PYC Therapeutics Ltd

ASX:PYC

Earnings Call Transcript 2022-Q3

[Rohan Hockings, executive]

Good morning, everyone, and welcome to the PYC Therapeutics Third Quarter Investor Update. My name is Rohan Hockings. I'm the company's Managing Director, and I'm going to be your host for today. Welcome to those who've joined us in person. It's very nice to not be sharing the room with a computer and trying to maintain emotional engagement for an hour. So for the benefit of those online, we are in a vast auditorium, and we had a crowd member of 1 up until about 3 minutes ago, but we've now got 4 in the audience in real-time, so we're looking forward to some audience interactivity.

Before we begin today's call, just a reminder to everyone that the call is being recorded. And also, I would like to make the following safe harbor statement, reminding you that today's discussion will contain forward-looking statements and involve risks and uncertainties. These risks and uncertainties are outlined in PYC's filings with the Australian Securities Exchange. As such, actual results may differ materially from what we discuss on today's call. PYC disclaims any obligation or intention to update these statements in the future. For the format today, it's going to be quite informal, and I'm very happy to entertain questions as we go through.

I think it's important for people to understand the content from start to finish. So please feel free. [Operator Instructions] What we'll go through today is a very brief recap of the PYC story, that tends to be a good foundation and background knowledge on the company amongst the participants of [indiscernible].

So we tend to drift towards the detail quite quickly, but we'll try and step back for any people who are new to the story and just give a very brief reintroduction of what we're about as an organization. And then what I want to do is to walk you through what's going on in the macro environment in the pharmaceutical industry and the RNA therapeutic space generally and then look at how that informs what's happening internally within PYC.

And what we'll do there is look back over the last 12 months and a review of the company achievements in that window and then in particular, a look forward to the coming 12 months and what you or shareholders can expect from the organization within that window. And as we do that, there are really 3 messages that I want to leave you with today.

The first one is that the trends towards RNA therapeutics within the industry are very, very strong. So RNA therapeutics are the -- one of, if not the defining trends within the pharmaceutical industry over the next 2 decades. So a very strong tailwind for the organization. And importantly, PYC internally is delivering on what we set out to do. In preparation for this call, I went back and had a look at our AGM presentation from last year.

We're very much on track to deliver the outcomes that we suggested, we would build value for shareholders as we move towards a clinical stage multi-asset company. I think what's been lost a little bit in terms of those achievements is that we are demonstrating not just the discovery capability that we've had in-house for a while, but now also the development capability through the RP11 program that shows not only can we find antisense oligonucleotides with therapeutic applicability, but also that we can make a drug out of those and take them to clinical development.

And the third one is it's inevitably going to fall to a conversation then what's going on in terms of the share price. Given that we are consistently [indiscernible] 52-week lows if we've got a very strong macro environment and also the company is delivering internally.

And so I suspect that will be a significant focus of the Q&A, and we'll spend a substantial amount of time looking at what's happening there and what the company is going to do about it going forwards.

So first, the step back and looking at PYC as a company. I think everyone is familiar now that we are a precision medicine company. So we make genetic medicines that will change the lives of people with significant unmet needs. That's effectively the paradigm that we look at how we go about the process of drug discovery and drug development.

At heart, we are a platform technology. We have invested very deeply in our drug delivery technology. And the dividend that we expect from that investment is that every drug that we launch into clinical development should be better than the last because we are refining both on the RNA therapeutic side, the different ways in which we can modulate gene expression, and importantly, on the drug delivery side, we're decoupling or attempting to decouple potency and tolerability. So we're giving ourselves a wider therapeutic index or gap in the dosage that is required to have an effect in the cell as compared to the dose that we'll see an adverse tolerability or a toxic outcome.

So we expect to be able to continue to improve the Achilles' heel of what is an already established path of medicine. And I think it's important that people understand that PYC are taking antisense oligonucleotides, which are entering the market in their own right. And what we are seeking to do is to improve that class of drug by addressing their fundamental weakness.

These are precision medicines that are a very, very elegant class of drug, but their problem is they don't reach the inside of their target cell very well. And that's where that platform technology comes into play. We are a multiple-asset company. So we are not a one-trick pony.

There is a lot of attention, and I think for very good reason, on our lead program in retinitis pigmentosa type 11. We are at a very exciting stage of development, and we're going to look very closely at what to expect in that program in the near term.

But I think it's important to remember, in particular, for our other blinding eye disease programs, there is a very significant amount of read-through that comes from the data that is being generated in that program. And I think as everyone knows, we also want to demonstrate the scalability of our technology into other target tissues. And we have spoken previously about our ambitions in the central nervous system, neuro-developmental disorders, and we're going to have a conversation in relation to where we're at there.

We're very much on track, I think is the headline message, and we're expecting to make an announcement to the market within the current quarter in relation to the expansion of our pipeline into the central nervous system with the program there. And I think it's important here to remember as well. The company has taken the view that we should push those assets further through the discovery window before we speak about them publicly.

So we are expecting a larger data set and body of work in support of that program than what we would previously have been looking at. And then I think everyone is aware that we have some earlier-stage discovery programs in the kidney, and we have got some very encouraging early data in relation to the ability of our drug-delivery technology to reach certain high-value cells within the kidney. So the focus there is now shifting across to the RNA therapeutic side to say, okay, which are the indications that we want to go after? And can we achieve the gene modulation with our antisense oligonucleotide in that context?

And finally, I think it's critical to remember that these are genetic medicines. And that's really important because the biological validity of the target that you are pursuing, so the weight and the depth of the evidence in support of the genetic target that you choose to pursue is the fundamental driver of your prospects of success in the clinic.

So PYC as an organization plays in the very low risk end of the spectrum in terms of the pharmaceutical industry. We take the highest validation that is possible in the form of pursuing monogenic diseases, which should translate into the greatest propensity for success when we get into clinical development, which is exactly the stage as you're well aware that we are currently entering with the lead program.

So very exciting in that context. If you thought about it from scratch, if you take a significant step back from the organization as a whole and you set out to design and build a drug development, drug discovery and drug development company, what you would really be looking to build are first-in-class disease-modifying therapies in monogenic disorders.

And the reason for that is we are not looking to make incremental advancements over existing drugs here. We are looking to provide genuine high-impact novel treatment options for patients. So first-in-class, disease modifying. We don't want to support or rescue part of the phenotype that, that patient is experiencing, not just part of the symptoms and the disease manifestations, but we want to get to the root cause of what's going on.

So we pursue disease-modifying therapies, the monogenic indications because you know that the disease is caused by a mutation in a single gene, so that's as compared to the more complex disease processes where we still don't fully understand what's occurring in that disease indication.

It's very difficult to fix something if you don't know how it's broken. And that's largely behind why you see such incredible attrition rates in the drug development pathways because of not only the challenges in modulating cellular behavior, but firstly, the initial premise of the understanding of what's going wrong inside that cell. So that's what PYC does.

We are a platform technology in the fortunate position now of having multiple assets in the lowest risk end of the pharmaceutical development spectrum. The macro trends towards RNA therapeutics is very strong, and it's only getting stronger. So I think on the last investor call, I referred listeners to an article that was written by John Maraganore, who is the founder of Alnylam and he's a bit of a doyen of the life sciences industry and to a very good nature publication on the experiences associated with growing that platform company in the form of Alnylam Therapeutics.

If you look at the commentary on this, I think it's from last week on his LinkedIn profile, he's commenting on the uptake of monoclonal antibodies. So the defining trend of the last 10 or 20 years in the pharmaceutical industry. And what you can see here on the left-hand side is there's a long lead time where you have very few assets approved and then the inflection point is reached, and there's a very rapid acceleration in terms of the number of therapeutics that are reaching market.

As people get to grips with the technology, and find the right applications for the technology, things accelerate very, very quickly. And you can see the original comment here is disruptive innovation takes time to inflect. And then you've got John Maraganore commenting on that journey being reflected in terms of the future 10 or 20 years in the pharmaceutical industry around the class of -- this is antisense oligonucleotide is the ASO acronym here and siRNA as small interfering RNA.

So single-stranded and double-stranded oligonucleotides as the defining trend of what's coming. This is important. John is a highly credible industry figure. And I don't know how many of you will have seen. But if you look to the right-hand side here, actually, this Alnylam drug in the bottom right-hand corner, ONPATTRO in the context of cardiomyopathy associated with amyloidosis added USD 10 billion to their market cap on the back of a successful clinical readout in the last fortnight.

So really huge implications of human data. And what we see in the industry at large is it's a real push and gravitation towards the clinical data. In the industry downturn, people are really looking for in-human validation of technologies, which again, I think, bodes very well for PYC as we move into that data generation phase in the clinic in the first quarter of next year. There's a whole bunch going on in all sorts of different domains.

The top one here refers to a company that is in the regulatory RNA domain. And this is a very exciting emerging field that looks at the role of pieces of RNA that are transcribed. So they are made into RNA from the DNA, but they do not code for a protein themselves.

And previously, they have been ascribed to the junk category and largely ignored. But given that 97% of the genome is non-coding for proteins, there's probably good reason to think that they actually do quite a lot inside the cell. And so there's a growing understanding now of the role of these regulatory RNAs and you can start to see how the data generated in the field is accelerating rapidly, which is creating more and more opportunities for finding therapeutic targets.

So a very exciting field in that domain. And I think everyone is well aware now of the impact of the messenger RNA and lipid nanoparticle successes on the back of the COVID vaccinations as well. I don't think we could be operating in a stronger environment in terms of the macro trend. And I think it's a largely underestimated feature of the organization.

For those who are in the Australian audience today, it's as though we're in the [indiscernible]. We're right in the very hot area. And I think that largely explains why we are so deeply invested in the platform as well. So we don't get any value recognition for it. It's difficult to describe the progress that we are making, too. We don't come out every time we find a new cell-penetrating peptide and say we have changed the parameters by x amount, that's just investment that happens in the background.

Very much the same at looking at different ways that we can modulate gene expression. We do lots and lots of work here. We are investing to build a company that has got multiple assets in clinical development, not just taking a single asset forward and folding in behind it.

If we look back at the historical performance of the organization and what we've done, and I think everyone is aware that at a certain point in time, we were pursuing a U.S. listing, at least the concept of the U.S. listing was very attractive to us to help us rightsize the significant valuation gap between PYC and its U.S. peers.

And largely, the reason for that was the financial valuation, the depth of the access to the capital markets and propagating that virtuous cycle of building value, bringing on additional funding at those enhanced valuations and continuing to do more and more work and expanding the application of our technology.

The headwinds that the industry experienced as we move from the greatest bull market in biotech history at the very start of last year to the bear market that we have seen and seeing from about the middle of last year through to today, largely change the time line of the ambition in that regard.

And so what we suggested that we would do is get the 3 pieces of data that change the value proposition in the eyes of the life sciences institutions. And they were, firstly, to establish a tolerated dose of our VP-001 in non-human primates, so the most toxicologically relevant species.

The second one was to demonstrate the capability to engage the U.S. regulator to show that we've got the regulatory engagement side in hand through the pre-IND meeting with the FDA. And the third one was the submission of the IND and actually becoming a clinical-stage company. And so you will see, if you look back at the organizational communications out to market, they have really been the hallmarks of the progress that we have wanted to see as we've transitioned to this multi-asset clinical-stage company.

And so you know, late last year, we checked off the first box. In the early parts of this year, we checked off the second. And I think everyone is aware, you'll see from up here, we plan on checking the final box in the fourth quarter. So we are very, very close now to the point where we have achieved all of those different objectives that we had. We can then present our story as a clinical-stage company with assets that are moving towards those first-in-human readouts generating human data that is so critical to the valuation of life sciences companies in this bear market.

And at the same time, ensuring that we continue to invest in the platform, so we are scaling up our activities in that context. So things have gone very well for us, unusually well in the course of life sciences companies over the past 12 months.

What we haven't done so well is have the value that's being created recognized in the market. And so what have we got in front of us that is going to help us to deliver those outcomes? Have we got things that are really going to move the needle? And I think the answer to that is yes.

So we are in the final stages of generating the reports for the GLP toxicology studies that will then form the basis of the IND submission that will go to the regulator in the fourth quarter. And what will happen from there, assuming that all goes well, is that we will have no response from the FDA that will hold up the progression of the program into clinical development.

And from there, we will be in a position to submit an application for human ethics to proceed with the interventional trial to complement the existing observational trial that we already have on foot. And from there, we will be enrolling patients into that clinical trial. And from there, we will be initiating part 1 of our combined Phase I/II study in RP11 patients, so important for people to understand that we do not have a Phase I that is directed purely towards healthy volunteers.

So we are directly into the domain then of generating data in human subjects. And we expect to have completed part 1 of the dosing in the combined Phase I/II study by the end of next year. So linking back to the commentary that we had previously, we're very much in the window for the generation of the data that is so critical to obtaining the fundamental rerate for life sciences organizations.

I think as we see it, we have got a rerate even before we start generating that data to go in terms of rightsizing to our U.S. peers, and I'm sure that will come up in conversation shortly. But then there's a second rerate that will come with the generation -- hopeful generation of human clinical safety and efficacy data in support of VP-001's progression into a single pivotal study, remembering that after the combined Phase I/II study, given that we have an unmet need in this patient population, so they have no treatment options available to them today and none in clinical development, we are anticipating a single registrational trial before we submit the new drug application in support of VP-001.

That's the RP11 side of things. We have a second program in the context of another blinding eye disease called autosomal dominant optic atrophy, and we anticipate being in a position to provide a market update before the end of this year in relation to the progression of that program. We are exactly where we need to be right now, the critical pieces of data that we are looking to generate are what they call by distribution or demonstrating in a larger eye that is anatomically representative of the human eye that we can reach the target cells because that's a big question in the development of precision medicines. Given that the fundamental weakness is the inability to reach the target cell and cross the target cell membrane, you need to be able to demonstrate that you can engage with your target inside your target cell. So point number one.

Point number two, can we modulate the gene expression? You've seen the initial data that we have in this regard. We have built that data pack out and continue to do so. So we will come out with an update on both of those things. And that really does give you the 80-20 readout in relation to that program.

Where we gain additional conviction in that program is from the fact that we already have the RP11 program that is established shortly the full nonclinical data pack in support of the progression of that asset into clinical development. And there will be readthrough on certain dimensions that relate to the modality as a whole that we can infer from the successful progression of the RP11 program to ADOA. We have a very strong interest in additional programs in the eye for those reasons because we know that this modality is differentiated in the treatment of blinding eye diseases of the retina.

You do not have another technology that can give you the depth, the breadth, the evenness and the durability of effect of antisense oligonucleotides in the retina. And particularly, the PPMO class and at the same time, remain a titratable technology. So if you have exceeded the ideal dosing window, you can allow the effects to wear off over time because it is not a DNA therapy, it is not a one-and-done. You have the ability to wind things down if you are seeing an overexposure to the investigational drug. In addition to that, as I mentioned before, we've got the expansion of the pipeline into programs into the central nervous system and the continued efforts that we've got in the discovery [indiscernible].

So it's a very, very active window for the organization in terms of where we are heading and the data that we will generate in support of clear punctuation marks on our journey as an organization to create value for shareholders.

So at that point, I'm going to stop and open up the floor for Q&A. I think, [indiscernible], you had one question that was submitted on the -- in the written submissions prior, if you wouldn't mind just turning the microphone on and we'll start with that one.

[Rohan Hockings, executive]

[Operator Instructions] Maybe [indiscernible], while you're pulling that one up, we've got a question about the cash burn going forward and the remaining runway. Yes, we can comment about that one.

So at the end of the fiscal year in the latest quarterly that's gone to market, you'll see a cash balance of just under $30 million. And if you couple that with the entitlement or anticipated entitlement to the R&D rebate for the fiscal year already gone, so the financial year that has been fully completed, so that we have full eligibility for at this point in time.

We're anticipating that will add about another $10 million to the cash balance. So we've got a cash runway of around $40 million today. But remembering that we will expect it to, absent any changes in the legislation engender the eligibility for the R&D rebate on that expenditure going forward. So we would anticipate that cash and receivables and future entitlements would exceed a cash runway of $50 million, which is sufficient to fund us through to the FY 2024.

And so we don't have an immediate need for cash. And as you can see on the left-hand side, we have got a very significant number of milestones to get through that are value-adding to shareholders within that window.

Are you ready to go, [indiscernible]?

[Unknown Executive]

The question that was sent in is that with the value of ProQR's clinical trial for the drug targeting eye disease for leber congenital amaurosis, could you please explain why the issues that brought the clinical trial undone weren't visible to ProQR in the preclinical organoid results? And does this failure of sepofarsen raised doubt to the value of the testing drug molecules in the retina organoids?

[Rohan Hockings, executive]

Thanks, [indiscernible]. I'm hopeful that everybody got that question online and the microphone was turned on. But maybe just as a brief recap, the question relates to another company's clinical program. This is a company called ProQR who had an antisense oligonucleotide that was directed towards an inherited retinal disease via the same route of administration that PYC is utilizing for VP-001, so via an intravitreal route of administration.

So there's a lot of similarities in terms of what ProQR were doing. And the question relates to the read-through implications of that outcome for PYC's technology. And in particular, the second part of the question was directed towards the fact that they had validated their technology in the context of patient-derived models or the retinal organoids that were described, does that mean that the fact that we have done the same and our technology does not give us conviction in the read-through to efficacy in the clinical setting?

So the first thing that I would say in relation to the ProQR trial of sepofarsen in LCA10 is, whilst there are many similarities with what PYC is doing, there are many differences as well. And I think importantly, there were 2 that always concerned us in relation to the likely outcome of creation of a treatment solution for patients with LCA10.

The first one was LCA, leber congenital amaurosis, as [indiscernible] has spoken about, has a very severe phenotype associated with it. So patients from the age of 6 weeks old have a significant loss of the photoreceptors in the eye and an aggressive course of disease progression from that point.

And when you've got a low starting fall of viable cells and a very aggressive rate and drop off of those cells, it's difficult to intervene in a meaningful way because the processes that are occurring in that cell and the number of cells that you've got to rescue from the outset are already lower.

So I think the severity of the phenotype is one reason we have steered clear of LCA from a strategy perspective. And I think if you compare and contrast that to retinitis pigmentosa, where patients are diagnosed often around the age of 6 to 18 years old, but don't manifest in full blindness until the fourth or fifth decade of life, that's one of the very attractive features of RP11 or retinitis pigmentosa more generally.

It's the slower progression of the disease course in that window. That does come with a downside. It means you don't get the rapidity of the outcome that you're looking for in the context of the clinical trial, you have to have a longer clinical trial in order to observe the natural loss of the visual function and functional vision in those patients before you can determine whether or not treatment is having an impact, which is why we are running the natural history studies right now.

So we are running a clinical trial, which is looking at the baseline rate of progression in those patients absent the intervention so that we can compare that to the performance on the visual function testing of the patients in the context of treatment with VP-001 as we move into the clinical trial going forward.

So that was the first, the severity of the phenotype. The second one is the absence of delivery technology. And so I think precisely, and it links through to the second point, if you look at the concentrations of drug that needed to be applied in the context of those patient-derived models in that program and there's a couple of very good papers [indiscernible] that report on this extensively, they're very high, and they exceed the concentrations that we are able to reach in vivo in the toxicological testing.

So I think it does demonstrate also the value of the delivery technology in that regard, but there are many additional nuances. This is a disease of a different cell type in the eye. It's the photoreceptors rather than the retinal pigment epithelium.

It's got a different gene, CEP290 that underlies that pathological process. There are very many differences in that context.

To answer the second question on the utility of the retinal organoids. The answer there is no. The retinal organoids and patient-derived models more generally, will continue to work towards becoming the gold standard in the evaluation of precision medicines in the non-clinical setting. And the reason for that is because these medicines are designed for humans and on the human genetic background.

And that is the best domain in which to test them. This material that is derived from patients that's representative of both the human genome and also the human genetic background. And actually, ProQR had a very interesting problem in this context.

They went to the effort of creating a mouse model with the human transgene and they still did not see any efficacy in that model, even though the human gene was being expressed in that model because the splicing machinery was different. So even if you've got an identical -- even with a human piece of DNA, don't necessarily see the impact of the drug in the background of the mouse because the mouse is machinery that splices in and out, the different introns and exons of the genes is not the same as in the human.

So I think you'll see, and in fact, we had an article sent recently around the increasing push towards patient-derived models, largely filling the space that animal models have filled historically, both from a pharmacological and increasingly a toxicological perspective as well. So no, I don't think it will.

[Unknown Executive]

I've got another question here. Can you update us on the business development discussions from the trip that you went to San Diego in the last quarter?

[Rohan Hockings, executive]

Yes. So I think on the last investor call, we mentioned that we were going over to the BIO Conference in San Diego in June. And we had a very constructive set of discussions with a wide range of different partners in that context. And I think one of the very nice things that came out of that and you do need to be a little bit self-aware on the back of there's some confirmation bias in the meetings that are set up tend to be with like-minded companies, companies that are interested in rare diseases, that are interested in genetic medicines, that are interested in blinding diseases of the eye.

But what we did back in those conversations was a very clear resonation of the organizational strategy. So we know that there is a very solid appreciation of where we have chosen to apply our technology in the context of -- and I know that it's difficult for people to follow.

But from a strategy perspective, we have chosen the monogenic diseases that we've spoken about, but monogenic diseases in which there is not enough of a particular protein in that cell. We are not trying to knock down a gene expression, which many different technologies can do.

We are trying to increase the expression of a target gene within a target cell, which very few technologies can do. And so I think there's a very clear appreciation of that and a very deep interest in our technology. I would say that the larger pharmaceutical companies have got a very strong interest in assets that are in human development in that context.

So Phase I/II is the window for those assets. I think you find in some of the smaller [indiscernible] and in particular, in those who are specifically interested in ophthalmology but they are willing to move earlier in terms of the licensing appetite. So we have ongoing communications following that with a very wide range of groups and with groups who are interested in very different parts of PYC's value chain, ranging all the way from the peptide libraries downstream to the different assets. But generally, it was a very encouraging sentiment that came out of it.

[Unknown Executive]

Based on the board cash receipts and cash balance and knowing what the forward cash flow looks like, at what stage would you require more funding? And how are you going to address this?

[Rohan Hockings, executive]

Yes. So I think we touched on that before. The answer is our current cash runway on the anticipated burn rate extends out into FY '24, So at that point, we would need to be looking to -- or before that point, we would need to be able to look to generate some form of additional capital, whether that's in a non-diluted capacity from a BD, which relates to BD activities, which relates to the earlier conversation or whether that relates to going back to the capital markets. We've got a comfortable window within which to pursue our objectives.

And I think we have a very clear ambition to go back to the capital markets as a clinical-stage company. We -- I think we get very focused here in Australia on cash burn, and I think we sometimes miss the forest for the trees. What's supposed to happen and very much plan A in the life sciences industry as a whole, if you can continue to deliver on your technical milestones, you continue to build value.

And as you build value, you bring on more capital to expand your activities and take the assets further into the development pathway. If you look at what PYC is doing, we have a trivial pre-money valuation in comparison to our U.S. peers.

We really have a very low valuation in terms of like-for-like companies that are at the same stage of development with similar technologies. And we are running the company very lean, very lean indeed. If you have a look at one of the peers that we've enunciated publicly, Stoke Therapeutics and you have a look at their most recent quarterly cash filings, financial statements, you'll see that burn -- the net burn they had $3 million of receipts in the quarter, but the gross burn is around USD 25 million a quarter.

So those guys are spending more in a quarter than we are spending net in a year. Now they have got one asset that has already made it into a clinical trial. That's right. They have also got another natural history study that they are just starting and the second program that they are moving through the lead selection phase into IND-enabling.

So pretty similar in terms of the nature of the activities that those guys are undertaking. We have got a smaller cash balance but a much, much lighter cash burn than our peers as well. We focus all of our investment into the science so that we continue to push the science forward. And I think had we arrived at this point in that environment that was prevalent towards the start of last year, you would see a very different outcome in terms of the valuation of the organization in that context and also consequently, the ability of the organization to bring the cash on board.

Now we're not in that environment and we need to look to evaluate all the different options to continue to fund the company's activities going forward. And that's why we are continuing to balance those conversations around business development as well as making sure we are meeting the technical milestones and improving the ability of the organization to get value recognition.

And I think possibly flowing on from that point, we need as an organization to take responsibility, I think, for not communicating the story as well as we should have. And in particular, I think in the contemplation of the transition to the U.S. capital markets and focus very much on professional institutional investors in the life sciences space, we have lost track of our needs to continue to communicate on a regular basis with the market on which we listed.

And so we clearly need to do a lot more in relation to telling our story to an audience locally, and those efforts have very much begun. So we've been engaging with a number of the different corporate advisory and broking houses and in particular, the analysts who are able to provide an interpretation of the story that comes from outside and in of the company, hopefully, with an awareness -- a deep awareness, both of what the organization does and also what's happening in the space amongst our U.S. peers. And I think there are some very high-quality analysts who are engaging with our story now that we are hoping to have published research on the organization to help the investment community understand what it is that we do because it's very clear to us that, look, this is a complex story, right?

And there are many different ways that you can tell it. You can speak about the platform technology that sits underneath it or you can talk about the individual programs. Each of those has a lot of depth that we need to go into in terms of what's sitting underneath them. Then you can talk about the different tools in the armory for identifying gene modulation strategies.

There's a lot going on. So distilling that story to its essence and communicating effectively has been a challenge for the organization. In particular, I think, running 2 sets of conversations with a very sophisticated U.S. audience and an Australian market that does not have the depth of understanding, particularly in the institutional investor space of the life sciences specifically, we've got to find a way as an organization of reaching a broader audience if we are going to set that virtuous cycle off.

[Unknown Executive]

When would shareholders be given an idea of the time scale of stage 1 and 2? And if efficiency can be pulled forward into Stage 1 and 2?

[Rohan Hockings, executive]

Yes. I think on the page that sits on the screen at the minute, you get a very clear indication of the time scale of part 1 of the Phase I/II study. And so to be clear, we have a single-ascending dose part 1 of the combined Phase I/II study. And then we have got a second part, which involves multiple dosing of patients, probably in 2 treatment groups and one sham group, that will be the continuation of the single-ascending dose study, the second part of the combined Phase I/II. And if you look at the page in front of you, we expect to be completing the dosing for the part 1 of that study within the next -- well, throughout the course of next year.

So hopefully, that gives enough clarity there. In terms of the question around whether efficacy can be pulled forward into Stage 1, 2? We will certainly be looking at efficacy dimensions in the initial clinical study in the first in-human.

So I'll be very clear from the outset of that we have a very keen focus on addressing the variables that go into getting an early insight on the efficacy of VP-001 in that study that will have the IND submitted in the next quarter and then begin the human part in the subsequent part of the first quarter of next year.

The way that we will do that or the way that we are considering doing that is by expanding the size of the study to include additional patients, including patients who are at different stages of disease progression and then also looking at secondary or exploratory endpoints, given that the study must primarily be focused on safety, including secondary or exploratory endpoints that are directed towards assessment of whether or not the drug is having an effect in those individuals.

So yes, we have a very clear focus on it. We will continue to communicate and obviously, it's going to be a very clear focus now as we move to becoming a clinical-stage company. We will give a much sharper time line on exactly what is happening in that Phase I/II and the study design protocol as we move forward. But I think you've got a pretty good structure of it there in front of you.

Any other questions?

[Unknown Analyst]

[indiscernible] really impressed with the momentum of the patent, I guess, the patent filings that you've had last financial year. Do you see that momentum continuing into this year in terms of the -- I think you had over a dozen patent filings. And will it be a repeat of the [indiscernible] to clinic as you have on display [indiscernible]? And is there learnings that [indiscernible] translate to the pipeline that's upcoming?

[Rohan Hockings, executive]

Yes. Firstly, thank you. I think that's part of the activities of the company that is not yet really supposed to be in the public domain, but obviously through IP Australia, you guys have got visibility into it and the question relates to the extent of the activities in that domain.

We know other companies are moving in the field, right? You don't get a macro trend like the one we spoke about and get competitive white space to yourself for very long. So we are -- we're here talking about the back end of the value chain and what's happening, but we are doing a lot of work at the front end, as you've seen.

So yes, it's very encouraging, and we've got a lot of data emerging in those [indiscernible] for the different programs that we are going to start talking to the market about very soon. So that's very exciting. Do we see the potential to increase the speed of the activities and move them forward? Yes, absolutely, we do.

And in particular, where you're in the same target tissue, very interesting question, right? So in the eye, yes, we've got a lot of in-house capability. So when we spoke about that investment in the [indiscernible], that includes the capability in-house to run those patient-derived models that we spoke about having an increasing role. So we've got a lot of that expertise, we've got a lot of the infrastructure, we've got a lot of the access to the patient-derived material and we've got a very good global network into clinicians who've got further access to different patients with different indications and different underlying mutations.

So speed in that domain, yes. Can we make the molecules better? Definitely. That's the platform investment that we're making as well. Is it the same in other target tissues? I don't know. We've got to be careful that we don't spread ourselves too thin. A new target tissue is a significant challenge. But here's where you can get read-through from what other people are doing.

So for instance, in the central nervous system and the neuro-developmental program that we expect to be talking to the market about very soon, we know that antisense oligonucleotides via [indiscernible] route of administration can make it to the target cells in the brain.

We may have some choices to make about the different chemistry options that we've got, the different delivery technologies that we could use in that capacity. Do we go through a receptor binding domain or do we go for functional delivery with the cell-penetrating peptide, which is relatively nonspecific, possibly both are open to us because of the strategic choice around the haplo-insufficiencies.

But will it take a little bit longer than the ocular programs? Yes, I definitely think it will. But you see also a very clear macro trend. And for those of you who read the Maraganore paper, they're talking about moving from target identification to an IND submission in 24 months, let's just say, 18 to 24 months. Those guys are seriously slick, right?

Now you've got to balance that with getting more information in the non-clinical setting that aids your conviction in the drug. If you're going to fail, you want to fail early. So now that you've got this additional data that's coming online, not just genomically, but transcriptomically and proteomically, we are starting to uncover through our access, particularly in the eye to human material. What do the expression profile of different genes look like in the different target cells in the eye and comparing disease states to unaffected individuals and working out what's the delta there and how does that inform our crafting of a therapeutic in that context.

That's privileged information that others are not generating yet. Do we take a little bit more time to get to the bottom of that and fully evaluate at those 2 different levels, what's going on with the therapeutic modality? They are complex questions. And that leads me through to a related point, we're building out our organizational structure as well.

So we've made 2 key recruitments from the world's largest specialty ophthalmology company within that window, a chief preclinical research officer in the U.S. and a Director of nonclinical operations in the U.S., they are helping us address that question, which is to bring that industry perspective on what's the core body of work, the minimum viable product that must go in support of the program before it moves into an IND-enabling study and how do we balance that minimal body of work with targeted addition to high-value incremental additional assays that are going to build out the conviction that we're going to see in upcoming clinical development.

So long-winded answer, but yes, there's lots going on.

[Unknown Analyst]

[indiscernible]

[Rohan Hockings, executive]

Yes. This is a very interesting point at the minute. What we've seen -- I didn't touch on it actually, I meant to. You've got a very strong macro trend towards RNA therapeutics in the industry. You've also got a very strong short-term macro trend back towards RNA therapeutics specifically. So we spoke last time about the doom and gloom in the U.S. capital markets. If you look at what's happened most recently in that domain on the back of Alnylam success with ONPATTRO, you've got the other driver.

We had some notable clinical failures previously. Now we're getting some notable clinical successes with facilitated delivery of RNA therapeutics -- and so the investment community is starting to pile back in. You see our peers moving 100%, 200% off their lows.

So from a commercial side of things, this is pretty recent, I mean I'm talking the last 4 weeks alone, that then, I think, puts very much back on the table, the prospect of looking at, trying to close the valuation gap to those U.S. peers, particularly given that we feel we've got a competitively differentiated technology in this capacity. And I think we do need to spend some more time thinking about it.

And fortunately, in relation to the earlier question, we're not doing anything in the short term in relation to visiting the capital markets. So we've got some time to have a look at the different options, think through very carefully how do we get the value that we have built for our shareholders recognized.

And I think, importantly, make sure it's an integrated approach this time that we don't look at one market rather than the other, but that we're looking in both markets in a complementary fashion.

[Unknown Executive]

[indiscernible] on the probability of success for PYC's PPMO technology in the upcoming clinical trial?

[Rohan Hockings, executive]

I think -- I mean probability of success, we've spoken about again at the start of the meeting in relation to -- we know that we are at the very high end of the spectrum in terms of genetic medicines. And within genetic medicines, we know that we've got the very highest form of validation of the biological validity of the target because we have monogenic underlying basis of what we're pursuing.

It's not just an association between the gene and the disease, but it's actually characterized as the causative gene behind the disease. So for instance, in the RP11 program, we know that it is caused by an insufficiency of expression of PRPF31. So if we can see and we can see in our patient-derived models that we can increase the transcript of PRPF31 flowing through to the protein and then the functional rescue that we see with those SEM images that are on the Investor Relations pack, we get a lot of conviction that we are in the right space in that context.

If you couple that with what we are seeing in relation to the non-human primate studies and the trafficking of the drug to the posterior segment to the target cells, we gained a lot of conviction from that as well. And from there, I think you're really looking for additional anecdotes. That's the full depth of the data pack telling us that we are in the right domain.

One other thing that does excite me a lot about RP11 specifically is this phenomenon of variable penetrance. This is a bit unusual. But you can have 2 members of the family, both of whom have the underlying mutation in PRPF31, one of whom is normal sighted and the other of whom is legally blind.

And that's a really interesting and rare phenomenon to observe. And what it's telling you is there's something else going on, which is actually the underlying idea of VP-001. It is modulating a controlling gene of PRPF31. So it's not a direct targeting PRPF31. It targets a gene that sits upstream and itself controls the expression of PRPF31, which has many advantages, some potential disadvantages as well.

But the interesting thing here is that tells you that it may only be a very, very subtle upregulation of PRPF31 that is required to cross a binary disease correction threshold. You've got patients that may be expressing 55% of the normal amount of PRPF31, who manifest no visual symptoms at all. But if you are manifesting or expressing 50% of PRPF31 normal expression levels, you are legally blind.

And I think that is very, very exciting for the RP11 program specifically, not applicable to the other programs in the pipeline at this stage because ADOA sits more on the spectrum of rescue rather than that binary threshold, and you see that in the variable phenotype associated with ADOA.

So look, other than saying that we are at the ultra high end of the industry spectrum, and it's the very best class of asset that you could hope to have in that context, it really comes down to an evaluation of the data.

[Unknown Executive]

Any of the non-core non-eye assets that could be licensed to provide funding for the core programs, giving you more runway to get the right time to raise more capital?

[Rohan Hockings, executive]

Yes, that's a very interesting question. And that's why I mentioned on the back of the BD conversations that we have discussions occurring for different parts of the company's value chain. Obviously, most of the interest is in the RP11 program or the potential to expand that to include the ADOA asset and take all of the ocular programs together.

But we are having some conversations that go all the way back to the peptide libraries. And that would be a very nice opportunity for us not to have to out-license any shareholding in our lead assets that we want to retain control and ownership over and it's very important to the U.S. investors that we do, but also gives us the opportunity to bring in a sizable upfront associated with not diluting ourselves out of our own pipeline assets. So yes, there are a number of those different conversations that are ongoing.

What we need to do here is to be careful that we are not taking on so much additional work that we're distracting ourselves from our core objective, which is the creation of value around the progression of assets from our platform technology. We have thought through very deeply what is the best way to apply our platform technology to the creation of novel therapeutics.

We are pursuing that path. We are making very good progress on that path. We have not yet been able to achieve proper value recognition for what we have done in that space, but I don't think we should jump to doing something else. I think we should stay the course and continue to push those assets to the very near-term inflection points that you see coming on the bottom part of this page.

So yes, we have options. I think, again, it comes down to a matter for the Board to consider very carefully what is the right way to navigate the different options that are presenting themselves to the company.

We might put out a last call for questions from anyone there. Maybe just to give people a minute or 2, if they do want to type any additional questions into the chat forum, we have had a very, very good 12 months as an organization.

It's clearly not reflected in our share price performance. That was explicable on the last investor call by what was happening in the macro environment, it no longer is. The macro environment, it's recent, but it very clearly has turned.

Sometimes, it takes longer for the sentiment in the United States to filter down to what's happening in Australia. We need to find a way of ensuring that we can continue to build value in our story because there are lots of activities at the front end that we are doing that continue to improve our platform technology. Our platform technology is continuing to spit out assets that are going into clinical development of an ever-increasing quality.

That is happening in the context of a broader industry that is intensely focused on therapeutics that leverage facilitated delivery technologies to get RNA therapeutics inside of cells. We are in the right space at the right time. And we've been in this space for long enough to get a sufficient head start to get ourselves to the point where we are generating meaningful outcomes.

So it's very difficult to explain, and I can't fully understand myself even in the context of not having maintained a sufficient dialogue with the market, quite how we've managed to see the extent of the decoupling of the intrinsic value creation within the organization with what's happening in the market. But it is certainly, in my view, it is far more pronounced today than it has ever been. We must, as an organization, find a way to address that problem because otherwise, you start to limit your ability to build further shareholder value based on the fact that you are diluting your existing investors out of the value that was already created but not yet recognized.

So I think we know we've got a lot of work in front of us. we are hell-bent on getting on to the hustings to communicate the story to a wider audience, both in Australia and in the U.S. and in Asia to get some additional recognition for what we've got here, which we think is very impressive, and we are close to pushing through into milestones that sit in front of us that I think are critical in terms of getting momentum behind our assets.

[Unknown Analyst]

[indiscernible]

[Rohan Hockings, executive]

So the question, I'm not sure that all got captured by the microphone, but it's about a sum of the parts valuation of the organization to the relative contribution of the RP11 program.

If you look at the potential addressable market for RP11, it's smaller than ADOA, and it's smaller than the two later-stage discovery programs that we anticipate making their way into the pipeline relatively soon.

So we have gone after progressively larger indications. So in that sense, it's definitely smaller, substantially smaller. And we're talking about, let's say, that you arrived at a number of a 5,000 addressable patient population in the Western world, and you take the median orphan drug pricing of around AUD 200,000, you're looking at a $1 billion market per annum in the context of RP11.

The ADOA market, we estimate, and I think it's in the public domain, that's about 50% larger, there's a two to threefold increase in the number of patients, but you do see, and we touched on it before, a significant variability in the spectrum of the ADOA patients. Some of them are still quite high functioning in terms of the visual function. So they may not want treatment.

And certainly, there may be patients who don't want to at least [indiscernible] therapeutic is proven in the context of patients who have a more severe visual deficit. The additional indications that we're pursuing are substantially larger, again, than both of those 2 assets.

Where, on a relative sum of the parts value contribution, it becomes more complex is the RP11 asset is much more advanced than other assets. Now ADOA gets the benefit of read-through, a lot of read-through from the RP11 program, but not the programs in the additional target tissues.

So if you look at the drivers of the risk-adjusted net present valuation, it's all about probability of success. That's what it comes down to here. I can't say to you that we've got the [indiscernible] success in those earlier-stage assets as we have in RP11 because we don't have a full non-clinical data pack in support of them right now. So...

[Unknown Analyst]

[indiscernible]

[Rohan Hockings, executive]

Yes. That's quite an abstract question. So again, the benefit of those online, but the relative value of know-how and capability within the organization as an IP-moat against stopping competitors coming into the space versus the tangible value associated with the pipeline assets.

I think that's one thing that is -- I mean, very hard to answer that. But one thing that is not seen that big investment that we are making in the discovery engine, we have some extraordinary people in our organization, some very, very smart people who are highly motivated and doing some very good work.

I think we have gone a long way in addressing gaps in organizational capability. One of the areas that we weren't as strong as we should have been is in that speed of the pathway, the efficiency of the pathway to the IND filing. We didn't have the industry knowledge and you don't find it in Australia. So we're having to build out our operations across 2 different jurisdictions. I think we've gone a long way there recently with our critical hires.

So I think you're going to find an increase in the efficiency of that conversion associated with a lively balance of brilliant scientists that come more from an academic background, but are learning the industry side of things, with industry background scientists who have a deep understanding of how hard laboratory science is at the [indiscernible].

So I think we've got a nice marrying of the skills in that domain. We've got a very high capability translational team in the U.S. I think those guys have done a very nice job as well. That sees us through into the Phase I/II study. Possibly, we bring on a CMO at a later stage of development as we hit the pivotal in the RP11 program.

But I think the people are a tremendous asset for PYC. And you see it in the cost base. I mean just look at that comparison between our U.S. peers and the cost base and the Australian cost base. A big part of that is the R&D rebate, right? That's a great thing that the federal government has put in place to encourage the growth of the industries here. Part of it is because the scientists here are more sticky.

And that -- we're fortunate in a way because there's not so many different players here that you're getting [indiscernible] every day of the week going up the roads to different companies. But I think actually, it's driven by people being really hungry to change patients' lives and we can smell it now.

We're close, really, really close. And if you think we've got a patient population here in Perth, 20 patients waiting for this clinical trial to kick off who have given us access to their cells to generate materials for us to determine whether our drug is effective or not. They come in, they speak to us. They give us a lot of their time. We've got a deep commitment to repaying the faith of the RP11 patient community, the ADOA patient community and patient communities and the additional indications that you're going to start hearing more about very soon.

So hard to say relative contribution, but I place a very high value on our people. Any company that is generating intangible property, really needs to think very carefully about its people, and we do.

I think that's it. So thank you very much, everyone, for your attendance and engagement throughout the course of the meeting. Please feel to send any additional questions that weren't covered through to the [e-mail] e-mail address. We're more than happy to pick up the phone any time and have a chat in relation to what we're doing.

We're very excited about it. We understand it hasn't been from a commercial perspective, the journey that we wanted to see. But I think we have got a lot of different elements within our control now to try and turn those things around, and we look forward to doing so and picking up the conversation again in November at the Annual General Meeting. Thanks very much, everyone.