Voyager Therapeutics Inc (VYGR) 2017 Q1 法說會逐字稿

Welcome to the Voyager Therapeutics First Quarter 2017 Financial and Operating Results Conference Call.

(Operator Instructions)

Please be advised that this call is being recorded at the company's request.

At this time, I'd like to turn it over to Matt Osborne, Voyager's Head of Investor Relations and Corporate Communications.

Welcome to the conference call. This afternoon, we issued a press release which outlines the results for the first quarter of 2017, as well as corporate highlights. The release is available at voagertherapuetics.com.

Today on our call, Dr. Steve Paul, Voyager's President and CEO, will briefly discuss the recent corporate highlights. Dr. Bernard Ravina, Voyager's Chief Medical Officer will review the pipeline program highlights. Jane Henderson, Voyager's Chief Financial Officer will review the first quarter financials, and then we will open up the call for your questions.

Before we begin, just a reminder that the estimates in other forward looking statements included in this call represent this company's view as of today, May 9th, 2017. Voyager disclaims any obligation to update these statements to reflect future events or circumstances. Please refer to today's earning's release as well as Voyager's filings with the FCC for information concerning risk factors that could cause actual results to differ materially from those expresses or implied by such statements. With that, I'll pass the call over to Steve.

Voyager continues to execute on all aspects of our business, including research and development, as well as production and manufacturing, which positions us nicely for both the near term and long term. As Bernard will briefly discuss, we recently, and for the first time, presented our interim phase 1 B data, or VYADC01 for advanced Parkinson's Disease at major medical conferences attended by both neurologists and neurosurgeons, which represent our target position audience's for this new therapy.

The new data presented at the American Academy of Neurology meeting here in Boston, showed that the improvement in motor symptoms with VYADC01 was dose dependent and translated nicely into improvements in patient's quality of life, which are important measures of therapeutic benefit and the value of this one and done treatment for advanced Parkinson's disease.

We believe these results further indicate that the motor symptom improvements that we are seeing would VYADC01 are real, robust and reproducible. Now, our rich pipeline of potential gene therapy medicines continues to advance, as well. And through careful optimization of both Vector design and delivery, we remain on track to deliver three IND's over the next 24 months. During the first quarter, we were pleased to select a lead clinical candidate, VY-SOD-101 for a monogenic form of ALS.

And soon, we plan to announce lead clinical candidates for our Huntington's disease and Friedreich's Ataxia Programs. I want to emphasize the quality of these clinical candidates, which have been selected after very thorough drugs, or in our case, vector delivery and discovery optimization effort. Let me also emphasize that our planned advancement of VYADC01 into late stage clinical trials, in the advancement of our pre-clinical programs towards the clinic, require the capability of manufacturing GMP quality vector at scale.

And we are pleased that to date, our baculovirus, SF9 self reduction, and GMP manufacturing process, have resulted in both high quality and high yield of our vector campaigns. We are very excited with the progress we've made this year on our multiple programs and remains committed to investing in our core competencies, our people, our pipeline, our vector engineering platform, and our manufacturing capabilities. With that, I'll turn it over to Bernard who can discuss further the progress with our Parkinson's disease program.

Thank you, Steve and good evening everyone. As Steve mentioned, the interim phase 1 B results were selected for oral presentation at the American Academy of Neurology meeting at Boston, and at the American Association of Neurological Surgeons meeting in Los Angeles.

Feedback from attendees at these conferences confirm our interpretation of our interim phase 1 B data that has targeted one time delivery of VYADC01 was well tolerated, increased ADC enzyme activity in the putamen and allowed patients to lower their doses of orally with dopa while also providing durable and clinically meaningful improvements in motor symptoms, and quality of life. With the carrier that these data stem from an open label phase one B trial, the attendees were uniformly encouraged by these results.

As you know, we fully intend to explore the dose range for this program and are in the final stages of dose and delivery optimization. Having successfully completed dosing and all [provocations] in cohort three late last year, we will soon begin treating patients with a posterior trajectory that aligns more with the anatomical structure of the putamen, which could result in higher total volume of coverage of the putamen and also a higher total dose of VYADC01. Additional clinical trial sites have been activated and will soon begin dosing patients with this approach.

Preliminary delivery data from this approach along with data from cohorts one through three in the third quarter of this year will provide us with sufficient information to design and begin implementing our double-blind, placebo-controlled trial later this year. As a reminder, the initial data we generated from the interim results from cohort two, from the phase one B trial, are well within the goals we've set out to achieve and have already yielded clinically meaningful results.

Replicating these results in cohort three would be further validation of the approach. We're excited to continue to optimize both delivery and dose. Our preclinical programs also continue to advance with our lead candidate, the ALS program targeting the SOD mutation approaching the clinic. With a single intrathecal injection, VY-SOD-101 has the potential to thoroughly reduce the levels of toxic, mutant SOD protein in the spinal cord and slow the progression of ALS.

Preclinical data and large mammals demonstrated that a single, IP administration resulted in robust knockdown of SOD in motor neurons. Slowing the progression of this fatal disease for the hundreds of patients in the US with this mutation would be a dramatic advancement.

For our Huntington's disease and Friedreich's ataxia programs, which are not far behind our ALS program, we are making good progress on selecting lead candidates. In these two programs, we aim to suppress the expression of the toxic mutant [Huntington] and replace missing [frataxin] respectively, with the goal of slowing or halting the progression of these devastating neurological diseases with a onetime treatment.

So, we are very pleased with the progress of the lead Parkinson's program, with further data expected during the third quarter of this year. And with our progress in advancing our pipeline with lead clinical candidates selections in [IED's] fast approaching. I will know pass the call over to Jane, who can walk you through our financials in more detail.

Thank you, Bernard. I'll spend the next few moments reviewing the financials and guidance before moving to Q&A. Voyager reported a GAAP net loss of $16.6 million or $0.65 per share for the first quarter ended March 31, 2017; compared to a GAAP net loss of $7.2 million or $0.29 per share for the same period in 2016.

Collaboration revenues of $1.5 million, for the first quarter of 2017 compared to collaboration revenues of $4.8 million for the first quarter of 2016. Collaboration revenues reflect Sanofi Genzyme recognized payments for R&D services and primarily due to ongoing reassessments of performance periods for individual programs under the collaboration.

As well as previously announced [seat] prioritized development of VY-SMN-101 for spinal muscular atrophy. R&D expenses of $14.1 million for the first quarter, compared to $8.7 million for same period in 2016. The increase in R&D expenses year over year for the quarter were largely due to expenditures associated with the development of Voyager's pipeline and increased personnel and facility cost to support the advancement of the pipeline programs.

G&A expenses of $4.9 million for the first quarter of this year compared to $3.6 million for the same period in 2016. The increase in G&A expenses was primarily due to personnel cost to support Voyager's growth and facility cost. Voyager ended the quarter with total cash, cash equivalence and marketable debt securities of $157.7 million and the company has no long term debt.

In terms of guidance, we continue to expect to end 2017 with total cash, cash equivalence, and marketable debt securities of approximately $90 million to $100 million. We continue to project that our existing cash, cash equivalence and marketable securities will be sufficient to fund operating expenses and Cap Expenditures into 2019.

As a reminder, the guidance for year end 2017 cash, the projections for cash runway sufficient into 2019 does not assume that Sanofi Genzyme opts in for the ex-U.S. rights to the Parkinson's program sometime during this year. For this particular program, as a reminder, there is no up-front cash payment from Sanofi Genzyme should they opt in for ex-U.S. rights. The costs for this program are roughly shared between the two companies once they do opt in.

The cash runway into 2019 also does not include potential additional business development activities, which we remain committed to pursuing, particularly around some of our un-partnered programs and platform capabilities. With that, we would now like to open the call up for questions.

(Operator Instructions)

Phil Nadel of Cowen and Company. Your line is open.

First one, on manufacturing, it appears that it took Spark about 12 months post the end of the phase three to negotiate all the manufacturing QA and QC requirements with the FDA. Could you give us an update where you are in that process? Is that something that you've begun? Is that something that you could do in parallel with conducting the phase three in order to have a pretty definitive understanding at the time that the phase three concludes?

Yes, for the Parkinson's -- this is Steve Paul -- for the Parkinson's program, we've already had a pre-IND meeting with the FDA. A big part of that discussion was around the bridging strategy we have for GMP vector for our VY-AADC02 program. We feel very confident that the requirements for bridging are well laid out and well attainable from our perspective and so we don't anticipate any issues. We've also made great progress in producing the vector at scale under GMP conditions, and that's basically where we are right now.

And do you feel that you have a good understanding of what QA/QC assays will be necessary for the commercial--

Yes, absolutely. Yes, we've gone through that in great detail with the agency and feel we have a very, very good understanding. I just would add that while the vector requirements for our Parkinson's program are somewhat less than they are for systemic administration, we also very much like the scalability of the process that we're using.

Got it. That's (Inaudible - microphone inaccessible) and then second, on the VY-SOD-101 program, what remains to be completed before moving that into a clinical development?

So the toxicology work is underway, this is the pre IND safety testing that goes in for every drug candidate and that -- those studies are underway. We also need to make sure that we can produce that vector -- again, GMP quality vector, so we've got both toxicology work and some manufacturing process work. Again, we're feeling pretty good about where we are in those programs and so in that program and with respect to both toxicology and manufacturing.

OK, great. And then one last question from me. It sounds like from your prepared remarks, that the decision of which dose and surgery trajectory to use in the phase three trial, will be based on kind of full or long term data - intermediate to long term data from the first three cohorts of the study and then some initial data from the posterior trial. Is that correct?

And if so, how would you -- I guess, how do you assess the chances of the posterior volume and marginally larger dose introducing side effects that weren't seen at the lower -- essentially lower doses tested at the first phase -- at the first three cohorts?

Yes. Well, of course, that's why we're doing the study. We feel pretty confident that we'll find the adequate dose among the three cohorts. We're already seeing what we believe are very encouraging data from cohort two. We'll see what happens with cohort three, which as you know, is a dose about three times the dose used in cohort two. The posterior trajectory has been used before, for other surgical procedures. And so, we're pretty confident we won't see any significant issues with that.

But, of course, we're going to dose a few patients to see what we see, with respect to the clinical response to the vector. So, we're cautiously optimistic that posterior trajectory will work. But, as I've said earlier, we feel very good about where we are with respect to the top of the head trajectory that we've already, more or less, perfected we believe.

Great, thanks for taking my questions.

James Birchenough of Wells Fargo.

Yes, hi guys. And congrats on the all the progress, as well. Can you say for the posterior trajectory, what dose level you're using in that next dose cohort?

Yes. We'll go up to the same concentration that was used in cohort three. We don't believe there's any reason to go to higher concentrations. So, if anything it will be incrementally higher dose than cohort three in the ingoing trial. And as Steve said, there's experience with posterior trajectory.

And, I think people can kind of simplistically think about it -- it's just a different angle to do what we have done successfully with the top of the head or the transfrontal trajectory. So essentially, we're looking for a somewhat more efficient surgery. Potentially, with a single injection into the putamen and perhaps a little bit more coverage.

And Jim, the volume will be increased in that posterior trajectory, up to 1.8 mLs. So, about double what we're doing now in cohort two. Which, as you know, - and cohort three and, as you know, that will hopefully increase the volume coverage from the 42% that we've seen in cohort three to somewhere north of that. So, we're anticipating a simpler procedure, potentially. As well as, even better coverage. And that's the goal of that posterior trajectory study.

And Steve, at the point where you expect to start a phase three study, how many sites will have had experience with the therapy? And do you think that will be sufficient to match what you'll need in a phase three?

And so, we'll have a least four sites in the US, the ones that are participating in this posterior trajectory study, that have done the surgery. And we plan to add sites for the randomized studies. We'll go up to eight surgical sites, give or take. And we think that will be sufficient Jim to conduct the randomized trials.

And then, just following upon Phil's question on manufacturing. Can you make any general comments about cost of goods at the gene and cell therapy meeting today? There was one gene therapy manufacturer that threw cold water on the margins they were getting form their process. But, do expect to have pharmaceutical or biotech type margins? Can you, just maybe, comment in general?

I anticipate, particularly for the Parkinson's program Jim, which as you know is [intraparenchymal] in the brain, relatively small volume. Think of it as a similar volume as to the anterior chamber of the eye. Not very much. I consider that the cost of goods to be quite reasonable here. Because, we've already calculated a number of runs that we would have, you know, in a let's say a 200L Parr reactor, as being quite modest so we don't think that's going to be an issue for us at all.

I think the challenge there becomes more when you go after systemic IV administration where you're administering possibly two orders of magnitude more vector than we're administering OK? So I think we are going to be in really good shape for the Parkinson's program.

Just a final question, just on the ongoing dose cohort three -- obviously we'll get the full data in the third quarter but have there been safety interims or safety looks? And can you provide reassurance that there are no new issues that have come up with that higher concentration?

Yes Jim we'll have the read out in Q3. That will be the six month from cohort three and we'll also provide updates on cohort one and two at that point. There have been no new safety's signals and if there were something material, we would let you know.

Yes. We've been pretty encouraged Jim about the safety and as you know the actual procedure. The surgeons are getting better and the actual variability between patients in cohort three is really very minimal. Quite impressive in my view.

Great. Thanks for taking the questions.

[Christopher Morei] of Nomura Instinet. Your question please.

Thanks, I've got a few. So just to touch upon the last point that you made the variability across patients. When do you expect we are going to see the patient by patient data from whether it's across the cohorts or cohort three and the later ones?

Yes as I mentioned to Jim we'll give the update cohort three six month Q3 updates on the first two cohorts. We'll take a look when we put those data out what the best way to present it is.

Yes, yes. It's a good question --

Yes and as we've--

--is the question--

-- previous presentations we have all the -- we have error bars, whether it's confidence intervals to standard errors in everything.

So you get a good sense of the variability from that.

We'll make sure that's --

-- no but we'll make sure that the variability, you know, from the standard errors or standard error the means are apparent when we present the data.

OK. I was just thinking about concordance -- across end points for individual patients. It would be nice to see, you know, patient by patient data in terms of the various measurements. Are you planning on presenting that?

Point well taken, we'll look at what --

Yes, we could. I mean, you know, you'll see -- what I was referring to by the way was not so much variability on the clinical outcome measures. I was talking more about variability on delivery. But both of those are reasonable things to discuss.

And we'll point out the overall point that you're getting at is what the internal consistency of the data and overall that's been very good. They are not presented patient by patient but you see very consistent trends in all the end points across the two cohorts so far and across time.

OK, well that's helpful. And maybe just one on manufacturing to touch back on that earlier question. When you think of going onto the phase three are you looking on a 12 week sort of bridging type scenario going from this phase one batch to new bathes? Or how should we think about that study?

And secondarily, will you be able to use this next manufacturing process to help bring forward the SOD one program? And the next programs into, you know, I guess let's call it phase three studies -- the point being would you be able to do SOD one and maybe get away with one study and not have to worry about this manufacturing change again?

So just on bridging, let me be clear. So for the Parkinson's program, the bridging requirement -- this has been all established by our pre IND meeting on the new vector that we're making, won't require any clinical bridging at all. That's going to require some pre clinical assessment of the quality of the vector which we specified as I said in my response to the earlier question, that's all been laid out what that has to look like. But also a toxicology study which will be done in rats and completed and all of that will be part of that package but it won't require any clinical bridging at this point.

And similarly we hope to maintain that platform. The reason we're doing a bridging study, as you probably know, is that the material that we're currently using in the clinic was made in 293 cells using triple transient [transfection] and is made with a different process but what we need to do is show that this new process -- or the process that we're using, which involves baculovirus and Sf9 cells produces comparable vector. And that's all been laid out and discussed with the FDA.

OK, great. Thanks. And then just maybe one last one on that procedure. You know, how is the different trajectory perhaps impacting procedure times? Maybe remind us just the total procedure time for these patients. Obviously it's a little bit important given potential [CM control] phase three. And that's my last question. Thank you so much.

Thank you.

Yes, so we're screening for the posterior trajectory study now, so we'll get a better sense once we have a few cases in. And the efficiency of the surgery and reduction in time would come from the potential to just have a single cannula trajectory rather than two, that we've generally done per putamen for the transfrontal or top of the head approach. So we will -- as soon as we have a few cases, we will update you on that.

Yes. So the new trajectory -- just to be clear, aligns the injection trajectory with the anatomy of the putamen. And as Bernard said, theoretically could allow just a single pass, which will cut down the surgical time considerably but also give us the opportunity of filling up even a greater amount of the putamen.

OK, great. And sorry, what's that total procedure time that you'd anticipate or estimate?

Well, we don't know yet. We really want to get a few procedures under our belt and that will really help us know. And of course, these procedure times -- as you probably know, they start out a little bit on the long side as the surgeons are learning and just starting and then they get shorter and shorter as time goes on. Same thing, of course, happened with deep brain stimulation or DBS.

Got it. OK, thank you.

Thank you.

(Operator Instructions)

Katherine Breedis of Stifel.

Great. Thank you for taking my questions. With the data read outs for cohort three and the posterior delivery study coming in the third quarter, are you still anticipating that you'll be on track to potentially start a pivotal study in the fourth quarter of this year?

Yes we are. Yes. So the key information we need -- concentration, we'll get from cohort three and then a few cases of the posterior delivery. Again, it's not that different a surgery, it's simply a different angle of entry to do what we've done in the first study with 15 subjects, 30 putamens and so we'll have the data about that trajectory, how much volume we could infuse and the increased concentration from cohort three and we believe that'll be sufficient to select a dose. And the rest of the elements of the design are things that are actively under discussion right now.

Yes. Yes.

A lot of work, Katherine, is already ongoing and so it's just a matter of kind of plugging in the trajectory and dose and we're ready to go at that point.

That's great. I understand that the posterior delivery technique is used often in epilepsy surgeries. So does that help in terms of the surgeons at Emery and Ohio State coming up to speed more quickly? And do you have any anecdotal comments on the patient recruitment efforts at those centers for the posterior delivery study?

You're absolutely right that we've selected sites that are familiar with that trajectory, especially Emery and the Ohio site has done a tremendous number of infusions for different purposes, including brain tumors, so they're very experienced. We're really just getting that posterior delivery study going. We're screening right now, so we'll have further information when we have that Q3 readout and be able to comment further about times and how the surgeries went overall.

Excellent. Thank you for taking my questions.

Thank you.

If there are no questions in queue, I'd like to turn the call back over to Dr. Paul for any closing remarks.

Thank you. That concludes our call.

We want to thank everybody for attending and for your questions this evening. We look forward to updating you on our progress in the near future. Thank you so much.

Thank you, sir, and thank you, ladies and gentlemen. That does conclude your program. You may disconnect your lines at this time. Have a wonderful day.