Tackling Rare Genetic Diseases with Diagonal Therapeutics

In this episode, John Gagliano speaks with Eric Duhaime, Senior VP of Finance and Corporate Development at Diagonal Therapeutics, about the innovative approaches the company is taking in drug development, with a particular focus on clustering agonist antibodies and rare genetic diseases. Eric shares his journey in biotech, the mission of Diagonal Therapeutics, and insights into the current biotech market trends. The conversation also covers the company's pipeline, their strategic use of health data to prove commercial viability, and their novel bispecific antibodies, highlighting the importance of tackling the root causes of diseases like Hereditary Hemorrhagic Telangiectasia (HHT).

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In this episode:
🔹 Novel antibodies for rare diseases.
🔹 Restoring normal intracellular signaling pathways.
🔹 Navigating the current biotech market.

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Transcript

SPEAKER_00 0:02

Today's episode is brought to you by scientist.com. The life science industry's leading RD orchestration platform. Scientist.com gives researchers instant access to thousands of free edits of life, saving time, producing costs, and accelerating innovation.

BioPharm Catalyst Platform Overview

SPEAKER_03 1:40

Our catalyst calendars are updated as soon as the press release comes out, so you can be sure you have the most timely and accurate information to inform your biotech trading. All of our plans come with a seven-day free trial, and we frequently run discounts on our platform. So check out www.biofarmcatalyst.com to get started today. Good morning, good evening. I should say good morning, good afternoon, good evening, depending on where you're joining us from. Welcome to another episode of Biotech Bulls and Breakthroughs. For today's episode, we have a very unique guest on the line. We have Eric Duhaim from Diagonal Therapeutics, actually a privately held biotech company specializing in genetic diseases. And Eric is the senior vice president of finance and corporate development. So Eric, thank you so much for joining us. Welcome aboard. And I'll let you introduce yourself as well.

SPEAKER_01 2:39

Sure. Thanks. I appreciated you having me on. Again, Eric Duhaim, Senior Vice President of Finance and Corporate Development at Diagonal Therapeutics. I effectively oversee all of uh general and administrative functions at Diagnal. I've been with the company for about three years. Um, prior to uh joining Diagonal, I was the vice president of corporate development and finance at Goalfinch Bio, another privately held company. Uh most of my experience over uh about 20 years of the biopharma industry has been in finance, corporate development, strategic marketing across a number of different small biotech companies. But most of the experience has been focused on rare genetic diseases and helping companies build markets for diseases where there's no uh or you know, really uh poorly uh tolerated treatments for patients with really severe diseases.

SPEAKER_03 3:36

Very cool. Um certainly a space that we are uh familiar with ourselves. Um, as you may or may not know, you know, Biofarm Catalyst, we have a ton of investors on our platform um who are screening various biotech companies and um rare diseases is definitely an area that we talk about quite frequently. Um it's an area that gets quite a bit of attention from uh from investors uh for obvious reasons. Um so that's that's really great. Um, you know, you're you're right at home here. I I guess just, you know, if you if you wouldn't mind just telling me a little bit about Diagnal, just its history, you know, how it got got started, um, and just kind of the general mission when it comes to to drug development and attacking rare genetic diseases.

The Mission of Diagonal Therapeutics & Agonist Antibodies

SPEAKER_01 4:19

Sure, happy to. So Diagonal started back in 2022 with really an interest in creating clustering antibodies. And effectively, clustering antibodies relates to bringing together in a highly uh specific confirmation multiple different receptors at the cell surface to induce normal signaling intracellularly. And so there's a lot of antibody companies that are out there developing inhibitors, uh inhibitor antibodies to stop signaling from occurring, but not too many companies that were focused on activating antibodies. And so the premise behind the company was really to create uh novel monoclonal antibodies that did something intracellularly that no one else had been doing previously. And so most of our programs that we uh that we work on internally are activators that really require multiple different receptors. And in the case of our LEED program, four different receptors to come together in a highly specific conformation that will activate the signaling intracellularly. And so what typically happens is you know, um, there's a natural ligand that binds to a receptor that induces signaling. But when you have a loss of function or gain of function mutation at the cell surface, that signaling cascade kind of falls apart intracellularly. So the biospecific antibody that we've created takes that complex and forces the association together naturally or mechanically rather, that will induce normal signaling intracellularly, and you're effectively creating a functional cure for patients with the disease that have a loss of function mutation at the cell surface.

SPEAKER_03 6:06

Very interesting. So by that, I and with that in mind, how do you sort of how do you pick the, you know, the the, you know, we'll say the indications of the diseases that you're targeting?

SPEAKER_01 6:19

Yeah, so I most of the diseases that we that we go after are are ones where you don't have a standard of care, or the standard of care that is currently uh used in the clinic is subpar at best. And so most of the work that we're doing is creating markets for diseases where there's no, there's really no treatment paradigm, uh, so to so to speak. And so for our LEED program, which is for a rare bleeding disorder called hereditary hemorrhagic telangictasia, um, there was really no work that was done. There's a lot of off-label use of uh old cancer drugs that have an anti-proliferative uh uh effect. Um, and it's a disease of loss of function, haploinsufficient, where you have a mutation at one of two self-surfaced receptors that causes pretty significant bleeding, bleeding to the to the point of chronic anemia for patients. Um, and so, you know, there's about you know 250,000 patients, both in the US and the EU, and there was no approved therapies. There's still no approved therapies and a very limited uh amount of work that had been done to really understand what the what the opportunity was. Uh, and so we've done a lot of work internally to really educate both investors, pharma on what the opportunity for HHT uh to have a therapy that's actually brought to market uh could actually mean from a commercial perspective. And so we we try to identify opportunities where there's high MN need, large patient population, uh, and a clinical path that seems pretty attractable for a small biotech company such as Diagonal to go after on our own and not require, you know, the behemoth to help us um, you know, shepherd it through late stage development.

Diagonal's Pipeline and Upcoming Milestones

SPEAKER_03 8:01

Absolutely. And um, how many assets do you guys have currently in the pipeline?

SPEAKER_01 8:06

Yeah, so outside of our lead program that we're developing for hereditary hemorrhagic telangictesia or HHT, um, it's we're also exploring it in pulmonary or arterial hypertension. And then we have three other parallel programs that are more in the um in the lead optimization stage. So our lead is just about to enter the clinic. DIEX723 will be uh entering the clinic in in in the first half of 2026. Uh and the other three subsequent programs in our clinical pipeline or in our preclinical pipeline rather, uh, will be getting there probably in the next couple of years, uh, currently in lead optimization right now.

SPEAKER_03 8:44

Very cool. Okay, so that's I mean, that's that's fairly, I would say, you know, fairly robust for um for a for a privately held company. And and how many folks are at Diagonal? How large is the organization?

SPEAKER_01 8:56

So we're 24 full-time employees right now. Uh, you know, uh most of the folks that we that we have, you know, they're they're very experienced individuals that have spent decades of of time in biopharma and specifically biotech. Um, you know, most of them will wear multiple hats, but we have 24 uh individuals that are really uh masters of the craft that that that they that they do. Very cool.

SPEAKER_03 9:24

Um I guess um one one additional question I have is just regarding some of the competitors in the space. As I mentioned, you know, this is obviously an area that is um you know pretty popular right now. Um, you know, who are some of your main competitors? How do you guys think that you fit within um within the within the mold there, right? I know you had mentioned um, you know, that you're obviously you guys are a little bit on on the smaller side. Um I don't know if there are larger competitors in the space and you sort of have, you know, you mentioned that you sort of carved out a niche, but um what would you say are are some of the competitive advantages that you have over your competition?

SPEAKER_01 10:03

Yeah, I think first and foremost, the way that we approach these diseases is really going after the root cause of the disease. So there are a number of companies that are looking for you know anti-angiogenic effects, anti-angiogenesis will work downstream uh of the signaling cascade where the actual problem exists at the cell surface. So there's several nodes down below where the problem actually exists. So the way that we see our clinical differentiation is really to tackle the root cause right at the cell surface where you have the loss of functional mutation. And if you can fix that mutated receptor, if you will, you can fix all the downstream um pathways and mechanisms downstream. And so if you fix the top, you should be able to fix the bottom as well. Uh, most of the other competitive programs are going to be more likely to fix the bottom of the pathway, whereas we're fixing the top. I gotcha. Gotcha.

SPEAKER_03 11:02

Okay, so you guys are really trying to tackle the root cause of the issue. Right.

SPEAKER_01 11:06

And it yeah, and every program that we go after tackles it very, very similarly, where there's a mutated receptor and we're bringing together uh sort of like almost like a molecular glue, if you will, at the cell surface to bring the receptor complex together. And it has to be in a very specific conformation, almost recapitulating what a what it would be like for a natural ligand to bond that ball cluster.

SPEAKER_03 11:31

And what would you say is, you know, some of the I guess the you know the biggest challenges that you guys face in the current landscape right now in in in you know rare genetic disease? Obviously, it's a very complex space. You are talking about, you know, diseases that really don't have anything out there on the market. But what would you say are what's the most challenging aspect of what you guys do?

SPEAKER_01 11:53

Yeah, I think it's just generating the interest, right? For a disease where there's no approved therapies and there's really not a whole lot in clinical development, it's convincing investors and convincing pharma that this is a disease worth treating and worth developing a drug for. And so, you know, part of our um, you know, part of the effort that we spent over the last three years since I joined is really to build that commercial opportunity for folks to see that it's a it's a sizable opportunity. You know, one of the first things that we did after closing our Series A was to invest heavily in Komodo data. So Komodo is probably the largest claims uh uh data provider out there, and they have very pristine data. Uh, and most companies of our size and at our stage would not be investing so much in getting data and analyzing the data to show that there's a commercial opportunity or that there's a strong health economic argument. Um, but that was the first thing that we did upon closing the Series A was to generate some data in Komodo, prove that there's a high end met need. And uh we published it in the American Journal of Hematology in collaboration with the leading patient advocacy group and the leading KOL in the world. And so once you get a couple of those key thought leaders on the publication coupled with the company, it's you know, it's it's it's been a really uh great transformation. Now you're starting to see other companies leveraging that work to then go out and get their own um, you know, capital from investors.

SPEAKER_03 13:31

Absolutely. Um, so I mean, based off of that, I mean, you obviously feel like this is an attractive space for for investors to be in.

SPEAKER_01 13:39

Yeah, I mean, I I think when you look at our syndicate, we have 17 great biotech-specific investors who really believe in not only the indication, uh, but believe in the approach. There's again, there's a couple other anti-angiogenic companies out there, and they've chosen to invest in us because they believe in the promise of our approach, uh, which we we think is really revolutionary, but it actually fixes the underlying caused disease without uh having to go into gene therapy. You're using a bi-specific monoclonal antibody that are are pretty well understood at this point, where if you uh, you know, the the safety uh is pretty well known and um you know using a biospecific antibody to restore normal signal, you you should actually fix the underlying problem that patients have. Excellent.

Biotech Market Trends and Future Strategies

SPEAKER_03 14:26

Yeah, no, that that that's really great to hear. Um, and certainly, like I said, I mean it's something that we are, you know, hearing more and more about. I mean, I think, you know, you you obviously hear a fair amount about, you know, some of the other key areas, oncology, Alzheimer's, um, but you know, the this space is one that we do talk about quite frequently. And I think that it is um, it is one that, you know, you really, you know, you really can't ignore. And it certainly does present a um, I think a really good opportunity for um for investors. And um, you know, again, just for just for science in general to be able to advance this. Um, so that's really great. Um, I guess just one kind of final question for you. Um, you know, obviously biotech is uh a pretty crazy area to be in. Um, a lot of volatility, a lot of change um always happening. I mean, how do you kind of feel about the general state of things just across the market? Are you, you know, are you optimistic? Are you optimistic about where you guys are at? Um, just wanted to get your your kind of general market thoughts there.

SPEAKER_01 15:32

Yeah, I mean, I'm I'm highly optimistic where things are heading. Um, you know, I I you know, we can go on our experience only when we were raising our Series B. Uh part of it is the fact that we're going after uh the root cause in the biology that exists within this particular opportunity. And again, we we helped to build the awareness, build the momentum of the disease. Uh, but we had a lot of interest outside of the you know 17 investors that have come forward for our investment. Uh, there were a lot of other investors that are really interested in HHT, which I think bodes well for, you know, the the broader uh awareness for pharma and investors in in the HHT space. Uh, but beyond that, it's it's really um, you know, I think I think the market is starting, you're starting to see more IPOs, you're starting to see more MA. And I think that that that bodes well for the future of companies such as ours, who is looking to generate some meaningful data and then see see what the next steps would be after that.

SPEAKER_03 16:33

Do you have any thoughts on you know what sort of the future would look like for um for uh Diagonal in terms of you know whether you would think about partnerships, you know, with larger companies, or I know you mentioned MA, or I mean, I mean some of that stuff I know you might not be able to comment on, but I figured I would just, you know, in an ideal world, what were you guys are looking ahead?

SPEAKER_01 16:54

Yeah, I mean, we we recently closed a Series B, so it's uh, you know, we're just enjoying uh that could be fully committed to execution. Yeah. You know, we have a very productive platform that has built our internal pipeline. And, you know, we're open to partnerships to, you know, take targets of interest that pharma might have and leverage the capabilities within our platform, uh, or, you know, partner some of the assets that we have in our earlier pipeline. But in terms of the future of the company, you know, we're gonna continue to keep our options open, continue to have meaningful dialogue with pharma on the merits of our lead program, and then see where the financing um opportunities, you know, open up in the future.

SPEAKER_03 17:36

Yeah, no, I think that makes a lot of sense. Yeah, certainly post-funding, it's just it's nice to just be able to, you know, just focus on sort of the mission at hand, right?

SPEAKER_01 17:45

It's so true. I mean, so much of our team was dedicated to the financing effort that when you finally close it and you can take a step back and a deep breath. Now it's fully uh execution focused in getting our first regulatory filing for our first inhuman study that we're anticipating in the first half of this year. And generate clinical data.

Conclusion and Final Thoughts

SPEAKER_03 18:06

Absolutely. That that that's huge. You guys are right there in terms of that. So um that's really great to hear. Um, well, I I really appreciate the time, Eric. I uh for everyone listening on the line, I think, you know, um, I know that we have a mixture of listeners and viewers. Some folks are institutional, some folks are uh retail, some folks are uh private equity or VC. Um I know not everyone would necessarily be able to, you know, invest in a company like Diagonal as they are currently private, but it is really important to hear about what's going on within this space, right? And where the space is headed. Um, and you know, who knows at some point, you know, that could an IPO could be on the on the line or it could be, you know, um an acquisition target. So I think it's it's always good to for for everyone to be well, well versed in in the players in the space and the ones that are you know doing unique things. So I really appreciate the time and you walking us through what you guys are doing.

SPEAKER_01 19:04

Of course. Thanks, John. I really appreciate you having me on the on the podcast.

SPEAKER_03 19:07

Yeah, absolutely. Um, thank you so much. And for everyone listening, um, you know, feel free to feel uh excuse me, feel free to like, drop comments, um, ask any questions, and we will try to uh get back to you as quickly as we can. But um appreciate everyone's time and thank you guys so much.