Axial S-1 Club — Decibel Therapeutics

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Decibel Therapeutics is a biotechnology company focused on developing new medicines for hearing and balance disorders. With a recent pivot to gene therapy, the company has filed an S-1 to go public. Decibel is centered around regenerating functional hair cells and non-sensory support cells within the inner ear. Their platform combines single-cell sequencing with gene therapy “selectively replace genes for the treatment of congenital, monogenic hearing loss and to regenerate inner ear hair cells for the treatment of acquired hearing and balance disorders.”

Hearing loss affects over 40M people in the US and over 400M globally. Moreover, over 8M people in the US have some sort of balance disorder. Both of which have high unmet clinical need — this is probably due to the complex biology of the inner ear. Decibel’s platform uses gene expression profiles of cells within cochlea and other organs found within the inner ear to identify new targets for drug development like “reprogramming factors to promote inner ear hair cell regeneration, and cell-selective promoters to drive precise expression of transgenes in therapeutically relevant cell types of the inner ear.” Once a target is discovered, Decibel is relying on adeno-associated virus (AAV) therapeutics to deliver transgenes to restore function to the inner ear; what’s exciting is that the ear is pretty accessible to gene therapy delivery and could limit systemic exposure of the drug.

The company’s lead drug candidate, DB-OTO, is a gene therapy to restore the OTOF gene for hearing loss. Decibel also has other candidates like DB-ATO focused on patients with bilateral vestibulopathy and DB-020 to prevent cisplatin-induced hearing loss. For DB-OTO, around 20K patients in the US and Europe have hearing loss from mutations in the OTOF gene with the standard-of-care a cochlear implant right now.

Highlights

1. The platform is focused on converting supporting cells, those adjacent to hair cells in the inner ear, into new hair cells. The single-cell database is useful to reconstruct the differentiation trajectory of hair cells; reprogramming factors can be identified and delivered to the ear with an AAV to deliver these factors. The idea is that this method can reprogram supporting cells into hair ones during adulthood.
2. Around 466M people, with 34M children, have disabling hearing loss. In particular children with hearing loss experienced significant secondary effects like delays in language development and impairments in executive function. Hearing loss at birth affects around 1.7 out of every 1K children in the US. For older people, hearing loss might be associated with dementia. For the entire patient population, the condition could lead to social isolation and mental health disorders. Sadly, there are no FDA-approved therapies to restore hearing in patients.
3. Decibel is building a fully-integrated drug development company for hearing and balance disorders. An important part of the business model is the ability to identify new targets to restore and regenerate hair cells within the inner ear.

Team

Decibel’s CEO Laurence Reid replaced Steve Holtzman in 2020 after the latter retired after a long and successful career in biotechnology. Reid was previously consulting for Decibel and was an EIR at Third Rock Ventures. He was also the former CEO of Warp Drive Bio and was the CBO at Alnylam Pharmaceuticals. John Lee is the company’s interim CSO and spent over 15 years at Infinity Pharmaceuticals, a company Holtzman helped build ~2 decades ago.

Investors

The company has some pretty good investors with Third Rock Ventures and OrbiMed having significant stakes. Regneron is also an investor through a past partnership along with Foresite Capital, Casdin Capital, among others.

Technology

Decibel’s platform relies on single-cell sequencing to characterize the complex diversity found within the inner ear with the following focus:

1. Epigenetic profiling “to sequence regions of active DNA within cells”
2. Transcriptomics
3. Identification of alternative transcript splicing

This work has helped the company build out a database of expression profiles of inner ear cells: over 3M profiles from the cochlea and vestibule of several mammalian species that spans different ages and perturbations.

The platform is focused on converting supporting cells, those adjacent to hair cells in the inner ear, into new hair cells. The single-cell database is useful to reconstruct the differentiation trajectory of hair cells; reprogramming factors can be identified and delivered to the ear with an AAV to deliver these factors. The idea is that this method can reprogram supporting cells into hair ones during adulthood.

Decibel’s pipeline (where Decibel is focused on wholly-owning their assets) is focused on 3 areas:

1. “Gene Therapies for Congenital, Monogenic Hearing Loss designed to restore functional cells within the cochlea to address hearing disorders caused by single gene mutations”
2. “Gene Therapies for Hair Cell Regeneration designed to replace lost hair cells within the inner ear to address acquired hearing loss and balance disorders”
3. “Otoprotection Therapeutic in clinical development to prevent hearing loss in cancer patients undergoing chemotherapy with cisplatin”

DB-OTO is an AAV using a cell-selective promoter to provide expression of OTOF that is limited to hair cells. In Decibel’s “preclinical studies, the hair cell-selective expression of OTOF provided by DB-OTO enabled restoration of hearing in mice that was more durable than when OTOF was expressed under the control of a ubiquitous promoter, which is designed to drive expression in all cells.”

“DB-ATO is an AAV-based gene therapy that utilizes a proprietary supporting cell-selective promoter to express ATOH1, a transcription factor required for hair cell differentiation. DB-ATO aims to restore balance by promoting regeneration of hair cells in the vestibular system, the sensory system responsible for balance. In preclinical studies, selective expression of ATOH1 in vestibular supporting cells resulted in regeneration of vestibular hair cells in mouse models of BVP.”

“DB-020 is a novel formulation of sodium thiosulfate, or STS, that we have optimized for local delivery to the ear. STS inactivates cisplatin, a widely used chemotherapy that often leads to hearing loss and related complications in patients being treated for cancer. Decibel is developing DB-020 to prevent cisplatin-induced hearing loss without impacting the beneficial anti-tumor effect of cisplatin. In 2019, the company completed a randomized, double-blind, placebo-controlled Phase 1 clinical trial of DB-020 in healthy volunteers, in which DB-020 was well tolerated. Following the Phase 1 clinical trial, Decibel initiated a randomized, double-blind, placebo-controlled, multicenter Phase 1b clinical trial in 2020 to evaluate the safety and efficacy of DB-020 for the prevention of cisplatin-induced hearing loss.”

Decibel also has a development deal with Regeneron for parts of its pipeline:

“In 2017, we entered into a strategic collaboration with Regeneron Pharmaceuticals, Inc., or Regeneron, that is currently focused on developing gene therapies for monogenic forms of congenital hearing loss. Under the collaboration, we are developing DB-OTO, AAV.103 and AAV.104 with Regeneron using dedicated discovery teams from Regeneron and its mouse and human genetics research platforms and gene therapy capabilities. Regeneron has agreed to pay milestones and reimburse costs on a product-by-product basis intended to reflect approximately half of the development costs. We retain worldwide development and commercialization rights to all products developed under the collaboration and have agreed to pay Regeneron tiered royalties on net sales of products developed under the collaboration.”

Market

Around 466M people, with 34M children, have disabling hearing loss. In particular children with hearing loss experienced significant secondary effects like delays in language development and impairments in executive function. Hearing loss at birth affects around 1.7 out of every 1K children in the US. For older people, hearing loss might be associated with dementia. For the entire patient population, the condition could lead to social isolation and mental health disorders. Sadly, there are no FDA-approved therapies to restore hearing in patients.

Hearing loss comes into 2 main categories:

1. “Conductive, which occurs from physical interference of sound transmission in the ear canal or middle ear:
2. “Sensorineural, which occurs from dysfunction of the cochlea or auditory nerve in the inner ear.” The majority of hearing loss at birth is in this category. “Mutation of the OTOF and GJB2 genes are two of the most common causes of autosomal recessive, non-syndromic, congenital hearing loss. Mutations in the genes STRC, SLC26A4, Myosin15A, Cadherin23, TMPRSS3 and TMC1 are all also associated with autosomal recessive, non-syndromic congenital hearing loss.”

“Acquired hearing loss, which impacts both adults and children, may originate from both a genetic and non-genetic etiology. Use of certain medicines such as cisplatin, exposure to loud sounds and aging can all result in damage to the inner ear and ultimately hearing loss. Since the regenerative capacity of the mammalian inner ear is limited, damage to hair cells of the inner ear is considered permanent, often accumulates over years and may only be addressed through regenerative approaches. [Decibel believes] the number of people with disabling hearing loss will continue to increase as the WHO estimates that 1.1 billion people aged 12 to 35 years are at risk of hearing loss due to exposure to elevated noise levels in recreational settings.

Every U.S. state has an established early hearing detection and intervention program and greater than 96% of newborns are screened within one month after birth. Newborns with severe-to-profound congenital hearing loss are routinely identified through this screening, which typically employs either ABR or otoacoustic emission, or OAE, which are non-invasive measures of inner ear hair cell function. ABR measures neural activity between inner hair cells and the brain in response to brief sounds, and OAEs measure whether outer hair cells in the cochlea appropriately respond to sound in the inner ear. Importantly, both ABR and OAE are similar across animal species and are routinely used to assess hearing in both human patients and preclinical animal models. A newborn that fails an initial screen will typically be given a full diagnostic assessment, including genetic testing in some cases, as a follow-up to confirm the finding and to potentially identify the underlying cause of the hearing loss.

Adults that experience hearing loss may initially discuss this with their primary care physician but ultimately are likely to be tested by an audiologist and thereafter managed by an audiologist or otolaryngologist, trained as an ear, nose and throat specialist, or ENT. ENTs are the treating physicians for hearing loss and are trained as surgeons capable of performing cochlear implantation as well. In the United States, there are approximately 12,500 audiologists and 12,000 ENTs.

Current treatment options are severely limited for patients diagnosed with congenital or acquired hearing loss. Individuals with mild-to-moderate hearing loss, or a deficit of 25 to 55 decibels, or dB, from baseline, may be fitted with hearing aids. However, hearing aids are only able to amplify sounds too quiet to hear otherwise. Hearing aids are not able to address hearing loss due to disruptions in the hearing circuit.”

Business model

Decibel is building a fully-integrated drug development company for hearing and balance disorders. An important part of the business model is the ability to identify new targets to restore and regenerate hair cells within the inner ear.

The company is centered around 5 strategies:

1. “Advance our lead gene therapy product candidate, DB-OTO, into and through clinical development and regulatory approval. We are developing DB-OTO to provide hearing to individuals born with profound hearing loss due to mutation of the OTOF gene. In our preclinical studies, the hair cell-selective expression of OTOF provided by DB-OTO enabled restoration of hearing in mice that was more durable than when OTOF was expressed under the control of a ubiquitous promoter. We are currently conducting preclinical studies to support our planned submission of an IND to the FDA or a CTA within the European Union in . Subject to the acceptance of our IND or CTA, we expect to initiate a Phase 1/2 clinical trial in . To inform our clinical development strategy for DB-OTO, we are conducting a natural history study in what we believe is the largest characterized OTOF cohort of patients in collaboration with the Hospital Ramon y Cajal medical institution in Spain. Based on feedback from the FDA, we intend to include an accepted, objective measure of hearing sensitivity, auditory brainstem response, or ABR, as a primary endpoint in our planned Phase 1/2 clinical trial of DB-OTO, which we expect will enable us to quickly assess whether there is a therapeutic response, as well as age-appropriate behavioral measurements of hearing.”
2. “Pursue a development strategy for rapidly advancing DB-ATO into clinical trials. We are developing DB-ATO, our gene therapy program designed to restore balance in patients with BVP by regenerating lost hair cells in the vestibular system of the inner ear. In mouse models of BVP that we developed, cell-selective expression of ATOH1 resulted in regeneration of hair cells within the vestibular system. We are using behavioral and objective tests to assess preclinical efficacy of DB-ATO, including vestibulo-ocular reflex, or VOR, an involuntary movement of the eyes in response to head movement, whole body rotation or other stimulation, which has been utilized as an objective measure in clinical trials. We plan to nominate a development candidate for this program in . We are also conducting studies of AAV.201 to explore whether a single AAV vector delivering a combination of ATOH1, the transgene in DB-ATO, with another reprogramming factor may enable superior restoration of balance in patients with BVP. We plan to determine next steps and announce the target for AAV.201 in “ .
3. “Apply our platform capabilities to broaden our pipeline and develop gene therapies for congenital, monogenic hearing loss and acquired hearing and balance disorders. We are utilizing our platform and the learnings from the development of DB-OTO to develop AAV.103 to restore hearing in individuals with mutations in the GJB2 gene and AAV.104, an additional gene therapy program targeting another monogenic form of hearing loss. We are also using our platform to advance our cochlear hair cell regeneration program designed to treat acquired hearing loss by regenerating cochlear outer hair cells. We plan to leverage the strength of our platform to discover and develop other novel gene therapies designed to selectively replace genes for congenital, monogenic hearing loss or regenerate inner ear hair cells for acquired hearing and balance disorders.”
4. “Continue to expand our proprietary platform through integration of single-cell genomics and bioinformatics, precision gene therapy technologies and inner ear expertise. We are pioneering the integration of single-cell genomics and bioinformatics and precision gene therapy for the inner ear. We have generated what we believe is the largest database of inner ear, single-cell gene expression profiles and have utilized this database to identify and select cell-selective promoters and our gene therapy program targets, including reprogramming factors. We intend to further expand our product engine capabilities to enhance the therapeutic reach and productivity of our drug discovery process.”
5. “Maximize the value of our pipeline and our platform by exploring strategic collaborations. Given the potential of our platform, we may opportunistically enter into strategic collaborations around certain targets or programs. We may seek strategic collaborations where we believe the resources and expertise of a third-party pharmaceutical or biotechnology company could be beneficial to the development or commercialization of our product candidates, could advance our programs to maximize their market potential or could expand our platform capabilities, as our Regeneron collaboration has done. We believe that the benefits of a strategic collaboration could be particularly valuable to us with respect to the further development and commercialization of DB-020 and intend to evaluate such opportunities on the basis of the clinical data we generate in our ongoing Phase 1b clinical trial.”

Valuation

Decibel’s valuation is mainly in its lead programs: DB-OTO and DB-ATO. Other comparables with similar programs are:

• “Akouos, Inc., which is developing AK-OTOF, a gene therapy for profound hearing loss resulting from deficiency in OTOF, which is in preclinical development and has preclinical gene therapy programs targeting GJB2 and for treatment of sensorineural hearing loss through hair cell regeneration”
• “Frequency Therapeutics, Inc., which is developing in collaboration with Astellas Pharma Inc. FX-322, a small molecule intended to treat sensorineural hearing loss through regeneration of cochlear hair cells through activation of inner ear progenitor cells, which is currently in a Phase 2a clinical trial”
• “Otonomy, Inc., or Otonomy, and Applied Genetic Technologies Corporation, which are collaborating on the development of an AAV-based gene therapy to restore hearing in individuals with profound hearing loss caused by mutation of the GJB2 gene, which is in preclinical development”
• “Sensorion SA, which has two gene therapy programs targeting Usher Syndrome Type I and OTOF-deficiency in preclinical development”
• “We are aware of product candidates in development to protect against chemotherapy-induced ototoxicity, including PEDMARK, a formulation of STS delivered via systemic injection, being developed by Fennec Pharmaceuticals, Inc., or Fennec, for the prevention of platinum-induced ototoxicity in pediatric cancer patients with localized, non-metastatic, solid tumors. In August 2020, Fennec received a complete response letter from the FDA for its New Drug Application, or NDA, for PEDMARK. We are also aware of D-methionine, an amino acid that has been shown to protect against hearing loss in experimental settings, and SPI-3005, an oral agent primarily being developed by Sound Pharmaceuticals for noise and age-related hearing loss that is in Phase 2 clinical trials for chemotherapy related hearing loss. We are also aware of additional therapeutic approaches in preclinical development that may target prevention of hearing loss in patients receiving cisplatin chemotherapy.”

Mention highlights in the S-1

• Hearing: 278
• Patients: 80
• Orphan: 54
• AAV: 52
• IND: 48
• Monogenic: 27
• Genomics: 16
• Partnership: 6