Cyclerion Therapeutics,Inc. Stock

Good morning, and welcome to the Cyclerion Therapeutics Korsana Biosciences Merger Agreement Announcement Conference Call. I would like to remind you that this call is being recorded for replay. [Operator Instructions] I will now turn the conference call over to Rhonda Chicko, Chief Financial Officer of Cyclerion Therapeutics. Please go ahead.

Thank you, and good morning. Before we begin, I'd like to remind you that during this call, we may make forward-looking statements. These statements include expectations of both Cyclerion's and Korsana's management team regarding the proposed transaction, including its anticipated timing and financial terms and the post-closing ownership structure of Cyclerion. They also include expectation about Korsana's lead program, KRSA-028 and its data platform, including the potential differentiation from other therapies, clinical development plans and regulatory filing time lines, expectations for additional pipeline programs and the anticipated cash position and runway of the combined company.

These forward-looking statements are subject to certain risks and uncertainties. Our actual results may differ materially from expectations. For a discussion of risks and uncertainties, please review the descriptions included under the heading Risk Factors and Business in Cyclerion's most recent annual report on Form 10-K filed with the SEC as well as other SEC filings made by Cyclerion from time to time.

In addition, Cyclerion intends to file a proxy statement with the SEC in connection with the proposed merger transaction, which will contain important information about Korsana, the combined company and the additional risk factors related to the transaction. Investors are urged to review the proxy statement carefully when it becomes available. These filings are available through the website maintained by the SEC at www.sec.gov and also available on Cyclerion's website.

All forward-looking statements are made as of today's date, except to the extent required by law, we do not undertake any obligation to update any forward-looking statements. We also caution you against placing undue reliance on any forward-looking statements.

I will now turn the conference call over to Regina Graul, Chief Executive Officer of Cyclerion.

Thank you, Rhonda, and good morning. Joining me today is Jonathan Violin, Chief Executive Officer of Korsana Biosciences. In our press release this morning, we announced a merger agreement between Cyclerion and Korsana. Upon completion of this all-stock transaction, the combined company plans to operate under the name Korsana Biosciences, and Jon is expected to lead the company as its CEO. I will review certain details of our proposed transaction with Korsana as well as a concurrent private placement by a group of leading biotech investors to support Korsana's pipeline programs.

Jon will then provide an overview of Korsana, including its lead program and platform technology. In support of the proposed merger, Korsana has secured a private placement of approximately $380 million from a syndicate of leading health care investors. The financing includes subscriptions by such investors to purchase Korsana common stock and prefunded warrants exercisable for shares of Korsana common stock and is expected to close immediately prior to the completion of the merger. The company's combined cash position at closing, including the funds from the private placement is expected to provide a runway into 2029 and fund Korsana's KRSA-028 program through key clinical milestones expected in 2027.

Under the terms of the agreement, as of the closing of the transaction, premerger Cyclerion shareholders are expected to own approximately 1.5% of the combined company. Premerger Korsana stockholders, inclusive of those participating in the private placement are expected to own approximately 98.5% of the combined company as of the closing of the transaction. The percentage of the combined company that Cyclerion shareholders will own as of the closing of the transaction is subject to adjustments based on the estimated amount of Cyclerion net cash immediately prior to the closing date.

We expect the merger transaction to close in the third quarter of 2026, subject to the receipt of shareholder approvals and customary closing conditions. I would like to thank the Board members of both Cyclerion and Korsana for their support in approving the transaction, which is the result of a comprehensive strategic review by Cyclerion's Board and management team. We believe this is the best path forward for Cyclerion and our shareholders. Furthermore, we are confident in the ability of Korsana's seasoned leadership team to execute their vision of developing potential best-in-class therapies for neurodegenerative diseases with significant unmet needs.

Through their proprietary platform and innovative pipeline, we believe the combined company is well positioned to deliver on their key clinical milestones in the coming years.

With that, I will pass the conference call over to Jon.

Thank you, Regina, and good morning to everyone joining our call today. First of all, I'd like to thank the Cyclerion management team and Board for their support throughout this process and confidence in our strategy and clinical development plan. I'm grateful for the opportunity to lead the combined company and excited for the work ahead to discover and develop novel therapies to reduce the burden of neurodegenerative diseases, one of the largest unmet medical needs of our time. I'll share more about Korsana and our lead program, KRSA-028. But first, I'd like to note that listeners can access additional information about Korsana in our corporate presentation on our website, korsana.com.

Korsana is the seventh company launched with assets that were discovered by the team at Paragon Therapeutics, who have a remarkable track record of creating precision engineered biologics with potential to become best-in-class therapeutics. With this foundation, Korsana is advancing a pipeline of potentially best-in-class therapeutics for neurodegenerative diseases. Our lead program is KRSA-028, a novel and differentiated shuttle version of a pyroglutamate amyloid beta antibody for Alzheimer's disease. Approximately 13 million Americans are projected to have Alzheimer's by 2050, with associated long-term health care costs projected to be over $1 trillion by that time.

This is a disease with a massive and growing unmet need, and we believe that Korsana is well positioned to provide a potentially best-in-class therapeutic for patients who deserve better options than are currently available. Korsana's vision for advancing the treatment of Alzheimer's disease is grounded in 4 key beliefs. First, we believe that Alzheimer's is at an inflection point. While it's clearly one of the biggest unmet needs in medicine, it is now finally a druggable opportunity from a technical perspective. Two first-generation amyloid targeting drugs are now approved, validating and derisking the mechanism of action, but they leave substantial room to improve on safety, efficacy and convenience.

Second, we believe that shuttling technology, the ability to carry therapeutics to target tissues increases brain exposure of amyloid targeting drugs, remarkably improving their therapeutic profile and is the best way to optimize amyloid targeting drugs to treat diseases like Alzheimer's.

Third, we believe our approach based on our proprietary therapeutic targeting platform or THETA platform, has the potential to deliver a best-in-class product, supported by a seasoned leadership team of drug developers that have the experience and capability to bring novel therapeutics to market. And finally, we believe there is a path to rapid value creation with investigational products for Alzheimer's disease. Advancements in imaging biomarkers now enable precise measurement of amyloid plaque clearance in small numbers of patients, accelerating time lines to generate proof-of-concept data and making this an attractive space for investment.

Our initial focus is to develop a durably best-in-class amyloid targeted therapy for Alzheimer's, and we think we have that in KRSA-028. We optimized 028 based on lessons learned from the 2 approved amyloid targeting products, investigational products like Roche's trontinemab and important discoveries made in partnership with Paragon Therapeutics. Notably, trontinemab, which increases brain exposure by targeting the transferrin receptor is the first shuttled anti-amyloid drug with clinical data, and it shows more rapid and thorough plaque clearance in the brains of Alzheimer's patients compared to trials of non-shuttle drugs.

Strikingly, the trontinemab clinical data show a markedly lower rate of amyloid-related imaging abnormalities, or ARIA, compared to trial data for non-shuttled drugs. Both approved amyloid targeting drugs carry black box warnings for ARIA, and it's been a serious concern for this class of medications. So the trontinemab data have been met with high enthusiasm. However, while trontinemab has served as clear proof of concept for shuttle technology, its clinical data shows substantial room for improvement in safety, tolerability and convenience. In our preclinical studies, trontinemab targets and deplete reticulocytes, which can interrupt erythropoiesis and lead to anemia. Data show a 10% to 20% rate of anemia in the trontinemab Phase I/II trial and trends of reduced mean hemoglobin in patients on trontinemab.

Furthermore, based on its Phase III trial design, trontinemab treatment is burdensome, requiring monthly intravenous infusions and pretreatment with steroids due to a high rate of infusion-related reactions. For patients, matching trontinemab's efficacy while improving on these factors will be a welcome advance. And in fact, we have promising preclinical data that point to the potential of 028 as a best-in-class therapeutic for Alzheimer's. In partnership with the team at Paragon Therapeutics, we designed 028 to maximize efficacy, safety and tolerability, including avoiding the anemia risk associated with other transferrin receptor shuttled molecules.

028 was also designed to optimize pharmacokinetics and biophysical properties to enable infrequent low-volume subcutaneous dosing. To maximize efficacy, KRSA-028 targets the pyroglutamate form of amyloid beta, which is enriched in plaques, making 028 a plaque selective therapeutic versus molecules that target other amyloid beta species. Clinical trials of plaque selective antibodies have shown more robust plaque clearance and numerically greater slowing of cognitive decline than antibodies that target other amyloid forms. We think this makes 028 well positioned to maximize the clinical benefit of anti-amyloid therapy.

To avoid anemia and potentially to improve safety and tolerability, we designed KRSA-028 to include selective effector function modulation. We wanted to preserve antibody-dependent cellular phagocytosis or ADCP, believed to be the mechanism by which the approved anti-amyloid drugs clear amyloid plaques, but we wanted to reduce other antibody effector functions, which we hypothesized were responsible for the reticulocyte destruction and potentially other adverse immune effects of trontinemab such as a high rate of infusion-related reactions.

To achieve this, we incorporated a number of clinically precedented point mutations in the Fc region of the molecule designed to reduce antibody-dependent cellular type cytotoxicity or ADCC and complement-dependent cytotoxicity or CDC, while preserving phagocytosis by ADCP. In addition, to improve pharmacokinetics to lower the dose and dose frequency required for efficacy, we also included clinically validated Fc modifications to extend half-life.

Finally, to shuttle KRSA-028 into the brain, we designed 028 to include a transferrin receptor binding antibody fragment with similar binding characteristics to those of the clinically validated trontinemab. Our preclinical data, which you can review in our corporate presentation, show that KRSA-028 has the potential to deliver all the features we desired. It facilitates phagocytosis, matching the activity and potency of the approved pyroglutamate amyloid targeted drug donanemab. Compared head-to-head to trontinemab, it achieves more and higher sustained exposure, does not destroy reticulocytes and delivers five to sixfold higher brain concentrations.

We've also formulated KRSA-028 at high concentrations with low viscosity and high stability, all important for subcutaneous administration. And our modeling suggests it should match trontinemab efficacy at a low injection volume, well within the range needed for clinically proven auto-injectors. We plan to initiate clinical development with an integrated Phase I/II design, beginning with single ascending doses in healthy volunteers, followed by multiple ascending dose cohorts in early Alzheimer's patients. We will then enroll expansion cohorts at select doses to further characterize activity, safety and tolerability and enable Phase III dose selection.

We intend to file a CTN by the end of this year to initiate the single ascending dose arm in healthy volunteers in Australia and an IND at the beginning of 2027 to initiate the multiple ascending dose arm in early Alzheimer's patients in the United States. With this plan, we expect a key derisking readout from healthy volunteers in midyear 2027, including data for half-life extension, hematologic safety and CNS penetration. We then expect the first interim proof-of-concept data in Alzheimer's patients by the end of 2027, using PET tracers to evaluate how quickly plaque is cleared. From there, we expect a rich stream of clinical data readouts as we complete dose ranging and enroll expansion cohorts to collect all the data we believe we'll need to discuss a pivotal Phase III program of global regulators.

The transaction we announced today is expected to fund all of these activities, putting the combined company in a very strong position to accelerate the development of KRSA-028 with cash runway into 2029. We believe KRSA-028 has best-in-class potential and the technology behind it provides us a platform to build a broader pipeline. We call the combination of our proprietary transferrin receptor binding sequence and Fc engineering, the therapeutic targeting platform or THETA platform. It has enabled us to initiate discovery programs for other CNS targets and indications where a subcutaneous anemia-free shuttle has the potential to deliver best-in-class profiles. We aren't revealing these programs yet for competitive reasons, but look forward to disclosing them later this year or in 2027.

As some of you know, I've led the founding and growth of multiple biopharmaceutical companies. I've never been more excited about the company's prospects than I am for Korsana, and I look forward to the important progress I believe we'll make together in the coming years. We have a stellar team, an incredibly promising molecule in KRSA-028 and an immense opportunity in our pipeline. This is all anchored in a clear vision, delivering the best possible medicines for some of humanity's most devastating diseases.

I'd like to thank the team at Paragon Therapeutics for their partnership, the Korsana team for joining this mission and Korsana's investors for their support. We have important work ahead, and I look forward to sharing updates on our progress with you over the coming months and years.

With that, I'll now conclude my remarks and hand the call back to the operator. Thank you for joining the call today.

Ladies and gentlemen, this concludes the conference call today. All parties may now disconnect.

Good morning, everyone, and thank you for joining us today. I am Regina Graul, Chief Executive Officer of Cyclerion Therapeutics. I'm joined today by Dr. Husseini Manji, a globally recognized leader in neuroscience and mental health innovation. Dr. Manji's distinguished career spans leadership roles at the National Institute of Health, where he advanced foundational research on synaptic plasticity and at Janssen, Johnson & Johnson, where he served as Global Head of Neuroscience, driving the development of novel treatments for mood disorders. He currently holds professorships at both Oxford University and Yale University, focusing on severe neuropsychiatric disorders and as a member of the National Academy of Medicine.

Dr. Manji also played a key leadership role in translating the scientific discovery of esketamine's potential into SPRAVATO, the FDA-approved treatment for treatment-resistant depression. Dr. Manji is widely regarded as a thought leader in mental health policy and innovation with hundreds of peer-reviewed publications and a track record of translating science into transformative therapies. Dr. Manji is an adviser to Cyclerion and has been instrumental in informing the strategy for our lead program, CYC-126.

We're excited to share how we are pioneering a new therapeutic category in neuropsychiatry, one that leverages precision anesthesia, advanced EEG-guided technology and deep clinical precedence to address the enormous unmet need in treatment-resistant depression. Before we get started, I would like to remind everyone that certain matters discussed in this presentation are forward-looking statements.

We may, in some cases, use terms such as potential, may, expects, plans, could, opportunity, intends or other words that convey uncertainty of future events or outcomes to identify these forward-looking statements. These statements involve risks, uncertainties and other factors that may cause actual results, performances or achievements to be materially different from the information expressed or implied by these forward-looking statements.

We caution you that these statements are based on a combination of facts and factors currently known by us in our projections of the future about which we cannot be certain. Forward-looking statements in this presentation include, but are not limited to, statements about our ability to develop product candidates, the timing of our initiation of our Phase II proof-of-concept study, the design of our Phase II proof-of-concept study, the expected timing of our milestone payments related to Akebia clinical trials, our anticipated capital requirements, the timing of related milestones and availability of clinical data, creation of shareholder value and adoption of our product candidates once commercialized.

We cannot assure you that the forward-looking statements in this presentation will prove to be accurate. Actual performance and results may differ materially from those projected or suggested in the forward-looking statements due to various risks and uncertainties, including those under the heading Risk Factors in our annual report on Form 10-K filed with the SEC on March 4, 2025.

For today's call, I will first provide a brief overview of Cyclerion and introduce you to CYC-126, our lead therapeutic candidate. Dr. Manji will then provide additional context in the target patient population, procedure and our proof-of-concept clinical study. We will then transition into product development and the substantial progress we've made this year, including our recently announced Medsteer collaboration. We'll follow with our regulatory strategy across Australia and the United States, then a financial snapshot and capital expectations. Finally, we'll walk through the expected development time line and key milestones ahead that chart our path toward Phase II proof-of-concept readouts.

Cyclerion has been relaunched with a clear mission to pioneer a new class of neuropsychiatric therapies that blend precision anesthesia, real-time brain monitoring and scalable medical technology. We intentionally operate as a lean, highly expert team, small enough to move with speed, but built around leaders in neuropsychiatry, anesthesia, engineering, clinical development, intelligent medical systems and drug device integration.

Our team has collectively led many pivotal studies, secured numerous global regulatory approvals and launched commercial products across neurology and psychiatry. Further differentiating Cyclerion is our platform vision, technology-enabled anesthetic-based therapeutics that can precisely guide the brain into targeted EEG-defined states with potential therapeutic benefit across neuropsychiatric conditions. This is fundamentally different from developing another conventional medicine. It is a new mechanism-driven procedural approach designed to modulate brain function in a controlled and reproducible way.

With foundational intellectual property from MIT, a robust collaboration with Medsteer announced yesterday and compelling clinical precedents from multiple propofol studies, we are positioned to lead a new field at the intersection of neuroscience, anesthesia and precision medicine. We are building more than a single product. We are creating a capital-efficient platform and procedural model designed to expand across multiple neuropsychiatric indications over time. CYC-126 is designed to be the first individualized precision-delivered treatment for treatment-resistant depression based on evidence that controlled sedation can recalibrate dysfunctional neural network communications.

The treatment involves 2 stages that reflect how CYC-126's durable antidepressant effects may consolidate over time. First, the induction phase with treatments 3 times per week for 3 weeks. This initial treatment intends to rapidly establish EEG-defined brain states. Each session is intended to last approximately 2 to 3 hours. Our EEG-guided system is being designed to adjust dosing in real time with a level of precision that manual non-EEG-guided anesthesia simply cannot achieve. The induction phase is followed by a maintenance phase with potentially once monthly dosing. This phase is intended to reinforce network level changes, prolong durability and reduce relapse risk, conceptually similar to maintenance paradigms used in other neuromodulatory treatments like ECT or TMS, but intended to have greater precision and control.

Across both stages, the technology is designed to act as a copilot to the anesthesiologist, enabling individualized dosing informed by each patient's unique brain state response. We believe CYC-126 will not only leverage familiar generic anesthetics with well-known safety histories, it will also fit naturally into hospital PACU workflows and be delivered in a highly monitored environment.

For patients, this represents a fundamentally new paradigm, personalized, rapid-acting and designed for durable benefit. CYC-126 represents a fundamentally new therapeutic approach for treatment-resistant depression, one that uses 2 well-known anesthetics, but is designed to deliver them in an entirely new, highly controlled way. The therapy will integrate 4 components into a single unified product. The drugs, propofol and dexmedetomidine, a continuous EEG-based monitor, a decision-making algorithm that interprets the EEG in real time and infusion pumps for precise drug delivery.

Here is how the system works. Throughout the procedure, the patient's brain activity is continuously measured using EEG. That signal is incorporated into our control software algorithm to support precise adjustments of anesthetic delivery and maintenance of a defined therapeutic sedation state. In other words, we define the target sedation state, and the system is designed to guide dosing over time to support maintenance of a personalized reproducible brain state signature that we believe underpins antidepressant effects. This level of precision potentially directs and addresses a major limitation of prior propofol clinical studies, the inability to consistently achieve and maintain the therapeutic EEG state.

CYC-126 has the potential to offer hope to patients who are searching for an option that is effective, durable, predictable and safe. We believe this approach has the potential to be a transformative new treatment layer for millions of people living with treatment-resistant depression. I would now like to hand over to Dr. Husseini Manji, who will discuss the significant unmet need in treatment-resistant depression in CYC-126 planned Phase II proof-of-concept study.

Thank you, Regina. I'm pleased to be able to provide my thoughts on this innovative approach to treat TRD or Treatment-Resistant Depression. As you may know, I developed SPRAVATO because of my conviction that novel improved treatments for TRD need to focus on plasticity pathways. And that's what this novel approach with Cyclerion-126 does. So hopefully, it will represent an important much needed addition to our therapeutic armamentarium.

This slide shows a staggering unmet need to be addressed by this novel treatment. Major depressive disorder is the leading cause of disability worldwide and approximately 1 in 3 patients do not achieve adequate relief using our current SSRIs or SNRIs. This means that there are more than 3 million U.S. adults with TRD. Additionally, of the TRD patients who do respond to these treatments, a full 50% relapse after only 3 months of maintenance treatment. And the suicide rate is sevenfold higher amongst hospitalized TRD patients than in treatment-responsive MDD patients.

Finally, our current treatments require 3 to 6 weeks to become effective, way too slow to aid actively suicidal patients. MDD is also known to markedly increase the incidence of a variety of physical illnesses, especially cardiometabolic disorders. And there is an increase, about two to fourfold increased risk of premature death. There's also a 30% increased risk of cancer and cancer patients who are depressed have longer hospitalizations, poor quality of life and higher death rates.

Depression also has a major impact on the ability to functional occupationally, especially in our knowledge-based economy. As an example, there are high rates of absenteeism and presentism and those with serious mental illnesses have almost a 6 to 7x higher increased rate of unemployment. So overall, not only are health care costs tremendously increased, but there's also a major economic impact of increased work absence and disability payments.

So there's thus a clear and pressing need for better treatment options for TRD. SPRAVATO brought rapid-acting pharmacology to the field, but it has its own limitations. Repeated TMS is widely used and well tolerated, but has moderate remission rates. And electro convulsive therapy, while efficacious, requires the induction of full seizures and has well-documented cognitive and memory side effects.

Psychedelics, when approved, may be complex to administer with their long monitoring period. By contrast, Cyclerion-126 offers a potential new therapeutic layer that is hospital-based, highly supervised EEG-guided treatment that builds upon well-understood anesthetics. It has a potential for rapid, durable and reproducible benefits. Cyclerion-126 has the potential to help patients across all stages of depression, but in my opinion, will likely find its niche after SPRAVATO.

Now we know that slow wave activity reflects cortical synaptic strength and plasticity. Importantly, both ketamine and esketamine bring about rapid changes in slow wave activity and these slow wave activity increases correlate with antidepressant response at 24 hours. Although the studies shown here are small, 3 completely independent early clinical studies have demonstrated that propofol can produce rapid and meaningful antidepressant effects in TRD.

Consistent patterns were seen in each trial. The onset of benefit was within 1 to 2 weeks, durability lasted 3 to 6 months, and there were no major safety concerns, Importantly, achieving a very specific EEG-defined brain state such as slow wave activity or burst suppression is critical for clinical efficacy. And that's one of the key features with Cyclerion-126, being able to measure these EEG-defined states in real time and adjust the dosing accordingly.

As you know, these are heterogeneous disorders. So in the future, EEG-based biomarkers and artificial intelligence may also help identify those patients who are predicted to respond best. Cyclerion plans to run the much-needed well-controlled studies and solve the execution challenges that has limited this mechanism's full therapeutic potential. They plan to initiate a multinational 2-part proof-of-concept study in 2026. The goal is to confirm that one can reliably achieve the EEG states associated with antidepressant activity and to translate them into meaningful clinical benefit.

Part A is a randomized, double-blind 3-arm study, demonstrating the ability to induce and maintain the target EEG states, namely slow wave activity and burst suppression while characterizing safety, sedation depth and identifying the dose. They will also collect MADRS data to assess early efficacy signals and to optimize the parameters for Part B.

Part B uses the same 3-arm double-blind design, but is powered for clinical efficacy as assessed by MADRS score changes and secondary measures of durability, patient-reported outcomes, safety, cognition and the performance of the Sham control.

Part B is designed to deliver a definitive antidepressant signal and to identify the EEG signatures to take into Phase III. I think the company has been very thoughtful, methodical and doing things sequentially to establish the mechanistic, clinical and EEG foundation that will be needed for confirmatory trials. You can see on this slide the inclusion and exclusion criteria. They're very similar to what was done for SPRAVATO.

Part A will allow Cyclerion to confirm in [ cyclical ] modeling on the induction and the maintenance of the target EEG signatures while characterizing the safety, tolerability and dosing parameters needed for Part B. Cyclerion will also be looking directionally at efficacy in Part B. Part B will evaluate the safety, efficacy and will evaluate durability. Together, Parts A and B will build a cohesive evidence base, namely validating the EEG mechanisms, demonstrating clinical efficacy and generating long-term durability data to inform Phase III.

Importantly, things are designed to fit within established facility workflows for existing treatment modalities. So the psychiatrists will write the script and be in the room for the treatment administration while the anesthesiologist will actually administer the treatment. In this model, there are benefits for all the stakeholders.

For patients, a 2- to 3-hour procedure with an efficacious treatment with expected fast return to daily activities on the same day as a treatment. For the providers, it should be very easy to administer and for the facilities, the potential for reimbursement for the procedure and the drug with added efficiencies and ability to scale. This slide shows the end-to-end patient and clinic journey. The core message here is simple. High efficacy alone is not enough. Execution will determine widespread adoption.

So the journey starts with the patient searching for better treatment and an initial consultation. This stage sets expectations and establishes confidence in the treatment experience. Next is the screening and planning where benefits investigation, prior authorization and treatment scheduling occurs. This can be a major friction point, so strong operational support is essential to prevent drop-off.

At the center is site administration and observation. This includes prescribing, product ordering, administration with observation periods and structured monitoring. At the center is the site administration and structural observation. This is where clinics need to be most clinical, operational and have the reimbursement support. As you know, strategy matters. So ideally, they will begin with fewer well-supported sites and then mature and expand as things basically become much more straightforward.

Important to emphasize that this is not simply a drug launch. It is a design of a scalable treatment ecosystem, one which may help many, many patients. With that, I'll turn it over to Regina. Regina?

Thank you, Dr. Manji. Now let's dive a bit deeper into CYC-126's product development. Work is underway, and we are making steady and meaningful progress across all components required for the integrated system. Our product development strategy is guided by market research and commercial modeling with the goal of positioning CYC-126 to address a broad treatment-resistant depression population. Across hardware, software and the clinical protocol, we are making coordinated progress that gives us a clear line of sight to a fully integrated system and supports initiation of our Phase II proof-of-concept study in the second half of 2026.

The computational control module, the decision-making engine of the system is under active development. We are refining algorithms, defining EEG features linked to our target states and testing performance in simulated environments, including calibration around slow wave activity and burst suppression, robustness across patient scenarios and iterative dose control logic.

In parallel, we are developing a TRD-specific therapeutic protocol in close collaboration with anesthesiologists and psychiatrists to ensure alignment with standard hospital workflows and feasibility across sites. Our objective is to integrate the EEG hardware, infusion pumps, control algorithms and clinical protocol into a unified prototype. While integration is still underway, the path is clear and the progress remains on track to support clinical testing. This slide shows the strong progress we're making integrating the key components of CYC-126. On the first row, you will see the brain with the system. On the left is our computational control module. Here, we're integrating proprietary sedation-controlled software and a treatment-resistant depression specific protocol, all built on top of Medsteer's proven platform. This is where our collaboration with Medsteer, which we will discuss in the next slide, accelerates us.

The second row is the sensing and delivery hardware. This row covers the EEG monitor and infusion pump. For our devices, for our proof-of-concept study, we are intentionally leveraging FDA-cleared monitors and pumps rather than building hardware from scratch. That strategy is intended to limit hardware and regulatory risk and to keep the program capital efficient.

Finally, the third row shows the drug component. The drug row highlights our use of common generic anesthetics. This is fully aligned with our previously disclosed MIT license and allows us to build on extensive existing safety history and clinical data. Altogether, these elements keep us on track to have the full device ready in 2026 ahead of starting our proof-of-concept study.

Yesterday's announced collaboration with Medsteer is a critical accelerator for this program. Medsteer brings significant experience in closed-loop anesthesia with proven software technologies, advanced regulation algorithms and clinical data sets accumulated from real-world use across thousands of procedures globally. Their platform has a significant published base and is backed by 25 clinical studies and more than 9,000 patient inclusions with broad research use in the hospital setting.

Collaboration with Medsteer gives us a substantial technical advantage in CYC-126's development. Through this collaboration, Cyclerion intends to incorporate the following into CYC-126's development. Extensive clinical databases with granular patient information, including EEG data sets that inform algorithm calibration fit for our purpose, patents, know-how and software not all available commercially and engineering support that is intended to shorten development time lines.

Importantly, we retain the exclusive option to license certain Medsteer technology, patent rights, know-how and software into Cyclerion's field of use. Importantly, Cyclerion's field extends within and well beyond neuropsychiatric diseases such as treatment-resistant depression and excludes use in major surgery, general or multi-bed intensive care units and medical transport. We believe our relationship with Medsteer reduces program risk, accelerates time lines and positions Cyclerion with a first-mover advantage in anesthetic brain state modulation.

Now let's discuss more detail on CYC-126's regulatory strategy. We have spent extensive time honing our regulatory strategy to maximize speed and ensure global alignment. We are pursuing a dual country approach. In Australia, the TGA allows an expedited start for our Phase II proof-of-concept study in an efficient and high-quality environment that is well suited for early clinical studies. This path makes it possible for us to begin generating clinical data earlier than it would be possible in the United States alone.

In the United States, we continue active engagement with the FDA. Our program is treated as a drug-led combination product, which allows us to anchor the submission around the pharmacologic requirements while integrating the device into the development program. The FDA has communicated that we will receive pre-IND feedback in early 2026 to finalize expectations around study design, safety monitoring, CMC and device integration.

This multinational strategy gives us multiple regulatory touch points, derisks execution and ensures that we build the evidence package needed to support global registration.

Now we will provide a brief financial update. As of September 30, 2025, our cash balance was roughly $4.6 million. We are operating with a very lean disciplined cost structure, funding only essential development work and deferring noncore spend until after proof of concept. This allows us to stretch our capital and stay flexible in, when and how we raise additional funding. This structure has allowed us to monetize legacy assets, focus entirely on CYC-126 and materially reduce ongoing IP and development costs.

As a reminder, we licensed praliciguat to Akebia in 2021, retaining meaningful upside while transferring development responsibility. Akebia recently initiated a Phase II study, which provides an expected $1 million milestone for Cyclerion paid upon first patient dosed. Looking ahead, we estimate needing approximately $20 million to reach initial clinical readouts from Part A and approximately $50 million to complete the full proof-of-concept study.

With our lean cost base and milestone-driven financing strategy, we believe we can generate proof-of-concept data in a capital-efficient, derisked manner that offers investors clear visibility into major value inflection.

We will now discuss the anticipated time lines and milestones associated with generating proof-of-concept data for CYC-126. We believe our development road map is clear and anchored to achievable milestones. In 2025, we made significant progress across key program foundations, including preparation of the FDA pre-IND package, finalization of the full proof-of-concept study design, selection of prototype components for CYC-126 and definition of our regulatory and CMC strategy.

We also completed our initial market analysis and commercial model. In 2026, we anticipate receiving pre-IND feedback in Q1, completing the Australian CTN process following HREC approval and initiating the Phase II proof-of-concept study for CYC-126 in Australia in the second half of the year. In 2027, we expect to generate Phase II Part A safety and pharmacodynamic data. By the end of 2028, we aim to deliver full proof-of-concept results, prepare for our end of Phase II FDA meeting and advance our planning for pivotal studies.

Throughout this period, we also see opportunities to expand the pipeline and unlock potential nondilutive capital from our historical portfolio. The intent of each of these milestones is to build value, reduce risks and bring us closer to delivering a new treatment layer for treatment-resistant depression.

Let me close by bringing this back to the patient. CYC-126 is being built to serve a broad population of patients with treatment-resistant depression, including those who continue to struggle despite access to current approved products. Cyclerion is pairing well-understood anesthetics with real-time EEG in a hospital-based procedure designed to be precise, reproducible and durable. And we're doing it with capital efficiency, a clear Phase II plan and a direct line of sight to pivotal development.

Thank you for your time, your attention and your interest in Cyclerion as we advance CYC-126 toward clinical proof of concept and ultimately, towards the patients who urgently need better options.

Good morning, everyone. Yesterday, we announced Cyclerion's transformational relaunch as a neuropsychiatric company, supported by an MIT licensing agreement that secures foundational intellectual property. A copy of this release and presentation to accompany this call are available on the Investor Relations section of our website at ir.cyclerion.com. I am Regina Graul, Chief Executive Officer of Cyclerion Therapeutics. Thank you for joining us for the Cyclerion overview. Today, we'll share our strategy for building a new era in neuropsychiatric therapies, highlight the opportunities ahead and walk through our clinical and corporate road map.

Before we get started, I would like to remind everyone that certain matters discussed in this presentation are forward-looking statements. We may, in some cases, use terms such as potential, may, expects, plans, could, opportunity or other words that convey uncertainty of future events or outcomes to identify these forward-looking statements. These statements involve risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements. We caution you that these statements are based on a combination of facts and factors currently known by us and our projections of the future about which we cannot be certain.

Forward-looking statements in this presentation include, but are not limited to, statements about our ability to develop product candidates and the timing of related milestones, creation of shareholder value, adoption of our product candidates once commercialized and expected addressable market size. We cannot assure you that the forward-looking statements in this presentation will prove to be accurate. Actual performance and results may differ materially from those projected or suggested in the forward-looking statements due to a variety of risk factors and uncertainties. These are included under the heading of Risk Factors in our annual report on Form 10-K filed with the SEC on March 4, 2025, as well as other risks and uncertainties, which may be described in any subsequent quarterly report on Form 10-Q filed by the company and other reports the company files with the Securities and Exchange Commission.

Cyclerion is relaunching as a neuropsychiatric-focused company. This is not simply a continuation of our past. It's a strategic reset built on a strong foundation and clear growth strategy. At our core, we are a publicly traded company with a start-up mentality. We are lean, we are nimble, and we are focused. Our approach centers on the opportunity for patient impact and shareholder value creation, driven by a team with world-class expertise in neuropsychiatry and the biopharmaceutical industry. We intend to advance programs with discipline moving through well-defined derisked inflection points.

Equally important is our pipeline focus. We are developing tech-enabled therapies designed to optimize patient outcomes, targeting large neuropsychiatric markets with urgent unmet need. These are potentially novel, improved or first-in-class therapies backed by validated modes of action and designed for a rapid path to proof-of-concept. Together, this foundation and pipeline strategy define our relaunch, positioning Cyclerion to lead the next era in neuropsychiatric treatment.

Our collective vision is guided by a highly experienced Board and network of advisers with leadership experience from early research through late-stage commercialization. From seasoned biotech executives to global leaders in psychiatry, anesthesiology, regulatory affairs and commercialization, Cyclerion is supported by expertise that enables both scientific rigor and business discipline, all areas of direct relevance to advancing our pipeline. I would also like to highlight the news in yesterday's press release. We just announced that we have acquired the foundational intellectual property that was developed at MIT, IP that will help define and protect Cyclerion's leadership position in the field. I have great enthusiasm for the future prospects of our company and the impact we can deliver to patients.

We intend to use our foundational platform to pioneer a first-in-class option for anesthetic-based therapy in neuropsychiatry. Our lead indication is treatment-resistant depression, a severe condition affecting approximately 3 million patients in the U.S. alone. With few effective options, this patient population represents one of the highest unmet needs in psychiatry. We are advancing a proprietary tech-enabled delivery system designed to personalize therapies through bio feedback. Our approach harnesses well-characterized anesthetics with extensive safety data and a proven clinical history.

The strategy is supported by 3 independent proof-of-concept trials that demonstrated encouraging signals in treatment-resistant depression. Importantly, our therapy is designed to be delivered in a familiar setting by providers who already manage these medications and patients while addressing limitations of existing treatments. With this foundation, the program is Phase II ready, and we expect to initiate our proof-of-concept study by the end of 2026.

Yesterday, as a next step in bringing this important therapy to patients, we announced that we've entered into a licensing agreement with MIT to secure foundational intellectual property for the platform. Beyond treatment-resistant depression, we believe our platform offers expansion potential into other neuropsychiatric diseases, which we continue to investigate. We also retain the optionality to add strategically relevant therapies that enhance the platform. And we continue to monetize our legacy assets, which we believe can provide non-dilutive capital to further drive pipeline development.

Now let's step back to look at the treatment-resistant depression market. Out of the 21 million adults in the U.S. living with major depressive disorder, roughly 14% progressed to treatment-resistant depression. That's about 3 million patients. These 14% of patients account for half of the $40 billion economic burden of depression. They face two to tenfold higher incidence of suicide or suicide attempts and a 23% higher all-cause mortality rate compared to patients with major depression. This is not just a clinical crisis, but also a massive cost burden for health care systems, employers and families, there was a need for better options and that need is urgent. Unfortunately, today's treatments for treatment-resistant depression are limited and often unsatisfactory. Electroconvulsive therapy remains a standard intervention but carries both acute and chronic safety risks, including memory loss and is further limited by the significant social stigma associated with the procedure.

Recently approved medicines such as Spravato provide another option, but they come with box safety warnings and the potential for misuse. Brain stimulation devices like rTMS can be helpful for some, but the results are inconsistent and the treatment schedules can be burdensome. This leaves many patients cycling through therapies with limited benefit and concomitant safety risks before escalating to highly invasive interventions. That's where Cyclerion can come in, offering the potential for a safe, effective and scalable alternative. Our approach is designed to intervene and provide durable relief without the stigma, safety concerns or logistical burdens of today's therapies and to fill that critical gap between standard antidepressants and invasive procedures.

Our solution is a personalized tech-enabled therapy that uses well-known generic anesthetics with extensive safety databases, medicines that anesthesiologists are deeply familiar with from decades of routine use in surgical and procedural settings. What makes our approach novel is not only the drugs themselves in depression, but also the way they are delivered. Through continuous EEG monitoring and proprietary algorithmic controller, our system is designed to allow precise titration to specific brain states linked to antidepressant benefit. We believe this biofeedback-driven model could enable truly individualized treatment tailored to each patient's brain activity in real time. The result is a therapy that's potentially safe, highly efficacious, scalable and efficient. Patients may benefit from rapid durable relief without the burden of current TRD treatments.

Providers would gain a familiar framework to administer care and hospitals would be able to integrate this into their existing infrastructure. Our therapeutic candidate is designed to be a preferred option across the treatment landscape. For patients, it could offer the potential for a safe, effective and well-tolerated treatment with a rapid return to normal activities. For providers, our therapy offers the potential for a low treatment burden delivered within a familiar procedural framework and the ability to administer care without the common side effects of available options such as cognitive impairment, social stigma and disassociation.

For hospitals, we believe the model is highly attractive, the potential for reimbursement for the procedure, device and medicines, all while fitting neatly into an established procedural framework within the PACU setting. Taken together, we believe this is a solution that could be the preferred treatment for TRD and has the potential to benefit all stakeholders, patients, providers and health systems, paving the way for broad adoption and impact, filling the gap between inadequate standard interventions and invasive last resort procedures.

Brain regions communicate with one another through rhythmic electrical activity called oscillatory brain waves. In healthy individuals, these oscillations are well coordinated, allowing for proper regulation of mood, thought and behavior. In TRD, these rhythms become disrupted. The communication between key regions of the brain, including those responsible for emotion, motivation and cognition is dysregulated. And this breakdown is believed to underlie the persistent symptoms patients experience such as hopelessness, rumination, difficulty regulating emotion and anxiety. Research has shown that carefully controlled sedation can restore synchronized communication between brain regions, essentially resetting the neural circuits that have become dysfunctional in TRD. This is a scientific basis for Cyclerion's therapeutic candidate.

By using specific anesthetics and leveraging a tech-enabled delivery system to achieve these precise brain states, we believe we can unlock a safe, reproducible and individualized approach to treating depression. Importantly, this concept has already been supported by 3 independent clinical studies, providing a strong foundation for our development program. The use of anesthetics for TRD is supported by compelling early phase clinical evidence. Across 3 studies, propfol has demonstrated consistent antidepressant effects with favorable safety profiles. The rapid onset of benefit in all studies was observed within 1 to 2 weeks with durability lasting 3 to 6 months. All 3 studies used anesthesiologist controlled dosing with EEG guidance, optimizing to sedation with or without burst suppression. These results provide strong rationale for our development program.

Let's look at the clinical evidence supporting our approach, starting from left to right. On the left, a pilot study in 10 patients with moderate to severe TRD tested 10 infusions over 3 weeks. The results were striking, 60% of patients responded and 50% achieved remission. Importantly, 4 of the 5 remitters sustained remission for at least 3 months with 2 of the 4 sustained remission in the sixth month and potentially longer. In the middle, a larger randomized controlled trial of 24 patients compared different dosing strategies. At the higher dose, which targeted EEG suppression, half the patients responded and 42% achieved remission. At the lower dose, the results were minimal, but when those patients crossed over to the higher dose, response and remission rates matched the higher dose group. This reinforces the importance of reaching the right brain state to unlock antidepressant benefit.

Finally, on the right, in a study of 15 geriatric patients, 2 carefully controlled infusions that enhanced slow-wave sleep produced a 67% response rate. What's particularly compelling is that the symptom improvement was not random. It was correlated with the amount of slow wave activity achieved during treatment. In other words, patients who reached higher levels of slow wave activity experienced greater reduction in depressive symptoms. Taken together, these 3 independent studies in younger, older and mixed TRD populations consistently showed rapid onset, meaningful response and remission rates and durability over periods of months. This convergence of evidence forms a strong foundation for Cyclerion's development program.

We are now advancing toward a Phase II randomized double-blind proof-of-concept study. The trial will include 2 parts: Part A focused on safety and pharmacodynamics and Part B focused on safety and efficacy. Patients will be randomized across either 2 specific general anesthesia states, one deeper and the other a sham control arm. Treatment is expected to be delivered 3 times per week for 3 weeks, with follow-up extending up to 6 months to assess durability. We expect to initiate this trial in 2026 with initial data readouts in 2027. Our near-term milestones are clear. By year-end 2025, we expect to confirm our proof-of-concept trial design, complete our pre-IND with the FDA and finalize a working prototype of the device. In 2026, we aim to secure FDA IND clearance and initiate our Phase II proof-of-concept trial. Safety and pharmacodynamic data will follow leading into safety efficacy data in 2027. By 2028, we plan to have full Phase II data and to meet with the FDA to align on advancing into pivotal trials.

In closing, Cyclerion is transformationally relaunching as a new company dedicated to neuropsychiatry. Our lead focus is treatment-resistant depression where the unmet need is greatest. And from this foundation, we see the potential to expand into other serious neuropsychiatric disorders. We are operating with the discipline of a public company and the agility of a start-up, lean, focused and guided by world-class expertise. This relaunch is about more than just one program. It's about building a class of therapies designed to reshape the treatment landscape in mental health. Our goal is clear: to deliver meaningful impact for patients while creating significant sustainable value for our shareholders.

Thank you for your attention and support, and we look forward to updating you as Cyclerion continues this exciting new chapter.