NASDAQ: CVKD
Host: Hello, and welcome to the Life Science Investor Forum. On behalf of OTC Markets and our co-host, Zacks Small Cap Research, we are very pleased you have joined us. The next presentation of the day is from Cadrenal Therapeutics. Their session will be moderated by David Bautz, Senior Equity Analyst with Zacks Small Cap Research. Please note you may submit questions for the presenter. You can also view our company's availability for a one-on-one meeting by clicking book a meeting. At this point, I'm very pleased to welcome Quang Pham, Chairman and Chief Executive Officer of Cadrenal Therapeutics (NASDAQ: CVKD). Welcome, Quang and David.
Quang Pham: Great.
David Bautz: All right, so let's dive in. Obviously, the big news recently was the company's in-licensing of CAD-1005, which looks like it's ready to move into Phase 3 development. While you were evaluating this compound for a potential in-licensing opportunity, what were the specific elements in the data package that convinced you that this asset was worth going after?
QP: Yeah, great question, David. We're very excited. CAD-1005 was formerly known in the internet world among researchers, hematologists, cardiologists, and cardiac surgeons as VLX-1005 for Verolox Therapeutics' lead asset. Verolox Therapeutics and its researchers and management team did a wonderful job of getting 1005, which we now refer to as CAD under Cadrenal. We actually acquired the asset along with another asset, an oral agent in the 12-LOX category, which is in preclinical. So, the lead asset, CAD-1005, is Phase 2 complete. It is an IV solution, acute hospital therapy for patients with suspected or confirmed HIT, heparin-induced thrombocytopenia. And HIT is in the world of... I'll give you what would be an example of a HIT patient. Somebody goes in for a heart surgery, cardiac surgery, is given heparin, the most widely used anticoagulant or blood thinner via IV in the hospital setting to protect the patient from getting blood clots. And a small number of patients have this immune reaction. So you go in, getting cardiac surgery, heart surgery, getting heparin, everything's going well, you're coming out, and all of a sudden you have this reaction, and it causes your platelets to drop; it's called heparin-induced thrombocytopenia, then you're going to develop blood clots. So you're developing blood clots from taking heparin, which is supposed to be designed to keep you from getting blood clots. And then the patient is in extreme critical care in the ICU. We tested the drug in these patients, and what we found out when we started looking at Verolox last year to acquire VLX-1005 was that thrombotic events in the arm with 1005 were tremendous in reducing the number of thrombotic events. Now, the study, the Phase 2, was not designed for statistical significance, but the signal was very promising. So based on that and based on the safety of the two Phase 1s and the preclinical modeling not only in HIT but in obesity and type 1 and type 2 diabetes, we made the decision to acquire it and take the data package to the FDA. And the FDA has scheduled an end-of-Phase 2 meeting for us for Cadrenal or CAD-1005 for HIT. And the drug also has orphan drug status as well as fast track.
DB: Excellent. All right. Why don't you walk us through the mechanism of action for the drugs? I know it works differently from what else is out there. Maybe talk about how it addresses the actual underlying biology of the disease.
QP: Yeah, I'll make it so the investors and other interested parties can get this, and obviously, questions and inquiries for a deeper scientific dive are always available with our medical team. But basically, in the world of anticoagulation, you started with warfarin. It's an oral for general thrombosis. Then about 15 years ago, the world of Factor Xas came into existence, the Eliquis, Xarelto. They're both oral chronic. In the hospital setting, it's heparin. And there are two other agents that are used, argatroban and bivalirudin. And so, what happens is, when they're giving heparin, and they develop HIT, these patients are given argatroban or bivalirudin, which is only going to treat the clot. It does not treat the underlying platelet activation. So the technology, the platform, is called 12-lipoxygenase inhibition. About a decade ago, about six to eight companies globally tried to develop 12-LOX for a number of different indications, and 1005 is the only one that made it into the clinic. It works in HIT in terms of platelet activation and without increasing bleeding to help the patients recover, whereas the other two drugs just basically try to stop the clots after they form.
QP: One drug, our drug is the underlying, the other one is basically the symptoms or the aftereffect of HIT. So that's the major difference. It is also found that 12-LOX inhibition in the preclinical setting, scientific researchers also saw effectiveness in type 1 diabetes, type 2, and the inflammatory consequences of obesity. We're very excited about that. There's been publication about the effects on obesity and type 2 diabetes in the preclinical setting that we're about to share. The research has been completed and has been published. This is the first time that we're going to publicize it because Verolox did not do it because they were busy with other strategic priorities towards the second half of 2025. So, we're very excited. As you know, previously we've been a company focused on what we call cardrenal: cardiovascular and renal. Our previous lead asset was tecarfarin, a vitamin K antagonist like warfarin, which had potentially a better profile and efficacy than warfarin as it's not cleared through the kidneys and that has also orphan drug and fast track from the FDA for patients on end-stage kidney disease, stage 5, on or about to get on dialysis, who also could have concomitant atrial fibrillation or irregular heartbeat.
QP: But when we came across 1005, one, we thought the reduction in thrombotics events, which as I mentioned, we've been in front of the FDA and we know that events really is what at the end of the day, it's not marker, it's not other signals, it's do you reduce events and eventually prevent mortality from these events, strokes, heart attack, thrombus formation, PEs, pulmonary embolism, and those kind of things that are associated with thrombosis. I must say that we disclosed that the study's original primary endpoint was the rate of platelet count recovery, which at the time Verolox scientists had informed me that at that time in the literature, that was from the HIT experts globally, that the thought was that if they could accelerate the rate of platelet recovery, they put that in the primary endpoint and the thrombotic events as the secondary. As it turned out, the thrombotic events looked very promising, but the rate of recovery in the primary event was the same between 1005 and then the other arm, where placebo was used on the background of argatroban or bivalirudin, the other two anticoagulants to prevent clots.
DB: So, to follow up on those results from that Phase 2 study, what was the safety like for the compound?
QP: The safety for the two Phase 1 and Phase 2, no extra bleeding. I think that's usually the number one concern when you're taking an anticoagulant, whether IV or oral, chronically or in an acute setting, if you're preventing blood clots, hopefully the tradeoff is not that you're not getting a ton of bleeding. In this case, the drug has shown to be very safe in the two Phase 1 and Phase 2, so we're very pleased about that.
DB: Excellent. You mentioned that the lead indication will be HIT, but there are other indications that the drug might be used for. What is it about HIT that kind of makes it the most compelling initial indication to go after?
QP: Well, number one, HIT is deadly. HIT is serious, and there is a great unmet need for that. Once again, it's in a setting where it's cardiac surgery turned into hematology. So somewhere there, based on our experience with end-stage kidney disease dialysis patients who are under the care of nephrologists, once they develop atrial fibrillation or irregular heartbeat, they're now under the care of electrophysiologists, especially under cardiology. So when we bring that experience in, not only in the tecarfarin as well as the other drug deal we acquired last year called Fornefexian, which is an acute setting Factor XI in Phase 2 ready, we saw that it's a unique challenge of going from cardiac surgery ICU and then all of a sudden the care goes over to the hematologist. From our experience, we always felt thrombotic events have been our experience with the FDA, so HIT was chosen by the Veralox investors and management team because one, it was a great unmet need, and two, the FDA designated the drug an orphan drug, as well as gave it fast track and orphan status in the EU. So that was number one. Two, the promising reduction in thrombotic events. Now, they chose HIT, obviously, because it's manageable. As you know, the anticoagulant world, whether it's acute or chronic or oral, is vast, so there are pockets of unmet need, and clearly, HIT has been without a new drug for decades.
DB: Yeah, absolutely. So, in thinking about the Phase 3 program, how are you going to design that? What are the outcomes going to be for that trial and other parameters for that Phase 3 study?
QP: Based on our extensive interactions with the FDA in anticoagulation in the space, we went in with the reduction in thrombotic events as the primary endpoint. It's therapy of 7 to 14 days, dose BID, and will also be powered for superiority over the other arm. Once again, in the background, the inclusion criteria was either they had to be on bivalirudin or argatroban, the other two hospital-based anticoagulants, but it's going to be expanded even more. So we're going to share that in the near future here, the whole trial design as proposed by us. Obviously, we're going to go into the meeting that we have already stated later this quarter to discuss with the agency, but it should be a size of under 200. The primary endpoint would be reduction in thrombotic events with this powered for superiority versus placebo in the background of bivalirudin, argatroban, and possibly other anticoagulation agents.
DB: So if the study's successful, if the drug eventually gets approved, is this something that's going to replace the current therapies, or is it going to be used in conjunction with them?
QP: In conjunction with.
DB: Okay. All right.
QP: Because once again, the other therapies are reactive. You get HIT and then the other therapies to prevent additional clots. This is to treat the thrombus, the platelet activation, and the underlying cause of HIT as a reaction to heparin. It's a very rare immune reaction, so both drugs are used differently, but overall, the safety and recovery of the patient in the hospital is at the top of priorities for the hematologists, the cardiac surgeon, and cardiologists who are taking care of these patients.
DB: As far as the Phase 3 design goes, what do you think is the most important part of your trial design that's going to help maximize the probability of success for that trial?
QP: Well, I think there are several factors. We, as a company, as a team, go into Phase 3 designs with the protocol and stats plan for success, obviously based on the previous track record of the drug candidate. In this case, it's 1005. Certainly, inclusion-exclusion criteria are very, very important. The selectivity of the sites that see HIT patients, but can also, these academic centers who can also enroll patients in the study, is always critical in the academic setting. So I would say those two are at the very top of the priorities for us as we look into this trial.
DB: Excellent. And then you did mention that you will be meeting with the FDA. Can you talk a little bit more about that, and then kind of what the purpose of that meeting is?
QP: We asked for a meeting with the FDA, and the FDA, I guess we already publicized it, it's an end-of-Phase 2 meeting, which they've already got the data, and we've already released the top-line data, obviously. It will be discussed in detail at an upcoming conference. There are other publication considerations for our academic consultants and advisors to the company. And that's the industry. It's exciting scientific findings and a company like ours, and most public companies, there are needs to be published. I mean, the researcher needs to be published, but we need to publicize the data. And so we try to find a balance of getting the data out for investors, but also respect the academic need for publication in peer-reviewed journals and presenting it for the first time in detail at specialty conferences, obviously, that relates to HIT or hematology. I think those are important considerations. I think we're very excited about an acute treatment, potentially for this orphan indication of 7 to 14 days, and also a 30-day follow-up to get them out of the hospital.
QP: It's different than what we've been working on before. Longer trials, bigger trials, and a one-year follow-up. We're excited about all those. I just want to reemphasize how dangerous HIT is and how deadly it is. It's something that could take on and rapidly advance, so we're excited about getting this drug, getting in sync, getting guidance from the agency, and then getting investors to back it. Veralox, the previous IND holder, had a very good track record of attracting investors to get it through Phase 2. So, the end-of-Phase 2 meeting is to go over the Phase 2 trial, but the purpose is also the path forward. What are we thinking about the primary endpoint for the Phase 3, inclusion-exclusion criteria, and also follow-ups, powering, and the stats plan? And that's pretty much, by definition, by the regs, that's what an EOP or end-of-Phase 2 meeting is.
DB: Do you have a general idea of timelines as far as when the study may start and then the enrollment timeframe?
QP: Yeah, I think we've already stated publicly, looking to start the study in the first quarter and have all the preparations done at the end of this year. Obviously, that's depending on the outcome and the guidance we get from the agency, and we never count our chickens before they hatch, none of our peers do either. And so we go in with the best preparation, the best powering of the study, the best data that we can get. I think we get, like our peers, the best KOL, the best care providers that are on the front lines, the ones that see HIT patients and know what a dire need it is to have a new therapy. And we're going to put, I think, a very good team and a good plan forward to interact with the agency. We're very bullish on the drug, on the process. And I think the investors want to see that. Everybody wants to see the guidance to make sure that the trial is feasible and fundable.
DB: That's a good segue to talk about financing a little bit. What should investors think about the funding strategy for this Phase 3 program?
QP: Well, like I said, the trial should be about 24 months, and it's going to cost about $35 million or $40 million. That's what we're estimating based on what we are preparing to speak with the agency about. Obviously, there are other costs, including CMC. There are other costs. There could be other requirements to do additional Phase 1 study. But we're very pleased with the safety track record of the drug. The other is actually to run it. You need people, you need smart people, and you need very good partners to run the trial. So, what I think when you look at a drug that's potentially $850 million with orphan drug status and fast track, and that's just the markets in the US and in the EU for a condition that really screams for a new therapy that really helps people stay alive. Once again, I just want to remind interested parties that are watching, you have a patient that goes in for cardiac surgery, whether it's a transplant, valve, or something, and you're expecting a good outcome. We have very good cardiac surgeons in this country. We have very good hospitals.
QP: We have very good medical device companies that support those kinds of operations, but they're using a drug that I think was invented in the 1930s. There's been no replacement for heparin. And the other drug, as we mentioned earlier, tecarfarin, an oral anticoagulant, the sister of heparin, is warfarin. It was around when President Eisenhower was in office in the '50s. So they're giving the IV heparin and, once again, unfortunately, a small number of patients develop this immune reaction, and they end up getting clots from the drug that they're taking to prevent it. It's a paradox. So far, there's been no solution, so we're very excited that two of our drug candidates have orphan drug designations. I mean, the U.S. Congress and the FDA recognized and passed the Orphan Drug Act over three decades ago for this purpose, so that drug companies like ours can focus and have some protection for the investment and the time to get therapies for populations under 200,000 that are affected in the United States.
DB: Yeah, absolutely. HIT is definitely a place or an indication that needs new drugs for sure. So lastly, because you mentioned it earlier that CAD-1005 has other potential uses, maybe you could go over what you're most excited about after HIT for this drug.
QP: One of the investors in Verilox was the T1D Fund, Type 1 Diabetes Fund. And so that's one of the early preclinical signals that we're uncovering, based on, as I said, we've been focused on HIT, but these are other publications that have been publicized. But the other one is reducing the inflammatory effects of obesity. As I said, it's been published; it just hasn't been publicized, so we're excited about starting to talk about that. But the focus operationally, financing for the company is around HIT in a Phase 2 meeting coming up. The purpose of talking and sharing the data on obesity, on Type 1, Type 2 diabetes is that there are so many global partners and small-cap, middle-cap companies working in these big disease areas, and I think researchers are looking for combinations. We just want to share that information for potential developers and partners. It is not a reality to try to do a Phase 3 concurrently with another Phase 3 for a small company of this size, so we just want to share the findings, the great preclinical work that the Verilox team did, and now that we own those assets, we want to share that so researchers and other companies can see the potential of 12-LOX inhibition.
DB: Yeah, absolutely. Last question. Looking ahead, say, three years into the future, what does success look like for Cadrenal and for CAD-1005?
QP: I think success for Cadrenal would be that we would have already applied, submitted an NDA with a fast track, and the drug is approved within three years. And that's for the IV, CAD 1005. But it's the beachhead for 12-LOX inhibition as a platform, and hopefully by that time our oral series, CAD 2000, is in at least Phase 2 for a chronic larger indication. That would be a huge win, whether it's with a partner or out-licensed to do those bigger indications that I talked about, Type 1, Type 2 diabetes, as well as having a play in helping patients with obesity and dealing with issues and the consequences of obesity would be a huge win if we can find a partner to help develop that while we focus on HIT.
DB: That sounds great. Quang, thanks again for joining us. We really appreciate the overview.
QP: Thank you, David, and thank you to the OTC Markets. Good to be back on.
SUBSCRIBE TO ZACKS SMALL CAP RESEARCH to receive our articles and reports emailed directly to you each morning. Please visit our website for additional information on Zacks SCR.
DISCLOSURE: Zacks Investment Awareness (ZIA) is a Zacks SCR product. The Zacks SCR analyst conducting this Chat hereby certifies that the views expressed accurately reflect the personal views of the analyst about the subject securities and issuer. Zacks SCR certifies that no part of any analyst’s compensation was, is, or will be, directly or indirectly, related to the recommendations or views expressed in this Chat. Zacks SCR believes the information used for the creation of this Chat has been obtained from sources considered to be reliable, but we can neither guarantee nor represent the completeness or accuracy of the information herewith. Such information and the opinions expressed are subject to change without notice.
This text is not a verbatim transcript. This transcript has been edited and does not reflect the video-recording exactly. You may find the video recording in its entirety here. Full Disclaimer HERE.