4D Molecular Therapeutics, Inc. (FDMT) Earnings Call Transcript & Summary

Hello, ladies and gentlemen. Thank you for standing by, and welcome to the 4D Molecular Therapeutics 4D-710 Phase I/II Interim Clinical Data Conference Call. [Operator Instructions] As a reminder, today's call is being recorded. With that, I will hand the call over to August Moretti, Chief Financial Officer, who will make introductory comments.

Thank you, operator, and welcome, everyone, to 4D Molecular Therapeutics 4D-710 Phase I/II Interim Clinical Data Conference Call. With me today are Dr. David Kirn, our Co-Founder and Chief Executive Officer; and Dr. Robert Fishman, our Chief Medical Officer and Pulmonology Therapeutic Area Head. As a reminder, on this call, we will be making forward-looking statements regarding our clinical data from our 4D-710 Phase I/II clinical trial, product development plans and research activities. These statements are subject to risks and uncertainties that may cause actual results to materially differ from those forecasted. A description of these risk factors can be found in the Risk Factors section of our most recent Form 10-K and Form 10-Q, which are on file with the SEC. A press release describing the interim results from our Phase I/II clinical study of 4D-710 in patients with cystic fibrosis is accessible on the Investors section of the 4D Molecular Therapeutics website and a recording of this webcast will be accessible on our website after completion of this call, along with the slide deck we use on today's call. Also the presentation by Dr. Jennifer Taylor-Cousar made at today's North American Cystic Fibrosis Conference will also be accessible on our website later today. With that, I'd like to turn the call over to Dr. David Kirn, Cofounder and Chief Executive Officer. David?

Thank you, Augie. Good afternoon, everyone, and thank you for joining us. Earlier today, we reported interim clinical data from the ongoing 4D-710 Phase I/II clinical trial. 4D-710 is our aerosol-delivered genetic medicine designed for the treatment of cystic fibrosis lung disease. Of note, these data represent the first support of transgene delivery and expression in the lung from an aerosolized genetic medicine in patients with cystic fibrosis. These are also the first clinical data with a proprietary aerosolized A-101 vector invented at 4DMT to therapeutic vector evolution. These data were presented today by Dr. Jennifer Taylor-Cousar, in a symposium presentation of the North American Cystic Fibrosis Conference. In addition, a summary of these data will be presented by Dr. Deepika Polineni, in the clinical plenary session of the conference being held tomorrow, Friday, November 4, at 2:00 p.m. Eastern. For those who aren't familiar with this conference, this is the premier medical meeting on cystic fibrosis, is hosted annually by our collaborators at the Cystic Fibrosis Foundation. Next slide, please. Prior to giving some background on the program and history of gene therapy approaches for cystic fibrosis, I'd like to first run through the key takeaways from Dr. Taylor-Cousar's presentation earlier today. These results are from 3 study participants with CF who were enrolled in the first of 2 expected dose exploration cohorts of the ongoing Phase I/II clinical trial. Enrollment in this cohort is now complete. Patients on the study must not be amenable to standard of care, CFTR modulator medicines. Data today demonstrated that 4D-710 was well tolerated with no 4D-710-related adverse effects post dosing. Additionally, biomarker results demonstrated widespread delivery and expression of the 4D-710 CFTR Delta R transgene throughout patients' lungs. All 3 patients had clear evidence of transgene expression. Notably, 100% of all lung samples tested with CFTR Delta R transgene delivery and expression were positive and it is estimated that approximately 40% of lung airway cells expressed the CFTR Delta R transgene. Next steps, including enrollment of cohort 2 and continued follow-up with patients on study to assess clinical endpoints, including quality of life and percent predictive FEV1 over time. Now before we share details on the summary points, I'd like to take a step back and give a brief history of prior AAV-based approaches for CF as well as to highlight the advances that 4DMT has made. Next slide. Prior AAV gene therapy approaches and cystic fibrosis relied exclusively on a conventional naturally occurring AAV vector. While this AAV2 has been administered safely to over 100 cystic fibrosis patients participating on 6 different trials, clinical activity and transgene expression were not demonstrated within the lungs. Of note, in a 42-patient Phase II clinical trial of aerosolize AAV2 pairing with the CFTR transgene, [ JT ] was demonstrated that no transgene expression was seen within lung tissue samples. In addition, on this slide, you see the design details of the most definitive clinical trial with aerosolized AAV gene therapy in CF, in a randomized Phase II trial in 102 patients, 2 doses were given 30 days apart. Transgene expression in lung is not reported. No benefit was demonstrated in terms of FEV1 or other lung-related endpoints. Of note, the investigators felt that better aerosol-delivered AAV vectors were clearly needed. Next slide. So at 4DMT, we took a very different approach rather than relying on a nonspecific naturally occurring AAV vectors such as AAV2, we decided to innovate to invent a novel synthetic AAV derived vector that is customized for efficient aerosol delivery to the lung. We applied a Nobel prize winning technology called Directed Evolution to invent our customized vector A101, as shown on this slide. Our Genetic Medicine 4D-710 for CF comprises our proprietary A-101 vector, which was invented through directed evolution in primates as shown here. We refer to our vector and pension platform as therapeutic vector evolution. We start our design process for every disease target on the white board where we design the optimal target vector profile for that disease or set of diseases. In the case of our vector invention for CF lung disease, our target vector profile included routine aerosol delivery at a safe and cost-effective dose level and resistance to antibodies present in the human population. Next, we use our massive synthetic AV derived capsid library as a starting material for our competitive selection process. We have approximately 1 billion different synthetic capsid vector sequences in our library. We then performed sequential in vivo selection rounds in nonhuman primates following aerosol delivery to isolate the vector that best matched our target vector profile. Next slide. In the upper left figure, we showed the limitations of standard conventional AAV in the lung after aerosol delivery. The conventional vectors are unable to penetrate the mucus very efficiently and antibodies within the mucus are able to neutralize the vector as well. In marked contrast in the lower left figure, we show the characteristics of our proprietary A-101 vector. The vector was designed to penetrate through the mucus barrier to resist utilization by antibodies in the mucus and to transduce lung airway cells efficiently. The vector is highly specific to lung as we will show on the next slide. Our product 4D-710 comprises the A101 vector carrying a transgene payload. This payload has the ubiquitous strong promoter upstream of the CFTR Delta R transgene. This particular transgene product has been well studied and has been shown to be highly active in large animal models such as the pig model with CF and in human CF patient-derived lung airway model in vitro. Next slide. On this slide, we'll review transformative preclinical data that characterizes the A101 vector and the 4D-710 product that incorporates this spectrum. As you'll see, the A101 vector matches the target sector profile we set for this product. In the upper left panel, we share data on vector resistance to human antibodies in the population. Human pooled IVIG is used as a source of antibodies from thousands of individuals. In this figure, you can see that our A101 vector in the 4D-710 product is highly resistant to human antibodies compared with numerous conventional AAV vectors, including the following: AAV1, AAV2, AAV8 and AAV9. In the lower left panel, we show biodistribution data on 4D-710 in nonhuman primates after aerosol administration. As shown in this bar graph, over 99% of the input base is retained within the lung. Therefore, this is a highly efficient and specific transgene delivery system for the primate run. In the bar graph in the middle of this slide, we see data supporting widespread distribution and highly efficient transgene expression within the nonhuman primate lung. 48 lung samples were assessed from 3 animals after aerosol delivery. In total, 96% of all samples were positive for transgene delivery and 92% were positive for transgene expression. Finally, in the panel on the far right, we see widespread intense CFTR protein expression throughout large airways, smaller airways and Alveoli in these nonhuman primates. A clear dose response is demonstrated. These data supported our IND for 4D-710 and the initiation of our Phase I/II clinical trial. Now I'd like to turn the presentation over to our Chief Medical Officer, Bob Fishman.

Thanks, David. And next slide, please. Here is the design of our Phase I/II clinical trial of aerosolized 4D-710 for patients with cystic fibrosis lung disease. The Phase I dose exploration phase is designed to assess 2 dose level cohorts, 1E15 and 2E15 vg per patient as a single dose. Today, we will share interim safety and lung tissue biomarker data from all 3 cohort 1 patients on study. As of the data cutoff, patients have been on study for approximately 3 to 6 months. Cohort 2 enrollment is underway. The study includes adults with CF that was not amenable to CFTR modulator therapy. This could be because the CFTR mutation is not amenable to modulators or because of modulator side effects. Overall, approximately 15% of patients with CF fall into this subgroup. We, therefore, are treating patients with high unmet medical need on this trial. In this first in-human trial, however, patients were required to have relatively preserved lung function is demonstrated by percent predicted FEV1 of 50% to 100% and resting O2 saturation of 92% or higher. Key study objectives include the following: to assess safety and tolerability; to assess CFTR transgene delivery and expression throughout multiple regions of both lungs in patients; to assess clinical activity over 12 months as determined by changes in spirometry, including percent predicted FEV1 and quality of life assessments; finally, to determine the recommended Phase II dose. In the study diagram below, you can see the 4D-710 aerosol administration is given on day 1. Bronchoscopy is performed on day 28 in order to collect multiple lung tissue samples for assessment of transgene delivery and expression. Transient mild immunosuppression is given as a prednisone taper over 4 weeks starting on day minus 1. Based on preclinical data, we believe the transgene expression can increase over 8 to 12 weeks before stabilizing. Next slide, please. This table shows key baseline characteristics of the 3 Cohort 1 patients. Ages ranged from 20 to 36 years old, both males and females were enrolled and patients were either intolerant of CFTR modulators or they have CFTR mutations that were ineligible for CFTR modulator treatment. Of note, as is typical in a Phase I/II first-in-human clinical trial, these enrolled patients have relatively intact lung function with percent predicted FEV1 approximately 70% to 95%. In the future, as we enroll patients and dose expansion, we anticipate enrollment of patients with more advanced lung disease. Next slide. Here, we summarize safety results on this trial to date. No 4D-710 related adverse events were reported after completion of dosing administration. During aerosol administration, a single patient reported transient, mild dry throat and fatigue. Next slide. This ongoing clinical trial incorporates detailed and extensive assessments of 4D-710 mediated transgene delivery and expression within the lungs of trial participants. This is critical because of the failure of prior gene therapy attempts to demonstrate transgene expression within the lungs of treated subjects. In this trial, the bronchoscopy was scheduled for day 28 after dosing. Bronchoscopy was performed to collect numerous widespread lung tissue samples for assessment of 4D-710 mediated transgene delivery and expression. The table on the left summarizes the number and location of lung samples collected by biopsies and brushings of both lungs and multiple regions. Biopsy samples were obtained for polymerase chain reaction or PCR specifically for transgene DNA. In addition, both biopsy and brushing samples were obtained for insight to hybridization for ISH specifically for transgene RNA expression within biopsy samples. Native CFTR DNA and RNA would not be detected with this assay. The diagram on the right shows the locations of all 4 protocol-defined biopsies in green. These biopsies were taken at the entry to the upper and middle lobes on the right and at the entry to the upper lobe and middle lobe on the left. In orange, lung brushing locations are shown in the lower lobes bilaterally. Next slide. Here, we summarize the results of our detailed evaluation of the lung biopsy and brushing samples in Cohort 1 patients. Overall, widespread transgene delivery and expression were demonstrated and expression was shown in all 3 patients. These data are the first ever reported to demonstrate widespread and reproducible expression of a transgene throughout human lungs. Now I'd like to share the details with you. 100% of the lung biopsies collected 5 in total were positive for transgene delivery. 100% of lung samples, 11 in total were positive for CFTR transgene expression. The tissue samples were from 6 different locations within the lungs. Finally, approximately 40% of lung airway epithelial cells on average were stained positive for CFTR expression by ISH. Importantly, machine learning-assisted image analysis software was used to make these calculations in an unbiased fashion. Next slide. On this slide, we share detailed biopsy data demonstrating widespread delivery and expression of the CFTR transgene product in all 3 participant's lungs. The table on the left shows patient specific results for delivery. You will note that participants 1 and 3 had 2 bilateral biopsies each for DNA and RNA expression, whereas for technical reasons, investigators were able to perform 1 biopsy only in participant 2. All 5 biopsies were positive. In the bar graph on the right, the y-axis shows the percent of ISH expression positive cells in each biopsy. Percent cell positivity was determined by machine learning-assisted image analysis software. These data show reproducibility among the 3 patients and lungs bilaterally. The range of percent cell positivity was from 36% up to 47% in these patients. Next slide. On this slide, we show a representative example of an ISH image from patient 1. Negative controls are shown in the left panels. In the center panels, round staining represents CFTR transgene RNA expression within numerous cells in the endobronchial biopsy. The top panel shows low magnification, whereas the lower panel was higher magnification. Next slide. All major cell types demonstrated CFTR transgene expression basal cells, goblet cells and predominantly ciliated columnar epithelial cells. This endobronchial biopsy sample sustaining of all 3 cell types. Marked in blue is the basement membrane from the endobronchial biopsy and above the line is the airway epithelium. The feasibility to transduce and express transgenes within these cell types have implications for potential use of the same 4D vector for other respiratory diseases in the future. Next slide. 6 evaluable brushing samples were obtained. 4 were obtained from patient 1 and 2 from patient 3. These examples of endobronchial brushings from the lower lobes bilaterally demonstrate widespread gene expression. Negative controls are shown in the left panel. And with that, I will turn the program back to David Kirn. David?

Thank you, Bob. Next slide, please. So, in summary, these clinical data demonstrate the following: 4D-710 aerosol delivery was safe and well tolerated with no 4D-710 related adverse events after dosing. Widespread CFTR transgene expression was demonstrated in all 11 lung samples, including samples from 6 different lung lobes and including both large and small airways. On average, approximately 40% of all lung airway cells expressed the CFTR transgene. Of note, cystic fibrosis publications support that overall CFTR function of approximately 10% to 20% or higher may be associated with clinical benefit. These clinical results should they be confirmed with additional patients and follow-up should validate the feasibility and design of the 4D-710 product. These clinical data also support the validation of the A101 vector for delivery and expression of other transgenes for lung targeted genetic medicines. Finally, these clinical data validate our therapeutic vector evolution platform. Of note, the lung vector A101 represents the third therapeutic area vector we have invented and taken into clinical trials, each by a different routine route of administration. All 3 vectors have demonstrated initial safety, tolerability delivery, transgene expression and clinical activity. So what are the next steps? Cohort 2 enrollment is underway. This dose is twice the Cohort 1 dose. Patients will be followed closely for 12 months to assess clinical benefits. These endpoints include changes from baseline in percent predicted FEV1 and in quality of life. It is expected that at least 6 to 12 months of follow-up will be needed to determine and confirm the extent of lung disease stabilization and/or improvement. We expect to release additional clinical data from this trial in 2023. These clinical data also opened the possibility of performing combination studies in people with CF receiving CFTR modulators. This is a larger patient population than those on this current clinical trial and treatment with modulators has the clear potential to further increase delivery and transient expression of 4D-710 in human lung airways. Finally, with support from these clinical data, we are continuing the development of our A101 vector-based preclinical research candidates in the pulmonology therapeutic area. We expect to disclose pipeline product candidates in the future once they reach the IND candidate stage. And so with that, thank you for your attention. And thank you to the investigators and the patients on our clinical trials. We now welcome your questions. Operator? Hi, operator, are you there?

[Operator Instructions] Your first question comes from the line of Mani Foroohar with SBB Securities.

Congratulations on the results. One of the questions that has arisen across many different tissue types for gene therapy has been the durability on endo cell basis. What can you tell us from your perspective on how long follow-up you'd need to get a sense of what the durability is, I guess, as an inverse of what cell turnover would be? And then I have 1 quick follow-up.

Well, thanks, Mani, for the question. we do know from preclinical studies that the turnover in the mouse lung, the half-life is about 1.5 years. It's not known what the half-life is in -- humans are specifically set patients, but assuming it's typically longer, we would really think that durability, we'd want to see at least 6 to 12 months of follow-up to really get a sense for that answer. And then by extension, I think repeat dosing will be feasible if we need to go that route. But to date, we'll just follow these patients and see what expression looks like beyond this initial look at 8 weeks.

That's really helpful. And then totally separate question you've talked about disclosed 40% of cells were positive, a somewhat binary metric, but certainly an impressive number in absolute terms. When you think about future updates on how we should think about data? Are there -- should we plan and expect to have data that would allow for a more quantitative measurement of how much expression you're getting i.e., as a hit or be above the 10% of cell function of the CFTR versus normal metric of the amount of [indiscernible] being produced, the amount of CFTR functions, ion flux, sort of other quantitative metrics of individual cell functions as opposed to just a binary metric of the presence or absence of some of those CFTR and [ H cell ]? Does that make sense?

Yes, it's a great question. I'd say in primates, what we know is we get a pretty significant overexpression. So for example, both at the RNA and the protein level, we believe we're getting expressed many times, many fold higher than endogenous levels, which actually tend to be very low. In humans, we don't have a good way of showing that, we do believe that for some of those cells where you see that very dark brown standing, we're almost certainly overexpressing beyond what the physiologic range would be. The protein is more difficult because we don't have a good reagent today to tell the difference between our protein, the CFTR Delta R and the endogenous if it's present. So that's something we're working on. In terms of the function of the ion channel, that's something that we really don't have the techniques to evaluate in the lung, but we've certainly done extensive characterizations of the function of that channel. And we do know that when we see RNA expression, we also get high-level protein expression and the correct localization and high-level functional activity that's very similar to the wild-type CFTR.

Your next question comes from the line of Nalin Tejavibulya from Jefferies.

And congratulations on the results. First question I have is, would you expect the required dosage of the therapy to be affected by the [ lentus ] mucus in different patients? And along the same lines, could you discuss your expectations on maybe you -- potentially redosability of 4D-710? And might you need to do titration of dose in order to get the right dosage for these patients?

Thank you, Nalin, for the questions. So we do expect that mucus has been a barrier to AAV delivery and transduction in the past. That's 1 of the reasons we used therapeutic vector evolution for evolving a vector that could get through the mucus in a nonhuman primate. We've also shown that this sector can penetrate mucus that's produced from cystic fibrosis patient-derived air liquid interface models in vitro. So we do know that the vector can penetrate that mucus as well. In the clinic, we do everything we can with our investigators and patients to clear out the lungs as much as possible immediately prior to dosing. So patients have a very vigorous physiotherapy that's used to clear out the airways in the presence of bronchodilators to really clear out the lungs immediately prior to dosing. We do think that's an important step. In terms of repeat dosing feasibility, that's something we're going to be studying we do know that we can deliver aerosol vector in the face of antibodies in primates and get delivery and gene expression. So the next step will actually be to do multiple doses in primates and then eventually patients if that's something that we decided we need.

And I have a quick follow-up. So given that this is the first demonstration of widespread expression of the [indiscernible] delivered by an AAV vector, could you please help us understand how you're thinking about licensing opportunities for A101 capsid?

Yes. Well, I think -- thank you, Nalin, for that question. Our business model from the very beginning was to be fully integrated genetic medicines company. So there will be definitely therapeutic areas and particular products where we want to retain rights and build a commercial organization. At the same time, we want a diversified business model where we also leverage our vectors to do -- and our products to do high-quality partnerships and to have a really a diversified model that way. And so we do believe there should be significant interest in the A101 vector for partnering opportunities in both in centric fibrosis and in other areas because, again, this is the first time we've ever seen a vector that could achieve this -- any reproducible transient expression let alone, 40% at the very first dose level. So that will be an important part of our pulmonary therapeutic areas to have our own products and also licensed products where we leverage our vector to do high-quality partnerships.

There are no further questions. I would now like to turn the call back to Dr. David Kirn.

All right. Thank you, operator, and thank you all for your time and attention today. We look forward to many future fruitful conference calls and discussions with you all. Have a great day.

This concludes today's call. You may now disconnect.