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

[Audio Gap] Health Care Conference. Our next presenting company is 4D Molecular Therapeutics. With me are David Kirn, CEO, Founder -- Co-Founder of the company; and Uneek Mehra, Chief Financial Officer and Chief Business Officer. I think you guys have some slides you want to run through first, so we can start with that, and then we'll jump straight into Q&A.

Absolutely. Well, thanks for having us. And I'll just show a few slides just to introduce the company, and then we can just get into Q&A.

Sounds good.

So at 4DMT, we're harnessing the power of directed evolution for targeted next-generation genetic medicines. So we're a leading clinical-stage next-generation AAV company. Our platform is directed evolution, which is a Nobel Prize-winning technology in which we start with 1 billion synthetic capsids that are proprietary to the company. And then we do serial selections in nonhuman primates to identify vectors that are highly customized for any tissue in the body. So it's an incredibly robust platform. We do also have a robust product engine. We have strong clinical proof of concept across 3 different therapeutic areas, including large market ophthalmology, lung and cardiology. These products all use 3 different routes of administration, so we've shown that directed evolution can allow us to invent vectors that we use by either intravitreal injection, aerosol delivery or intravenously for the heart. Our pipeline is robust, 5 clinical candidates in 7 patient populations, including 4 large market ophthalmology opportunities, which is -- each of which is a multibillion-dollar opportunity for us. We also have 2 IND candidates, 1 of which will be -- have the IND filed this quarter. And that's for geographic atrophy. We have made great progress with FDA and EMA on our lead program in 4D-150. So we have both RMAT and PRIME designation for 4D-150 in wet AMD, which we think is the only product in ophthalmology that's ever had that dual designation. We have strong in-house capabilities for everything from GMP manufacturing to next-generation vector discovery, payload design, product engineering. And we have a very strong balance sheet with close to $600 million in the bank as of end of Q1. And Uneek can speak to our cash position later in the presentation. We have a robust and broad product portfolio, and the vast majority of these, we've retained 100% of the rights as well. In ophthalmology, we have 4D-150 for wet AMD, DME and eventually, we believe, DR. We also have several rare disease opportunities with 4D-125 and 110, and then 4D-175 is our geographic atrophy asset. Importantly, these all leverage the same R100 vector that we invented for low-dose, safe, noninflammatory delivery, intravitreal injection. Pulmonary leverages our aerosol vector A101. The lead product there is 4D-710 for cystic fibrosis. Lung disease currently in a Phase I/II with strong proof of concept for safe delivery and gene expression. And then 4D-725 is for alpha-1 antitrypsin lung disease. And then finally, cardiology, C102 is the vector for low-dose IV delivery to the heart, and that is -- the lead product there is 4D-310 for Fabry disease cardiomyopathy. 4D-150 is again our lead product. It's in wet AMD and DME currently and soon to be, we believe, will move eventually into DR. We believe we're poised to be the market leader here for a number of reasons. First of all, therapeutic durability and the need to continually redose with bolus therapy is a problem in wet AMD for these patients, and we believe with a single injection, we can dramatically reduce or -- reduce the need for injections in patients and in some cases completely prevent patients from needing further injections over time. The second real issue in wet AMD is that with the bolus therapeutics standard anti-VEGFs, what we can see in some patients is oscillation and the thickness of the retina. So retina becomes very edematous, and then it shrinks down, and then it swells again and shrinks down. And that oscillation over time is strongly correlated with loss of BCVA, loss of visual acuity over time. So we believe that giving nice, continuous steady state expression right in the retina, right where we need the therapeutic to be is just a better fundamental way to deliver aflibercept in these boluses. And again, in our product, we also have an anti-VEGF-C mechanism. So we're targeting 4 different mediators of wet AMD, which we think we're the only product that can do that. We have recently, several months ago, presented data from the PRISM Phase II clinical trial. In this case, we were focused in what was called the dose expansion in the highest-need patients in terms of anti-VEGF need and the highest disease burden in terms of the thickness and presence of fluid in the retina by OCT. So very high need, difficult-to-treat population, starting with the most difficult, which we thought from a development standpoint makes sense, starting with the hardest-to-treat patients with the highest unmet need. And what we showed is with a single safe routine intravitreal injection, we had outstanding safety, as you can see in that second column, with no significant or recurrent inflammation. Patients are on topical eye drops and get off those on time over the course of about 5 months and then stay off of the eye drops. So it's very well tolerated and easy to administer. We saw an 89%, almost 90% overall reduction in the need for anti-VEGF injections. So if you think about VABYSMO is a blockbuster, and they've probably taken maybe 30% of the injections out of the system by their greater durability, we're not going 30%. We're going 90% with a single administration. 84% of patients had either 0 or 1 supplemental injection. And 63% were completely injection free, which is just, again, evidence of a high degree of activity. Retinal anatomical control, we said, was important to kind of stabilize that retina and get rid of these oscillations. And when we compared to an aflibercept control arm, we saw exactly that. The retina CST thickness was really stabilized on 4D-150, whereas in aflibercept, we could see it oscillate up and down, which leads to vision loss over time. And we did update a long-term durability from our Phase I study. We had 3 patients in the 3E10 dose level, which had -- were injection free at 1 year, and all 3 of those patients continue injection-free with up to 2 years of durability now. So similar to other AAV retinal programs, we're now showing that this is a very durable way to deliver drugs to the eye. The Phase I/II clinical trial, PRISM, the next update from this study will be a separate cohort of patients on PRISM that have actually more a broad wet AMD disease activity. So in contrast, the last data update, which was a cohort that was highest -- the highest-need patients, that was a 50-patient randomized controlled study. This will be 32 patients, same 2 dose levels of 4D-150 but more broad, some newly diagnosed, some diagnosed and high need and more of a blended population to just extend the activity and the safety to a broader patient population, which would be similar to Phase III. And in parallel with that, we're designing and planning for Phase III as well. 4D-175 is again leveraging the same R100 vector but for geographic atrophy, going after a well genetically validated target complement factor H. In this case, we have a short-form complement factor H, which is shortened but retains all the functional activity of full-size complement factor H in a way that allows us to get it into the AAV capsid but also have better penetration into the retina, which we think could translate into even better efficacy than full-length complement factor H. In this program, we'll be filing the IND this quarter and starting the trial in the second half of the year. Do you want to speak to cash balance?

Yes. I mean maybe just to reiterate on the key milestones coming up, I think David has already spoken about the population extension that's coming up in July 2024. So at ASRS. We also have publicly announced an update on our Phase III clinical trial design, which is in Q3, right, around the same time. And then for 4D-150 for DME, we have a 24-week analysis on 22 patients coming up in Q4. So that's -- these are 2 material and quite significant data catalysts for us at the second half of the year. I spoke about 4D-175 for GA. Our next update on CF is on June at ECFS, where we'll have more data on our patients further to what we announced last year at the NACFC, which is the North America Cystic Fibrosis Conference. Overall strong cash balance, $589 million, that takes us into second half of 2027 and includes both accounts for 2 Phase III studies on wet AMD. So we feel pretty good where we are positioned right now with a number of catalysts coming in the remainder of the year. And with that, we can give you back and you can...

Yes. Thanks for that. That was pretty comprehensive. And clearly, there's a lot going on with the company this year. Maybe we can start with 150. So I guess the question we get asked a lot is, so we had updates from you guys and also updates from competitors around the same time, can you maybe tell us how you're thinking about your competitive positioning in wet AMD for gene therapy? And maybe we also have these other products coming into the pipeline, the sort of long-term inserts in the eye. How are you thinking about how your product would be differentiated from other gene therapy products as well as other potential long-term therapies?

Sure. So 4D-150, we think we are very well differentiated from each of these other approaches, and I'll get to that in a minute as to why. And we think we have an amazing opportunity in front of us in wet AMD, DME and eventually DR. And each of these is a multibillion-dollar opportunity even with small market penetration, which we think we can do better than that. In terms of other gene therapies, what people have really been looking for, physicians and patients, is a simple single intravitreal injection with great safety because large market, you're just not going to tolerate chronic inflammation. And that's what we've been able to show uniquely, is that we can get a high degree of activity, great safety, patients get off their steroids. It's a simple steroid regimen of topical eye drops, and it's all with a simple intravitreal injection that basically takes 10 seconds in the clinic just like an EYLEA injection. So that's a game changer. That's a fundamental -- and nobody else can say that they have that, not REGENX or Adverum, no one. So that's a massive opportunity for us right there. If you think about DME, none of the gene therapies are in there. We're all aware of the history of Adverum in that population where that chronic inflammation in the front of the eye may have translated into that hypotony. We don't see that inflammation in front of the eye. So we don't think we're going to see that. So again, assuming we can demonstrate safety in the second half of this year, then DME is a massive opportunity for us, large growing population. We're the only game in town there as well. And then anything that works in wet AMD typically has efficacy in DME, which then translates to diabetic retinopathy. So that is all wide open for us, and we're highly differentiated versus other gene therapies. If we think about the TKIs, the implants every 6 months or so, well, first of all, that's a 6-month play. It's not a multiyear play like ours. And secondarily, they've really positioned those as a product that's more of a niche in patients who have had a great response to therapy already. Some of the data that was presented around the time of ours had patients where their retinal thickness was normal. They weren't even swollen at all, let alone had fluid like our patients. So I think that's been more positioned as a niche therapy to extend the duration of treatment in patients who are going to respond well anyway. Now we're all aware of the recent data they've had in DR, which maybe opens up the question of how much disease activity is there currently, and we'll just have to see how that emerges over time. But I think we're very well differentiated in terms of being active in the highest need patients. We should be able to easily treat earlier stage and less active disease patients given our safety profile and simple intravitreal injection. So it's really a massive opportunity for us, and then leveraging the same vector in geographic atrophy with a great target just gives us a fourth large market opportunity.

And Daniel, just to add on that, that is the reason we also think we have both the RMAT and PRIME designation. There's no other therapy that has that. So that uses our regulatory discussions as well. So I just wanted to throw that in as well.

Good point. Good point. As we think about long-term efficacy, so we have a 24-week data. That looks pretty compelling. But then I guess the biggest question is, what's it going to look like at 12 months, 24 months? I know you're talking about a onetime treatment. What are physicians looking for in terms of when you think about injection rate reduction as well as injection freedom. So we've seen almost 90% in injection reduction so far and 63% of patients remain injection-free at 24 weeks. But what are you looking to show long term that would be sort of clinically relevant?

Yes. I think -- let's just -- I think there's 2 things to look at. Number one is based on our data that we presented to date, our enrollment is off the chart. So what we've seen is we have aggressive enrollment targets, and we've done -- we've enrolled twice as fast as we expected to. So we've been really struck by the excitement that physicians and patients have for this sort of therapy and from what we've shown to date. So I think that's differentiating. And then let's look at the VABYSMO launch. They're literally going from 8 weeks to 12 weeks in most patients. A few patients can get out to 16. But it's basically 8 to 12. So they're taking about 1/3 of the -- 1/3 of the injections out of the system. And yet it's a blockbuster. So that tells you if you can stretch out therapeutic benefit beyond that, which we can do, and hit something anywhere close to 90%, you're going to have a blockbuster on your hands. There's no doubt about that. If you then add in this potential to say, hey, long term, this is a fundamentally better way to deliver the biologic, to have it there continually 24 hours a day, steady state, you don't get those oscillations, that's going to translate into long-term visual outcome benefits. Well, again, that's another huge reason for patients to want to use this and physicians to want to use it. So we'd love to continue to have a high degree of injection reductions. Some number of patients will be injection-free. Some will need 1 a year. Some might need 2. But everybody is going to benefit, we think, across the entire range of wet AMD patients.

Got it. And then similarly, in terms of safety, how do we get comfortable with the long-term safety profile? So, so far, safety has been pretty good. But admittedly, patients are just coming off of the steroid treatment for the time point we have at this point. How do we get comfortable with safety after that, after patients are not receiving steroid treatment?

Yes, safety is always critical. We're always looking to build the database, and we'll continue to report out new patient populations such as this population extension, 32 patients at ASRS in July. So we're always building on that. And we're also giving longer-term follow-up on our Phase I patients. Again, as we said before, some of those patients are out at 2 years now, and we haven't seen any late toxicity crop up. With AAV gene therapy, typically, if you're going to see inflammation, which is typically -- if you're going to see toxicity, it's related to inflammation. You see it early on. You're going to see it in the first month, maybe 2 months. But the number of patients where you just suddenly have it pop up at a late date where there was nothing early, it's incredibly rare if not a case report. So we feel really good about the safety because, again, we think we've had patients off of steroids for a long period of time. We just haven't seen anything on steroids or after steroids. And I think the history of the field suggests that we're in really good shape.

And can you help us frame expectations for the upcoming data at ASRS? And maybe elaborate a little more on why is it important to study this population extension cohort, what's different about these patients from what -- the patients you've dosed so far? And from what you know at this point, what are your expectations for efficacy?

Yes. So just -- I think just starting from good drug development, we thought it was important after Phase I, after we sorted out what dose range we want to be in, to start with the highest-need patients, prove safety and activity there and then move into a broader population, which is what we're doing here. So we had these really blockbuster results from the highest-need patients. We'd expect to see something similar in the broader patient population that we report out in July. If anything, they may be less treatment, high need. They will be less high disease activity. So we think it will be more like a Phase III population that we're going to treat. So it's going to extend that efficacy. It's going to extend that safety to 32 patients, same 2 dose levels, 1E10, 3E10. So we would expect to see similar results in a similar series of areas of interest, which would be safety, BCVA over time, CST over time and then reduction in injection frequencies over time. And then we'll look at how many patients are injection free or got 0 to 1 just like we did in this population.

Do you have a sense of what percent of patients fall under the criteria for the population extension versus the more severe patients you've dosed so far?

You mean the upcoming data, how many will be the most severe?

Like I guess, in general, what percent of patients...

I see what you're saying. Yes, we think it's probably about 20%, 25% of patients would fall into that most severe category, whereas this broader one would encompass, I think, probably 95% of all patients.

Okay. And I think you've shared some details on your Phase III plans in terms of the dose you're planning to use, size of the patients. What additional update should we expect to see in 3Q? What else is there to finalize with FDA in terms of discussions for the Phase III trial?

Yes. Do you want to kind of speak to the update in Q3?