CRISPR Therapeutics AG (NASDAQ:CRSP) Citi 2024 Virtual Oncology Leadership Summit Conference February 21, 2024 1:00 PM ET
Company Participants
Samarth Kulkarni – Chairman and Chief Executive Officer
Conference Call Participants
Yigal Nochomovitz – Citigroup
Yigal Nochomovitz
All right. Welcome back, everyone, to the next session of Citi’s Virtual Oncology Leadership Summit. I’m Yigal Nochomovitz, one of the biotech analysts here at Citigroup. Remember if you have questions for Sam Kulkarni, the CEO of CRISPR, who’s our next speaker, just e-mail me, and I will be able to just check the e-mail and relate the questions.
So Sam, again, thank you so much for taking the time to speak with us and an incredibly busy schedule. Obviously, everyone is pretty familiar with your story. But still, I think it would be helpful just to set the scene at a very high level. What are the long-term goals of the company? What are some of the key priorities for 2024? And what should people be watching for? Thanks.
Samarth Kulkarni
Yes. Thank you, Yigal, for having us at this conference. I always enjoy these fireside chats with you, whether it’s virtual or in person. And it’s an important time to do it given the stage of the company. We’re almost a decade into starting the company when we — since we started the company, and we’re here where. We’ve gotten the first CRISPR drug approved in the world, which is a remarkable achievement.
But we’ve also put our portfolio in such a strong position to parlay this initial success into something that could be multi-asset, multi-therapeutic area with different growth levers that could get us to becoming a sustainable company in the not-too-distant future. I was reading an article today about the $100 billion club and how Vertex and Regeneron are part of the $100 billion club but they both were started in 1988 and ’89, it takes 30-plus years or longer to get to that kind of level and it took Genentech just as long, maybe a little bit shorter.
But hopefully, we can be on the same trajectory with CRISPR and do it in an even faster timescale, just like we’ve been much faster in getting our first drug approved relative to some other companies that have installed works in the biotech space.
So for us, overall, the mission remains the same, which is to create a great company, great biotech company that’s getting drugs to the clinic, but also through the clinic to patients to help patients with severe diseases across a number of different therapeutic areas.
But I think from a business standpoint, we want to take a stage-based approach where we completed one phase of the company. And now we’re looking at this – we’re in the middle of a second phase of the company where a number of our portfolio drugs will declare themselves, and we’ll see what’s working, what’s not over the course of the next 12 to 18 months that would dictate the next stage of growth for the company before we ultimately become a sustainable, profitable company.
Yigal Nochomovitz
Okay. Great. Well, let’s obviously start then with the tip of the spear in CASGEVY, which obviously was recently approved and is – the launch is underway. Obviously, Vertex is leading the charge there, so they may be limited in what you can say in terms of detail.
But at a high level, what can you tell us about the early metrics to the extent possible, the 12 sites, centers of excellence, which are beginning the deployment of the therapy, the uptake so far? Any anecdotes, any feedback from the marketplace in terms of how the launch is going?
Samarth Kulkarni
Yes. Thanks for that question. And at the outset, I’ll say that, we’re really glad to be partnered with Vertex. They are the best positioned company to launch a drug like CASGEVY for these indications. They have the experience with rare diseases. From a commercialization standpoint, they’ve – they have the organizational nimbleness and flexibility to deal with the launch that’s different from a typical biopharma launch or a pharmaceutical launch that we’ve seen in the past.
And I think the biggest thing is the data are remarkable and what we presented and what we got approved off of. And you will see eventually a lot of patients benefit from what is a transformational drug.
With that qualification, I also, as you said, we’re not able to make too many comments about the CASGEVY launch given Vertex is leading the launch, and we’ll let them set the tone and provide the metrics and provide the updates on how it’s going. But from my own experience, and this is regardless of what I see on the launch, which is the physicians are tremendously excited. The entire health care system is excited about CASGEVY. You have a number of initiatives popping up from the government side. For instance, the – from the White House on enabling launch and access to medicines such as CASGEVY with through CMS across the different state Medicaid organizations.
So there’s a lot of energy brewing in the system to enable CASGEVY, which may not have been the case with some other cell gene therapy launches. I think the number one question we got at JPMorgan was Roctavian was – it didn’t really meet expectations and the launch didn’t go as planned. What makes you think that CASGEVY is any different.
And I think they’re apples and oranges. I don’t think you can really compare the two apart from the fact that they’re both followed in the cell and gene therapy bucket because the indications are very different. The unmet need is very different. The already commercializing is very different.
And so broadly, I would say, what we’re going to see is strong patient demand because that’s what we saw in the clinical trials. What we see is a lot of physician enthusiasm, judging from what I’ve seen at least directly. And I see the system gearing up to support a launch for a drug as transformative as CASGEVY. So we feel generally good about how it may all go. But again, with the caveat that Vertex will be the one providing sort of the metrics, the guidance, et cetera, for how the launch will go.
Yigal Nochomovitz
I mean I know you can’t say a lot of detail, but will Vertex be presenting what those metrics are in terms of the – who’s in the queue, like who’s done part – who’s got the patient start forms filled out, which centers are seeing more of the patients. Are we going to get that level of detail or not necessarily?
Samarth Kulkarni
Vertex will provide the guidance. And they have, for instance, provided guidance now on the number of ATCs that are qualified, which is an important metric in all this. They have provided some guidance around some of the payer discussions, especially the contract with Synergy and the early access in France. So I think you will see more information from Vertex, but it’s hard for me to comment on what they’re going to guide on.
Yigal Nochomovitz
Okay. Fair enough. But then moving sort of back to your development of the product and making it potentially better for patients, you have a program where you’re going to potentially be moving away from the full self and preconditioning. This is the c-Kit AC [ph] Where does that stand in development? Because as you mentioned before, and I think it was originally highlighted at your R&D Day back in New York City a few years ago that, that could potentially widen the funnel quite substantially in terms of who would be amenable for CASGEVY?
Samarth Kulkarni
Yes. This is a very important initiative for us and for Vertex. I think we both recognize that singularly, a gentler conditioning agent could significantly expand the addressable population. But not only that, in terms of the addressable opportunity, it’s also significantly going to accelerate the uptake of CASGEVY in the population that’s eligible.
So it’s hard to say is it at 3x, is it a 4x uptake difference if you have a gentler conditioning agent all depends on the data that come out with it. But in general, I think it will make – it will pave the way for greater uptake in the population.
So from our end, we did talk about it at the Innovation Day that we held a couple of years ago where we had a c-Kit conjugated toxin, c-Kit antibody conjugate a toxin and this ADC showed very encouraging early data.
Subsequently, since we – that disclosure, what we’ve done is to acquire a GMP level antibody from a company called Magenta that disposed of its assets. And that’s a – it’s a great antibody that has high affinity but very fast clearance, which is important in this setting because we don’t want the antibody hanging around to impact the product that were edited product that we’re putting into patients.
And we’ve actually licensed in a toxin that we think is best suited for this purpose. It’s not as toxic as amanitin or some of the toxins used in the cancer settings. And with this conjugate, we’re now doing all the studies, how there’s mouse studies or HP studies to demonstrate that there would be engraftment in the metabolic system using this ADC for conditioning. That’s it. All these take some time to first get to the clinic and then get it into the mode of treatment in clinical trials and then ultimately approval, but it is a high priority for us.
Now I think Vertex also has signaled that it’s a high priority for them. They have their own agents that they’ve developed across different targets and – which is great for us because we’re going to move in parallel and ultimately put the data side by side and decide which agent will be best for gentler conditioning. And regardless of whether we’ve developed it or Vertex, I think it will accrue towards CASGEVY from a benefit standpoint. So – and meaningfully increase the value of that program.
Yigal Nochomovitz
Just one question I’m getting from the investor on this. I know you may be have to answer. But Vertex, I don’t believe they’ve announced the European price yet. Do you know anything about when that might happen? Or is that a question for them?
Samarth Kulkarni
A question for them. I think what I can say is they’ve been very responsible about how we price CASGEVY overall. I think the studies from studies from IISER and also from other agencies has indicated that pharmacoeconomic is far greater than where CASGEVY has been priced so far in the U.S. And I think Vertex will continue to take that responsible path in Europe as well.
Yigal Nochomovitz
Okay. Let’s move on to your programs then in AlloCAR T. So I think the last update was last December, and you mentioned that you were prioritizing the next gen set of assets, the CTX112 over the CTX110. So this, of course, is the Regnase-1 and the TGF beta receptor 2 knockout. So why did you decide to do that? What is the edge that you get from 112 over 110 and how will it help you accelerate the development?
Samarth Kulkarni
Yes. We’re quite excited about our next-gen CAR-Ts. A little bit of history here of what happened, which is we had our first gen program, CTX110 and 130 that went into the clinic in the 2018 time frame. At the same time, we said we already had a life cycle management or plan to improve the product where we did a very large screen, empirical screen to find other edits that make these cells more potent because what we were realizing is the cells actually persist for about a month in patients. So the persistence is not as much the issue as it is exhaustion. But the cells were getting exhausted about day 14 in the patients that we treated.
So we said, what if you made the cells more potent and also somewhat exhaustion-proof where they keep going until they’re eliminated by the host immune system. And we did an empirical screen and found these edits like Regnase-1. And we also noticed that a Pairwise edit of the highly prioritized edits had a synergistic effect, so even better than single edit.
These were targets that weren’t as – didn’t have as much notoriety in the scientific publications at the time. So we started – we were talking to a number of other companies that are also in the space. And it turned out that one of the other companies had also done a large screen. And they had come with the same edit as the top edit for making CAR-Ts more potent.
Now it turns out that last year, Carl June published a paper with showing that Regnase-1, again, is the best edit, they can make in CAR-Ts. And that’s gained a lot of attention since after its publication. This is a transcriptional binding protein that somehow regulates cytokine release, but also the maturation state of the T cells.
So with the Regnase-1 edit, particularly in combination with another edit we find that the CAR-Ts are retain more of the central memory phenotype, a little more naive and not fully differentiated, but at the same time, produce more pro-inflammatory cytokines that make the cells much more potent.
And so we landed upon this edit. And then as we were thinking about the notion of solid tumors in the solid tumors, resisting CAR-Ts and a lot of it was TGF-beta-mediated. So we said that if you can take out the TGF-beta receptor, and that’s where we edit out the TGF-beta R2, then the cells will also be resistant to that sort of defense mechanism that tumors have through TGF data secretion.
So those are the two edits we prioritized. And together, they had a lot of synergistic effect, and they had no other side effects on the CAR-T health or T-cell health or expansion in manufacturing. And so far, I think our decision to move from the first gen to the next gen seems like a very good decision. We haven’t disclosed any clinical data yet, but we did say that we’re seeing greater expansion. We’re seeing better PK profile from the next-gen CAR-Ts versus the first gen, and we’re also seeing greater manufacturability and the yield improvement that allows us to operate at a much lower COGS than we were with the first-gen products.
So more to come this year, but we’re moving along both CTX112 and CTX131 through dose escalation at this point and we’re now into relevant doses where we’re starting to accrue data that we’ll disclose at the right time.
Yigal Nochomovitz
Okay. What can — what sort of COGS savings might you anticipate just in order of magnitude for this new approach?
Samarth Kulkarni
Yes. I think we’ve seen at least a 4 to 5x decrease in COGS. So we’re now talking about COGS in the regime of 10 to 15k or 10 – 4 per patient, maybe 10 to 20k depending on where we land on the dose, but it’s significantly lower than auto CAR-T and gives us great flexibility from a pricing perspective and capital efficiency perspective in general.
Yigal Nochomovitz
And then with respect to some of the other competitors in the auto CD19 space, we know who they are, thoughts on how you might differentiate? I mean, you obviously have a very good approach here with this dual knockout you’ve just discussed. But maybe a little bit further behind in terms of showing the initial clinical data?
Samarth Kulkarni
Yes. I mean I think at this point, there was the big RT versus NK cell battle. And I think if you ask most experts in the space right now, they’ll say that CAR-Ts are more potent than NK cells, I think in general, whether it’s iPSC-derived or healthy donor-derived and especially with the — when compared to these edited CAR-Ts or edited T-cells.
So I think in that regard, I think CAR-Ts are looking very favorable. I think in regards to competition within the CAR-T space, our allogeneic CAR-T space, you have one approach where there’s a PD-1 edit. There’s another approach where there’s a different conditioning agent, another approach where there’s a different substrate with gamma-delta T-cells. We’ll have to see how the data play out. A lot of this – now is depends a little bit on patient selection. And I think the reality is with auto CAR-Ts being – getting second-line approval, it gets harder to find patients that have the right characteristics to put on your trials.
So the numbers with small numbers, you may not get the right marker or what’s better, what’s worth. But I feel that we’re the best positioned because we’re not using a very high LD regimen. We’re not using a CD52 agent. And so our – we’re much more tolerable conditioning for patients. And our CAR-Ts are more potent, and that gives us some big advantage as we compete with bispecifics and auto CAR-T in the large B-cell space.
Yigal Nochomovitz
And how does the lipid [ph] depletion compare with the typical what you see in the auto CAR-T? Is it on par? Or is it lighter?
Samarth Kulkarni
Our flu side regimen is on par with auto CAR-T. But we’ve seen other allogeneic players use an enhanced LD, where you have a much higher level of flu side [ph] that’s administered. And that makes it tricky because then you’re exposing the patient to infections and other side effects, which make it compete from a commercial standpoint.
Yigal Nochomovitz
And so you mentioned you’re going to share the initial 112 data in the [indiscernible] Can you say a little more specifically when we might see that, of course, with the handoff to Vertex for the commercial program, everyone is focused on your catalysts internally. So is that something we could expect this year or unclear yet?
Samarth Kulkarni
Yes. Most likely, we’ll have data from 112 this year. We’re trying to figure out which conference and where makes the most sense. But we’re moving through dose escalation pretty quickly, which also is an important indicator, which enrollment in the trial is always an indicator of how PIs view the particular product. And so I think we’ve had no issues enrolling patients and finding patients even if it’s crowded.
The big – for investors, the question we always get is how are you going to compete out of CAR-T given their earlier lines of therapy and now with bispecifics. But the conundrum here is, there’s about 25,000 eligible patients in second and third line DLBCL or lymphoma settings. But only about – only about 25% of them are getting treated with an auto CAR-T or less, right? And we’ve already seen some flat lining of auto CAR-T revenues, which tells you that it’s only available in certain centers, and it’s not going to be broadly used in community settings.
And so the conundrum we have is there’s 75% of patients where there’s an unmet need yet with all the clinical trials starting in these large academic medical centers where this auto CAR-T is easily available, how do you manage that dynamic of doing a clinical trial in an expedient fashion and getting an approval so that it can serve the unmet need and the remaining 75% of the market or maybe even in the full market, if you could position appropriately.
The other thing that we’re also seeing is bispecifics came with a lot of fanfare, if you look at some of the estimates from analysts not too long ago. But the durability of bispecifics is still an open question. I think there was a recent publication on glofitamab, where the people are losing complete responses a year – over a year into the therapy or 1.5 years out as well, so it’s not – the data have not been the same as auto CAR-T, but I think AlloCAR-T could get there in terms of long-term durability.
Yigal Nochomovitz
All right. Let’s move on and talk about the new initiative also announced, I think, in December on autoimmune, you’re planning to start a Phase I in SLE in lupus. Where does that stand? What are the gating steps to get that going?
Samarth Kulkarni
I mean I think at this point, it’s nothing extraordinary in terms of gating steps, I think we do have to get regulatory approval and then do the site – site initiations and get the IRB approvals and get to dosing patients. So we’re on track to – with what commitment we’ve made, which is to open the clinical trial in the first half of this year, and we’ll provide updates as we go along.
I think this is an incredible opportunity for us. Somehow, the stars have aligned or allogeneic CAR-Ts in autoimmune settings with the data that were demonstrated or shown at ASH last year by SHEP [ph] and others. Point number one is if you get a full B-cell depletion, you do reset the immune system for these diseases. And the B-cell depletion for AlloCAR-T looks very similar to what we see with Auto Cart-T. I don’t think there’s much difference. And so that’s point number one. So allo may work just as well as auto CAR T.
Second is for auto CAR-Ts, it’s going to be hard to move very fast because the trial sizes are larger to get approval, you may need more than one Phase III trial to get approval. And for auto CAR-T companies to be able to do a 400, 500 patient trial, it’s going to take a long time. With AlloCAR-T, you can move much faster since it’s available off the shelf, just like you would with an antibody or a small molecule.
The third point is this whole notion of T-cell leukemia is rising even at a small fraction out of the CAR-T-treated patients that the FDA published on recently is posing a question or casting a shadow with some of the sites we’ve talked about in terms of using auto CAR-Ts in the autoimmune population. It’s different in the oncology setting where there’s a greater tolerance for such risks.
And so the stars have aligned for AlloCAR Ts or allo-CARNKs or whatever solutions that you may bring into autoimmune. And then within the allo space, we feel like we’re best positioned because we have a pivotal-ready manufacturing process. We have low COGS compared to a lot of other players. I think CAR-Ts will be better than NK cells in terms of B-cell depletion, ultimately. And we have healthy donor drug CAR-Ts of greater data than IPS-derived CAR-T at this point in terms of showing this B-cell depletion.
So from many different standpoints, we feel like we’re best positioned out of all the players in terms of moving very fast against this opportunity, which could be much larger than the oncology opportunity. And it’s evident also from all the pharma interest that we’re getting in this particular indication.
Yigal Nochomovitz
Okay. Quickly, what are your thoughts on — you have the CD19? Do you think that there’s an advantage to having BCMA as well or no for the first for lupus and other autoimmune and what is your plan for the preconditioning, how is that going to go?
Samarth Kulkarni
Yes. We’re going to start with standard preconditioning like we do with auto CAR-T in oncology settings. Eventually we wanted to see if we can go lower and make it even more tolerable and easy in the preconditioning, but we want to derisk by starting what we have right now.
And I think in terms of the targets, obviously, there are people running CD20, CD19, CD20 and BCMA. I think CD19 gets to the sort of the larger population cells that are being depleted, even earlier stage of differentiation relative to more mature B-cells that you would do with BCMA. And so if we’re using CD19 to illuminate that population and create that B-cell reset, CD19 should be a better target relative to CD20 or BCMA. But we’d love to see what the data tell us and maybe there’s some synergy between targets, but at this point, CD19 seems like the best bet.
Yigal Nochomovitz
Okay. Quickly, let’s talk solid tumors, the RCC study doesn’t get a lot of airtime. What’s the next data update there? I know there was some early data that you’ve shown with the first-gen product, you got a CR in one patient. You’ve now moved on to the same two edits we just discussed for the CD19 now compared with the CD70. So just give us a quick update there, so we can move on and talk about other aspects of the company like in vivo?
Samarth Kulkarni
Yes. No. I think our PIs, we’re doing our solid tumor trials are pretty excited about CD70 with the – they were a bit disappointed that we decided to move to the next gen from the first gen in some ways. But for us, it made a lot of sense.
Yigal Nochomovitz
They were disappointed. I would thought they would have embraced that.
Samarth Kulkarni
I mean they’re excited on one hand, but they feel like we lost some time because they weren’t just keep going with 130 because – because we did see the complete response, which they never see in these settings. Even the stable disease outcomes that we saw in patients were long-lasting stable disease outcomes in these patients. Again, these are patients who die pretty quickly in these metastatic settings, and we saw encouraging data.
And then Allogene obviously showed some PRs as well with their CD70 effort, indicating broadly that this target is a valid target in RCC and perhaps even other solid tumors, like lung cancer and pancreatic cancer. So we’re moving through dose escalation. The dose escalation takes a little longer for solid tumors and CD70 versus DLBCL, because the stack – time between scans is longer and then the stagger is a little bit different.
But we are approaching what could be therapeutic doses now with CTX131. And so we’ll have plenty of data that we accrue this year. We haven’t determined when we would disclose the data, but another one that’s moving on track.
Yigal Nochomovitz
And then there’s some others, there’s the anti-GPC3. There’s an anti-PTK7, another anti-LIV-1 [ph] just where do those stand?
Samarth Kulkarni
Yes. So I think GPC3 is a unique construct. We actually partner with an academic institute, Roswell Park in Buffalo. They are actually manufacturing and putting into trials as an autologous CAR-T. And we have the option should the data look good. We have the option of making it a CRISPR program, an exclusive option. So we financed a different entity to create this CAR-T and get into clinic. And then we get to see the data and decide if you want to move it forward rapidly as an auto CAR-T or an AlloCAR-T. And then we have other targets that we’ve looked at where we’ve done all the preclinical work and have it ready on the shelf. And should we start seeing good data in solid tumors, we’re going to click go in other targets like LIV-1.
Yigal Nochomovitz
Okay. All right. Let’s talk about in vivo, a super interesting area for you. What at a high level, let’s start with the delivery strategy. So like the LNPs that are using tell us about the technology there, how they’re different. You potentially have advantages relative to other approaches and then we can move into the targets. And of course, you certainly showed some very nice NHP data last year, knockdown data which looked good?
Samarth Kulkarni
Yes. We’re excited about our in vivo platform. We looked at a lot of different LNPs and we licensed in this LNP from a provider we haven’t disclosed who they are yet. And this LNP has even greater potency than some of the LNP data we’ve seen from other generic companies to date.
What’s also interesting is you don’t need conjugations like a gallant conjugation or other targeting moieties to get uptake in the liver at a very high efficiency. So we showed nearly 70% editing in whole liver, which equates to about 100 – nearly 100% editing in hepatocytes. With this LNP platform, we feel like relatively safe in NHPs, and we have that therapeutic window to get very high editing without having any safety issues. And it should be a very scalable platform, should we be able to show that with our early products 310 and 320.
So even more scalable than the AlloCAR-T franchise in a way because if we show good data with 310 and 320 and we find out very quickly because you can find out editing in within 2 or 3 weeks of dosing a patient, should we show that. We have 3 or 4 other programs, and we haven’t disclosed those targets yet where we’re ready to go and bring it to the clinic in rapid succession, assuming we un-gate them.
Yigal Nochomovitz
So can you tell us a little bit more about the NHP data? I mean you just mentioned it, but to me, to my mind, it would seem very translatable to the human clinical trial in terms of the target and the modality. And would you agree with that?
Samarth Kulkarni
Absolutely. And that was Intellia that first demonstrated that, and they showed that, in fact, the potency could be even higher in humans relative to monkeys. And you can get – achieve the same editing levels with a much lower dose when you do the allometric scaling in humans. So the translatability is very high, which is why we’re so bullish on these programs given the NHP data that were — that we had, both from an efficiency of editing, durability of editing and a safety standpoint.
Yigal Nochomovitz
What are — I mean, what is your modeling? Or what does the biology tell you about the percent? Is there some sort of threshold in terms of editing percent that you need in the liver to achieve a read-through to a clinical endpoint in these settings? Is there a goal in terms of what you need to see?
Samarth Kulkarni
Yes. I think both for ANGPTL3 and LPA we want to get as high editing as possible because there’s a very clear correlation that disruption of those genes results in better cardiovascular outcomes based on natural history data. And so with ANGPTL3, which regulates lipoprotein lipase, I think we want to get relatively high editing.
But your — it’s — it will be a relatively linear scale, I think, as you go in terms of the dose response, at least that’s what we saw in the monkeys. And you’ll start seeing benefits even earlier. With ANGPTL3 there in certain settings, you can use pancreatitis as a biomarker for instance. And so you don’t have to wait for all the outcomes data to understand if you’re getting the benefits from editing and then you can also titrate and see if different levels of editing have different levels of benefit. But generally, at this point, starting off, we want to get as high editing as possible within the safety region.
Yigal Nochomovitz
So the studies are underway. Just to remind everyone when they started. It’s too separate. It’s one cohort for 310, one for 320. How are you deciding who goes into which cohort? I mean, I would think you could – some of these patients could potentially be eligible for both? How are you doing that?
Samarth Kulkarni
No. I think with ANGPTL3, a lot of them are patients who are either refractory to other agents like PCSK9, bunch of patients that have homozygous familial hypercholesterolemia. There are some patients that have very high triglycerides in addition to high LDL. So those are the populations we’re starting with ANGPTL3.
It’s very similar to the development path that is Kisa [ph] Regeneron employed for Kisa, which is a successful drug. It’s an antibody targeting ANGPTL3 and what other siRNA companies are doing. With LPA, it’s a different population. There are patients who are very healthy otherwise and have well-controlled LDL, but LPA is an independent risk factor, which again, has a very strong natural history associations in terms of levels of LPA and cardiovascular risk.
Now there are two big RNAi trials ongoing for LTA with different cutoffs of LPA, which we’ll read out in the next 12 months that will directly show you the outcomes benefit or hopefully show you the outcome benefit from disrupting the LPA gene.
What we’re doing is similar to what the RNAi doing, but accept it’s a onetime intervention. And I think there’ll be a lot more patients on LPA that will be eligible here relative to ANGPTL3. ANGPTL3 more of a rare disease model in terms of development as we’re thinking about it. LPA, our estimate is there’s over 10 million people with high LPA in the U.S. alone. So it’s a large market and which is why it’s been of great interest to all the pharma companies.
Yigal Nochomovitz
Okay. Thanks for clarifying that. So in terms of the time lines for the data are we going to see some initial look this year? Is it going to be — what are we going to see? Just some biomarker data? I mean, obviously, outcomes is going to require much, much larger studies. So I assume that’s not in the cards at least for the initial – these initial patients?
Samarth Kulkarni
Yes. I think the first test for us is to see that there is protein knockdown or – which is easily measured, right? With ANGPTL3, for instance, within 2, 3 weeks of dosing a patient, you can measure the ANGPTL3 levels. And if that’s knocked down 80%, it’s a very clear indication that you’re getting the desired outcome from editing perspective. So that would be the first step.
I think beyond that, I think we want to look at a number of biomarkers and ultimately, I think we need to do a randomized controlled trial. It doesn’t have to be outcomes-based trial but a randomized controlled trial with the select biomarkers. And then we’ll see you on outcomes trials. But for LPA we may need – we’ll need an outcomes trial for ANGPTL3 we may not.
Yigal Nochomovitz
Okay. Makes sense. And as far as the percent knockdown, I mean there’s just different genes. So would you expect similar percent knockdowns for LPA versus ANGPTL3? Or were there other specific reasons why they may not be similar or given a similar dose, similar patient?
Samarth Kulkarni
It should be very similar in our NHP data. Again, we showed near about 70% reduction in ANGPTL3 or LPA in whole liver, which equates to a near 100% knockdown in hepatocytes. So if you get the Cas9 into the hepatocytes, you’re going to see the knockdown. It’s almost 100%.
So I don’t — I wouldn’t imagine that my big differences between the two targets. And that’s the beauty of this very scalable platform. I think the data we see from 310 and 320 will translate beyond to the next four or five targets that we’ve lined up as well.
Yigal Nochomovitz
How many — can you say how many patients we’re going to get in these initial buckets for 310 to 320, have you disclosed that level of detail?
Samarth Kulkarni
Yes. We’re going to do a standard dose escalation. I think we’d like to get to a dozen patients or so in terms of data disclosures. So it depends on how fast the trials move and what the timing of that disclosure might be, but not different from what other companies have done or early in dose escalation.
Yigal Nochomovitz
And you have outlined that as a data point for 2024?
Samarth Kulkarni
No, we have not guided to data on 310, 320 for 2024. We said we’ll be accruing data, and we’ll make a determination midyear based on how fast the trial is moving or whether we could or could not have a data disclosure this year.
Yigal Nochomovitz
Okay. And then what other settings or targets would you be contemplating next? Would they be cardiovascular or elsewhere?
Samarth Kulkarni
We have both common and rare diseases lined up, and we hope to disclose those targets midyear this year. These will rely on the same LNP platform for liver delivery. But given it’s a very competitive space, we don’t want to disclose the targets yet, but we will at some point this year.
Yigal Nochomovitz
Okay. All right. Let’s move on and talk about type 1 diabetes. Again, that’s partnered with Vertex. Can you talk about where that stands with the Phase I? And when might we see the next data update there?
Samarth Kulkarni
Yes. So we’re continuing our trials with CTX211. Just to give you a little bit of history, we started these programs, partnering with ViaCyte, which then got acquired by Vertex. So we’re partner with Vertex to a certain extent. We — just to diversify our bets in the space, we licensed our technology to Vertex for their gene-edited hypoimmune cells that they’re developing with their own cell lines, and they’ll provide guidance on how it’s moving and what stage that’s at relative to the other unedited self, they’re moving forward in the clinic as well.
We have the programs that we have collaborated on with ViaCyte, namely at the time was called VCTX211. And that program is continuing in clinical trials. We had a bit of a slowdown as we sorted out how we would work in a joint model with Vertex, but then ultimately, Vertex decided to opt out of the 211 program to focus on their own programs. And so we now have the program wholly owned, and we’re restarting the patient enrollment in these trials at this point. So we’ll have more to say on diabetes.
But ultimately, I do think this whole notion of IPS-derived organ transplantation is going to be a huge factor in how we think about medicine in the future. As long as we can deal with neurodegeneration, people will live longer and a lot of organs are going to be replaceable that will allow people to live longer and type 1 diabetes is the best test case or whether we can replace our pancreas with iPSC or stem cell-derived hypoimmune cells that produce insulin.
Yigal Nochomovitz
And so can you just expand a little more because you have the device, obviously, which is sort of, as I understand, like half a credit card size implant, which — but you’ve also had the device free approach, which where the cells have been engineered so that you may not be subject to the immune rejection. So can you just expand on where the priority is there? And which one of those would be the one that you would take forward to late-stage studies?
Samarth Kulkarni
Yes. I think on the – the device approach is obviously the one that’s in the trials right now. On a device-free approach, I think there a few conditions that we have to think about it. One is, from our perspective, we’d like to put a switch in those cells if we go the device-free approach because we’re injecting these cells freely into the patient, and we don’t know where they end up. And if something goes wrong, we’d like to go turn those cells off and just have them die.
So we’re working on a switch in these next-generation cells for a device-free approach, and they also need to be differentiated at different levels than in the device approach where we don’t differentiate them all the way to allow them to find their niche within the device.
So I think there are a number of things to consider here, and we’re continuing to invest in this space. And I do think it’s going to be the – this whole approach is going to work eventually. We’ll see how the competitive forces stack up between the different companies in the space. But at this point, we feel good about where we stand.
Yigal Nochomovitz
I mean is the goal to reduce insulin dependence in the type 1 or potentially just remove the need for insulin or is it to improve – keep them on their basal insulin, but then have an improvement on HbA1c, like how are you thinking about the mix of factors to get disease amelioration?
Samarth Kulkarni
Well, ultimately, we want to have – make them free of insulin. That’s the ultimate goal. But in the near term, I think what we’re – one of the things to look at is the reduction of hypoglycemic events or better control of their sugar. And a lot of these patients who have A1cs above 8, et cetera, they have – a lot of the risk is in hypoglycemic events. And I think if we’re able to temper those, control those, we don’t have such high vacillation. I think that also goes a long way. But ultimately, we want to dial up the dose of the cells to a point where the insulin requirement is very low, if not zero.
Yigal Nochomovitz
Okay. Well, what is the next data update specifically then for 211? And then which — which end points? Is it some of the ones you just mentioned that we’re going to see?
Samarth Kulkarni
Yes. So we’ll provide some guidance midyear this year. I think the key endpoint, obviously, what we’re trying to figure out with 211 is we’ve made these edits, particularly the insertion of PD-L1 gene and HLAE gene in addition to the beta 2M edit. And what is the immune invasion that these cells have in the presence of host T-cells or host immune system? I think the threshold question here is, can we get – can we achieve hyperimmunity or hypoimmune cells that are stealth and protect themselves against the host immune system. And if that’s something that we achieve with these cells, everything else is titratable. We can dial up the cell dose for more insulin production, or we can dial it down if you need to. But the threshold question is, are these cells able to evade the immune system?
Yigal Nochomovitz
And I mean, if you go into late-stage studies with the device, what’s the TPP in terms of durability? I mean, I know these are still questions you’re working on. I mean is it one of — is it like a rechargeable thing where you’d have to do a surgery and put a new one back in after several years? Or you would hope just on how we reset the pancreas in such a way that they would just be tube reset to a lower set point for insulin? I’m not sure how to think about it that way.
Samarth Kulkarni
Yeah, all good questions. We need to get to it once we see some initial data. But with the device approach you want it to be durable for at least 3 years, if not more, because anything short of that would mean that you’re doing surgery each time to replace the device. And that’s probably not feasible commercially or not going to have huge uptake.
So durability in the device is key. But I think with cell injection, as long as there’s no immune rejection, that could happen more frequently, then you don’t have to have the same level of durability for device-free approach. But I think those are things that we’ll have to sort out as we see initial clinical data.
Yigal Nochomovitz
And then, sorry, just to wrap up, Sam, obviously, there’s a lot going on, on the innovation curve in terms of next-generation approaches, version 2, 3, 4, 5 and higher for gene editing different in enzyme systems, different CAST systems. There’s a lot of new companies that are in that space. Where are you in that life cycle in terms of some of the new efforts at the discovery stage?
Samarth Kulkarni
Yes. We’re doing — we don’t think of it as first gen versus next-gen editing in a way or CRISPR 2.0 and 3.0 and 4.0, all the terms that these new companies are employing. It’s like antibodies. I think we need to fit for purpose. If you look at certain indications, you’ll have — we’ll have to take what the most superior approach is. In some cases, the best approach for a certain indication may be reverse transcriptase based editing. In certain cases, it may be insertion of a large gene with the retro transpose on, in other case, it may be base editing.
So I think they’re all different effector functions that you’re adding on to a Cas9 ultimately. So the picture of a Cas9, CRISPR/Cas9 goes from molecular scissors to sort of a molecular UPS truck that’s bringing cargo to a particular part of the genome where you’re loading an effector protein to do a desired modification on the genome and whether it’s a reverse transcriptase or whether it’s A MNase.
And so if that’s the mental picture, mental model, we’re looking at saying, here are the diseases we want to go after. And for this particular disease, this is the best approach. And we’ve developed all these next-gen editing effector molecules to go along with our Cas9s to use them as we need to. And I think we do have the IP to cover all of it because we have issued claims that say, that name all these effector proteins conjugated with the Cas9 to be able to make a genetic modification of the genome in a guide dependent manner is covered by our IP. Now there’s other IP that may be necessary, et cetera, we’ll sort that out indication by indication. But this is a huge focus for us. It’s – we’ve set up two units, one in Boston, one in San Francisco to do all the next-gen editing, and it’s going very well so far.
Yigal Nochomovitz
Awesome. And then sort of last question. Obviously, you’ve got a very healthy cash balance to say the least, I think, over $2 billion, and you raised even more just recently with high interest, high demand, I should say. So how are you thinking about capital allocation? Where do you want to put the dollars to work amongst the programs that we’ve just discussed, what’s – are there new areas where you want to invest further? Just tell us at a high level how you’re thinking about deploying that capital over the next several years?
Samarth Kulkarni
Yes, absolutely. I mean the first threshold condition for us in the way we’ve designed the company is, we always that take — sometimes take 20, 25 years to become a $75 million to $100 million company. It doesn’t come easy in terms of company trajectory. You don’t become a $30 billion company overnight. Now there are some cases where it’s moved much faster like Argenx. But it takes some time.
So we wanted to put ourselves in a position where we have line of sight to profitability now at some point, depending on CASGEVY success. But we have enough cash balance where should macro conditions really worse than even we’re still in business. So we’re going to be hanging around the hoop in a secularly growing area and any dislocations from a macro perspective only provide us more opportunity given the strong balance sheet.
That said, we also want to be very aggressive where others are being defensive in terms of investments in delivery, technologies, especially to enable some of the next-gen editing approaches and also autoimmune. And autoimmune is not going to be an inexpensive proposition should there be good initial data because there are a number of indications to expand into. The trials are larger, and we want to be able to finance all that to take full advantage of what could be a – what can we pull position for us in a rapidly emerging area. And so that’s what led us to topping off our balance sheet, but it gives us great flexibility.
That said, I think we continue to remain very disciplined because the last thing you want to do when you have a big balance sheet is to lose that fiscal discipline that ultimately needs to work to return — to have that return on invested capital that we’re all looking for in biotech?
Yigal Nochomovitz
All right. Thank you so much. Great discussion. As always, Sam, to look with the progress and we’ll change things [ph] no doubt. Thank you.
Samarth Kulkarni
Wonderful. Thank you, Yigal.
Yigal Nochomovitz
Welcome.
Question-and-Answer Session
End of Q&A
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