CRISPR Therapeutics AG (NASDAQ:CRSP) Bank of America Securities 2023 Health Care Conference May 9, 2023 1:40 PM ET
Company Participants
Sam Kulkarni – CEO
Conference Call Participants
Geoff Meacham – Bank of America
Geoff Meacham
Welcome to the morning session of the BofA Healthcare Conference. I’m Geoff Meacham. I’m the senior biopharma analyst here at BofA. And we’re thrilled to have CRISPR Therapeutics here. And speaking on behalf, we have Sam Kulkarni. Sam, welcome.
Sam Kulkarni
Thank you.
Question-and-Answer Session
Q – Geoff Meacham
So let’s kick it off just with a higher level view of there’s lots of technologies in the gene-editing space. There’s lots of bells and whistles. You guys are the most advanced when you look at kind of the exa-cel likely approval. But let’s take a step back and give us a bit of where we are today, how has editing evolved? And what advantage do you see today for CRISPR versus some of your peers?
Sam Kulkarni
Yes. Thank you, Geoff, and this is our seventh year at this conference. And the company has evolved quite a bit over that period of time and we’re proud to have built the foundations of what could be the next Genentech at CRISPR Therapeutics.
We’re not only the most advanced in terms of having the assets that’s closest to the market, but also we’re doing quite a bit of early research around all new forms of editing that positions us to be the leaders and be preeminent for years to come.
Just an example of that is very soon we’re going to make a transition from just being an ex vivo company to having in vivo programs. In the next 2 years, I foresee us bringing to the clinic programs with forms of editing that are newer forms of editing or advancements on what we currently use with CRISPR-Cas9. And all that, with the view of creating a sustainable enterprise that will become the next Genentech in the biotech space and a very special company for years to come.
And we’re obviously supported by a strong balance sheet that allows us to do not just 1 or 2 programs, but several programs in parallel. I mean, right now we have 7 clinical trials going. We’ll pretty soon have double-digit clinical trials, lots of catalysts, lots of data coming. And we’re learning from all of these to further inform our programs like our immuno-oncology programs. We learn from data of 200-plus patients to inform what we want in our next-gen program, so we’re putting that into play.
So overall, we feel — I always think about the company in terms of performance, but also health. We feel like we’re very good in terms of performing against our assets, but we also built a strong company that could be sustainable and be the leader for a long time to come.
Geoff Meacham
Got you. And Sam, can you talk a little bit about the regulatory backdrop? That’s always a point of a lot of anxiety when you have some companies going on clinical hold or some surprise regulatory decisions, where do you think kind of FDA is today with comfort and editing as a platform?
Sam Kulkarni
Yes. We found the FDA, but also the European Medicines Agency and other agencies like the MHRA to be very supportive around gene-editing. The mistake that I think a lot of the investors today are making is overlaying patterns from viral-based therapies on to gene-editing.
There’s — if you look at the 2018 guidance that — document that came out from the FDA, one of the things that’s most striking in that document is the notion of variability. The agency doesn’t like a lot of variability in the drug product that’s been produced. And when you use viruses, it’s no pun intended, invariably the case that you have a lot of variability because of the biological nature of how viruses work.
And so patterns that you see on tech ops or CMC from an AAV-based therapy or a lentivirus-based therapy doesn’t necessarily apply to a gene-editing-based therapy. What we have is a much more deterministic mechanism of action with CRISPR-Cas9, where every time we manufacture, we get very consistent editing, very consistent drug product. And that carries — that gives the regulators a lot of confidence, but comfort around the fact that every patient is going to get the same type of therapy. And this is something that we also had the benefit from the early going with Vertex of saying let’s design a process that’s ready for commercial right from the get-go versus taking an academic process and translating or comparing it or modifying it to fit commercial purposes.
And so all those give us a significant advantage in terms of those regulatory discussions. And I think the — what we’ve seen from the agencies, I should say is nothing but support to bring a medicine like CTX001 or exa-cel to patients that have no other options. Especially in the sickle cell space with the failure of the confirmatory trial for crizanlizumab, there really is nothing. And so this could be a major boon for these patients suffering from this terrible disease.
Geoff Meacham
Let’s talk about exa-cel for a minute. So when you look at your clinical program, the package has years of exposure and very consistent risk benefit profile. Give us a perspective on kind of what you learned as you were interacting with regulatory agencies in U.S. and Europe about what requirements they’re looking for and maybe how that informs your development of other additive products.
Sam Kulkarni
Yes. I think a key to developing these cell-based programs or cell therapies with editing is getting the CMC right. I think it’s a lot of — I’ve seen a lot of companies say, oh, the FDA said this, but we’ll figure it out later on. I think that’s something we can show comparability later on. And the problem is when you do that, all of a sudden throws into question all the data you generated with the process you had before. Can you include that in the pivotal data or not? And I think getting the CMC right is one of the most critical factors and almost a threshold requirement for success with gene-edited cell therapies, maybe slightly different with the in vivo programs.
And then beyond that, then you do need to get agreement on what the trial design is and how you want to run the pivotal arch. I think there — right now, there are a lot of questions in certain disease areas where in the past, you can do single-arm trials. And now you may need to do a single-arm trial, but also an RCT in parallel or go straight to an RCT. And those — that’s all very important to get agreement on beforehand.
Take an example, our CTX130 program, targeting CD70 in T-cell malignancies. This is a patient population that have no options. This is where indications like CTCL, where cancers develop on your skin. One of our patients that self-identified and was the subject of an NPR article, this is a former NBA player who couldn’t get up out of the wheelchair because their feet were full of cancer cells. And then within a month of getting CTX130, this person was walking around normally.
And now in fact, they said they want to travel to Europe for the first time get on a plane. And so that’s a transformative effect on this patient. But even in indications like that, I think it’s very important and that’s why we haven’t guided to when we’re going to have a BLA or what the plan is for a pivotal trial because we want to get alignment before we say here’s how we’re guiding to not just additional data, but here’s how we’re guiding to a potential BLA filing.
And I think the exa-cel experience has taught us a lot on regulatory and should give us a competitive advantage as we advance more programs, not just into the clinic, but all the way through approval.
Geoff Meacham
And you’re right. I mean the regulatory bodies, for example, the EMA typically likes head-to-head. And I think U.S. FDA will accept a single-arm study. Is — do they look at the programs in the context of the technology? Or is it the disease itself and kind of the unmet need and the traditional kind of way?
Sam Kulkarni
Yes. I would say the technology becomes a threshold matter. If you’ve — there are certain requirements for a new technology. And if you meet those requirements, then it’s the standard way of looking at risk benefit. Then they look at the disease, the unmet need, the data that you have generated.
And so far, for the first 3 programs that we put out there, we have RMAT designation for all 3 based on the data. And that tells you that the — one, the agency sees a lot of value in these programs. But they also put that in context of the unmet need that — in those indications and specific populations.
Geoff Meacham
Sam, you mentioned manufacturing. So talk about what CRISPR’s capacity is, where you see in the next couple of years, how many different studies you could — you have the capacity to — to get through from proof-of-concept to even a larger scale Phase III?
Sam Kulkarni
Yes. So I think we’ve compartmentalized the capacity for autologous separate from allogeneic. And the differences with allogeneic, a very small footprint can generate thousands of patient doses because what you’re doing every time you manufacture, you’re getting 50 to 100 patient doses, right? And compare that to autologous, where you’re getting 1 patient’s dose every time you occupy a suite for 7 days, right? And that is a very important distinction that investors need to understand, which plays into gross margins, into profitability, but also how much you need to invest to get to approval.
In the autologous context with exa-cel, what we’ve done is create a modular manufacturing facilities that are redundant in the sense that we have facilities in the U.S., in Europe and eventually probably more than that, just to be closer to the sites of care so that we can take the patient cells, get them to the manufacturing facility as quickly as we can, but also be able to supply and modulate how much supply we can manage based on demand without ever having to be in a situation like we had with the [Vecma] where they were supply-constrained. So we’ve created that ability together with Vertex. And obviously, it’s no small investment. But now that we’ve created that footprint, I think it gives us a lot of flexibility and scalability.
Geoff Meacham
And I think — so Vertex, your commercial partner for exa-cel, has talked about 75 sites for manufacturing. Is that the starting point? Do you think that needs to double over time? And is that capability leverageable when you look to other autologous kind of therapy?
Sam Kulkarni
Yes. So the 75 sites they’re talking about the qualified treatment centers.
Geoff Meacham
Right.
Sam Kulkarni
So manufacturing-wise, it’s just a handful of sites, U.S. and Europe. But the qualified treatment centers are the centers that are able to do a transplant procedure, but they’re also trained in collecting the cells from the patient, sending the cells to our manufacturing facility, receiving the frozen cells, calling them properly and then dosing the patient, right?
A lot of this reminds me actually have the medical device space and the launches there. You had these advanced products like TVARs or others that — where you needed like the cath lab, you needed qualified imaging specialists to be able to do these implants. And it took a whole system of training to be able — to enable them. So these qualified treatment centers are going to be critical in enabling the launch. And we eventually want to target 75.
But early on, I think even if you get going with somewhere in the 15 to 20 range, that gives us enough demand in the early going to get the product launched properly. But eventually, we want to have 75 centers, but also globally, we may expand beyond that as we reach into patient populations in Asia and Africa. I think there’s several — hundredfold more sickle cases in South Asia versus the U.S., for instance. Now the affordability is much lower and a very small sliver of those patients may be able to afford it, but even that small sliver is a meaningful number. So I think eventually, we do need to get beyond the U.S. and Europe, and there’s significant unmet need and demand outside.
Geoff Meacham
And Vertex, your partner has talked about the pre-commercial kind of considerations when you think about the pricing reimbursement access. So to what input does CRISPR have in those conversations? I know it’s more than just a handoff. I mean, there’s an interaction there, but I wasn’t sure the degree that you guys help with the commercial launch.
Sam Kulkarni
Yes, I think we’re doing everything we can to help Vertex. I think we’re lucky to have a partner like Vertex that has tremendous experience in launching in rare diseases. They also have the built-in infrastructure, both the U.S. and Europe to be — to have — to leverage relationships, for instances, with payers. And I think that’s going to give us a very big leg up versus others that are launching the same space.
I think to the extent that there is a strategy around how we think about patient populations, how we think about demand, all that we’re here in support of Vertex. I think right now we’re mostly busy with helping around CMC aspects to make sure that we get over the finish line on the BLA or getting the approval, but that’s our focus right now and we’ll be helping Vertex, but they’re clearly taking the lead.
Geoff Meacham
Right. And when you think about the sort of next-gen, the conditioning regimen as part of exa-cel is we call it first gen. I mean, it doesn’t at all like downplay the data itself. But like when you think about kind of the next steps of how you improve upon that, walk through how you imagine the myeloablation improvements? And how can that be — those lessons be learned in future programs for CRISPR?
Sam Kulkarni
Yes. Absolutely. I think one thing I’ll say is even with the exa-cel the way it is right now, the addressable market is very large. You just do the math, it’s too early for us to comment on pricing, but if you take the ICER pricing of $2 million per patient and 25,000 patients in the U.S., that’s a $50 billion addressable market.
The key question is, how quickly are you going to penetrate that market? And how are you going to expand beyond the 25,000 patients? And that’s where myeloablative — gentler conditioning agent comes in. If you have a gentler conditioning agent, where you don’t have to go through the whole B-cell transplant process and you’re selectively depleting the CD34 cells in the bone marrow and then reinfusing with the edited cells, that will make it that much easier and you’re going to have 2 effects. One is more patients are going to raise their hands to get this therapy that have milder disease, but then you’re also going to have a better penetration rate within the severe population.
Now it’s not that straightforward to bring a gentler conditioning agent to the market. And one of the reasons we’ve seen failures in the space is most of the companies that were dedicated to developing gentler conditioning agents were developing it for other indications like in AML, something else, where the PK/PD profile of those agents were optimized for a different need.
What Vertex and us are doing are we’re developing it solely for sickle cell and thalassemia. So what we want is an agent that has a pretty quick half-life so that it disappears and doesn’t impair or doesn’t affect the drug product that’s infused, right, for instance, which may not be the same for AML.
So we’re optimizing parameters that would — that’s bespoke for sickle cell and thalassemia, which gives us greater confidence that we can bring something to bear in these indications or with this therapy, whereas others haven’t been able to.
Geoff Meacham
In the beta-thalassemia end of things. So maybe just for reference, just give us your perspective on comparing contrast with like the bluebird kind of platform? And where you see kind of the risks there?
Sam Kulkarni
Yes. I think, one, I think bluebird, I think, kudos are due. They’ve been in this space for a long time and they were pioneers in developing transplant-based cell therapies.
Now that said, I think given where we are now with the timing being almost very close to each other around potential approvals and potentially getting to market in sickle cell, which is a big market, I do think CRISPR-based therapy have a huge leg up. One, because the narrative around CRISPR, deterministic approach, where you’d have a precise edit to your genome is something that patients seem to grasp on to much stronger, more so than the physicians.
And the physicians themselves also feel like the unknown unknowns that you may have with the virus-based approach in better control with the CRISPR-based approach. And I think that’s going to play into the choice that the physicians and the patients make together. In many cases, the parents making the decision. And I think you’re going to see a significant tailwind for our product relative to others out there.
But again, I think this is more about a category buildup versus one versus another. So I always am careful about what I say of exa-cel versus bluebird. But my own personal takes, having seen similar competitive programs before, is that the CRISPR narrative is going to capture the imagination of the patients. It’s going to give them more comfort and that’s going to lead to a relatively big advantage in market shares.
Geoff Meacham
I got you. Let’s switch gears to the CAR-T. So you guys have had some experience in hematology and solid tumors. Just for those in the audience, so give us some perspective on the next-gen kind of CAR-Ts and how that’s different than your first wave of experience?
Sam Kulkarni
Yes. And I would say this is a entirely new paradigm in drug development and discovery. In small molecule world, what you do is you develop a small molecule for a particular indication. Either it works or it doesn’t. Sometimes you have a backup small molecule, but it’s not an improvement on the first one. It’s a backup. Sometimes you have follow-ons, so you think may be better.
But what we’re doing here is to develop a — take a particular thesis and say cell-based therapies are going to be very important in cancers because they can actually completely eliminate the cancer and lead to cures. And what we’re doing is putting the first gens in and then improving upon that with everything we learned from the first gens, whether it’s patient biomarker data, whether it’s patient PK/PD data, we’re putting into play with the next gens. And with the next-gen program that we have with CTX112 and CTX131, one, we’ve been able to cycle it very quickly. Within 18 months of the first gens, we brought the second gens to the clinic now where we’re enrolling — we disclosed yesterday that we’re enrolling patients.
And while we haven’t shown damage data on it, but there was a recent publication by Carl June, the person who invented CAR-Ts and had a similar edit, Regnase-1, with a different coedit called [Roquin-1]. And that publication showed that these next-gen CAR-Ts are not just 10x better, hundredfold better in terms of expansion, cancer cell killing and the ability to retain naive state in these CAR-Ts or more memory like state. And I think that’s all going to come into play with our next gens, which we’re enrolling now, not to mention the advantage we have in terms of manufacturing because these cells expand a lot more. So every time you do a manufacturing run, you get 100 patients worth of doses. So all that’s going to come into play with the next gens.
The first gens that we have CTX110 and CTX130, I think are products in their own right and we’re going to push that forward all the way. And we’re going to bring the next gens forward and decide how we’re going to position one worse than other over time once we see more data.
But at this point, I think a few things have happened, the Carl June paper, but the fact that in the next few months, we’ll have PK/PD data around the next gens. And all the pharma companies are now picking up the phone saying, oh, we want to learn more about your next gens. I think they went dormant for a period of time there before that. But now I think there’s a lot more interest and a lot of interest from the investigators, which is why we had the presidential symposium at the EBMT conference last month with our CTX110 data and the interest is just growing. So while investors may be thinking that cell therapies have hit the midyear, I think the investigators and pharma companies are just ramping up on their interest.
Geoff Meacham
Right. So the next gen could have the potential of longer durability of effect and maybe better responses at the onset?
Sam Kulkarni
Both. I think you’ll have — hopefully, we’ll have a greater proportion of patients with complete responses or greater responses in the early going. And those responses are deep enough that lead to durability. And so you have a greater proportion of patients reaching, let’s say, 6, 12 months of durable responses.
Geoff Meacham
And with the next-gen technology, talk a little bit about the safety profile. Is the CRS in the like — would you expect there to be tweaks to that as well?
Sam Kulkarni
Unknown at this point, we have to see what the data look like, but that is something that we’re watching very carefully to make sure that the increased cell expansion doesn’t lead to more CRS. But CRS is something that investigators will figure out how to manage now. I think if you look at all the advances and how people use [TOC], how quickly they intervene with tocilizumab, I think CRS has generally been a managed phenomenon lately.
Geoff Meacham
That’s perfect. And when you look at the sort of compare and contrast a lot of the experts that we’ve talked to years ago have said bispecifics are — with respect to CRS, you have recurring CRS and maybe the efficacy isn’t there. But there’s been an evolution of bispecifics in some of these liquid tumor types. Give us your background on where you think a CAR-T cell therapy would stack up against some of these next-generation bispecifics?
Sam Kulkarni
Yes, it’s going to be a very fascinating dynamics in the [indiscernible] market positive lymphomas, for instance. I think what you’re going to see, if I take my crystal ball and say what’s going to happen in 5 years, I think in the academic medical centers, you’re probably — they’re still going to do a lot of autologous therapies because they have access to those therapies, but that’s a very small portion of the market, like 15% of the market. The majority of the market, 85% of the market is in the community settings.
And there I think it’s going to be — I don’t think we want a winner-take-all situation, but there’s going to be both bispecifics and allogeneic CAR-Ts vying for the same market.
And allo CAR-Ts have a significant advantage in a sense that it’s 1 dose. And a lot of the patients that are treated in these community settings are coming from faraway places. They’re not living right next to the centers where they get treated. And bispecifics where you have to take 9 courses or 10 courses of treatment and each of them having risk of CRS or even potentially ICANS, I think that’s not going to fly in the community settings.
I’m not saying that means that bispecifics are no go. I mean, right now it’s pretty impressive data with Epcoritamab and Glofitamab, for instance, there will be penetration. But if allo CAR-T reaches the potential, I think you’re going to see allo CAR-T as the preferred modality in community settings.
Geoff Meacham
Got you. And just give us a status update on where we are with the next-gen assets? So 121, 131, the CD70 program?
Sam Kulkarni
Yes. So right now, what we have is CTX110, where we’re pushing forward pedal to the metal in a registrational trial, where we hope that the 2 course treatment, the data are better than the 1 course treatment and that is a very competitive profile that can get approved.
CTX130 in CD70, we’re — continue to have regular discussions with regulators to understand what is required for a registrational trial. We’ve shown sufficient data. We showed some data at EHA last year and we’ve shown tremendous benefit for patients that have no other options in these indications.
And so we want to — again, to our earlier discussion, I want to get a complete alignment to say this is what the registrational trial could be and we’re going to push forward on that in T-cell lymphomas.
For solid tumors, we’re going to move to CTX131. And we’re very confident in that because, one, you’re seeing other programs targeting CD70 show responses in CD70-positive solid tumors. We had the world’s probably the first complete response in a solid tumor with an allo CAR-T or any CAR-T last year that we disclosed in RCC. And we see a lot of biomarker data in the patients we’ve treated, which gives us confidence around CD70 is a target in solid tumors. So we’re going to push forward with CTX131 in solid tumors. And that could be — that’s probably our biggest shot in the portfolio — in our portfolio where that works, we’re a completely different company. And then we’re going to move forward CTX112 and CD19 and see how it compares with CTX110.
So there’s a lot of — it’s pretty — it’s hard for everyone to keep track of everything we’re doing. But a lot of things in motion and a lot of cards to turn over, but that’s the advantage we have is that we have more information, more experience in the space than any other player in the space.
Geoff Meacham
And you’re right. So with the RCC or the kidney cancer patient, there has been fewer CAR-T programs that have had success in solid tumors, I mean hardly any. But historically, you haven’t seen cell therapy for solid tumors widespread because of T-cell exhaustion and durability question. So help us with kind of how you guys are thinking about evolving CRISPR to address solid tumors in a more effective way?
Sam Kulkarni
Absolutely. And the key consideration in solid tumor is exhaustion. I think when we looked at all the patients we dosed with CD70 in solid tumors, we took the cell samples out and looked at these CAR-Ts. And the biggest phenomenon we saw that’s different from hematologic malignancies is exhaustion comes early in these CAR-Ts. So it’s going to need next-gen edits. And that’s happening around both autologous and allogeneic cell therapies.
At AACR recently, there was some very interesting data on GPC3 targeted auto CAR-Ts with the TGFBR2 edit, similar to what we’re doing. And in fact, most people won’t know, we have a GPC3 auto CAR-T program that’s also moving forward with the same edit. So these next-gen edits are becoming very important. There’s a recent dataset around expressing cytokines like IL-10 in these auto CAR-Ts and that makes them much less prone to exhaustion in these solid tumors.
So the frontier of solid tumors and CAR-T is going to get cracked in the next 18 months and you’re going to see a tremendous resurgence in this space. And what’s also going to be clear is that traditional lentiviral-based CAR-T is not going to work and you’re going to need edited versions that are much more sophisticated to make it work in solid tumors.
Geoff Meacham
Right. And outside of the hem/onc setting, some companies are evolving CAR-Ts to autoimmune or sort of [I&I] type of indications, like what — talk about with CRISPR, you guys are also looking into rare diseases too. So what are the opportunities outside of the exa-cel and hem/onc kind of franchises?
Sam Kulkarni
Yes. So I think we have 3 other franchises now. So obviously, autoimmune we’re looking at. But what we’re doing is fundamentally trying to change the manufacturing process where the efficiency of manufacturing is that much greater because autoimmune is a much bigger market, may require more than one dose. So we want to make sure that we’re not spending — and the price point is different autoimmune versus cancers. So we want to make sure that we have a profitable product. And so we’re trying to reduce the gross — the COGS of these products relatively low so we can make an actual product there.
But I’m very excited about in vivo where we’re going to dose patients in the near future. We announced yesterday in our [Q] that we’re moving forward multiple in vivo programs and these are for targets like ANGPTL3, LPA, where the biology is getting derisked with RNAi. And so a single-shot therapy where people have reduced their LDL cholesterol or triglycerides by 50%, 60%, that’s a pretty meaningful advance for society. I mean we’re going to see a big impact on when people die from these therapies because you’re going to add like 10 years to their lives given the cardiac disease is the #1 killer that we see.
So we’re excited about that. Our diabetes program, together with Vertex, has moved forward quite nicely. We’re dosing more and more patients there. So we’re going to have plenty of cards to turn over in the next 12 months.
Geoff Meacham
Excellent. With that, we’re out of time. So Sam, thank you very much.
Sam Kulkarni
Yes. Thank you, Geoff.
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