Intellia Therapeutics Inc (NTLA) 2017 Q3 法說會逐字稿

Good morning. My name is Tamia, and I will be your conference operator today. At this time, I would like to welcome everyone to the Intellia Therapeutics Third Quarter 2017 Earnings Conference Call. (Operator Instructions) Thank you.

Ms. Lindsey Trickett, you may begin your conference.

Thank you. Good morning, and thank you for joining us today for Intellia's conference call to discuss our third quarter earnings. I'm Lindsey Trickett, Intellia's Head of Investor Relations. There is a presentation available for download at intelliatx.com, so that you can follow along with this morning's call.

Before we get started, I'd like to review our safe harbor statement. Today's presentation contains statements that are forward-looking under the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations and assumptions that are subject to risks and uncertainties and involve a number of risk factors that could cause actual results to differ materially from projected results.

In particular, our data relating to our non-human primate, rats and mice studies are interim and preliminary in nature, and they are ongoing and not completed. These data may not be indicative of the viability of developing a CRISPR/Cas9-based human therapeutics. And future data from these and other studies may impede such product developments. The data we are presenting today may not continue for the animal models we are presenting, or we may be unable to repeat or serve it in other studies.

It's also possible that the animal models have developed or may later develop serious events of which we are unaware today. Additional information concerning these risk factors is contained in our SEC filings, including our 10-K and most recent 10-Q, which are available on the Investor Relation section of our website, intelliatx.com.

Although Intellia may elect to update forward-looking statements in the future, we specifically disclaim any obligation to do so even if our expectations change, unless required by law. For this reason, you should not rely on these forward-looking statements as representing our expectations as of any date after today.

Now let's get started. Joining me on today's call from Intellia are Nessan Bermingham, Chief Executive Officer, President and Founder; John Leonard, EVP of R&D; and Graeme Bell, our CFO.

We have a lot to get to today, so I hand it over to Nessan to walk you through our agenda.

Thank you, Lindsey. Hi, I'm Nessan Bermingham, CEO of Intellia. Thanks for taking the time today to join the call. I'll start with an overview of the progress we've made during the quarter and then hand over to John Leonard to walk you through some exciting non-human primate data and provide an update on our research and development efforts. Then we'll have Graeme share our financial results, and I'll wrap things up with a review of our upcoming milestones on what you should expect for the rest of 2017 and into 2018.

Please turn to Slide 5. We remain well-positioned financially with $222 million in cash on the balance sheet at the end of the quarter. On the R&D front, we'd share with you today that we successfully showed, for the first time, genome editing in the liver of non-human primates with CRISPR/Cas9, which we were able to accomplish utilizing a proprietary lipid nanoparticle delivery system. In these exploratory studies, we observed editing levels over 20% in several non-human primates under different dosing conditions.

Our expectation is that, as you recall from our earlier work in both mice and rats, those editing levels will increase as we perform guide and formulation optimization and as we further redose animals in these preliminary studies. In these non-human primate studies, we confirm the well-tolerated safety profile of our LNP system as well as the rapid clearance of all its components.

During the quarter, we also shared the results for our durability study in mice, showing up both the level of editing and the decrease in serum TTR protein, our target, remain consistent for the 12 months of the study.

Lastly, we made progress in discovery work in the central nervous system. As reported today, we observed successful genome editing with CRISPR/Cas9 in the central nervous system of mice, demonstrating utility and adaptability of our lipid nanoparticle delivery systems.

I'll now hand it over to John Leonard to share with you some additional details on these exciting achievements.

Thanks, Nessan. I'll start today with the results of our mouse durability study shown on Slide 7. In this experiment, we dosed mice with a single intravenous infusion of CRISPR/Cas9, delivered via our lipid nanoparticle delivery system. We then measured the extent of editing in liver cells of those mice. And if you can see from the graph on the left, we saw a dose-dependent editing, reaching and maintaining the 70% level throughout the entire 12 months.

Remember that most of the TTR protein is produced in the liver. So levels of serum TTR are a good biomarker to test whether or not we were successful modifying the genome to turn off the production of this protein by editing in the liver. Note that in our high-dose group, again, following a single intravenous infusion of our lipid nanoparticle delivery system, we observed a 97% decrease in serum TTR in the animals with the highest level of editing throughout the one year observation period.

In the picture on the far right of this slide, you can see that our LNPs are successfully delivering messenger RNA to the hepatocyte precursor cell population. And since the editing is sustained at the 12-month mark, we believe that we are actually editing these stem cells, so that when they produce new hepatocytes, those new hepatocytes also retain the edit. As we move into the non-human primate studies, it is important to remind you that no one has reported editing the non-human primate liver with an in vivo application of CRISPR/Cas9.

On Slide 9, we show that in non-human primate liver, we have achieved editing of up to a little over 30% of the target gene following a single intravenous dose for the LNP system. We've also demonstrated increased levels of editing after administering a second dose. By redosing animals that have been previously treated, we observed total editing levels of over 20% in some animals.

In these preliminary experiments, we studied a variety of conditions and dosing regimens, and we're pleased with these results. We continue to perform experiments to optimize various complements of our system. These results give us a strong foundation on which to build as we work to identify a development candidate move towards the clinic.

In addition to seeing editing levels of greater than 20% in several animals, we also analyzed the TTR expression in these animals. On Slide 9, we saw a serum TTR decreases of up to 60% in the animals with the highest levels of editing. While it's unknown how much editing is required to achieve a therapeutic effect, these results are promising, and we are encouraged by these data as well as by the fact that the regimens were well tolerated.

Now that we have achieved this significant milestone, Intellia will be focused on guide and formulation optimization, selection of a candidate guide for use in humans and the initiation of our IND-enabling activities.

Now I'll turn it over to Graeme for an update on our financials.

Thank you, John. Turning to Slide 11. As you can see from our consolidated statement of operations, we reported collaboration revenue of $7.3 million in the quarter compared to $4.9 million in the same quarter of 2016.

R&D expenses increased to $17.5 million for the quarter as we continue to expand the organization and build the critical skills and capabilities in support of our platform technology. As we now have a total workforce of 169, a 135 of whom work in R&D, we continue to target a 70:30 ratio between R&D and G&A as we think about capital deployment.

G&A expenses increased to $5.7 million. And as we round out 2017, this will represent the first full year that we have spent in our new corporate headquarters at 40 Erie Street here in Cambridge, Massachusetts. Overall, we saw a net loss of $15.4 million, which comes out as loss per share of $0.44.

Turning to the balance sheet. As Nessan already mentioned, we ended the quarter with $222 million of cash and cash equivalents and reiterate our guidance that the cash will support our ongoing operations and CapEx through mid-2019. Based on these financials as well as the continued progress in preclinical models, we continue to work towards accelerating the development of life-transforming therapies.

With that, I'll hand it back to Nessan for an overview of our upcoming milestones and what we should expect from Intellia in the coming months and into 2018.

Thanks, Graeme. Before we head into the Q&A, I want to share with you the roadmap to get to an IND filing, utilizing CRISPR/Cas9 in the lipid nanoparticle delivery system.

On Slide 14, you can see that we have achieved editing in mice, rats and now in non-human primates. At this point, we turn our focus towards the remaining steps that's prior to our IND filing. Those steps include optimizing the delivery system we plan to use in our ongoing non-human primate studies, the selection of the human guide for human trials and the subsequent IND-enabling activities and studies. We look forward to providing you updates on our progress in these areas as we move towards the clinic.

As we look beyond TTR, the process for developing our follow-on indications in the liver will be substantially streamlined as the primary component that we'll need to switch out is the guide that provides the coordinates for the location and the genome we want to edit. We are working hard to get our platform technology right so as to reduce development time lines for our next wave of programs.

To wrap up, on Slide 15, the key takeaways for today's call are that: Intellia delivered CRISPR/Cas9 to non-human primate livers using our lipid nanoparticle delivery system; we achieved editing at the target site in the liver, the TTR locus, in the treated non-human primates; that editing translated into reduction in serum TTR protein in these non-human primates; redosing increased levels of editing in the non-human primates; a well-tolerated safety profile was shown with both single and multiple doses in the non-human primate studies.

With respect to upcoming activities, you should expect to see the nomination of our first development candidate for human clinical trials; the initiation of IND-enabling activities; demonstration of insertion and/or repair editing in non-human primates; and preclinical data on immuno-oncology candidate. We believe that Intellia is well-positioned to become an industry leader in the development of life-transforming treatments.

On a personal note, I would like to congratulate and thank the whole Intellia team. The company is just under 4.5 years old and, I believe, has made tremendous progress in that short period of time. I believe the data we presented today marks an inflection point as we move towards realizing our ultimate mission of developing curative genome editing treatment that can positively transform the lives of people living with severe and life-threatening disease.

With that, I'll turn it over to the operator to manage the call. Thanks again for your time today, and we look forward to remaining in touch.

(Operator Instructions) And your first question comes from the line of Maury Raycroft from Jefferies.

Congrats on the unprecedented results. My first question is on the single-dose range results, where you're seeing between 0.1% and 32%. And I'm wondering if you can clarify if the results are from using different guide RNAs. Were they primarily from non-human primates or human cross-reactive guides? And is there a way to move efficacy closer to the higher end of editing going forward?

Thank you, Maurice, for the question. I'll turn that over to John to answer.

Sure. Maury, that's correct. That full range includes the results of a set of variety of experiments that included different guides and different LNP formulations and different dosing regimens. But the data that we show here and referred to during the course of the presentation that you see on Slide 9 is with a single guide that was then dosed at low and high doses. And as we said, some of those animals were then redosed.

Got it. And as far as selecting a guide that would move the efficacy closer to the higher end, is it likely that that's going to be (inaudible) I assume?

Yes. I mean, this first work was all done with guides that were ceno-specific. And we have a set of guides that are cross-reactive to the human and ceno. And we're working through that set literally as we speak.

Got it. And it looks like the second dose administered came about 40, 50 days after the first dose. How did you decide this time frame? And is this reasonable that this time frame would be used in humans as well?

Yes. I wouldn't read too much into the timing of this, at least with respect to humans. This has more to do with dealing with the CRO and animal slots and being able to process the information as it was coming in. I don't think that this is the preferred dosing regimen, which we certainly have established at this point. That's work that lies ahead.

Okay. And as far as going beyond 2 doses, is it feasible and would this be part of additional studies as well?

Yes. It's -- the dosing continues. I would not portray these numbers as a ceiling. But we think it's very important to note that we've established editing occurs and that with at least a second dose or a redose, one can add additional editing to that. How much further one can go is work that's ongoing, and we'll report that information at the appropriate time.

Got it. And my last question is on the new mouse data that you mentioned in the press release and on the call as well. If you could just talk more about the LNP delivery and editing in the CNS. What was the delivery route? And if you can comment on what the target was as well.

Yes. We're not talking about the target just yet, but this was an intracerebral injection, and there were 2 sets of studies. One was to show that the LNPs actually worked, and we used a -- just a protein readout, not looking for editing and established that, in fact, with high levels of delivery to neurons, which is important to note. And then came back in separate studies, carried out a single-intracerebral injection with no guide and look for editing at the injection site and achieved levels that were from 10% to 25%. So we're very, very excited. Those are some of the first experiments. And it's our expectation that with additional work, we should be able to improve on that.

(Operator Instructions) Your next question comes from the line of Gena Wang from Barclays.

Maybe I'd break my one question into 2 parts. So for the 20% level genome editing, are you referring to the total cells or just hepatocytes?

Thanks, Gena, for the question.

That is -- oh, I'm sorry. Go ahead, Nessan.

No, no, no, John. I'm just thanking Gena. Go for it.

That's -- that is total cells. Although we would expect the preponderance of those cells are hepatocytes because that's how the liver is made up. And we know from prior work in mice that its hepatocytes that preferentially take up the material. We have not specifically looked at individual cell types in the monkeys just yet.

Okay. And then my second part of the question is, I don't know if you can disclose the high dose and the low dose, the actual dose. And also going forward, will you try to have higher initial dose? Or you would like to repeat dose beyond second dose in order to achieve, say, higher serum TTR knockdown, like beyond 60% what we have seen in the RNA therapy?

Yes. We're not disclosing the dose. There's work going on already to move beyond where we are. And it is absolutely our objective to get to TTR levels that are reduced beyond 60%, whether that's by redosing or different dosing regimens or more likely with a different guide that will actually be a human guide. All that lies ahead in the upcoming months.

And your next question comes from the line of Joseph Schwartz from Leerink Partners.

Congrats on all the progress. So I was wondering if you could put the 20% threshold for editing levels that you've highlight, that you've surpassed in multiple non-human primates into context for us. What is the goal that you think that you need to achieve considering that the 97% reduction in serum TTR that the mice you treated corresponded with around a 70% editing at the target DNA site in the liver?

You want me to keep going in this?

Go for it, John.

Sure. I think it's important to step back and look at the mice as the result of a lot of work that was done to show what the system is capable of. And what we demonstrated was that with a lot of optimization, one could essentially ablate TTR production. And as we indicated here, we got to 97% sustained levels of reduction. So that's therapeutically relevant. We believe that we can achieve that in humans. I think the ultimate therapeutic readout is TTR protein levels, and we will determine whatever dosing regimen we ultimately come up with and guide based on the TTR levels that we achieved. And that will tell us what the editing is necessary to get to. So we don't start out with the objective of matching the mice. We may. We -- that lies ahead to see if that in fact happens. But that therapeutic objective is TTR protein reduction, and that would be our primary readout.

Okay. And then given you are now focused on selecting a human guide and formulation for a development candidate to file an IND on, I was wondering if you could talk about what's entailed in that process? And how far away are you from your target product profile in this regard? I know you said in the press release that you hope one would be complete as early as first quarter of '18, and that you're also focused on streamlining the process so that future candidates can benefit from the groundwork you're laying now. So I was hoping you could expand on that a little bit just so we can envision what still needs to be accomplished and how far away you think you're off -- you're from that target product profile in that regard.

Well, without going into all the details, we are sifting through human guide candidates, and several of those have been in non-human primates. So we have a sense of where we are. We feel that we've gone a long ways to stabilizing the LNP formulation. That may be tweaked a little bit during the course of this work. And you referenced the date that we gave out, so that's very much what we're looking towards. We want to bring forward a candidate that we expect will be competitive. And the information that's been released recently tells us what we have to shoot for, and we're very, very mindful of that.

And Joe, just on the -- as you probably recall from the IPO and then subsequent to the IPO, our initial -- when we did exploratory work in the mice and then into rats, just to reiterate what John has said, we got low editing levels within the liver. And then as we continue to actually optimize our overall LNP delivery system, we were able to bring that up and significantly, and such that it was almost undetectable extrapolating serum TTR. So 97% drop in extrapolating serum TTR. So now as we think about the non-human primate, where I could see optimization of the delivery system, but also as you probably recall, you were looking at the timing also across the TTR region so you can find the most active guide. Today, we've been using effectively exploratory guides to help us identify and show that we can actually deliver and edit within the liver, and then to show again that one we redosed or that we're actually able to increase overall editing efficiency while also looking at overall assays' intolerability of the lipid delivery system under various dosing paradigms. So I think this is just the next phase after showing that LNP/GFP data that we did earlier this year. This is the next step in that road map of identifying that formulation and the DC candidate, which we reiterate today. Our guidance around nomination of that, anticipated in the first quarter of next year.

And your next question comes from the line of David Nierengarten from Wedbush Securities.

Maybe a little different question on your editing efficiencies. Have you -- and kind of as apples-to-apples, you can get -- I know it's different therapeutic paradigms and everything. But have you compared that in your animal models to an RNAi-type of approach just to see where you are in comparison to that? And if there's improvements or are there modifications you can make to improve or to continue to get it prepared for the clinic?

So the answer to that, straight out of the gate, is no. We don't compare it to siRNA or kind of (inaudible) modality. Ultimately, we're looking at the level of extrapolating serum TTR protein that's present within these animals. And that really is the driver here as we look at the ultimate goal or target product profile here for our product as we move forward. So clearly, the next phase, as John outlined, is really going into now the optimization of the LNP delivery system and the identification of that DC. And that provides us with the greatest reduction in that serum TTR protein level, either from a small dose or a handful of doses in our preclinical studies. John, would you add anything to that?

No. I mean, it's -- the RNA work, I think, has given us a good indication of what we need to achieve with respect to TTR levels, but that's where it stops.

And your next question comes from the line of Alethia Young from Crédit Suisse.

Congrats on the progress. Can you guys talk a little bit about Novartis collaboration? And what's going on with the ex vivo work that you're doing there?

Thank you, Alethia, for the question. So absolutely, the Novartis collaboration remains a pretty active collaboration as you recall. And Novartis got approval recently at the first CAR-T program. Part of the area that we've been working with Novartis on is around CAR-Ts and continued development in that space in addition to hematopoietic stem cells, and the progression of their program in HSC towards, and ultimately we hope into the clinic. And given the nature of the collaboration, we really need not disclose many details around it. We have provided some information around the HSC program, our lead program, our data should generate from the program to date. But again, it's a partnership that we really do not present much data at public domain around.

Have you guys said anything on like time lines around going to the clinic?

We have not. Novartis is in control of that for the first HSC program as it progresses towards the clinic. So really that resides within Novartis' development plan, and they control that time line.

And then just maybe -- as it relates to Regeneron. Have they've been helpful with you guys as far as like kind of working with TTR program and like kind of progressing that into -- as you move towards the clinic?

I think we've been very fortunate with both partnerships that we signed. As I mentioned, Novartis is in the area of CAR-Ts and hematopoietic stem cells that provides us access to lipid nanoparticle library that Novartis have developed for siRNA delivery. And David Morrissey, who run that program, then joined the company as CTO here. With respect to the Regeneron partnership, which is predominantly focused on in vivo liver delivery and genome editing with CRISPR/Cas9, that partnership has been very active and fruitful partnership to date. And they have been active in the TTR program, which is our first codevelopment, copromotion program with Regeneron, where Intellia is developing the TTR program but Regeneron sharing the expenses associated with that program. So I would say that the capability that Regeneron has, tools, reagents, animal models and expertise has flow -- some of that is flow-through to Intellia as we think about moving the TTR and other programs forward towards the clinic.

At this time, I will turn the conference call back over to management for closing remarks.

Thank you. Thank you, everybody, for joining us today. We look forward to providing you with systematic updates as appropriate. Appreciate you taking the time. Have a great day.

This concludes today's conference call. You may now disconnect.