Sparing Patients the Ravages of Steroid Medicines and Overproduction of Cortisol

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Sparing Patients the Ravages of Steroid Medicines and Overproduction of Cortisol with David Katz Sparrow Pharmaceuticals An Empowered Patient Podcast Published September 1, 2021

Karen Jagoda: Welcome to the EmpoweredPatientPodcast.com show. I'm Karen Jagoda and my guest today is David Katz. He's the Chief Scientific Officer at Sparrow Pharmaceuticals, that's sparrowpharma.com, an emerging clinical stage biopharmaceutical company. The topic today is therapies for disorders of corticosteroid excess. I want to welcome you to the show today, David. I appreciate you taking a few minutes to be with us.

David Katz: Thanks Karen. It's nice to be here.

Karen Jagoda: Thank you. I wanted to start with a relatively easy question, and that is for you to help us understand what Sparrow's tagline means, and that is "Sparing patients the ravages of steroids." Give us a little bit of insight into where you came up with that basic concept.

David Katz: Right. I think the first question is, what are steroids? And then why do we need to spare patients from their ravages? So many of your listeners will be familiar with the steroid drugs, such as prednisone, or more formally, the corticosteroid drugs. And those are used to control a range of autoimmune diseases, such as rheumatoid arthritis. They're used to prevent organ transplant rejection, and millions of patients rely on long-term steroid therapy to maintain their health, but they come at a tremendous cost, and that's the side effects.

David Katz: In fact, the first patients who used steroids at the Mayo Clinic in 1948, within two days, had gone from being rheumatoid arthritis patients who were bedridden to being able to get up and go shopping. Within seven days, the side effects had got so bad that the first patient said, forget this, I'm going back to bed, and I'm never going to take this awful drug again.

David Katz: And those side effects can be all kinds of things. They can cause diabetes. They cause weight gain, heart disease. They make people susceptible to fractures. They cause muscle weakness, fragile skin. They can cause depression, insomnia, glaucoma, memory loss. So really a range of adverse effects across many different organ systems.

David Katz: And those are common, not only to patients who rely on steroid medicines but also people whose bodies make too much of their own steroid, which is called cortisol. And there are two conditions in which that happens. Cushing’s Syndrome, which is a rare disease, and then autonomous cortisol secretion, which is a fairly common disease. It might be present in up to 1% of the population, but it is very under-recognized and very underdiagnosed. And so, our goal is to spare all of those patients the common ravages of the steroids, whether they come from a tumor inside the person's body or from a medication that they take.

Karen Jagoda: I have to ask you, with all those possible side effects, are the positive features of steroids for the diseases they're being prescribed for worth all that risk? David Katz Sparrow Pharmaceuticals Page 1 of 6 EmpoweredPatientPodcast.com ©TBI LLC 2021

Sparing Patients the Ravages of Steroid Medicines and Overproduction of Cortisol with David Katz Sparrow Pharmaceuticals An Empowered Patient Podcast Published September 1, 2021

David Katz: Well, millions of patients make that decision, yes, and many more decide otherwise. Our insight is into the importance of intracellular steroids. So commonly, in medical practice, cortisol and the steroid medicines are thought to act as hormones that are at a distance.

David Katz: Cortisol is made in an organ called the adrenal, and then it circulates throughout the body. And endocrinologists tend to think about the cortisol that's circulating as really being the effector of both the good effects, so immune suppression that you want in a patient who has a transplanted organ or an autoimmune disease, as well as all the bad effects.

David Katz: What we recognize actually is that most of the receptors of cortisol are within the cell and that it's the steroid that's in the cell that matters. And most of that actually is made by a different pathway, by an enzyme called HSD1, which is the target of our drug.

David Katz: And the magic of that is the immune suppressive actions of the steroids almost uniquely seem to be dependent on systemic steroids more than the intracellular steroids. And so, by blocking the formation of this pool of intracellular steroids by inhibiting HSD1, we can block many of the bad effects without necessarily meaningfully altering the desired effect in patients who are taking steroid medicines.

Karen Jagoda: Got it. So the steroids don't go away. The steroid medications don't go away. They're just perhaps even more effective, but more importantly, they don't cause these kinds of side effects. And so did the people and the pharmaceutical companies designing and developing and marketing steroids see your treatment, your new therapeutic, as a way to enhance what they're offering. Is there a collaboration thing going on?

David Katz: So, first of all, I don't want people to get the idea that we're making any sort of claim about making steroids more efficacious because that's not something that we have proven or even tested as yet. But the steroids are old generic medicines. And so there are no pharmaceutical companies that, at least for systemic use, there aren't a lot that are developing steroid products. There are some that are developing specialty steroid products for particular uses, but actually, our tagline is something of a play on an effort that big pharma has been pushing for over 40 years now, which is to spare steroids.

David Katz Sparrow Pharmaceuticals Page 2 of 6 EmpoweredPatientPodcast.com ©TBI LLC 2021

Sparing Patients the Ravages of Steroid Medicines and Overproduction of Cortisol with David Katz Sparrow Pharmaceuticals An Empowered Patient Podcast Published September 1, 2021

David Katz: There's been a lot of effort to develop new targeted biologic medicines for specific autoimmune diseases. The goal of that has been to get people off of steroids. Despite 40 years of effort and a number of good efficacious drugs that have come out and are helping patients, that part of the goal hasn't succeeded because many of their patients require not only the targeted therapy but also the steroid. And so they're still at risk for the steroid side effects.

David Katz: If you go to a rheumatology conference, you often see a number of presentations from pharmaceutical companies bemoaning how many of the patients on their brand-new targeted therapy still need to take steroids to really control their disease.

Karen Jagoda: Tell us about the drugs that you have in your pipeline. I understand you have one called SPI-62?

David Katz: Right, so that's our lead drug candidate. And that drug is currently in a Phase one clinical trial. We anticipate that we will start a Phase two clinical trial in Cushing's Syndrome by the end of the year, and Phase two trials in autonomous cortisol secretion, and for patients who rely on steroids because they have a disease called polymyalgia rheumatica, in the first half of 2022.

Karen Jagoda: So you're developing drugs to treat some of these rare diseases more than focusing on the side effects from people taking steroids for other diseases, or is it all the same?

David Katz: First of all, I mean, there is one rare disease in which we're going to do a clinical trial, which is Cushing's Syndrome. Predominantly we are not a rare disease company. So for autonomous cortisol secretion, there may be as many as about three million patients in the US, and then there are millions of patients who rely on steroid medicines. They have a variety of different diseases.

David Katz: The first disease that we will study is polymyalgia rheumatica, which is the most common autoimmune disease of the elderly. It presents as an arthritic syndrome. It is characterized by an unusual feature called claudication, which basically means that the more you use it, the harder it is to use it, and the more painful it is. So these patients have arthritis, but their arthritis, for example, in their legs, particularly, gets worse the more they try to walk.

David Katz: The arthritis in their arms and shoulders gets worse the more they try to do common activities of daily living, such as preparing meals, anything that you can think of, dressing, et cetera, in which you move your arms around. The typical patient, this is a disease that most commonly appears in seniors, so the median age of onset is 73, and about three-quarters of the patients are women. So many of them are our mothers, our aunts, or our sisters. They literally have only two choices because it's been a very overlooked disease, even though there are about three-quarters of a million patients in the US. David Katz Sparrow Pharmaceuticals Page 3 of 6 EmpoweredPatientPodcast.com ©TBI LLC 2021

Sparing Patients the Ravages of Steroid Medicines and Overproduction of Cortisol with David Katz Sparrow Pharmaceuticals An Empowered Patient Podcast Published September 1, 2021

David Katz: Steroids are the only medication that is approved for the treatment of polymyalgia rheumatica. For these patients, the choice is to live with the increasingly painful symptoms of PMR or take a drug that is likely to worsen their hypertension, make them more susceptible to bone fractures, among other terrible side effects.

David Katz: If you think about the demographics of the polymyalgia rheumatica population, mostly older women, those people are more susceptible to many of the side effects of the steroid medicines, such as hypertension, osteoporosis, diabetes, glaucoma. And so, they really have a Hobbesian choice today, and they really need a third option, which we hope to provide them by developing SPI-62 in combination with a steroid as a safer steroid product.

Karen Jagoda: I'm just wondering, hearing you describe this, what does the endocrinology field look like in the next five years?

David Katz: Well, in the next five years, I think it will probably look about the same that it does now because it's probably more than five years before this gets on the market, by the time we get through Phase two and Phase three trials and registration.

David Katz: But once this gets onto the market, hopefully, there will be a couple of things that happen. And we're talking about both rheumatology, which is the predominant practice in which steroid medicines are used, as well as endocrinology, which is where patients with Cushing's Syndrome and autonomous cortisol secretion would be treated.

David Katz: In terms of rheumatology, we hope to have that third choice, which is a safe and effective steroid medication that has an overall safety and efficacy profile, similar to the best of today's drugs, but that has broad applicability across autoimmune diseases.

David Katz: Being a small molecule rather than a biologic is probably going to be more convenient, like a once-a-day pill, and probably also a lot less expensive. This will relieve a substantial burden on patients and payers because the immune biologics today are the number one drug costs in the United States. I mean, it's well over a hundred billion dollars.

Karen Jagoda: And that's with a B.

David Katz: Yes.

Sparing Patients the Ravages of Steroid Medicines and Overproduction of Cortisol with David Katz Sparrow Pharmaceuticals An Empowered Patient Podcast Published September 1, 2021

Karen Jagoda: So before I let you go today, just tell us a little bit about your background and what brought you to Sparrow and your interest in this really underserved sort R and D or discovery.

David Katz: The arc of my scientific career has always curved towards my interest in helping people, and so this actually grew out of work that I did when I was in big pharma. I led the clinical development of some molecules in the same class that inhibits this enzyme HSD1. And the history of that was that companies looked at Cushing's Syndrome and said, well, here's this rare disease that has all these features that map on to common chronic diseases.

David Katz: Our hypothesis is that if we reduce cortisol by inhibiting HSD1 in common chronic diseases, that will help all of those patients. Well, it turns out that that doesn't work so well because cortisol helps regulate things like diabetes and hypertension, but it's only one of many factors.

David Katz: And so the drugs had some efficacy, but not enough to be commercially competitive. What we're doing is focusing on patients where the steroids are the dominant cause of whatever morbidity the patient has. And so we expect to see, or we hope to see a much larger effect, much larger benefit, for those selected patients.

David Katz: In that sense, it's a form of personalized medicine. It's not that we are looking for a particular genetic makeup. We're looking for people who have too much of a certain chemical in their body, whether it's cortisol that their own body is making, or prednisone, or dexamethasone, or another steroid medicine that they take to control a disease.

Karen Jagoda: So this is really the last question, but are we at the beginning of the understanding of this space, or do you feel fairly competent you understand what's going on in both taking the steroids as well as having it inside the body from a tumor or such?

David Katz: Yes, I think there's a need for a lot of education because this is going to be a new concept for physicians and for patients as well. I think the science is very solid, but it's not very widely disseminated. And that's part of what keeps me excited about working at Sparrow because besides helping people, I also love teaching. Spreading this message, that there's a new way to think about steroids and steroid access is really exciting to me.

Sparing Patients the Ravages of Steroid Medicines and Overproduction of Cortisol with David Katz Sparrow Pharmaceuticals An Empowered Patient Podcast Published September 1, 2021

Karen Jagoda: Thanks to my guest today, David Katz, Chief Scientific Officer at Sparrow Pharmaceuticals, sparrowpharma.com. Follow them on Twitter @sparrowpharma. I'm Karen Jagoda, and you've been listening to the EmpoweredPatientPodcast.com show. Follow me on Twitter @KarenJagoda, like us on Facebook at Empowered Patient Radio. Thanks for listening. And we'll see you next time.

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