00:23:18] positive, Sarah Vans plans to go to the FDA to get advice for a potential phase three trial starting sometime in 2025. The combination trial will be a little further behind with its readout, possibly end of 2025 or early 2026, but Craig mentioned that both tracks are considered equally

[00:23:38] important in Sarah Vans' future offering for the Parkinson's community. We can get C4-24's kind of the mainstay. I think that'll be very impactful but we're also very cognizant that there are a lot of Parkinson's patients that are suffering with higher rates of off-time and right now

[00:23:58] their only solution to trying go from on time to off-time. It's either take additional oral medications which all have high adverse event rates and the 30 to 40% rate or they need to go to oral infusions which require them to have a problem. Call noted that designing, planning, and executing

[00:24:16] clinical trials in Parkinson's disease is no easy feat. There will be a lot of challenges the company will need to anticipate and get ahead of the curve to give it the best chance of success. The trick

[00:24:28] with Parkinson's disease is that almost all the measurements we use, whether they are completed by clinicians or completed by the patients themselves, are prone to a high degree of variability. So it's really important that those treatments are assessed in a way that helps reduce

[00:24:48] the variability. He said reducing this variability will come down to selecting experience clinical trial sites, rigorous training of staff, careful data monitoring and a focus on accuracy versus speed which can sometimes be difficult when you're trying to please investors.

[00:25:05] Run gets rewarded if things happen fast but if they happen sloppy nobody gets punished except when drugs fail because of softiness which has happened time and time again in Parkinson's disease. So one of the really critical things going forward is, he is fast as possible

[00:25:23] but make sure you're as accurate as possible. Craig said that the company is fully aware of the challenges in Parkinson's disease trials and the high potential for a large placebo effect. So the company is working on ways to ensure sites are selected and trained appropriately

[00:25:39] to avoid interest site variability. We will employ an enrollment authorization committee that will look at all of the patients to make sure that the site has evaluated the patient and that that patient fits into the enrollment criteria to try to minimize any placebo effect.

[00:25:56] And while serivance will be working hard to make sure it's trial that I and Claude and his cleanest possible, they also need to be thinking about realistic benchmarks over reduction in the drugs off time that they think payers are going to cover and serivance is aiming to show

[00:26:12] a 1.3 hour improvement in off time. The reason why we picked 1.3 hours was it's a products in that run to 1.1 hour. It's more than likely not going to get reimbursed by payers so we really are confident from what we see in the face two study that we're going to

[00:26:31] see efficacy of playing the 1.5 to two hour range, which from discussions we've had with payers on this scene very willing to reimburse. And if we're hitting that, especially combined with the low adverse event rate we saw in the phase two study. And given the landscape,

[00:26:48] which generic drugs like Leaver D'Opah, the company has been actively thinking about what sort of price tag this drug might have because Craig said it's been clear that payers aren't willing to pay for small increments in efficacy. They were a big job. So when we've done our research

[00:27:04] and show efficacy in that kind of 1.5 to potentially have two hours as an upside, payers get very excited about reimbursing it, the product, and they look to reimburse it. Somewhere between $12,500 to $25,000 per year, obviously the upside could go up if we're able

[00:27:21] to show additional improvements on some of the non-motor symptoms. So we are employing some unique tools into our face to travel to look at things like speech cadence, facial movement, using AI and digital health technologies. We're also looking at changes in cognition.

[00:27:39] They were also using a really interesting tool from a company called Beacon BIOSing, Mills looking at sleep EEG to see if we're having an impact on sleep and sleep architect. So potentially, $44, let's table stakes, the Parkinson's is having an impact on off time and

[00:27:55] making that off time go to good on time. But we may be able to wrap around that and provide patients on the street, hopefully a better experience and that we'll be able to offer them kind of market-leading improvements in their life but not burning them with adverse events

[00:28:10] and potentially having an impact on some of the non-motor symptoms as well. And Carl noted that while the drug will likely be approved on a primary endpoint focused on motor symptoms, secondary measures showing significant improvements on non-motor

[00:28:23] symptoms like daytime sleepiness, attentiveness and mood could really give it a commercial edge. And there's a reason to think the Sarah Vans compound could help there because this indirect pathway that is overactive has both motor and non-motor impacts.

[00:28:41] So there may be something beyond the typical motor effects that may help make the treatment differentiated from the current purely motor treatments. We've seen commercially products that are effective in Parkinson's disease like recent COMT inhibitor approvals and other NAOB inhibitor

[00:29:03] approvals have not done particularly well commercially, partly because it's a bit of a more of the same. They are modulations and enhancements on pre-existing therapeutic modalities but they're not really fundamentally different. And those are kind of faltered commercially so I think something

[00:29:23] like the Sarah Vans product will need to be successful in the traditional modes on motor effects and need to be potent, not just sort of mildly effective, they need to be potently effective and will be even more likely to be commercially successful if there are additional non-motor

[00:29:45] effects that travel with that motor benefit. As mentioned earlier, Sarah Vans' financing journey has been informed by its eventual wish to become a publicly listed company. As some point in the future given that we currently have three products in clinical development that does seem appropriate

[00:30:04] to our next financing, or did they be a short crossover into an IPO or straight into an initial public offering just depending on the openness of the markets as we look at it over the next

[00:30:14] 9 to 12 months. The company has a couple of inflection points based on data readouts that it's eyeing to go down the IPO route and the first one could happen in late summer 2024 which is coming

[00:30:25] up pretty soon or early 2025. The earlier timeline would be off the back of a data readout for its phase one asset in front of temporal dementia and Alzheimer's disease, and we didn't focus on that

[00:30:38] because it's still pretty early and its not Sarah Vans' lead compound but if there's potential for them to IPO on the back of it, we could see some surprises there. The second one is on the Parkinson's

[00:30:49] data. The mainly other natural inflection points were potentially due on IPO would be in early 2025 on the other side of the final therapy data. Have you thought about how much you would need or

[00:31:00] like said how much you would try and raise in the? So the number certainly then floating around is in the $100 billion range. So it's all really happening for Sarah Vans. I spoke to the

[00:31:10] company in April and by the time this episode gets released in June, we could be very close to some important news updates that speaks to the company's future. Moving further into the future, I usually ask companies where they see themselves 5 to 10 years down the road. Obviously you

[00:31:27] have a big a pipeline, if you want to just talk about like what the wish is. Yeah so well looking at the company five years down the road, I dropped my CVN 424 would be getting ready to launch so we would be moving from a platform company to development

[00:31:43] company to a commercialization company. Our goal with at least 44 would be to partner at XUS and watch product on our own and the US. Craig also mentioned he hopes to see a fully fledged pipeline by van with other assets in dementia and Alzheimer's, heading into pivotal

[00:32:00] trials as well as some other Parkinson's disease modifying agents that are currently in i&D enabling studies. So the nice thing for us is it's not a single product but a single product to lead us

[00:32:13] to potentially being a very strong commercial CNS player. So that's it for another episode of raising biotech, a ball the approach in a difficult area of research and definitely looking for to hearing more important updates in the coming months. Thanks to my guests Craig Thompson

[00:32:31] and Carl Keybirds for sharing their time and inside and thanks to you for listening in. If you like this episode please do me a favor and subscribe, write a review, share it around

[00:32:42] and join the LinkedIn group for more updates. But now I'm Serani Fernando and I'll see you on the next and final episode the season two of raising biotech.