WAVE Life Sciences Ltd (WVE) 2021 Q1 法說會逐字稿

Good morning, and welcome to the Wave Life Sciences First Quarter 2021 Financial Results Conference Call. (Operator Instructions) As a reminder, this call is being recorded and webcast.

I will now turn the call over to Kate Rausch, Head of Investor Relations at Wave Life Sciences. Please go ahead.

Thank you, operator. Good morning, and thank you for joining us today to discuss our recent business progress and review Wave's first quarter 2021 operating results. On the call with me today is Dr. Paul Bolno, Wave's President and Chief Executive Officer; Dr. Mike Panzara, Chief Medical Officer, Head of Therapeutics, Discovery and Development; and Kyle Moran, Chief Financial Officer.

This morning, we issued a news release detailing our first quarter financial results and provided a business update. This news release and a slide presentation to accompany this webcast are available in the Investors section of our website, www.wavelifesciences.com.

Before we begin, I would like to remind you that discussions during this conference call will include forward-looking statements. These statements are subject to a number of risks and uncertainties that could cause our actual results to differ materially from those described in the forward-looking statements. The factors that could cause actual results to differ are discussed in the press release issued today and in our SEC filings, including our annual report on Form 10-K for the year ended December 31, 2020. We undertake no obligation to update or revise any forward-looking statements for any reason.

I'd now like to turn the call over to Paul. Paul?

Thanks, Kate. Good morning to everyone on the call. Thank you for joining us. During the call today, I will provide some opening remarks, after which Mike will give an update on our clinical trials and Kyle will briefly review our financials.

It has been an incredibly productive start to the year for Wave as we advanced 3 cross-generation stereopure oligonucleotides into clinical development. We have formally initiated clinical trials for WVE-004, our C9orf72 candidate in ALS and FTD; and WVE-003, our SNP3 candidate in Huntington's disease. We've also received important regulatory approvals towards initiating our third PN chemistry program targeting exon 53 in DMD, WVE-N531. These clinical trials are designed to enable rapid proof-of-concept using biomarker-driven adaptive designs and are the first investigative candidates designed with our novel PN backbone chemistry modification. Next year, we expect that data from these clinical trials will enable decision-making about next steps for these programs as well as provide insight into PN chemistry across different modalities, tissue types and targets.

We've also made substantial progress with our endogenous ADAR editing capability, which we believe is the most advanced in its class. We have generated a breadth of RNA editing data, demonstrating activity across in vivo and in vitro systems, including in vivo editing in the central nervous system. Much of this data is being presented in an oral presentation tomorrow, May 14, at the ASGCT Annual Meeting. Our first ADAR editing program for alpha-1 antitrypsin disease has generated promising initial results, and we are on track to share in vivo data this quarter.

Our PRISM platform is unique and differentiated from others developing RNA therapeutics. At our foundation, we set out to embrace, rather than ignore, the reality and importance of stereochemistry that exists in each and every oligonucleotide. In choosing the control for the 3-dimensional orientations of backbone linkages and advanced single isomer therapeutics, we can apply the principles of rational drug design to our pipeline candidates, which is impossible with mixture-based oligonucleotides. This resolution enables us to define distinct profiles for our stereopure molecules, and we now have several years of clinical data to further inform our platform.

Earlier this year, we announced the discontinuation of our remaining first-generation programs following the results of the PRECISION-HD trials. While we only saw modest and inconsistent reductions of mutant huntingtin, it is important to note there were no clinically meaningful trends in disease progression or laboratory values such as elevations in CSF, white blood cells, proteins and neurofilament light chain, or NFL. There were, however, suggestions of allele selectivity, underscoring the precision enabled by our platform. In our next-generation programs, we have prioritized the use of in vivo models during preclinical development to ensure we advance clinical candidates that will reach the desired site of action and engage target.

In addition to the wealth of data collected over the past several years, we are also leveraging an influx of new talent in oligonucleotide therapeutics to further advance our understanding of design principles, pharmacology and toxicology. The application of PN backbone chemistry modifications in the context of controlling stereochemistry was a major advancement that emerged from our platform. And based on what we have seen preclinically, this innovation has the potential to significantly improve the profile of therapeutic oligonucleotides, independent of sequence, tissue type or modality.

Separately, our ADAR editing capability further expands our toolkit beyond silencing and splicing, enabling us to select the best modality to address the root cause of genetic diseases. We anticipate sharing more on PN chemistry and ADAR editing at a Research Day later this year.

Our current pipeline is comprised of programs designed with next generation of PRISM, including PN chemistry. I'm extremely proud of how quickly we have advanced this innovation to the clinic, and we are rapidly approaching the first of many opportunities for clinical proof-of-concept of PN chemistry.

I'd now like to turn the call over to Mike Panzara for an update on our neurology programs. Mike?

Thanks, Paul. The foundational work that has been done throughout the evolution of PRISM has provided us with a diverse and robust neurology-focused portfolio that is currently moving through stages of preclinical discovery and clinical development, as illustrated here.

As Paul just mentioned, all of our current discovery stage and preclinical programs utilize PN chemistry, including the multiple discovery programs in collaboration with our partner, Takeda. These programs are yielding exciting results, including target engagement and distribution in the central nervous system of nonhuman primates, which further validate our approach. Our Therapeutics Discovery portfolio continues to build upon this progress to maximize the potential of oligonucleotide therapeutics for the treatment of neurological disorders with high unmet need.

Now I'd like to discuss the programs currently in clinical development with 3 next-generation candidates. Our development organization is focused on site activation and initiating dosing simultaneously in 3 clinical trials across 4 disease areas: C9orf72 associated amyotrophic lateral sclerosis, or ALS, and frontotemporal dementia, or FTD, with WVE-004, our candidate targeting C9orf72 hexanucleotide repeat expansions; Huntington's disease with WVE-003, our SNP3 targeting candidate; and Duchenne muscular dystrophy with WVE-N531, our exon 53 skipping candidate.

Each of these clinical candidates incorporates PN chemistry, and the availability of relevant preclinical models has enabled a greater understanding of PK/PD relationships to guide development. Further, the learnings from our first-generation programs are being incorporated to mitigate risk and more efficiently execute our plans.

Starting with C9orf72. Our clinical candidate, WVE-004, is designed to target a hexanucleotide repeat expansion in the C9orf72 transfer, which is one of the most common genetic causes of ALS and FTD. These expansions drive the common pathophysiology underlying these 2 diverse and devastating phenotypes. And 004 is the first C9orf72 candidate being advanced simultaneously in a single basket-like study for both C9 ALS and C9 FTD.

C9orf72 mutations lead to multiple drivers of toxicity. The hexanucleotide repeat containing RNA transcripts deposit in tissues and are toxic on their own, but they are also translated into long dipeptide repeat proteins, or DPR proteins, that trigger cellular toxicity through a variety of downstream mechanisms. 004 selectively targets the pre-mRNA of variant transcripts that contain the hexanucleotide expansion with the goal of suppressing both the RNA- and DPR-associated toxicities while allowing C9 protein expression. In the first quarter, our foundational work to identify and validate the targeting site used to achieve this selective knockdown was published in Nature Communications.

On the right of the Slide 11, you can see the preclinical data that demonstrates 004's ability to rapidly and durably reduce over 90% of the DPR poly-GP in the spinal cord and reduce at least 80% of poly-GP in the cortex. This effect lasted at least 6 months only after 2 ICV injections of 004 administered 7 days apart at the start of the study. C9orf72 protein was unchanged over the same period.

The effect of 004 on poly-GP in the CSF is a key endpoint in our clinical study, so we are looking forward to assessing the impact of treatment in human given these promising preclinical results. These results, along with data from nonhuman primates, have also allowed us to start at the dose that our clinical trial predicted to be pharmacologically active.

This week at the European Network to Cure ALS Virtual Meeting, or ENCALS, we introduced FOCUS-C9, an adaptive trial that is designed to enable faster optimization of dosing frequency of 004 based upon review of unblinded data throughout the study. FOCUS-C9 is a Phase Ib/IIa global, multicenter, randomized, double-blind, placebo-controlled trial in which we are planning to enroll approximately 50 patients with documented C9orf72 expansions and confirmed ALS, FTD or mixed phenotypes.

FOCUS-C9 includes single- and multiple-ascending dose portions of 004 administered intrathecal. At points throughout the study, based upon predefined data-driven milestones, an independent committee will review unblinded data to determine next single-dose level to be escalated to and the optimal frequency in the next multi-dose cohort, meaning whether the dosing interval should be monthly or less frequent. Samples are collected for biomarker analysis at multiple time points within both the single- and multi-ascending dose portions to enable the assessments required to make these recommendations. Regulatory and ethics approvals have been received and clinical site activation is underway, so we anticipate dosing sometime soon.

I'll now turn over to WVE-003, our allele selective candidate for Huntington's disease, which is designed to selectively lower mutant huntingtin while preserving wild-type huntingtin. The presentations, posters and feedback from experts at the recent virtual CHDI HD Therapeutics Conference only served to bolster our confidence that we are pursuing the right approach to Huntington's. Let's review what we know.

Patients with Huntington's disease have expanded CAG repeat in their huntingtin gene that leads the production of mutant huntingtin protein. This is a monogenic autosomal dominant genetic disease that is fully penetrant and affects the entire brain. Preserving wild-type huntingtin is as important as lowering mutant huntingtin. Evidence supports that Huntington's disease is driven by both the gain of function of mutant huntingtin protein and the loss of function of wild-type protein, which is essential for homeostasis of the central nervous system.

Wild-type protein is critical for the protection of neurons that are under stress and plays a key role in trafficking synaptic proteins and vesicles, including the production and transport of brain-derived neurotrophic factor, or BDNF, in the cortex. Wild-type protein is also critical for the formation and function of cilia, which control the flow of CSF and help maintain CNS homeostasis. In healthy individuals, these important functions of wild-type huntingtin balance out the collective stresses based on the central nervous system. However, in the case of HD, there is the added burden of the mutant protein itself. Those living with HD have been subjected to decades of toxic stress that come with mutant huntingtin protein years prior to symptom onset.

Looking at levels of wild-type in healthy individual or models that lack the effect of mutant protein does not adequately represent the role the healthy protein plays in the context of Huntington's disease. This smaller protective reservoir of wild-type huntingtin eventually loses the battle to the expected stresses placed on the CNS, along with the toxic effects of mutant huntingtin, resulting in disease progression.

If one thinks about this as a push-pull of positive and negative factors in this balance of wild-type and mutant huntingtin in the CNS, it stands to reason that depletion of wild-type protein along with mutant protein as with nonselective approaches would shift the balance towards disease progression, erasing any benefit or even potentially accelerating decline. This has been our hypothesis since we began our HD program. And the data that are emerging support our position and make us resolute in our differentiated approach to treating this disease.

003 has been improved over our prior SNP targeting candidates by applying PN backbone chemistry modifications in the context of control over stereochemistry. Further, the presence of the SNP in a relevant animal model has allowed us to do in vivo preclinical work to determine a dose predicted to be pharmacologically active right from the start of first cohort.

Slide 16 illustrates some of these in vitro and in vivo data demonstrating that 003 is highly selective for mutant huntingtin and able to achieve potent and durable knockdown of mutant huntingtin in vivo in the BACHD mouse model. We investigated this model knowing that there were several limitations, including the fact that it contains multiple properties of the mHTT genes, some of which do not have the SNP3 variant. Nonetheless, as shown on the bottom of the slide, we observed potent and durable knockdown in mutant huntingtin and striated them out to 12 weeks, a similar effect observed in the cortex.

Nonhuman primates do not have SNP3, and as such, we are not able to evaluate the pharmacodynamic effects in this model. Therefore, we use the concentration data from the BACHD mouse compared with tissue concentrations in the CSF of -- CNS of nonhuman primates and then use PK/PD modeling to estimate tissue concentrations required to achieve striatum and cortical knockdown in humans with 003. These analyses are guiding the starting dose and dosing regimen planned for our clinical trial.

While target engagement studies in the CNS of nonhuman primates were not possible for 003, they were possible for our most advanced therapeutic candidate in our CNS discovery collaboration with Takeda, WVE-005. Like 003, this candidate uses PN chemistry. But unlike 003, the human transcript targeted by 005 is homologous to the monkey sequence, allowing us to assess target engagement throughout the CNS. In this study, for an undisclosed target, nonhuman primates received a single 12-milligram intrathecal injection of 005. 1 month after administration, we observed that the candidate was widely distributed throughout the CNS and led to substantial knockdown of target, including in the striatum. This experiment once again highlights the potential of this next-generation chemistry.

In the first quarter, we received regulatory and ethics approvals to initiate SELECT-HD, a Phase Ib/IIa global, multicenter, randomized, double-blind, placebo-controlled trial of 003 in early manifest HD. We are targeting enrollment of approximately 36 patients carrying SNP3 in association with expanded CAG repeat. Patients from the PRECISION-HD studies will be able to transition to SELECT-HD after a washout period assuming they meet other inclusion and exclusion criteria. Unfortunately, based on the recently disclosed safety and efficacy data, patients who received active treatment with tominersen in the GENERATION-HD study will not be permitted to enroll in SELECT-HD. Although those who received placebo in GENERATION-HD are eligible to be screened for study entry.

Like FOCUS-C9, SELECT-HD has an adaptive design to enable optimization of dosing frequency and more rapid determination of target engagement. An independent committee will evaluate unblinded data in an ongoing basis to guide dose escalation and dosing interval in each cohort. Key objectives in addition to safety and tolerability include plasma PK, CSF exposure of 003 and changes in key biomarkers, including mutant huntingtin, wild-type huntingtin and neurofilament light chain over the course of the study. Clinical site activation is underway, and we expect to dose our first patient soon.

WVE-N531 is our systemically administered candidate for patients with Duchenne muscular dystrophy, or DMD, that are amenable to exon 53 skipping. This is also our first stereopure splicing candidate designed applying PN chemistry. As we have shared previously, when applying this format to an exon 23 targeting surrogate, treatment of an aggressive double knockout, or DKO, mouse model lacking both utrophin and dystrophin result in rescue of mice treated with 75 milligrams every other week as compared with PBS or first-generation chemistry dosed at 150-milligram per kilogram weekly. Once again, application of the PN backbone modifications had a profound effect.

In March 2021, we initiated clinical development of N531 with the submission of a clinical trial application. Since then, we've received regulatory approval for an open-label clinical trial that is powered to evaluate whether N531 dosed every other week increases dystrophin production in up to 15 boys with DMD. The trial will also assess drug concentration in muscle and initial safety. Dosing is expected to initiate this year.

I will now pass the call back over to Paul to discuss our ADAR editing capability and upcoming milestones there. Paul?

Thanks, Mike. We continue to generate compelling RNA editing results with our ADAR editing capability, which we believe has many advantages over others and positions us at the forefront of this space. As a reminder, our approach to RNA editing employs short, fully chemically modified oligonucleotides to recruit endogenous RNA editing enzymes called ADAR. Our ADAR editing compounds are optimized using our proprietary stereochemistry and PN chemistry, which enables us to avoid delivery vehicles, such as AAV vectors or nanoparticles, and allows us to leverage the established manufacturing processes. To date, we have demonstrated editing activity across in vivo and in vitro systems, including durable RNA editing of up to 50% in nonhuman primates with GalNAc-conjugated oligonucleotides. Our ADAR editing oligonucleotides are also highly specific.

Our practical approach to RNA editing opens the door to a number of therapeutic applications, such as restoring or modifying protein function and up-regulation of protein expression. These applications greatly expand the landscape of disease variants that we can potentially address, and we are advancing discovery work for multiple ADAR editing targets as well as evaluating new potential targets.

Our first ADAR editing program uses a GalNac-conjugated oligonucleotide to correct a single RNA-based mutation in the mRNA coded by the SERPINA1 Z allele, which triggers alpha-1 antitrypsin deficiency, or AATD. ADAR editing is a simple and efficient approach to treating this disease by simultaneously reducing aggregation of the mutated, misfolded alpha-1 protein and increasing circulating levels of wild-type alpha-1 antitrypsin protein, thus addressing both the liver and lung manifestations of AATD, all while avoiding the risk of permanent off-target changes to DNA.

Last year, we successfully demonstrated upwards of 60% editing of the SERPINA1 Z allele transcripts to wild-type and hepatocytes in vitro, which led to a threefold increase in functional wild-type AAT protein. Encouraged by these results, we moved forward to successfully develop a proprietary transgenic mouse model containing both humanized SERPINA1 and humanized ADAR that enables pharmacokinetic and pharmacodynamic assessment of human sequences in vivo. We are on track to share in vivo data from this model in the first half of 2021, and we expect to present additional data at a scientific congress later this year. These in vivo results are expected to enable lead candidate optimization as well as inform potential preclinical development studies and time lines.

In summary, 2021 is a year of execution for Wave in a busy time as our next-generation pipeline advances in the clinic. As you heard today, we are advancing 3 unique clinical programs that will each provide insight into our novel PN chemistry and potentially rapid proof-of-concept and clinical validation of our platform with biomarker data. We're making excellent progress with our ADAR editing capability. And in addition to the expected in vivo data update for AATD that I just mentioned, I look forward to speaking further about our RNA editing platform at a Research Day later this year, which we expect to share more details about on our next quarterly call.

I will now turn the call over to Kyle Moran, our Chief Financial Officer, to report our financial results before turning the call over to questions. Kyle?

Thanks, Paul. We ended the first quarter with $148.5 million in cash and cash equivalents and marketable securities. This balance does not include an additional $30 million in committed research support that we received in early April under our collaboration with Takeda.

Our total operating expenses for the first quarter 2021 were $43.4 million as compared to $54.2 million last year. R&D expenses were $33.4 million as compared to $41.2 million in the same period in 2020. This decrease was primarily related to a decrease in external expenses related to our discontinued suvodirsen program as well as decreases in compensation-related and other external expenses, partially offset by increases related to our clinical and preclinical activities for our HD programs and C9orf72 program for ALS and FTD.

G&A expenses were $10.1 million for the first quarter of 2021 as compared to $13 million last year, with the decrease driven by lower compensation-related and other external expenses.

Finally, we continue to expect that our existing cash and cash equivalents, together with our expected and committed cash from our existing collaboration, will enable us to fund our operating and capital expenditure requirements into the second quarter of 2023. As a reminder, this does not include potential milestone payments or other uncommitted payments under our Takeda collaboration.

Thanks, Kyle. With that, we'll open up the call for questions. Operator?

(Operator Instructions) Our first question will come from of Salim Syed from Mizuho.

This is Michael Lin on for Salim. A few, if possible. First, on the C9 trial design, just wondering about the protocol and how adaptive these trials would be. Are they being written to be able to enroll many -- the hundreds of patients to potentially be converted to registrational? I'll follow up after that.

Thank you. I'll pass the call over to Mike.

So the way the study is designed, as you can see, it allows the study to be expanded as necessary to collect additional information. I mean we made it flexible about -- to enable us to really -- once we get recommendations from the independent committee on next steps to be able to adapt the study as necessary. So I think we'll have to wait to see what the data show, but it is our intention to make it adaptable and flexible to enable us to direct it the way we need to, to understand the clinical meaningfulness in both ALS and FTD.

So I can't expand on number of patients based on the committee's assessment then. So if that's the specific question, yes.

Great. And one on AATD on the upcoming data. What will you be looking for specifically to move forward into the clinic or not? And how would you prioritize this if it did move forward versus the other pipeline programs?

So the prioritization for AATD and the reason we worked on generating the model was really driven based on identifying, one, the production of the protein. So again, not working on what a percent editing is. That's interesting, but what drives the progress on a medicine is does it generate the protein. So one will be protein production. Other features that we'll be evaluating, obviously, are protein, not just protein production but protein function. So we'll be able to look at a number of those assessments, and that's going to guide our decision on translation.

Okay. Great. And last one, on Alzheimer's disease mentioned today. After the donanemab data, how are you thinking about treatment, specifically from the ASO side? Maybe what should we think about in terms of potential targets?

So just for clarification, I want to make sure on -- you might be thinking about frontotemporal dementia. I just want to make sure we're not thinking about Alzheimer's. So we have FTD, so frontotemporal dementia, otherwise, I think it's frontotemporal degeneration, is the one area of dementia that we mentioned today. So I want to be careful that we didn't discuss Alzheimer's disease as a target therapeutic. But happy to discuss antisense treatment and therapeutics for the treatment of CNS and neurologic diseases more broadly if that's the question, but I just want to make sure we get your question correct.

Yes, that would be helpful.

I was going to say...

Let's just finish answering his question.

I was going to say is that, yes, I mean, we're -- as you see with the FOCUS-C9 study, the emphasis on FTD getting patients in and actually the cortical effects that we saw in the preclinical models make us very excited about being able to access the CNS to be able to have an effect on FTD. It's -- we're going to be using clinically some of the clinical outcome measures that you'd want to measure, cognitive change, in our FTD study to be able to get at that question.

I mean, I think if we just step back and think about neurologic diseases more broadly, I mean, I think one of the data sets that's compelling that Mike shared in addition to a number of the in vivo mouse studies is we see really great intrathecal distribution across the brain. So I think as we think about distributing to the regions of the brain that are necessary for a whole variety of neurologic diseases, we see intrathecal administration delivering this. It's not different than some of our colleagues in this space discuss around distribution. So we do believe antisense oligonucleotides can distribute.

What we see with the PN is this broad distribution, so this addition of us highly controlled. So the data we're generating, the value of stereochemistry is that beginning and addressing the reality of it is all the assessments of target engagement we're seeing are with the actual compound because we're not dealing with a mixture of 523,000, 204,000, 203,000 different molecules that can distribute differently. So by having a single drug, we know that the knockdown that we're seeing is based on the design of that single oligonucleotide.

And I think what we've also seen is the benefit of durability. So as Mike said in the adaptive design piece, we're going to be testing it and exploring that in the clinic. And so as we think about chronic administration of medicines on a whole host of different diseases, it importantly is dosing frequency. So being able not to sacrifice potency for dosing frequency is something that we're excited to continue to explore in the clinic.

So as we think about the future of antisense oligonucleotide for the treatment of neurologic diseases, we think the future is promising in a data-driven way, and we'll be assessing that further across 3 clinical studies currently. So I hope that answers your question. We're always happy to explore that more, but I think the future looks bright for treating genetic diseases with oligonucleotides.

That's super helpful. I guess what I was referencing was just the mention of Alzheimer's in the press release, along with other CNS indications.

Okay. Sorry. Sorry. No, no. I think we are talking -- now I know where you're going, which is the holistic list of targets that are -- that we've been exploring in the large indications. Where we said, for example -- that's why we're thinking about -- we said, for example, what represents large neurologic indications, so Parkinson's, Alzheimer's and other large indications. So thank you. I apologize for our -- we are focused on the pipeline that we're exploring as opposed to what the potential is. So apologies for our misunderstanding of your question.

And our next question will come from the line of Joon Lee from Truist.

For all of your CNS programs, in addition to the new and improved backbone chemistry, have you considered a different route of delivery? Another company has recently disclosed proceeding with intracerebroventricular route using (inaudible) cord, I believe, for Huntington's disease. It does give you more direct access compared to intrathecal, and I'm not aware of any IP that prevents you from doing that. So I would appreciate if you could provide some perspective there. And I have a follow-up question.

Yes. I mean there's always opportunities to think about different approaches. When we think about permanent catheter placements and other drilling holes and (inaudible) for delivery, I think our first question always is about what problem -- and this is true for anything, what problem are we trying to solve for.

So I think as we currently think about the data that we've generated to date, intrathecal access to the central nervous system is available. We've shown that now in intrathecal nonhuman primate studies. We've looked at ICV injectors in mice, and we see correlation in terms of distribution in CNS tissue. So for -- to date to look -- and if we, again, also see durability, which we're assessing in the clinic, the less frequent administration also causes the question that it's not without risk. So we permanent drilling catheters in the CNS, they can get clogged. They need to be changed.

And so, again, it really comes down to what is the -- and every medicine is different. So we can't speak for other companies and what challenges they're addressing using the delivery mechanism. What we assess with ours is are we -- what are we solving for? And so as we think about intrathecal distributions, we've demonstrated across multiple tissues, utilizing the PN enhancements on our medicines themselves, we don't right now see that. As we look at durability and different indications, we could want to solve other problems in the future (inaudible). Could come up, but right now, that doesn't seem to address the solution that we have with the current administration. Mike, I don't know if there's anything you want to add.

No. I'm just going to -- I would just say the same thing. It's like you have to -- in general, you're -- you want to go for the simplest form of administration you can that gives you the access you're looking for. So given the progress we've made with accessing all parts of the brain in these diseases through intrathecal administration, that would be the simplest approach, especially as Paul indicates, when you're talking about the durability of effect after single doses, that leads us to the approach that we don't need to do ICV with a catheter and we can do what's necessary, doing something that any neurologist can do.

I think the other thing, I mean, we've had now -- I mean, and we have the benefit with an extensive amount of time now been able to explore multiple animal models across multiple species. So again, ICV in mice, intrathecal in nonhuman primate. We also have clinical data to look at distribution as we shared in our experience with Huntington, understanding different concentration levels with different backbone chemistry.

So I think as we look at the totality of data that we've generated and the totality of generated -- that our colleagues and other companies have generated, I think we see meaningful changes with the implementation of the PN backbone that's translating into animal PK/PD that we are exploring currently in the clinic through adaptive designs that are going to give us answers in the clinic.

Got it. And looking forward to your ADAR presentation tomorrow at ASGCT. Can you talk about some differences between the approach you're taking with GalNAc-conjugated guide RNA versus circular guide RNA that's being used by another company? I guess we'll find out tomorrow, but just wanted to get any input that you can share on what we should be focusing on tomorrow and some perspectives on the pros and cons of different approaches.

Yes. I mean I can't speak necessarily for the pros and cons of others. We're all learning about the other approaches to treating. I can speak about our approach, which, importantly, GalNAc is not, let's say, an approach. GalNAc is a targeting (inaudible) for the tissue target of interest.

So one of the advantages when we built the ADAR platform from the beginning, and we've demonstrated this with some of our CNS data as well, is that where short oligonucleotides go and distribute, we can generate an editing capability there. So we've done and looked at that in vivo in our CNS, so looking non-GalNAc-conjugated distribution and correction.

What we're looking at for AATD, obviously, is a hepatic target in a hepatocyte because GalNAc then becomes an advantage because we can just target the cell type of interest. So I think what's really important from a platform perspective is the platform can exist without Galnac, but we are using GalNAc as well where we think about the liver specifically.

So I think on both the platform context, we think we've got a really interesting approach in that we don't need to use various delivery vehicles. We can take all of our learnings around stereocontrolled PN-containing oligonucleotides and continue to demonstrate and learn from data that we've generated across multiple species and even past clinical studies experience learning about stereocontrolled oligos and apply that to this ADAR platform and take the advantage of GalNAc conjugation for specific hepatocyte targeting.

I think tomorrow, as we start to learn more about what's happening across the field, we'll be able to parse that out more. But we're excited to have a presentation tomorrow and really be there again at the forefront of ADAR RNA editing to be able to share those data.

Our next question will come from the line of Mani Foroohar from SVB Leerink.

I'll ask one quick one on enrollment. When we look at rolling over placebo patients with GENERATION-HD into SELECT, how many of those patients are still eligible? I worry a little bit that, obviously, Huntington is a relentlessly progressive disease. So some proportion of those patients may now be meaningfully more severe than they were when they were first screened for generation.

And secondarily, whenever -- based on whatever portion of those patients are likely in your view to roll over, how much of a head start does that give you on enrollment in SELECT? And are there other mechanisms that you can pursue or changes in trial process to sort of accelerate the completion of enrollment there given there were a couple of delays and hiccups along the way for GENERATION previously?

I'll pass off the question to Mike.

Yes. No. Thanks. So regarding the movement from GENERATION-HD, right now, the way it stands is patients don't have -- it hasn't been disclosed to patients whether they've been receiving placebo or active treatment. So we're hopeful that, that will happen, and then patients can make the choice about whether they want to do that transition. And we're not exactly sure when that will be, but we're hoping that, that happens relatively soon as we have disclosed to all the patients now what they've been receiving.

Second of all, there is that possibility that patients will have progressed out of our inclusion criteria, which is why they are going to have to be rescreened for both inclusion and exclusion, including whether they have SNP3. So that will be an important inclusion/exclusion criteria. But as we think about the overall population, we'd expect about 40% of them are essentially to have the appropriate SNP.

Regarding the other operational things to help move things along, we've learned a lot from the GENERATION -- from the PRECISION-HD1 and PRECISION-HD2 studies. We've learned a lot about how to operationalize intrathecal administration more efficiently. We have a lot of site overlap between GENERATION-HD and PRECISION-HD, which has allowed us to -- our physicians to get experienced in the screening process. We have new laboratories to do SNP identification. There's a variety of things that have really helped accelerate -- make us feel comfortable that we'll be able to accelerate the recruitment for SELECT-HD, including the addition of regions that we know have higher representations of SNP3. So there's a variety of things we're doing that have -- that we're comfortable will help.

In addition with the adaptive design, there's going to be -- a whole along the way the committee is going to be looking at unblinded data to guide next steps and make recommendations. So that, in and of itself, is a huge change versus data generation in PRECISION-HD1 and 2.

Our next question will be of the line of Paul Matteis from Stifel.

This is Alex on for Paul. A couple of questions on SNP3. Appreciate the 005 target engagement data in nonhuman primate, but I was wondering if you could maybe quantify a little bit some of the biodistribution that you mentioned you're seeing in nonhuman primates with 003 that you're using for the PK/PD modeling, knowing that's not really a disease model, but anything you can say there would be really helpful.

And then secondarily, I'm curious if 003 targets the exon 1 fragment of mHTT. And generally, your thoughts on the exon 1 side as a potential driver of pathology in HD.

Mike, do you want to start around...

Yes. So I mean regarding the nonhuman primate data, I think that the -- what we are -- what I can say about the distribution in the nonhuman primate, even though it's not target engagement data for the SNP3 compounds, we are very clearly able to achieve concentrations throughout the brain, including in deep gray structures in striatum that would be predicted to engage target based on what we have from the BACHD. So -- and a very large window to be able to dose escalate to, again, engage target.

So I think that we are quite comfortable based on the preclinical data we have that we are able to get into the regions that matter and engage targets. So -- and again, we're starting at a dose that we believe is pharmacologically active right from the beginning, and then the committee will tell us how close we are to that and then be able to adjust as necessary. So that's regarding that.

Now in terms of exon 1 and what we think there, I mean, as we've said previously that a lot of the exon 1 data -- I mean this is from postmortem, this is from -- it seems to be most relevant and those with extremely long expansions. Nonetheless, when we're bringing down mutant protein, we would expect to be able to also have an impact on exon 1. So...

Yes. Just to add to that, I mean, antisense oligonucleotides can reach intronic and exonic transcripts, so we should therefore hit exon 1. But as Mike -- I think the most important piece, I think the data is still -- independently of whether or not we hit it, I think the data is still questionable and beyond really, really long repeat. So I think as we go back and think about our targeting for SNP3, I think we can leverage a ton of experience with SNPs 1 and 2 and what we've seen in general with the enhancement of PN chemistry in terms of distribution, durability and potency.

I think we can see and believe that mutant protein suppression is important, and yes, we're distributing and knocking down the mutant protein. But I think what we've learned a lot about in the first clinical trial and silencing is, and as Mike alluded to post CHDI, is a substantial focus in doubling down our efforts that wild-type sparing is as important a driver of disease pathology as mutant protein production is.

And so the approach that we set out 2 years ago established treatment of disease, which is wild-type sparing, mutant reduction, we believe, is the way to address the pathology. And we'll be generating clinical data and be able to assess that again with SNP3 using the PN chemistry.

Our next question will come from the line of Eun Yang from Jefferies.

I have a few questions. The first on AATD program. So apology, you mentioned it's not just editing efficiency, you've already shown 50% in nonhuman primates, but producing wild-type AAT protein. So -- and then function. So question to you is that do you know what level or number of wild-type AAT protein is needed in order to see some clinical benefits? What's the kind of a minimum level? So that's question one.

And second question is on 004. So you are already doing site activations. So when should we expect the data -- clinical data from this trial?

And lastly, the $30 million -- additional $30 million you received from Takeda in April, how would that be amortized in income statement? Would that be similar to what you've done in the past??

All right. Well, the good news is this question get -- you're going to hear a lot of voices around the table. So it's great. I'll take the AATD question. I'll pass to Mike for the second one, and Kyle can answer your treatment question.

Your important question is, how do we look at this in vivo data that's upcoming and how are we looking at that in terms of advancing AATD program. I think when we think about alpha-1 antitrypsin, and I think you're spot on, we're looking at protein levels. But the SERPINA1 model is different because they're all -- they're -- in humans, let's say, in that you can generate protein. And I think we'll be looking at levels of protein generated in that model to be able to model that towards kind of where one would expect to be at the human level.

I think to date, one sees kind of a threshold level around 11 micromolar protein to be clinically relevant. That's kind of the basis for the number of the protein infusion products. And we know that the protein infusion product tends to tail off at the end because the protein degrades and then they have patients that have to be redosed on a weekly basis. So these patients have these gaps in treatment.

I think if we can have sustained correction where maybe you don't have those drops, we could see that kind of this minimum threshold criteria where not only are we treating the hepatic issue, but really at that level know that you're at levels that can treat the pulmonary complications. I think that would be exciting. But I think the key for us, and as we generate that data and share that more broadly, exactly to that point, that's the data that we'll be assessing from those models in terms of translation.

And I think the important piece there that we'll be assessing as well is not just the protein production. But as we've demonstrated before from the in vitro correction of the AAT protein is that we could generate it, that was functional, we want to see that replicated now in the animal model. So I think we're taking the deliberate approach to make sure we generate the preclinical data that's going to position us for thinking about how this program transitions. And I think that's why we've been excited to date, one, around the AATD program, but I think more broadly, where it really represents in Wave's ability to bring ADAR editing into patients across a whole variety of indications, importantly, CNS indications as well where we don't need GalNAc to able to target neurons. So I think there's a whole variety of approaches that we can take. But obviously, this is the first in vivo demonstration that we'll be able to look at on a corrected protein and be able to study that more broadly.

I'll pass -- any questions -- just because of the -- are there any questions there? And if not, I'll hand over to Mike to address your question now. So Mike, do you want to take the next one?

Sure. I mean also -- I mean regarding next year, I mean, we have 3 biomarker studies underway that are going to allow us to have -- with these adaptive designs that are going to allow us to have a continuous flow of data. And that's very exciting.

And I mean specifically regarding 001, as I indicated, we're going to be dosing soon, and we'll have a good sense of how the studies are moving throughout the year. But what we share from the studies is going to be informed by how the studies proceed, the types of data that comes in, the meaningful -- whether there's a meaningful number of patients at any given point in time and whether the feedback we receive from the independent committees, and those -- that feedback is going to be coming in throughout the course of this year and next. And from there, we'll guide what -- when we disclose data and what that data will be.

And we anticipate data, however, during this time that will enable us to make decisions and then provide greater insights into the chemistry. So that's sort of how it's proceeding now. It's obviously going to be driven by how quickly we get those patients in, and we're optimistic now given site activations and the fact we're going to be dosing soon.

But it is an important notion when we think about just the adaptive design principle of running studies, which is different than running kind of biomarker-driven studies where you've got to aggregate the data and then analyze it and aggregate and then put the card at the end. I think, as Mike said, data is evaluated in an ongoing way by an independent committee that's going to inform things. And with those studies running now and data being generated this year and next, I think there's a variety of times where those committees could fight, we should share data.

So it's a little less specific, and as Mike said, we'll be able to provide more updates to guidance along the way. Kyle, you want to take the $30 million?

Yes. Eun, thanks for your question. And your assumption is correct. We would account for that in the same way that we've accounted for the upfront cash payments and other committed cash payments we've gotten to date with GAAP revenue and amortization.

(Operator Instructions) Our next question is from the line of Luca Issi from RBC.

This is [Lisa] on for Luca here. A couple of questions for us. So first one, we have obviously seen the Phase III data from Roche Ionis, and it seems to me that there is or may have had a detrimental impact to patients versus placebo as placebo directionally outperformed the high dose and we have seen a dose-dependent increase there in ventricular volume in the brain. Did you have the same read on this data? And if so, do you think that it's possible that a wild-type sparing approach may not have caused a detrimental impact here?

And second question, you've obviously discontinued SNP1 and SNP2 with the old chemistry. Just wondering, what is the plan going forward? Are you planning to explore the PN chemistry for SNP1 and SNP2 or only for SNP3?

Thank you. To take the first -- of your version, and I think like everybody else, we have to view it as we're only seeing what everybody else is seeing from the outset. So it's hard to comment on what they saw. I think objectively, you pointed out what they saw, which was a dose-dependent change in clinical measurements, and importantly, those clinical measurements were cortical and striatal. So I think it's -- there's a jump to distribution, I think it was a broader question than just striatal distribution.

So I think as we think about that data in the context of the biology, as Mike laid out on this call, I think, very, very well. We do think that there's 2 approaches of one characterization of drug. One is obviously, to your point on hypothesis, wild-type sparing. And that if one thinks about the disease as both one of a toxic gain of function and a toxic loss of function, taking that below the 50% -- I know there's a lot of discussion after Roche's data, people just saying, well, studies have been done in 50% reductions in normal animals and shown it safe. I think one has to remember that the situation that those animals were under were on a 50% reduction of a normal phenotype.

What we're dealing with in Huntington's patients, as we kind of have been explaining for a while now, is that the -- those reductions that are being studied in the clinic are reductions that are happening in the setting of already a 50% reduction and under the setting of stress of patients who are progressing in disease. So one has to think about the totality of removing the neuroprotective feature of wild-type protein and a whole host of other functions, including cilia function, which involve CNS, CSF flow. Those are really important characteristics.

So yes, I think that's something that needs to be explored, and I think that's why we're excited about seeing that. I think we were also happy in the analysis that patients on the studies that we were looking at didn't progress. Now take that for where it is. I think as other characterization, we didn't see increases or elevations in white counts and protein and NfL. So I think if we think about the totality of both the oligo approaches as well as the wild-type sparing, I think that's driven why we believe a stereocontrolled approach of wild-type sparing is important. It's why we're excited about bringing PN into the clinic with SNP3.

And to your question, yes, we can apply and have generated early data around being ready with SNP1 and 2. I think the measured approach we're going -- with PN chemistry. I think the measured approach right now is, as Mike alluded to with the trial design, is let's get the data with PN chemistry, with SNP3 and use that as a driver before spending more resources on SNP1 and 2. But yes, we are prepared to go back to looking at the totality of HD within allele-specific approach. I don't know, Mike, if there's...

No. I mean just -- I mean my -- listen, we've been concerned from the beginning that a nonselective approach could have detrimental effects. We have said that first, and that's why we're doing what we're doing. There are a lot of reasons that could be assessed for what happened with that Phase III study. But certainly, effects on wild-type has to be part of the consideration, which is why we're making our wild-type assay available. It's an important data set we need to understand. But we're concerned enough that we are -- unfortunately, we said initially, we would allow patients who have been treated with tominersen into SELECT-HD. We've had to now not do that out of whatever is happening there because we're concerned enough not -- to unfortunately have to exclude those patients. So it's a concern. It's an observation. It needs to be studied. We have the tools now to study it, and we're hoping that the community asks these questions because we believe it's important.

I see no further questions in the queue. I'd like to turn the call back over to Dr. Paul Bolno for any closing remarks.

Thanks, everyone, for joining the call this morning to review our first quarter 2021 corporate updates, and thank you to our Wave employees for their hard work and commitment to patients. We look forward to speaking to you all again soon. Have a nice day. Thank you.

This concludes today's conference call. Thank you for participating. You may now disconnect.