Viridian Therapeutics Inc (VRDN) 2017 Q3 法說會逐字稿

Good afternoon, ladies and gentlemen, and welcome to the miRagen Therapeutics Third Quarter 2017 Earnings Conference Call. (Operator Instructions) As a reminder, today's call is being recorded, and now I'd like to turn the conference over to Luke Heagle from Pure Communications. Please go ahead, sir.

Thank you, and good afternoon, everyone. On the call today are miRagen's President and Chief Executive Officer, Bill Marshall; Chief Financial Officer, Jason Leverone; Executive Vice President of Research and Development, Paul Rubin; and Chief Business Officer, Adam Levy.

Before we begin, I would like to remind everyone that this conference call and webcast will contain forward-looking statements about the company. These statements are subject to risks and uncertainties that could cause actual results to differ. Please note that these forward-looking statements reflect our opinions only as of the date of this call. We will undertake no obligation to revise or publicly release the results of any revisions to these forward-looking statements in light of new information or future events.

Factors that could cause actual results or outcomes to differ materially from those expressed and/or implied by such forward-looking statements are discussed in greater detail in our most recent filings on Form 10-K and our other periodic reports on Forms 10-Q and 8-K filed with the SEC. I would now like to turn the call over to Bill Marshall, President and Chief Executive Officer of miRagen. Bill?

Thanks, Luke. Good afternoon, and thank you for joining us for our third quarter update and results conference call. Most importantly in the third quarter, we continued to deliver progress in the clinic and performed well against our strategic initiatives.

In the third quarter, we believe we made continued advances across our pipelines of microRNA therapeutic candidates and continued to execute on our foothold clinical development strategy. As a reminder, in order to build efficiency into our business and clinical models, we've employed, what we call a foothold progressive derisking clinical development strategy for each of our program.

The foothold strategy is designed to potentially allow for a more rapid and cost-effective pathway to first regulatory approval. We believe that first-in human clinical studies designed to measure biomarker readouts of drug action, alongside the traditional safety measures help to derisk the drug candidate and provide important insight that can help guide Phase II clinical trial designs and expanded indication trials.

We also believe our approach to addressing dysregulated microRNA to restore functional harmony is applicable to multiple disease areas of high unmet medical need including oncology, fibrosis, neurodegeneration and cardiovascular disease. Our deep expertise in microRNA biology and drug development provides a strong foundation to develop product candidates to treat the broad range of diseases in which microRNA dysregulation is implicated.

I will begin with an update on our lead anticancer product candidate, MRG-106. We are currently evaluating MRG-106 in a Phase I multiple ascending dose study in patients with mycosis fungoides, or MF, the most common form of cutaneous T-cell lymphoma, or CTCL. We continue to make progress in the trial, which has been designed to evaluate the systemic administration of MRG-106.

We were pleased to present new interim data from the ongoing trial at the EORTC Cutaneous Lymphoma Task Force Meeting in October. These results included observations from additional patients as well as longer-term dosing data for patients who have continued on the trial, since we provided an update on our second quarter call. 22 of 23 patients, or 96% of the systemically treated patients showed improvement in total skin disease, as measured by the maximal change in each patient's modified Severity Weighted Assessment Tool, or mSWAT score, which is assesses the severity of skin disease over a patient's entire body.

Under the initial Phase I protocol, not all patients had the opportunity to be treated for more than 1 month. Based on clinical responses we observed early in the trial, we were able to amend the protocol to allow patients to continue to be treated beyond one month. Importantly, 9 of 13 patients that were treated for more than one month showed a 50% or greater maximal improvement in mSWAT scores. These responses appear to be generally durable for patients who continued on therapy.

As we reported, 5 patients have experienced a durable response for 4 months or longer. This is an important observation for MRG-106, as durability of response is an important consideration for approval of drugs in this indication. Additionally, patients who showed improvement appear to do so regardless of whether they were receiving background medications for CTCL together with MRG-106, or MRG-106 alone. Furthermore, MRG-106 has been generally well tolerated to date, at all dose levels, ranging from 75 milligrams to 900 milligrams.

Based on early safety and efficacy signals we have experienced in treating patients with CTCL, we recently expanded our Phase I trial and are currently evaluating MRG-106 in additional oncology indications. These additional indications include adult T-cell leukemia lymphoma, diffuse large-B cell lymphoma and chronic lymphocytic leukemia. In each of these 3 expansion indications, the disease process appears to correlate with an increase in microRNA-155 levels, the direct target of MRG-106.

We began dosing subjects in these expansion indications in the second half of 2017, and plan to release interim data from these expansion indications in 2018. We also intend to initiate a larger, controlled Phase II clinical trial with MRG-106 to treat cutaneous T-cell lymphoma patients in the second half of 2018 and will provide further updates on our progress throughout 2018.

As I mentioned, MF is the most common form of cutaneous T-cell lymphoma, a sometimes deadly disease that in many cases causes painful, disfiguring tumors on the skin. MF is estimated to affect between 16,000 to 20,000 people in the United States. MF can be a serious condition and there is a strong need for new treatment options with acceptable safety profiles.

Turning to our other lead drug candidate, MRG-201. We presented results from the double-blinded placebo-controlled single and multiple dose escalation Phase I trial evaluating MRG-201 in induced cutaneous fibrosis at the American Society for Dermatologic Surgery annual meeting in October. A total of 54 volunteers participated in this clinical trial and MRG-201 was generally safe and well tolerated at all dose levels evaluated.

In the study, we observed that MRG-201 may be able to regulate multiple genes involved in fibrotic tissue deposition in humans. Moreover, this appeared to result in a reduction in fibroplasia, a histopathological marker of scar tissue accumulation, while not affecting normal wound healing. We plan to initiate a double-blinded randomized Phase IIa trial to evaluate MRG-201 in subjects with a predisposition for keloid formation in the first half of 2018. Keloids are smooth, hard, benign growths that form when scar tissue grows excessively. Future indications to be studied for microRNA-29 replacements could include fibrotic diseases of the lung and eye.

In addition, new preclinical safety and feasibility data on inhaled delivery of MRG-201, which miRagen plans to evaluate for the potential treatment of pulmonary fibrosis, were presented at the European Respiratory Society International Congress in September. We utilized a nose-only inhalation exposure system with the Lovelace Biomedical Research Institute in this study, to more effectively assess accurate dose, compound integrity, particle size and exposure. The results appear to demonstrate that MRG-201 was nebulized, with its chemical integrity maintained, and could be administered via inhalation to rats.

Exposure to the lung tissue after inhalation was high, and we observed suppression of several markers of fibrogenesis. We look forward to releasing additional preclinical safety and efficacy data for the potential treatment of lung fibrosis in 2018.

I will now provide an update on MRG-110, the lead product candidate under our collaboration with Servier. During the first half of 2018, we plan to initiate two Phase I clinical trials to evaluate safety, pharmacokinetics and pharmacodynamic effects of MRG-110, an inhibitor of microRNA-92A delivered both systemically and intradermally.

MicroRNA-92 has been shown in our preclinical studies and reported in multiple peer review scientific publications to be a negative regulator of new blood vessel creation. As part of our Phase I clinical trials, in addition to safety and pharmacokinetics, we intend to analyze biomarkers that may provide mechanistic proof of concept and support further study of MRG-110 in the treatment of cardiovascular disease and certain other conditions where vascular flow is compromised.

In summary, we believe we have made important progress advancing our pipeline of microRNA-targeted therapeutic candidates in the third quarter, and believe that our foothold clinical development strategy is working as designed. Despite both clinical trials for MRG-106 and MRG-201 being first in-human studies, we believe we've been able to show mechanistic proof of concept in each of these programs.

We believe achievement of mechanistic proof of concept in Phase I can help improve the probability of success in later clinical evaluation as well as provide guidance for appropriate dose ranges to be studied, both in the foothold indications as well as other potential expansion opportunities. We look forward to expanding the ongoing MRG-106 Phase I trial into additional oncology indications, initiating MRG-106 Phase II controlled clinical trial in cutaneous T-cell lymphoma in 2018, initiating the MRG-201 Phase IIa trial in cutaneous fibrosis in the first half of 2018, and advancing MRG-110 into clinical development in collaboration with Servier in the first half of 2018.

The entire miRagen team is energized by our early clinical results and is committed to delivering on our mission of developing innovative therapies for those patients in need of new treatment. With that, I will turn the call over to Jason Leverone, our Chief Financial Officer, to summarize the financial results for the quarter. Jason?

Thanks, Bill. I appreciate the opportunity to update everyone on our financial results for the third quarter of 2017. We ended the quarter with approximately $42.8 million in cash and cash equivalents compared to $22.1 million as of December 31, 2016. Our total net cash used in operations was approximately $20.9 million for the first 9 months of 2017. Based on our current cash position, we believe that our current resources, together with amounts funded under our collaboration, will be sufficient to fund our planned operations through the end of 2018.

Turning to the income statement. We recognized $1.6 million in total revenue during the third quarter of 2017. This compares to $0.9 million recognized during the third quarter of 2016. The increase in revenue was primarily due to an increase in research and development activity, under our collaboration with Servier, as we prepare to advance MRG-110 into 2 clinical trials with Servier in 2018.

Moving now to operating expenses. Research and development expenses increased to $5 million for the third quarter of 2017 from $3 million during the third quarter of 2016. The increase in research and development expenses was due primarily to increased personnel cost, as we added to our research and development team. We also incurred higher clinical trial and related manufacturing costs to support our expanding development stage programs during the third quarter of 2017.

General and administrative expenses increased to $2.5 million for the third quarter of 2017 from $2.1 million for the third quarter of 2016. The increase in G&A expenses was due primarily to increases in consulting, board compensation and professional fees related to our expanded operations since becoming a public company in February 2017, as well as higher share-based compensation charges.

These increases were partially offset by a decrease in merger-related legal expenses as compared to the third quarter of 2016. This brings our third quarter 2017 net loss attributable to common stockholders to $5.8 million compared to $4.2 million for the third quarter of 2016. With that, I will ask the operator to open the call for questions. Operator?

(Operator Instructions) And we'll go first to Liana Moussatos with Wedbush Securities.

Congratulations on your progress. When are we going to see an ASH that was different than what we saw at the last interim look? And to Jason, with the increasing activity with the Servier, with MRG-110, what kind of revenues would we expect between now and year-end, and then in 2018?

Thanks Liana, the upcoming presentation of the American Society Hematology will include additional durability data on patients that maintained treatment with MRG-106 in the study. We'll also be looking at some new patients that have been dosed and we'll likely be looking at the various routes of administration that we're pursuing as part of determining the path forward in the Phase II clinical trial.

In Phase II, will it be either subcutaneous or intravenous? Or would there be more than one dosing administration?

So the -- we are really going to be data driven by the route of administration that's chosen the -- there is a balance of whether we see differences in efficacy via route of administration as well as considerations around patient convenience.

So under the current protocol, we can evaluate a variety of different routes of administration, subcutaneous, IV infusion over a 2 hour period, or IV push administration over 1 to 2 minutes. We believe that from a patient convenience viewpoint, as you know, we do -- loading dose on day 1, 3 and 5. We then do maintenance dosing thereafter.

The notion would be that we would use the most efficacious route of administration during the loading dose, and then the -- both most efficacious route of administration during maintenance, but also to optimize convenience for a patient. So we are able to assess all of those routes of administration and this was one of the key parts of continuing the trial, to look at those different amount -- routes of administration as well.

Okay. And then for Jason, what kind of revenues can we expect from Servier this year and next year?

Thanks, Liana. So we recognized $1.5 million -- $1.6 million in revenue this quarter, that was significantly all from Servier and our collaboration, their amounts reimbursable to us. That was up significantly from prior quarter, sort of, as we prepare and do CMC activities to set ourselves ready to go into the clinic next year with Servier.

So I would expect that $1.5 million number to be sort of the standard going forward for the next few quarters next year, in terms of amounts reimbursable to us under Servier. We also expect that we would earn -- begin to earn development milestones under our collaboration agreement and would expect to begin to recognize those as revenue next year as well.

So the $1.6 million is a base? And that might increase as the development of MRG-110 continues?

That's correct.

(Operator Instructions) And Liana, please go ahead.

Okay. I can't stop asking questions. For 201, you're doing a lot to establish the foothold in cutaneous fibrosis. What are your thoughts on expansion and timing for things like IPF since you have the good data with the inhalation formulation? And maybe something like AMD for the eye?

Thanks, Liana. So the data from the cutaneous studies really set the stage for us. The ability to affect the expression of a broad range of genes that are involved in fibrogenesis, really provides that mechanistic proof of concept, that independent of the type of fibrosis, we know that the agent is able to regulate fibrogenesis in man.

So our intent moving forward is really to push into the keloid trial so that we can establish the relevance of the compound in a pathologic, fibrotic state that we can readily monitor. And the outcomes from the Phase I, that show that we are able to -- in cutaneous wounds, that we are able to reduce the scar tissue accumulation, while not affecting normal wound healing, really has very significant implications from a general scarring viewpoint.

So again, true to our foothold strategy, the keloids will be the initiation, but our hope is that in cutaneous manifestations of pathologic fibrosis and general fibrosis and scarring, that we would be able to expand that forward in dermatological indications.

For IPF, which is another area of high interest to the company, we're -- we will continue to do some additional formulation work as well as assessment of additional molecules, in this area to really settle on a final clinical candidate that we would carry forward. So we would expect that we'll offer additional guidance on that, moving forward, as we move into 2018.

I guess, the last thing is that the -- in terms of MRG-201 is that we've done a lot of preclinical studies over the course of the last several months, that really help us to understand the distribution and potential for pharmacodynamics in the eye. As you know, there are many pathologic fibrotic conditions, ocular conditions, where there is high unmet need.

The literature suggests that these all involve miR-29 and we are really establishing, with various routes of administration, the cells that we can access with the drug candidate as well as really determining the indication we'd like to move forward. Again, as things develop and the data drives us in the appropriate direction, we'll be offering guidance on the expansion indications for MRG-201 and other microRNA-29 memetics.

Okay, and you mentioned, just now, additional molecules and additional formulation work for IPF, and guidance later in 2018. What do you mean by additional molecules?

So we have been looking at some additional chemical modifications to the MRG-201 molecule that really, we hope, will lead to enhancements in both the lifetime of activity and potentially affect, both the dose and the frequency of administration that would be required. But we want to have some comparative free clinical studies completed so that we make the best choice on the molecule that we would move forward into clinical examination in the setting of IPF.

(Operator Instructions) And with no further questions at this time, we'll turn the program back over to the management team for concluding remarks. Gentlemen?

Thank you. This is Bill Marshall. Thank you for your time today and for continuing to track our progress. The excitement at MiRagen continues to build as we see the consistent results in safety and initial efficacy measures in the third quarter.

We believe that our foretold clinical development strategy is working as designed to derisk our product candidate and provide important insights to help guide Phase II clinical trial designs and expanded indication trials. We believe our deep expertise in microRNA biology and drug development, provides a strong foundation to develop product candidates to treat the broad range of diseases in which microRNA dysregulation is implicated, enabling the potential creation of sustained value for patients and shareholders.

We look forward to keeping you informed as we advance our product candidates in the months ahead and move into later stage trials in the coming year. We also look forward to seeing many of you on the road as we attend the Anti-Fibrotic Drug Development, Stifel, Jefferies, Piper Jaffray, Evercore and American Society for Hematology Conferences this quarter. In the meantime, please reach out to us if you have additional questions. Thank you, and have a great afternoon.

And ladies and gentlemen, once again, that does conclude today's conference. Again, I'd like to thank everyone for joining us today.