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

Great. Good afternoon, everyone. Thank you so much for joining us. Really pleased to have the team from 4DMT. So with us, we have David Kirn, Co-Founder and CEO of Molecular Therapeutics; and we have Uneek, who's the CFO of the company, who just made it in, given the weather storm.

So to start here, David, could we speak to your directed evolution gene therapy platform, the pipeline progress across the 3 disease verticals to date, and your 12-month catalyst path?

Sure. So thanks for having us. It's great to be here. So we're very much a platform and a product company. Our underlying product -- platform is directed evolution, which allows us to invent customized vectors for any tissue in the body essentially and get away from just using the standard conventional vectors which are nonspecific. So it's really been a game changer. We developed a diverse pipeline of vectors and products by design because we thought the diversification was a good idea when it's new biology. And we're thrilled to say now that all 3 of the vectors that we've taken into the clinic in 3 different therapeutic areas have all validated. So R100 with intravitreal injection in the retina -- into the vitreous for retinal transduction; A101 with aerosol delivery to the lung; and then C102 for IV delivery to the heart. These have all shown high-level transduction at much lower doses than are typically used, and a high degree of gene expression and clinical activity. So we're thrilled that the platform now has borne out in humans. Our pipeline is -- our primary value driver is large market ophthalmology. So 4D-150 for wet AMD, DME, and we think ultimately for DR, diabetic retinopathy. We also have 4D-175 where we're filing the IND this month to go into the clinic for geographic atrophy. And we have 4D-710 for cystic fibrosis lung disease that's starting in the patients who are ineligible or intolerant of modulators, but eventually moving into the combination space there. And then 4D-310 for Fabry disease, cardiomyopathy, is also -- looks very promising. We expect to be off clinical hold with that shortly. In terms of upcoming catalysts, it's a very catalyst-rich 9 months for us. So what we're looking at is, again, filing the IND for 4D-150. Then 4D-150, we're going to be presenting Phase II data in a broad Phase III-like population at ASRS in Stockholm on July 17. We're looking forward to that. After that, we plan on giving an update on Phase III design for 4D-150 in wet AMD. We've had a lot of interactions under the PRIME designation in Europe and RMAT in the U.S. We think we're the only company and product to have that dual designation. So we're having a lot of interactions around Phase III. So we expect to update that in Q3. And then an exciting new opportunity for us with 4D-150 is diabetic macular edema. So this is an area where there's huge unmet need, a real need for a long-term durable product. But there's no other gene therapy competition there. So we view that as very exciting. And that's in Q4 we'll give an update on the Phase I/II dose confirmation phase of that study. And then initiating Phase III in Q1 of '25. So it's a busy 9 months.

Uneek, how -- given you have these 3 distinct verticals and there's a decent amount of expenditure that will go alongside these Phase III trials that you have to run, how are you allocating across them? And are you thinking about partnerships? And just long-term strategy here.

Yes. I mean I think based on what David just said, our primary focus or big part of allocation is the ophtha portfolio. So we've just raised capital earlier this year that allows us to take wet AMD both Phase III studies into fruition. So we are well covered for that. On the CF and on the cardio side, it's a slightly separate model for allocation on the CF. We have the partnership with Cystic Fibrosis Foundation. So we do expect, as the program continues to mature, that we will have both thought leadership as well as financial support from the CF Foundation. Our Phase I and Phase II studies for CF are already covered in the cash balance. We have about $589 million as of the end of last quarter. So that takes into consideration both the Phase III study for ophtha and for wet AMD. Mind you, DME is not yet covered in that. So as we announce the data, we will have to plan for that. But at least for wet AMD and the ophtha portfolio, all the ongoing Phase I, Phase II are well covered. Cystic fibrosis, we've covered it through the allocation from the current asset we have. And then as we lift the clinical hold on Fabry disease, that's an exciting area for us to continue to think about partnerships. So in terms of allocating capital, I think it's largely large market ophtha. But from a partnership perspective, we are open for both pharmacologic CF as well as for cardiology as these programs go forward.

Perfect. Starting with the ophthalmology vertical. What were the key takeaways from your Phase II data of 4D-150 in wet age-related macro degeneration? And what are the next steps here?

So we're really excited about that data. We reported that out at the Angiogenesis meeting in February. This is the PRISM study, Phase II dose expansion. So these were the highest-need, most severe disease activity patients that are essentially failing standard of care. So it's about 20% of the overall population. I don't think anybody has kind of dared to go into these patients, but we felt, first in, first Phase II, we should start with the highest need and then broaden. And what we showed there was a very strong safety profile. So essentially no significant inflammation, no recurrent inflammation, in marked contrast to prior programs with intravitreal AAV. So that was a real game changer. Our corticosteroid prophylaxis is very simple. It's a topical only 20-week regimen with Durezol. So once patients were off of that on time, they didn't go back on to steroids. So a very simple, straightforward, safe product. We're thrilled with the efficacy that we saw in terms of stabilization of the CST below where we see the aflibercept control arm going up and down. So we're able to show that, not only do we get superior CST thinning and reduction of the edema, but also stabilization. And there's great data to suggest that, if you stabilize the retinal anatomy over time, that should translate into superior visual outcomes. So that could be a game changer. This may not be just much, much more convenient for patients, which they want and would love, but also superior vision over time. So that was exciting. And then again, this is a randomized study looking at 2 different dose levels versus aflibercept control, 50 patients total. And when we looked at the efficacy, we saw about a 90% reduction in annualized injections. So we took 90% of the injections out of the population. So VABYSMO is a blockbuster, and it reduces injection -- total injections by about 20% over 6 months. So we're going 90%, versus 20%, which is the best the world has to offer today. So it's really remarkable. 84% of patients had no injections or just 1 and 63% had absolutely no further injections over 6 months. So very exciting efficacy, very exciting anatomical control. And BCVA was equivalent to aflibercept, which is the best you can hope for in a study at this point in time. And then the next PRISM Phase II data will be in July, and we can get into that in a minute. But that's going to be more of a broad population, more representative of a Phase III population.

So on the back of these datasets, maybe help us understand the differentiation, right, versus the other therapies. And what kind of -- what gives you confidence here in durability of benefit that's been seen?

Yes. I think the -- there's no question that gene therapy, given the durability that's been shown in the retina with AAV of 5 years, 10 years with things like Luxturna and even other aflibercept-expressing constructs, there's no doubt that that will win at the end of the day, if you can do it by a simple, safe intravitreal injection. It has to work into the standard of care in the clinic. And that's what we do. We innovated with directed evolution to invent a vector that was intravitreal, and it's very low dose because it's more targeted, and therefore, doesn't have the inflammation you see with some of these other assets. So I think what differentiates us to start is just being intravitreal and lack of inflammation. So that differentiates us from other intravitreal approaches and other subretinal or suprachoroidal approaches. I think in terms of differentiation from things like the tyrosine kinase inhibitors, I think those groups have taken a very different approach. Those molecules are probably less potent than high-expressing vector or expressing directly in the retina. So they've intentionally identified and focused on patients who have very low need. So they take patients who are on excellent control already and then just try to maintain them for 6 months. What we've done here is take the most difficult patients and tried to control them for many, many years. And I think there's no doubt that, at the end of the day, that's going to win out if we can continue to prove the safety and efficacy.

On the durability aspect, could you speak to CST where there was a slight upward trend through 24 weeks in the Phase II study?

Yes, it's interesting, there was a -- we saw excellent CST control, the high-dose arm, we saw a nice dose response. And the high-dose arm was superior, meaning below the CST on the aflibercept arm, at all time points. But after 20 weeks, between 20 and 24, you saw a little uptick. And I think just as humans, we see that, even though it's not statistical, it's probably noise, can't help but get our attention. So we got a lot of questions around that. And so we were able to answer the durability question this last weekend by releasing data on the injection-free patients on the study showing that that CST is rock-stable and is not changing. It's literally a flat line. So I don't think you could hope for a better consistent expression and activity out through 24 weeks on that study. And we do have emerging longer-term durability data from our Phase I patients. We have 4 patients who are out beyond a year and injection-free. And now were up to 2 years, somewhere between 1.5 years to 2 years in those 4 patients with continued disease-free status. So we're starting to build our own durability data to complement what others have shown in the retina.

And what are your thoughts on redosing, dosing the fellow eye or evaluating higher doses to optimize efficacy and durability?

Yes. I'd say from a durability standpoint, I don't think it's necessary. And I think from a -- just a Phase III planning standpoint, we're thrilled with the data we're seeing on the 3E10. That being said, I think FDA will probably want a contralateral eye dose because about 40% of patients with wet AMD will develop in the second eye, which is a great opportunity for us and great for patients if we can show that that's safe. So that's something we've done in rare disease; we now just need to replicate it in wet AMD. So we do expect that to be part of a Phase III plan, is contralateral eye dosing. And I think in the long run, once this is kind of in a Phase IV study, once this is on the market, you could imagine some people who have such high VEGF levels that you maybe dose, you watch them for 6 months, you say, "They could use a top up." Why not? Do a top-up and then they're done. But for now, we're thrilled with the single dose, 3E10, get the Phase III done, get on the market, and then build some of these other datasets.

And when do you plan to provide an update on the Phase I patients? And what do you expect to present in terms of clinical measures and follow-up?

So I think people are particularly interested in, A, the ongoing safety from that dataset. So we would anticipate giving a broad safety update at the ASRS Meeting. The focus of that meeting, of course, is 24 weeks on the population extension, but we would expect to give a broad safety update, including the patients out at 2 years or even beyond from the Phase I. I think that's important. And then we certainly would continue to report out the activity in the -- those injection-free patients, is that maintained or if patients -- is there evidence of that effect wearing off, which we don't anticipate happening, but we'd update that.

Great. Can you remind us of the Phase III design and the remaining gating factors towards initiation next year?

Yes. So the plan is to start in Q1 of '25. And that's just -- it's 2 things drive that. One is we're doing this alone, we're retaining all the value of this program, which we think is an amazing opportunity. But that requires hiring some real -- hiring Phase III teams, which takes time to get it right. We've got a great team currently, we need to build that, add on some expertise. And then we have both RMAT designation with FDA and PRIME designation with Europe. And we're having very productive collaborative calls with both of them to align on the final protocol, and that just takes time with these regulatory bodies. We do think that 4D-150 is the first ophthalmology product ever to have those dual designation, so it's a real opportunity for us to get it right and get alignment. So I think between hiring our internal group and then completing the protocol design with the agencies, we should be in good shape to start in Q1.

And what gives you confidence that the Phase III datasets will provide compelling evidence for the drug to physicians and payers? And maybe speak to feedback from physicians on the Phase II data and how stakeholders are thinking about the value of gene therapy beyond the potential to be injection-free.

Sure. I think -- we look at the -- what can we measure to say how excited people are? I think a big driver is enrollment rates. And as soon as we open up a new arm on PRISM, it -- the enrollment just takes off, it's immediate. And that interest is only increasing over time. So we're seeing incredible interest by physicians. These are very entrepreneurial physicians. They're innovative. They like to do new and different things. And we're also seeing a high degree of interest from patients. Patients want something like this. They don't want to be injected in the eye every 4 to 8 weeks. And that's independent of the potential benefit in terms of long-term vision. So right now, there's an incredible amount of excitement and interest, and people are jumping onboard. I think for the skeptics out there, we just need more safety data over a longer period of time. I think everybody, it's a large market opportunity, make sure there's no lurking safety issue. We haven't seen any to date. But some people who are skeptical are going to want to wait for more data. We hope that this data in July will significantly increase our dataset with regards to safety and the amount of follow-up we have on patients, including in Phase I. So I think that's really going to move the needle for the remaining skeptics. But right now, we see incredible excitement and incredible uptake and very high enrollment rates.

With regard to the Phase II data from the population extension cohort that will be seen at ASRS, given these patients are not as severe or as a high unmet need as those from the prior Phase II release, could you speak to whether there is a higher bar in terms of what needs to be shown now?

Well, there's a higher bar, but I think people would be thrilled with the level of efficacy we've seen. I think there's no reason to think that safety would be any different in this population. People are going to want to see that. There's no reason to believe that -- you can't do much better than 90% reduction in annualized injections. So I think as long as we're in that neighborhood, that's a huge home run for us. You mentioned the injection-free rate, and I think one would think that the exact injection-free rate you have with a product like ours is going to be dependent on the patient population. So if anything, we expect in this population, maybe it goes up a little bit. We can't -- we're not promising. We haven't seen the data. But one would anticipate that could be the case, at least as good as in the highest-need patients. So I think overall, that's the profile, as long as we hit what we showed in the highest-need patients, that would be a huge home run and a win for the product.

Can you speak to the tolerability profile and the confidence it will hold into DME, and how you're thinking about the efficacy benchmarks into that first dataset by year-end?

Yes. So the history there that I think you're getting at is there have been intravitreal programs with Adverum where they saw pretty significant toxicity in DME that led them to stop that program. Now what's important to remember is there's nothing about DME patients that makes them more likely to suffer from the inflammation that drove that. The issue is they saw a front-of-the-eye inflammation in wet AMD. Now when you have front-of-the-eye inflammation in DME, that is less well tolerated than it is in wet AMD. It's a problem in wet AMD, but it's catastrophic in DME. We don't see that front-of-the-eye inflammation. We don't see those front-of-the-eye effects. So we don't think there's any reason to believe our safety profile would be any different in DME than it is in wet AMD. And we intend on showing that in Q4. So it's really more about the type of toxicity that they were seeing in the front of the eye matched with the biology of a diabetic that led to those problems. We don't see the inciting front-of-the-eye toxicity, so we wouldn't expect to see that.

Maybe frame for us how to think about this upcoming dataset in DME from an efficacy standpoint.

So it's 22 patients. It's small patient numbers. It's not randomized. It's really a dose confirmation on our way to Phase II. And Phase II is where we'll define the ultimate efficacy signal and, obviously, in Phase III. But this is an early look where we can say, A, is it safe? Can we use the 3E10 dose, which we intend to do, use the 3E10 dose in DME as well as in wet AMD. So confirming that that's a safe dose. And then in diabetics, you don't really have the run-in of patients being treated for a year or 2 where you know exactly how much VEGF they need and you can look at that annualized reduction. You don't have that history because these patients generally don't get treated. So what we'll have to look at there is CST reduction, so showing that we can control the anatomy. And then showing what frequency of dosing patients need, and hopefully looking for some sort of a dose response between the dose levels or something that's compelling enough to what one would expect. So it's not as clean a safety -- sorry, it's not as clean an efficacy package as you had in the Phase II randomized study because it's not randomized, we don't have the control arm in this. But we should be able to get a strong sense of safety, gene expression, and some evidence of biological activity and reduction in the need for injections. And then it will be straight into a randomized Phase II where we do have the control arm and we set ourselves up for Phase III.

And you're moving forward into the geographic atrophy trial, as you mentioned. Help us understand here the read-through from positive data in AMD to geographic atrophy.

Well, one of the really exciting things about this platform is it's -- we say it's modular. What we mean by that is, once you have a vector that works, it's safe, you can manufacture it, you can inject it, it doesn't aggregate, you get high-level transduction in the target tissue, and it's safe, once you have that, then you can swap in and out of different transgene payloads with very little risk. The only risk you're now taking is on the target you're going after. So with geographic atrophy, since we're using the same R100 intravitreal capsid, we can build on all of that safety data, which at this point is well over 100 patients, probably approaching 150, you can leverage all of that when you go into the clinic. You know exactly what dose range you want to be in. Physicians are comfortable with the vector, FDA is comfortable with the vector. So we think it really derisks the geographic atrophy program tremendously by using the same vector.

Maybe pivoting over to cystic fibrosis, you presented...

Salveen, one more point on the ophtha. So we covered wet AMD, DME. We do think that if the DME safety translates well, we have a shot at DR as well, we shouldn't lose sight of the fact. Because I think that's the third large market ophtha indication that we are excited about. And we are already starting to think about that. So it's wet AMD, DME, DR, and then your last indication was GA. So it's a portfolio of 4 large market opportunities in ophtha, all treated by the same vector capsid, the R100, and that modularity, I think, is super exciting for us. I just wanted to make sure we kept that...

That's a great point. We think of 4D-150 as really a whole pipeline of opportunities in a single product across these large market opportunities.

Maybe actually, before we switch over to CF, commercially, how do you think it will play out in the market? And one, in terms of where you'll fit in in the treatment paradigm such as AMD, but number two, how receptive are doctors going to be to using a gene therapy?

So I think the biggest proxy we see right now of doctor receptivity is just the enrollment speed of our trials. I mean all of the trials so far have been enrolling at least 2 quarters ahead of schedule. So we can translate that there are -- there is a real demand for our product. In terms of our current thinking on commercialization, so it was not by accident that we started in the toughest to treat. It was well thought-out, that we want to make our impact in these difficult-to-treat patient population, who was -- who comprise roughly around 20% to 25% of the overall population. So that's, call it, the beachhead. That's where we want to anchor ourselves as we sort of start to think of adoption of gene therapy, especially our gene therapy. Then you have about 10% to 15% of those who are logistically challenged. By that, if you just extrapolate these are 70 to 75-year-olds who are dependent on caregivers, can't even get to the clinics, they miss a dose and then the vicious cycle of their efficacy starts to happen. So that, I think, is also a good target for us to begin with. By the time we zone in on this, call it, roughly about 35% to 40%, the remainder of the population with adoption, given that we are now going to be showing broad population data, that should fit in later down the line. So we are looking at it as a 3-phase commercialization where difficult-to-treat and logistically challenged are right in our first sort of adoption curve, and then the others should follow. And we think, look, from a pricing perspective, we've got to understand the practice economics of retina specialists. I mean this is an ASP-plus drug that is a Medicare Part B. We do think that with our pricing, which we are contemplating, which if you take a durability position of about 3 to 5 years and you compare that to annualized Eylea of about $10,000, roughly 50,000 for this, that's a bolus that physicians will get right upfront on the ASP-plus. So we do think there is incentive for physicians both clinically and financially. And I think those are the elements of the commercialization strategy that we are pursuing.

With regard to the cystic fibrosis vertical, you presented some data recently. Maybe put in context for us how that data should have been viewed. It looks like people were comparing it to TRIKAFTA and -- but clearly, this is a different population. So what was clinically meaningful in this population?

Yes. I think, first of all, it's a Phase I study, and no one had ever been able to show gene transduction in CF. And so we evolved the vector for widespread delivery throughout the airways, we saw widespread delivery and expression in primates, and no evidence of safety issues. When we went into the Phase I in humans, we were able to show a beautiful dose response of transduction and gene expression across 4 different dose levels, both by RNA and then also by the proteins. We showed not only the RNA transcript is expressed, but also the CFTR protein. So that's a home run right there. From [ 1,815 ] and below, so the lower 3 dose levels, were incredibly well tolerated. There were no adverse events. And at the highest dose level, it's well tolerated, but there are a few AEs that may or may not have been related. Given the vast over-expression at the highest dose, we said, "We don't even need to deal with that. Let's just stick with the dose that we started with and examine in a 1 lower dose."" So that's a home run right there, to have a very safe and well-tolerated high transduction level in multiple biopsies throughout the lung in humans. That's just a remarkable data set. You add on top of that, that most of these patients actually started with FEV1s in the normal range because of the Phase I first in human, not surprising, that's who they enrolled. But we did have 3 patients who have now up to 12 months follow-up at -- who started in the mild to moderate disease range, which is where Vertex focuses. And we saw 2 out of 3 of them had robust FEV1 responses. So to us, that's a strong signal. It's a small study. It's a Phase I, but that is a signal to say keep going. We also saw a benefit in terms of quality of life, which was unexpected. And that was all well above the minimally clinically important difference defined in that QOL instrument. So these are strong signals of activity. I think what maybe people don't understand is that, in patients who have a no-mutation, they have no CFTR function. We're starting in the hardest-to-treat patients in contrast to Vertex, where they're taking somebody who's got function already and juicing it up a little bit. The other thing is that these patients are going to have fixed defects. Even if you over-express CFTR in every single cell, you're not going to get them back to 100% because they have bronchiectasis, they have other structural changes that have occurred over time. So a 5% to 6% increase is actually quite impressive and important. So I think some people maybe just don't understand that, they thought, "Oh, boy, with the expression you're getting, you should cure everybody." And that's just not the way the biology works. But I still think there's a huge opportunity for us here. And we're looking forward to getting the Phase II data in these patients who have mild to moderate disease, where we can show the FEV1 benefit, the QOL benefit. And then Phase III is 60, 80 patients, so it's not huge. We're with the Cystic Fibrosis Foundation, so we know we can enroll that. And then accelerated approval is still on the table. We just need to prove that correlation between these clinical endpoints and the expression. So that's how we view it. We think it's a very strong step forward and is really a landmark study in terms of the treatment of CF patients. No one has achieved this.

Do you think there is any possibility of an accelerated approval pathway here?

There is, for sure. It's just that this is a [Technical Difficulty] work. No one's ever shown CFTR expression in the lung of a patient who has no CF. So by definition, no one has shown a correlation between that and clinical outcome. We have to be the ones to show that. So it's a bit of a chicken and the egg where you're doing pioneering work [Technical Difficulty] correlates to something. So we'll look and we'll say, look, is it better to do accelerated approval with that biomarker and FEV1 and QOL is supportive? Or is it -- and understand you probably have a Phase III going in the background. Or is it better to simply do the Phase III? It's only 60 to 80 patients, and you've got the CF Foundation with you and they know how to drive enrollment. So we'll look at all those options. I think all the options are on the table.

Maybe a last question here on the Fabry vertical. It's been on clinical hold for a bit of time now. When do you think it will get off clinical hold? And then talk to us about the forward path.

Yes. So the guidance we've given is we're -- the FDA asked us to do a safety study in primates with the new immune regimen that's now the standard of care in patients getting IV gene therapy with AAV. So that's rituximab [Technical Difficulty] these very commonly used drugs, very safe, ubiquitous. So we thought, "Hey, there's already clinical data with that regimen. Maybe we don't need a primate study." They asked for a primate study, that's fine. So we did it. We got a great group. We've got that done. We intend to file this quarter. We'll announce when we're off hold, which should be the next quarter, typically. And then we're excited to get enrolling on that again because that's one where we do have surrogates that predict. We have improvements in echocardiogram contractility. We have improvements in peak VO2, which would be a fully approvable endpoint, exercise tolerance. And we also have improvement in terms of quality of life. And we've shown biopsy-documented high-level expression in approximately 50% of cardiomyocytes and a reduction over time in the substrate in the first patient we've been able to biopsy. So we're excited to get going on that again, and that is one, again, where there would be an opportunity to look at accelerated approval, to look at and consider things like RMAT, the breakthrough equivalents. So we're excited to get that back on the road, and we think we have the package to do that.

Great. Well, with that, thank you so much, David. Thank you, Uneek. Really appreciate it.

Thanks for having us.

Yes. Thanks for having us.