CRISPR Therapeutics AG (NASDAQ:CRSP) Goldman Sachs 43rd Annual Global Healthcare Conference June 15, 2022 12:20 PM ET
Company Participants
Salveen Richter – Goldman Sachs
Conference Call Participants
Lawrence Klein – Chief Operating Officer
Salveen Richter
Good morning, everyone. Thanks for joining us. We’re really pleased to have CRISPR Therapeutics here and with us, we have Lawrence Klein, COO.
Question-and-Answer Session
Q – Salveen Richter
To start, Lawrence, you’re hosting an Innovation Day on June 21. Can you help set the stage for what we can expect there?
Lawrence Klein
Sure. Thanks, Salveen. Thanks for having us. Really glad to be here, and good morning, everyone. We’re very excited about that event. It’s a next Tuesday, 21, and we’ll be sharing updates across our portfolio. We have quite a broad portfolio of programs all based on CRISPR editing technology.
We group it into four main areas: ex vivo, which is primarily hemoglobinopathies, expel rare disease; oncology, where primarily we’re focused on allogeneic CAR-T therapies; third area is regenerative medicine. Our first efforts are in beta cell replacement approach for type 1 diabetes and then in vivo applications.
And we’ll share the latest updates in terms of the research with a real focus on the earlier stage work that we’re doing in each of those areas. The one I’d highlight is in vivo, where we haven’t said much publicly. Well we’ve made a tremendous amount of progress, and we’re getting very close to moving programs into the clinic and so I’m very excited to share more on those programs at the Innovation Day.
Salveen Richter
Great. And your first-generation oncology assets are all in the clinic here, and we’ve seen data from CAR-Ts targeting CD19 and CD70 in blood cancers. We’ll also see first CD70 data in solid tumors in BCMA this quarter. Well, A, should we expect it at the Innovation Day; and then, B, how do we think about your efforts to optimize these candidates, whether you’re adjusting dosing or you’re adding potency enhancements? Let’s start there.
Lawrence Klein
Sure. So we have three clinical programs, as you mentioned, CTX110, 120 and 130. Those are targeting CD19, BCMA and CD70, respectively. As you said, we’ve disclosed data on 110 and 130 in hema malignancies. 130 is also in the clinic in renal cell carcinoma. And we will release data by the end of the month on CTX120 in myeloma and CTX130 in renal cell carcinoma.
And with those three programs, it was our first efforts at off the — enabling an off-the-shelf product format using gene editing enabled by CRISPR. And the unique approach that we’ve used is this beta to a knockout strategy that I don’t think many other companies have shown clinical results with at this point.
And what we’ve shown to date is that we can achieve durable responses, durable remissions out now a couple of years post treatment with a single dose of an allogeneic cell therapy. And I think that’s a great advance for the field. In terms of competitive dynamics, these are all competitive fields, some more than others, as you know. And it may require additional edits in some of these areas to compete effectively. We’ve been working on 2 main areas in terms of additional edits
One is improving immunovasion of the product, and the other is improving potency. And those are the types of updates we’ll definitely share more on next week, but I think we’ve made a lot of exciting progress with those sort of next-generation editing strategies.
Salveen Richter
And then you ended the first quarter of the year with about $2.2 billion in cash. Can you discuss your capital allocation strategy as you look towards those 4 verticals that you talked about? How do you decide where to spend most of your resources?
Lawrence Klein
Sure. I think first off, we’re very happy to have that type of a cash balance in the current environment, and it’s the type of thing that will allow us to have multiple years of runway. In terms of capital allocation, obviously, the clinical programs require the majority of the capital. There, we have some advantages in that our lead program in the hemoglobinopathies is partnered with Vertex, and we have a favorable structure there that sort of caps our maximum expenditure over a period of time.
And so that’s around 20% of the spend. Oncology is the largest of the 4 pillars that I mentioned because we have 3 programs running in parallel in the clinic. And then regenerative medicine, also partnered, so that helps defray some of the costs. And in vivo is low expenditure at this point because it’s all preclinical. As we move into the clinic, that will start to increase, but the in vivo programs are more cost efficient than the ex vivo cell engineered programs.
Salveen Richter
Maybe just a question there on the in vivo side. So we’ve seen some of your — I guess, the other companies in the field actually start to move forward into in vivo. Why — when you look at your 4 verticals, why are you still in the preclinical stage on in vivo and when do you think you’ll actually get into the clinic here?
Lawrence Klein
So that does go back to a strategic decision we made back in 2014, 2015 to go ex vivo first. And the idea was we thought the technical hurdles in terms of getting programs in the clinic and achieving clinical proof of concepts were lower in ex vivo. But we fully intended to go into in vivo programs all along. But because we made that initial investment, that initial focus and strategic prioritization, I think it allowed us to get into the clinic more rapidly.
I think we have with Axi-Cel potentially the first approved — or on track for approval type of CRISPR-based therapy. So I think that’s had great benefits for us. The flip side to it is it takes longer to get into the clinic with in vivo. I think some of the results we saw last year really opened our eyes in terms of what’s possible, especially in the liver with lipid nanoparticle technologies that are readily available that one can access. And so we accelerated our efforts in that area, and we’ve got great data. We’re excited to share next week that will support moving programs into the clinic in that area.
Salveen Richter
So congratulations on the data at EHA over the weekend. And there yourselves and partner Vertex did present more data in EHA. Could you in beta thal and sickle cell, could you just provide us an overview of what was new?
Lawrence Klein
Sure. So we presented data on 75 patients. It’s 31 patients in sickle cell disease and 44 patients with beta thalassemia that — treated with Axi-Cel formerly known as CTX001. So it was about 45 to 50 more patients than we had shared in the previous update. And I think it’s safe to say the results are spectacular. And it’s the consistency. I think we loved what we saw with the first 20 or so patients, but now to show 75 patients, all who have very, very significant clinical benefit, 73 out of the 75, I think you can essentially call a functional cure.
We had 2,000 patients who reduced their transfusion burden by — on the order of 80% to 90%, but didn’t quite reach full transfusion independence yet. But that’s a remarkable product profile and really ushering in the era, I think, of curative therapies based on gene editing. So tremendously exciting for us, I think for the field, I think for the patient community, and we can’t wait to advance that program forward to — finally, for approval.
Salveen Richter
And you’ve reiterated time lines for regulatory submission by year-end. Maybe help us understand what gives you the confidence there? And what the FDA may look for in terms of duration of follow-up?
Lawrence Klein
Yes. I think people noticed that with the latest update, we’ve amended the endpoints to be — more of the registrational endpoints for the trial, which are transfusion independence in beta thalassemia and VOC elimination in sickle cell disease. And really, the discussion is ongoing with the agency right now are around how many patients for what duration of follow-up.
And we have that down to a window where it gives us confidence to say we still feel good about the end of the year, and that remains our goal where we still need to determine where exactly in that window that will fall.
I think it’s safe to say we won’t need all of the patients we’ve dosed so far to reach that time point, but it’s just a question of how many we need and what the exact time point is, that’s the ongoing conversation.
Salveen Richter
Why did you flip the endpoints? And do you see risk from that?
Lawrence Klein
Well we originally had — this is the original trial, the Phase I trial that’s been amended to be a registrational format. So the original end points were transfusion reduction, for instance, in beta thalassemia. But since we’re getting 95-plus percent of patients to transfusion independence that makes sense to use that as the endpoint. So it’s really more just what we’ve learned in the three or four years since starting that trial that informed that.
Salveen Richter
And any differences that you would expect on the part of the FDA when dealing with the gene editing, recognizing it’s ex vivo, but filing versus what we’ve seen with gene therapy?
Lawrence Klein
Yes. I think the manufacturing process is different, in that we don’t use a virus. And so they’re still the same categories of requirements around potency assay and release assays and that type of thing, but the nature of them are different because you don’t use a virus, you don’t have viral potency assay. You have an editing type of assay. And so there are differences like that, that I think our manufacturing process is a bit simpler. But overall, I think it’s fairly similar.
Salveen Richter
Great. Blue just had an adcom for their gene therapy in thalassemia. Was there anything that came up that surprised you? Or how do you think about read-through to you guys?
Lawrence Klein
Yes. Of course, we watched that with interest, as I think many did. And I think the outcome was very positive for all stakeholders, and we certainly were glad to see that degree of favorability in the results. And I think above all, it reflects the level of unmet need in this population and the acknowledgment on the part of those experts that therapies like this are desperately needed for patients. And we think our therapy with slightly better efficacy and without the risk of insertional mutagenesis really have some advantages. And we view the outcome there as really positive, I think, for everyone, our Axi-Cel included.
Salveen Richter
And the ability to withstand by self in preconditioning, it seems like a gating factor commercially or that you could just reach more patients if you don’t have that aspect. So can you comment on your efforts with Vertex to develop your own preconditioning or your own conditioning regimen or to pursue a different approach outside of that?
Lawrence Klein
Absolutely. It’s something that’s always been on our radar. Our plan has been from day one, get Axi-Cel approved with current standard of care conditioning. We think there’s around 30,000 patients where there’s a highly favorable risk-benefit equation there because of the severity of their disease. And that’s a sizable patient population that we can start to address with current conditioning. We want to get to targeted conditioning. We’re excited that the field is making progress.
Companies like Magento with trials now ongoing with novel agents. If those are successful, we’ll absolutely look to use those with Axi-Cel as quickly as it’s feasible. And those are therapies that will be available on the market if they’re successful, and there’ll be sort of a rising tide that lifts all gene therapies in this area.
We think — obviously, we think we have the best one, and so we’ll benefit most. But we also want to innovate ourselves and our partners at Vertex feel the same way. And so we both have internal efforts in that area ongoing. And it’s something that we’ll share more about in the future. But we’re making investments internally to see if we can push the field forward. But we’re excited at the amount of innovation that’s going on generally.
Salveen Richter
And what about an in vivo program here?
Lawrence Klein
Yes. That’s absolutely another innovation that could change the profile of these therapies. The trick there is getting gene editing machinery into hematopoietic stem cells. Fairly specifically, you don’t necessarily want to edit all the other tissues in the body. Lipid nanoparticles are very good at getting into the liver. Viruses also tend to go to the liver. You can get particles with a little more tropism to HSCs, something we’re looking at very closely, also working on internally.
We think the field’s not quite there yet, but there’s absolutely progress being made, and it’s something that we’re focused on.
Salveen Richter
So moving to CTX120, your CAR-T, that’s targeting BCMA. It seems like a very competitive space at this point. We’ve seen the autologous therapies, namely in J&J and Legend set a very high bar here. How do you see — I guess, firstly, how do you see yourselves as differentiated from the allogeneic therapies that have come in front of you? And then how do you think you’ll fit in with — given the bar that we’re seeing set by autologous?
Lawrence Klein
Sure. In terms of differentiation, I mean, if we look at ourselves and say Allogene or what I mentioned before, our beta2M met it, I think, is what’s different versus a different approach to dampen the immune rejection of the cells. And we think that, that has some real advantages in terms of getting away from harsher lymphodepletion. We’ve seen recently efforts to increase doses of siflu to having some pretty undesirable safety effects.
So we’d like to stay with the standard length of depletion and use editing to provide the immune invasion. So that’s in terms of differentiation. In terms of competition, I think the big question out there is can anybody compete with CARVYKTI at this point. I mean the data is quite incredible.
That being said, it’s a large patient population and treating all of those patients with an autologous approach will be very challenging from supply considerations, from patients not wanting to wait the 4 to 6 weeks to get treated and you have to go on bridging therapy and that type of thing. So we do think there’s a place for an off the shelf program that doesn’t necessarily have to match those numbers. But with a 80% CR rate, you do need to be somewhat close to that. And so we do think that’s quite a high bar.
Salveen Richter
Allogene on the allogeneic side had shown data before and clearly looked like they needed to optimize and has provided levers that they’re using. I believe you guys were supposed to announce data last year, and it looked like you’ve been optimizing as well. Can you give us any sense of what you’ve been working on as you head into this data set?
Lawrence Klein
Absolutely. So it primarily falls into those 2 buckets of improving immuno vision and improving potency of the cells, where we’ve been working on novel edits to achieve both of those things. Also in BCMA, what we’ve seen in the data is the binder seems to matter in ways that are somewhat unpredictable. I mean you’ve seen companies with a lot of experience in this space, fail with BCMA-targeted programs probably because of something in terms of the binder dynamics, and I think it’s difficult to know what’s contributing to that.
It seems like some reason, Legend has gotten it, right? And so we’re looking at that as well in terms of next-generation product concepts. And that’s — those are areas that we’ll focus on during the Innovation Day next week.
Salveen Richter
Maybe going back to your commercial commentary. If you had a profile that’s between BCMA and CARVYKTI. Do you think an allogeneic will sell?
Lawrence Klein
Yes. I think that’s kind of the window that we think you would need to be to have, obviously, the closer you are to CARVYKTI, the better — the higher potential there is there. But yes, absolutely. We think that’s the type of window that you need to show.
Salveen Richter
And what should we be looking for in this first data set?
Lawrence Klein
I think it would be those, it would be in rates of response and depth of response would be the primary thing. As well as safety.
Salveen Richter
Then moving to 130, your drug, your CD70, you presented data in T-cell lymphoma. Just walk us through what you learned from that data set and what it means about the profile of this drug?
Lawrence Klein
Yes, we’re excited about that data set. These are patient populations where there’s unfortunately tremendous unmet need. There’s really very little available for these patients. It’s fairly old types of chemotherapy that are being used to treat these diseases primarily coupled with targeted therapies that work depending on biomarker subsets and that type of thing. But overall, response rates are low, durability is low, and there’s a great need for new therapies.
And so what we’ve shown at our higher dose levels, we’ve seen a dose response across our different programs. So that deal 3 and above, we have 70% overall response rate, 30% CR rates in PTCL and CTCL subsets. So we’re very excited about that. We’ve gotten 2 patients to bridge to an allogeneic transplant, which is potentially curative in these indications, which is very difficult to do. And so the physicians in this area are extremely excited about this product. The safety is also quite remarkable compared to the other things they need to use to treat these diseases.
So we think there’s real potential for 130 in T-cell lymphomas. And then, of course, we are in RCC with that program as well. So this validates the target deriskers of the safety profile and that type of thing and would be really exciting if we can achieve something in solid tumors with CD70-directed CAR-T.
Salveen Richter
Have you disclosed how many patients we’re going to see from that initial data set in renal cell?
Lawrence Klein
We haven’t said it.
Salveen Richter
Okay. And how are you thinking about what the bar is here and what you want to see to move forward?
Lawrence Klein
Yes, on the line of therapy that we’re in, I think it doesn’t take much to have an approvable product profile. Checkpoint combinations in the 20% to 30% response rates and any kind of CR rate, 10%. But I think, first and foremost, just seeing responses and a favorable safety profile with an off-the-shelf CAR-T in RCC would be very exciting. Any kind of meaningful responses that we could then build on with modifying the dosing regimen or with additional edits would be an exciting advance for the field.
Salveen Richter
Okay. And on 110, your CAR-T targeting CD19, one could argue that the data we’ve seen so far has not met what we’ve seen on both the allogeneic and autologous side. So how are you thinking about optimization to kind of get to where you need to go there?
Lawrence Klein
So when we showed last October, we had around 20% CR rate at 6 months, which is kind of a landmark that people are using to compare. I think across allogeneic products, we think it’s quite competitive especially when you factor in the safety profile. It’s — of course, there are nuances to comparing apples-to-apples in those trials in terms of patient subset. We didn’t have any indolent follicular patients, for instance, and some of the other trials do and response rates there are typically significantly higher.
So we think compared to other allogeneic products, it’s very competitive. Compared to autologous, I think that’s where we believe we needed a bit more in terms of an initial CR rate and durability to have something that has the potential to supplant autologous in the market.
There could be a niche for a product like that in patients that can’t wait for autologous or can’t receive it based on where they’re located, that type of thing, access. But we’d love to get to 30-plus percent 6-month CR rates to really try to replace autologous. And that’s where we’ve deployed this consolidation dosing strategy, which we hope can deepen those responses and give us more durable CRs.
Salveen Richter
And you have a regenerative medicine vertical. Can you remind us where your stem cell therapy for type 1 diabetes stands at this point and when we might see first data?
Lawrence Klein
Sure. So we’re in the clinic. We started our trial late last year with a — it’s essentially — it’s a safety and immunoagent trial with small sentinel devices to look at can the cells engraft without immunosuppression and to look at safety, and it’ll lead into an efficacy trial with a slightly different product concept that’ll — we’re aiming to start in the not-too-distant future.
We’ll release more on time lines for that. That’s something we’ll go into depth on at the Innovation Day next week and kind of share our general strategy for progressively more sophisticated product versions in type 1 diabetes, ultimately aiming to get to an unencapsulated, injectable, infusible cell that doesn’t require immunosuppression.
Salveen Richter
And why is using undifferentiated beta cell precursors as opposed to fully differentiated iLED cells advantageous? And help us understand the derisking that’s played out on the ViaCyte side so far?
Lawrence Klein
Yes. So there’s 2 programs that people focus on most here, ourselves and Vertex has acquired SEMA. We’re partnered with ViaCyte. We use what’s called the Stage IV. It’s a pancreatic beta cell progenitor cell. So you take polyprotein stem cells and differentiate them part of the way to beta cell. The Vertex SEMA program uses a Stage VI cell.
It’s still not a fully mature — it’s not an iLED, it’s not a beta cell, but it’s closer than a stage IV cell. And there’s pros and cons. ViaCyte has done a lot of derisking in the clinic with the Stage 4 cell and worked on how you can encapsulate that cell such that you get engraftment and it can mature into a beta cell and produce meaningful levels of insulin.
And they’ve shown this — they’ve shown meaningful efficacy with immunosuppression. And what we’re trying to do is improve the cell both to avoid the need for immunosuppression and also improve the fitness and insulin production so you get more potency, more efficacy. And so because they’ve derisked everything using a stage 4 cell, we said, for our first effort here, we should not introduce additional risk by going to Stage VI. Nobody’s done Stage VI and then encapsulated device.
Stage VI cells require more nutrients. So there’s a higher hurdle for in terms of getting nutrients to cross the barrier of the device, which is a big issue with these therapies. So based on all the work they’ve done clinically, to show us how to do this with Stage IV cells. We thought that made the most sense initially. But we have a Stage VI program that’s in the works that we’ll say more about. And we plan to ultimately go there potentially, especially for unencapsulated versions of the product.
Salveen Richter
Great. Any questions from the audience?
UnidentifiedAnalyst
If you could remind us where you stand on — with — regarding IP and just following the recent U.S. PTO Appeal Board decision?
Lawrence Klein
Sure. So I think it’s important with the IP situation to remember there’s U.S. and ex U.S., and they’re very different. So ex U.S. was on a first-to-file regime when these inventions were made. The Berkeley-sharpened TA side of the dispute very clearly the first to file. And so ex U.S., we have granted IP that covers all uses of technology, environment-agnostic, covers huge areas. Many of the Broad’s patent have been stricken down ex U.S. So we have a very, very solid position ex U.S.
In the U.S., we have, I think it’s 40-plus granted patents that are a family of patents that cover the environment-agnostic use of the technology. So how you take a CRISPR-associated type 2 nuclease and change it such that it can be used to add a gene independent of environment. The Broad has a couple of patents that cover the eukaryotic specific uses of the technology. And those patents have been at the center of this debate that’s been covered in the media and has now gone to the USPTO Appeal Board and is now being appealed to the Federal Circuit.
So that’s the status of that is that the Broad has been successful so far in retaining those patents. That decision is now being appealed to the Federal Circuit, and they could lose those patents if they lose that appeal. If they win, they would keep those eukaryotic patents. And it would set up then a scenario globally where we have a very, very strong position in ex U.S.
We have what’s called roofing or Genus IP in the U.S. The Broad would have some specific eukaryotic IP in the U.S. And if either party wanted to use this technology for human therapeutics globally, they would need access in some form or fashion to the other part of the IP likely setting up a scenario where you would have a cross-license between the parties. But in terms of the time line for that to play out, it could still be a number of years.
Salveen Richter
Last question here. Outside of oncology, what are you most excited about that is in your pipeline? Maybe even entering your pipeline at some point some of the early work?
Lawrence Klein
Sure. Well, I’m very excited to unveil some of what we’re doing in vivo next week. Like I said, we haven’t said as much publicly, but we’ve made a tremendous amount of progress. We think we have data that rivals the leaders out there in terms of our in vivo pipeline and platform technology. And we’re advancing programs pretty rapidly towards IND filing. And so I’m excited about that and next Tuesday sharing more of that with all of you.
Salveen Richter
Great. Well, with that, thank you so much, Lawrence.
Lawrence Klein
Thank you, Salveen.
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