Viridian Therapeutics Inc (VRDN) 2018 Q1 法說會逐字稿

Good afternoon, everyone, and welcome to the miRagen Therapeutics First Quarter 2018 Conference Call. (Operator Instructions) And as a reminder, today's call is being recorded.

And now I'd like to turn the conference over to Luke Heagle from W2O Pure. 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 in 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 corporate update call for the first quarter 2018. We had a strong start to the year with the initiation of 2 clinical trials, introduction of new preclinical stage ophthalmology programs and completion of a financing that helps fund the company into early 2020.

We continue to advance, derisk and build confidence in our pipeline of high-potential RNA-targeted therapies, making miRagen uniquely positioned to bring RNA-targeted therapies to patients in need. First, we recently initiated 2 Phase I clinical trials for MRG-110 in collaboration with our partner, Servier. This represents an important part of our strategy to not only develop product candidates on our own, but to collaboratively expand the potential applications of our platform with partners who can bring valuable expertise and resources. We also unveiled a new preclinical program evaluating mimics of the microRNA-183/96/182 cluster, which has been shown to play an important role in the establishment and maintenance of neurosensory cells, including photoreceptors and hair cells, which are associated with hearing.

Last week, at the 2018 Association for Research in Vision and Ophthalmology, or ARVO, Annual Meeting, we presented preclinical data for mimics of the microRNA-183 cluster for potential use in retinal degeneration, a pathological condition that impacts thousands of patients annually and is characterized by gradual loss of photoreceptors and eventual blindness. Also at ARVO, we presented data from our preclinical work advancing MRG-201, a microRNA-29 mimic, as a therapeutic candidate with the potential to treat pathological fibrotic conditions of the eye.

These programs highlight our commitment to leverage the unique power of microRNA biology in biological process control to potentially address areas of large, unmet medical need, such as vision loss. Our most advanced program exploring cobomarsen, or MRG-106, a microRNA-155 inhibitor as a therapeutic strategy to treat hematological malignancies, continues to advance. We remain on track to initiate the SOLAR Phase II trial, evaluating cobomarsen in patients with mycosis fungoides, which is the most common form of cutaneous T-cell lymphoma, or CTCL, in the second half of 2018. As a reminder, we anticipate the trial will evaluate the safety and efficacy of 300 milligram of cobomarsen given by intravenous infusion versus an active control. We expect to enroll approximately 65 patients per treatment group.

Based on discussions with the FDA, we believe a successful outcome for the primary endpoint, overall response rate of 50% or greater improvement in the severity of a patient's skin disease over the patients' entire body maintained for at least 4 consecutive months ORR 4 with no evidence of disease progression in the blood, lymph nodes or viscera, could potentially allow us to apply for accelerated approval of cobomarsen in the United States.

Yesterday, we released additional clinical results from our ongoing Phase I study in CTCL, highlighting observations of durable improvements in patients' quality of life. We plan to release additional results at an upcoming medical meeting this quarter. We are also evaluating cobomarsen in 3 other indications within the current Phase I trial: adult T-cell leukemia/lymphoma, diffuse large B-cell lymphoma and chronic lymphocytic leukemia. We expect to release interim Phase I data in at least one of these expansion indications in the second half of 2018.

Turning to MRG-201. In the first half of 2018, we intend to initiate a double-blinded, randomized Phase II clinical trial to evaluate MRG-201 in subjects with a predisposition for keloid formation. We are also investigating MRG-201 in preclinical studies for the potential treatment of ocular and lung fibrosis.

Recently at ARVO, we presented preclinical data suggesting that MRG-201 may function as a potential therapeutic agent to inhibit corneal or retinal fibrosis. The preclinical study showed that delivery of MRG-201, through various routes of administration, resulted in functional uptake of the product candidate. It also demonstrated that MRG-201 reduced the expression of multiple collagens and other microRNA-29 target genes important in fibrogenesis, indicating that it may inhibit corneal and retinal fibrosis.

Patients suffering from ocular fibrosis have limited treatment options, and this data demonstrates the possible utility of MRG-201 to provide therapeutic benefit to these patients in need. We are also evaluating miR-29 mimics for the treatment of lung fibrosis and expect to release preclinical in vivo data later this year.

Now turning to MRG-110, an inhibitor of microRNA-92 and the lead product candidate under our collaboration with Servier. I'm happy to note that MRG-110 is our third product candidate to enter human clinical trials. In March 2018, Servier initiated a Phase I clinical trial of MRG-110 intended to support additional clinical studies that could allow for its eventual use in the potential treatment of heart failure. In that trial, MRG-110 is being evaluated for safety and tolerability in a systemic dosing protocol. The trial is expected to enroll 49 male subjects aged 18 to 45. Under the terms of our agreement with Servier, miRagen earned a milestone of EUR 3 million for the dosing of the first patient in the Phase I clinical trial.

In preclinical models, MRG-110 accelerated the formation of new blood vessels, which resulted in improved vascularization and improved functional outcomes. We also observed an acceleration in time to healing of wounds that received MRG-110 injections compared to controls treated with placebo or standard of care. Based on these findings, the collaboration decided to evaluate MRG-110 for its potential use in indications such as surgical incisions, severe lacerations or chronic wounds.

In May, we initiated a second Phase I trial designed to evaluate the safety, tolerability and pharmacokinetics of MRG-110 after intradermal injection in healthy volunteers receiving induced wounds through biopsy. The study is also intended to measure a variety of exploratory pharmacodynamic endpoints, such as molecular biomarker changes, blood flow and healing rate. The biomarker information for MRG-110 obtained in this clinical trial is also intended to support clinical studies for the treatment of heart failure.

We believe there is a significant need for therapies to treat a variety of wounds that are difficult to care for because of insufficient vascularization. The delay or lack of healing in these patients can result in significant morbidities, including infection, herniation and even death. We recently presented some of the new preclinical data at the Wound Healing Society Annual Meeting, showing the potential of MRG-110 to accelerate wound healing in healthy skin and in pathological conditions.

In summary, we believe we made important progress advancing our pipeline of microRNA therapeutic candidates while continuing to maintain organizational focus on our lead programs. We look forward to advancing both cobomarsen and MRG-201 into Phase II clinical trials later this year and further advancing our other product candidates during 2018.

We're excited about the opportunities that our RNA-focused discovery and development platform could provide. We believe that RNA-target therapies represent an important therapeutic approach in a variety of medical conditions with high unmet need, and miRagen is well positioned to be a leader in the field on several fronts.

With that, I will now turn the call over to Jason Leverone, our Chief Financial Officer, to review the financial results we reported earlier today. Jason?

Thank you, Bill, and good afternoon, everyone. Appreciate the opportunity to provide our first quarter 2018 financial results.

As Bill mentioned, we had a strong start to the year. We made important advances in the development of MRG-110 with our partner, Servier, which led to miRagen earning its first development milestone under our agreement with Servier during the quarter. Servier has been an important partner to miRagen for a number of years, and we look forward to developing MRG-110, now our third clinical stage product candidate, together with Servier.

Turning to our first quarter 2018 financials. We ended the quarter with approximately $78.1 million in cash and cash equivalents, including the $37.9 million in net proceeds from our public offering in February. Net cash used in operations for the quarter was $7.4 million compared to $8.2 million for the first quarter of 2017. Based on our current cash position, we believe our current resources will be sufficient to fund our operations into early 2020.

Turning to the income statement. We recognized $4.8 million in total revenue during the quarter. This compared to $0.5 million during the first quarter of 2017. The increase in revenue was due primarily to the $3.7 million milestone we earned and recognized as revenue under our agreement with Servier. We also recognized additional revenue related to an increase in research and development activity reimbursable to us via Servier as we advanced MRG-110 into clinical development during the quarter.

Overall, research and development expenses for the quarter increased to $6.4 million. This compared to $4.1 million for the first quarter of 2017. The increase in R&D expenses was due primarily to higher personnel costs as we added to our research and development team over the last 12 months. We also incurred higher technology license fees and clinical development expenses to support our now 3 clinical stage programs.

General and administrative expenses were $3.0 million for the quarter. This compare to $3.3 million for the first quarter of 2017. The decrease in G&A expenses was due primarily to lower professional fees in 2018 when compared to higher merger-related charges we incurred during the first quarter of 2017. This decrease was partially offset by higher personnel-related costs as we expanded our general and administrative team over the last 12 months.

With that, I will ask the operator to open the call for questions. Operator?

(Operator Instructions) And we'll go first to Jonathan Miller at Evercore ISI.

I wanted to ask a little bit about MRG-201 and the fibrosis trials that you're planning on starting. For the keloid patients, there's been some confusion over the past few years over how many patients there are exactly, where they are. What can you tell us about your expectations for enrollment there, how many centers you'll need and what the time line is on that trial? Secondly, for MRG-201. In the ocular fibrosis setting, how do you expect the formulation to be different? And how should we think about the effects of that formulation difference on the development pathway?

Great. Thanks for the questions. So on the first front, in the Phase II trial in keloids, we spent a lot of time in conversations with key opinion leaders and folks that treat patients with keloids. We've been able to identify several centers around the country that have databases with relatively large numbers of patients in them, and we will initiate those sites in the recruitment of the patients. For this study, we've designed a very powerful study where we're looking at intrapatient controlled analysis of biopsies in keloid formers. So because we can do powering and the sort of usual work on pretreatment, posttreatment analysis and do it within patients, where we're comparing placebo versus treatment, we are able to do a trial and power it sufficiently to lead to the outcomes we desire to see with a relatively small number of patients. And we feel at this point, with the centers that we have onboard, that we are well positioned to be able to recruit this without a problem. In terms of the second question on ocular fibrosis, what we reported at ARVO and what we've been looking at rather extensively is the effects of MRG-201 on fibrosis that occurs both in the retina as well as the cornea. And to that end, we've explored both intravitreal injection focused in the treatment of retinal conditions and subconjunctival in the treatment of corneal conditions. And what we have done to date is the preclinical studies have all been fairly simple formulations of MRG-201, again, with the intravitreal administration and the subconjunctival administration. As I mentioned, we do see good biodistribution, biomarker changes that are consistent with this potentially having a clinical benefit. The third thing that we looked at was conditions where there is some sort of a break in the barrier to the eye. So -- and the conditions we were looking at, this was an alkaline burn, which then compromises the intact eye. And in that case, what we were able to show quite nicely is that even topical administration of the compound leads to distribution and activity of the compound in the eye. So in that case, if we can identify certain indications where we would have a commensurate either ulceration or cut in the eye or traumatic damage to the eye, we would be working towards looking at some formulations that may increase the viscosity or the wettability of the compound to keep it in place in the eye. But no sort of major differences in formulation. Obviously, dose and dose form and concentration would likely be different in applications in the eye versus other potential applications for MRG-201.

Great. For the preclinical programs, sticking with the eye and progressive blindness there, how do you view the overlap with other competitor programs that are also looking at modulations of progressive blindness disorders? How broad is the application of this miR family?

So -- and thanks, Jonathan. It's a great question. So one of the things that really attracted us to the -- this particular set of microRNAs is that there's a lot of genetic correlations here. So both from animal models where deletion of certain microRNAs will lead to certain phenotypes, both in hearing loss and vision loss. There also are examples in human genetics that point to this -- in this direction. And as opposed to approaches that are really looking at either very specific mutations, in particular genes that are inducers of issues and vision loss, but what we believe with this is the power of microRNA biology, in modulating a pathway that's found stream and important in the maintenance and generation of a regime of genes important in vision loss, will likely give us broader application of this particular set of microRNAs than some of the other approaches. And we're also interested in the potential of complementarity between these approaches to really lead to greater benefit to patients.

And we'll go next to Liana Moussatos with Wedbush.

In the second half, you mentioned having data from one of the -- at least one of the expansion indications. What do you hope to see there in order to move forward in at least one? And which indication do you think is most likely to be the one that you report on?

Thanks, Liana, great questions again. And what we anticipate is, again, reporting out we've treated patients with each of the conditions. What we've been focused on in addition to continuing to build our safety database, the patients in these expansion indications are being treated with 600-milligram IV infusions. So we'll, obviously, build on the safety database in additional patient populations. At the same time, we're looking for alterations in blood counts. We're looking for alterations in lymph. We're looking for general changes in sort of the progression of the natural history of the disease based on the patient's history. And based on these observations, the treatments -- the patients that we're treating now are certainly in diseases that are more progressive. So being able to then see alterations in the trajectory of the disease progression are going to be interesting observations as we move forward. In terms of stratifying the indications, we have been -- we selected these 3 indications based on sort of the probabilities that microRNA-155 would be elevated. There's good reason to believe that in any of the indications, there will likely be miR-155 elevation. We've done preclinical studies in any of those diseases as well and shown promising preclinical data that supports the advancement. The -- we're intrigued by the opportunity in ATLL because we've studied -- this is a lymphoma/leukemia that's induced by HTLV-1, and this is a human lymphotropic virus. That virus actually co-opts the native microRNA-155 in your cells to advance its own life cycle. And what happens is the effects on resistance apoptosis, DNA repair mechanisms and other proliferative signaling leads to significant effects on progression of cancers as well. So we're particularly interested in that. It's a very difficult-to-treat condition. There really are no good treatments available for it. But we are intensely focused on all 3 of the applications. And like I said in the second half, we'll begin to report results that would be relevant in terms of altering blood cell profiles, lymph characteristics and looking at this relative to the natural history of the disease.

(Operator Instructions) And we'll go next to Eun Yang at Jefferies.

This is Suji calling in for Eun. I have a question about cobomarsen. Just wondering if the accelerated approval would be based on -- just on ORR 4 or any other endpoints? And my other question is for 183 cluster. Is this something that you have to give chronically? Or is this just onetime treatment?

Thanks, Suji, great questions. So on the cobomarsen front, the...

Primary.

The primary endpoint will be ORR 4. Based on our discussions with the FDA in our recent meeting, we received guidance from them that ORR 4 on its own as a primary endpoint, obviously, based on review of the results by the agency, could result in accelerated approval based on that primary endpoint alone. We will also be looking at additional endpoints. Another key secondary endpoint will be progression-free survival. And the advice that we've gotten to date has been that the primary endpoint alone could result in the accelerated approval. If the progression-free survival endpoint would read out at the same time as ORR 4, we believe that, that would then -- could then result in full approval on an accelerated basis. And we will also be looking at patient-reported outcomes. These will be sort of tools that the patient reports out on itching and pain in the tumors, and those are both important secondary and potential exploratory endpoints as we continue to move the compound forward. Yesterday, we released the data on the first analysis from the Phase I that does show a correlation between reductions in Skindex-29, which is a patient-reported outcome of pruritus and pain and reductions in tumor severity and mSWAT scores. So the primary endpoint, allowing for accelerated approval, would be ORR 4. Secondary endpoint of PFS, progression-free survival, would then allow for full approval. And then 183, so I would say that at this point, we don't have a sufficient amount of data to understand if this could potentially be sort of a signal administration regime. The data that we have so far has been in a model system where you really do have a limited amount of time. These are mutations in a receptor in a model system. The animals are weaned in the dark. When they move into the light, there's a rapid deterioration in vision. So what we saw was with dosing, we were able to blunt the reduction in visual acuity. We're going to conduct some additional experiments. But based on the distribution and the -- the eye, it turns out, is a pretty interesting compartment for nucleic acid therapeutics because there's a relatively low nucleus content, which is one mechanism by which they get degraded. The residence time and the amount of product candidate that we see in the eye has a pretty long duration. So if multiple injections would be necessary, we believe that, that could occur on a relatively infrequent basis. But today, I can't really fully answer the question of whether or not an acute treatment would be sufficient.

We'll go next to Madhu Kumar of B. Riley FBR.

So really 2 sets of questions. First one relates to SOLAR trial. So if you could remind us what will be the comparator drug and basically how that does on metrics like ORR 4 and progression-free survival? And then secondly, thinking about cobomarsen and the Phase I trial in CTCL and mycosis fungoides, how does it perform in terms of when you get the start of therapeutic response? And how does that kind of response kinetics inform the timing of the SOLAR trial, in terms of how long you would treat and you expect to see ORR 4 occurring?

Great. Thanks, Madhu. Great questions, as usual. So the -- so let me address the SOLAR trial and the comparator agents. So what we discussed with the FDA was 3 potential comparator agents: methotrexate, bexarotene or vorinostat. We really raised these 3 as the active controls based on the fact that they've all recently been analyzed in controlled studies. What we know from the reports in those controlled studies for bexarotene and methotrexate, the reported outcomes there were objective ORR 4 of somewhere between 12% and 14%, I believe, 12% to 15%. In the case of vorinostat, there wasn't an ORR 4 reported. It was reported as ORR. So not with the 4-month durability proviso on it. The observations were there. We're about a 7% ORR. And if we think about the secondary endpoint, progression-free survival, the observation from previous clinical trials were that bexarotene and methotrexate were about 3.4 months, and vorinostat was about 3.1 months. So we really modeled the powering of the SOLAR trial based on those 3 potential agents. We haven't guided yet on selection, but we'll do so soon as we're really zoning in on what the comparator will be. But it will be one of those 3, and it will be a single agent controlled comparison based on guidance from the FDA. The second question around the cobomarsen Phase I and sort of the response kinetics. So we've seen responses that onset as soon as 17 days after the initiation of treatment. We've seen other responses that don't really fully appear to gain traction until later in the course of treatment. There, the best correlation that we can draw is between the severity of the mSWAT score at the initiation of treatment has a factor on the length of time on product candidate prior to seeing responsiveness. But we tend to see responses over the course of several months. The longer that we keep patients on drug, we see a deepening response, generally, I would say. This really has led us then in the SOLAR trial to stipulate a specific intent to treat time, which would be 6 months, and we would then follow the parent -- the patients over this period of time. As you know, ORR 4's definition is that as we monitor the patients, if they're able to achieve a 50% reduction in the skin -- the mSWAT score, once they achieve that, we start the clock going. And as long as they can maintain that response while on drug for 4 months, then that response counts as a positive in the analysis. So there's a fair amount of heterogeneity in the time to response, and like I said, it really appears to be correlated with severity of mSWAT score at initiation of treatment.

It looks like we have no additional questions at this time. Dr. Marshall, I'll turn things back over to you, sir.

Great. Well, thank you very much for your time today and for continuing to track our progress. We're proud of our achievements thus far this year, and we will continue to work diligently towards outcomes that could benefit patients in the future. We look forward to keeping you informed as we advance our pipeline in the year ahead, and please feel free to reach out to us if you have any 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.