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Sterile Alpha and TIR Motif Containing 1 (SARM1) is an NAD(+) hydrolase enzyme implicated in neurological diseases with prominent axonopathies. A reported method for SARM1 inhibition involves the design of small molecules bearing reactive heterocyclic warheads, which intercept the hydrolysis of NAD(+) in the active site of SARM1 and subsequently inhibit enzymatic function of the TIR domain. Herein, we describe the discovery of a series of bicyclic SARM1 inhibitors, initially identified via a unique workflow for free-energy perturbation (FEP+) simulations. Subsequent hit expansion efforts identified potent and cell-active inhibitors with slow off-rates, which impart a unique conformational state of W662 in the SARM1 catalytic site, as assessed via X-ray crystallography. Finally, we discuss an identified liability associated with substrate-based SARM1 inhibitors such as 19, whereby insufficient target engagement results in an increase in biomarkers of neurodegeneration at low doses in vivo and exacerbates neuronal degeneration and cell death in vitro.