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

Everyone, thanks for joining us here at the Bank of America Healthcare Conference. My name is Daniel Giraldo, I'm one of the SMID cap biotech analysts here at the bank. Our next presenting company is 4D Molecular Therapeutics, and I think the company has a few slides. So David, if you want to go ahead and start, and then we'll do a short Q&A after.

All right. Thanks, Daniel. Thanks for having us. I'm David Kirn, Co-Founder and CEO of 4D. 4D-150 is our lead product candidate, this is currently in Phase III development in wet AMD. 4FRONT-1 is well underway with over 50 clinical trial sites activated to date. So there's a great moment there. And this is the first known genetic medicine to receive RMAT designation for both wet AMD and DME. So 4D-150 Phase III therapeutic designed to disrupt the global market for retinal vascular diseases and improve patient outcomes. And we'll walk through some of these items on the slide. So first of all, this is addressing a $17 billion anti-VEGF market, and this is growing significantly. And we're expressing aflibercept from our product, which is the market leader. So this is just showing the growth of the branded anti-VEGF market over time as the population ages. This is a massive and growing market. And then importantly, you can see in dark blue at the top there on the far right, the rapid uptake of VABYSMO, which is driven by about a 2-week improvement in durability. And this is in marked contrast to what we provide, which is multiyear durability. So I think this is evidence that new agents with improvements in durability can become blockbusters very quickly. This is looking at durability improvements over time in the field, and you see going from LUCENTIS to EYLEA, the durability is on the order of a little bit over a month, going from EYLEA to VABYSMO is again a month or 2. And yet each of these products has been a blockbuster as they've entered the market. You can see VABYSMO is reducing injection burden by about 23%. Our data to date says we can do about 85% to 95% reduction. So this is a backbone therapy with multiyear durability, and this is really addressing the key unmet need in this space, which is durability. This is the #1 thing that patients want. And when you ask them what novel mechanisms are you most interested in gene therapy is at the top. This is what we see with standard of care is in the middle there, you see the repeat bolus injections with the central subfield thickness of the retina expanding and contracting over and over again, and that leads to vision loss over time. In contrast, for 4D-150 where we're getting sustained expression of aflibercept 24 hours a day, 7 days a week. You see a nice stabilization of CST and the belief is that will result in better long-term vision outcomes. This is data from our Phase I/II PRISM study where we've treated and studied a very broad range of patients, probably more broad than anyone has done in development to date. And what we see on the far left is in the most extreme patients, the highest need recalcitrant patients, we see an ability to reduce injection burden by about 83%. Again, just for context for VABYSMO, 23% in frontline, this is 83% and the hardest to treat. And then when we move all the way to the right, and we look at recently diagnosed patients in our Phase II study, we see that we can reduce the injection burden by about over 90% at 94%. So really broad activity across a broad range of patients. Safety is critical and a large market opportunity like this with existing therapies, and we've been thrilled today with our safety. We think this comes from the fact that we innovated and invented a novel vector that is easy to inject intravitreally with little or no inflammation. You can see overall no serious adverse events. And importantly, about a 3% mild transient rate of cells in the eye, very similar to what we see with EYLEA, the market leader. I'm going to skip over that slide. Ease of clinical and commercial optimization here. Chris will speak a little bit to this, our Chief Commercial Officer. But importantly, this is a single IVT intravitreal injection seamlessly fits into the clinic flow, routine storage conditions, routine shipping conditions and really an optimal therapeutic for the buy-and-bill model, that makes these practices so lucrative. We think we're actually going to help them to make more money and fits seamlessly into their practice flow. This is a lot of what we're talking about. We believe payers are going to like this because patients have fewer visits, fewer complications of their disease. So that's going to save them money. And again, they'll be paying money upfront for long-term durable benefit. We have very low cost of goods on the order of $500. So we have a lot of pricing flexibility here. And again, we've already spoken to how this fits seamlessly into the clinic, and we'll free up space for them to make more money on other patients and other treatments. Finally, we're in Phase III. We expect to have top line data from our wet AMD pivotal trials, both of those Phase IIIs in the second half of '27. This is the design. I think what's important here in the interest of time is just to emphasize that this was designed by some of the most experienced key opinion leaders and experts in the field as well as top industry leaders who are responsible for approval of 6 of the top 7 retina agents out there, and it's very carefully designed to be a non-inferiority win on best corrected visual acuity or BCVA, and to show a very significant reduction in injection burden for patients on the treatment arm of 4D-150 in comparison to aflibercept. So again, we've talked about these time lines. We hope to beat these time lines and bring this in even faster than the 15 months that we've signaled externally. And then finally, in addition to 4D-150 for wet AMD, we also have very promising data for diabetic macular edema with this agent and have approval from FDA to do a single approval study for that, so we're looking to advance that. And then we also have an active program of 4D-710 for cystic fibrosis lung disease, where we're seeing some really outstanding clinical activity, and we look to update that in the second half of this year. Thank you.

All right. Great. Thanks, David. Thanks for that introduction. So I thought maybe we could start with just some general questions on the macro. This is something we've been asking all of our companies just because it's become very topical with all the recent changes, we've been seeing impacting the biotech industry. So maybe to start, can you comment on sort of your recent interactions with FDA? Have you noticed any changes? And then do you expect to have any significant interactions with them now that your Phase III trials are underway. And maybe if you have any thoughts on how their view on gene therapies could change over the next few years.

Do you want to start on that? Or are you -- so we haven't noticed any changes to date. The people were interacting with the FDA for the cystic fibrosis program have not changed. We recently received RMAT designation for DME with 4D-150. So there's incredible progress there. So -- and I think importantly, these questions around endpoints, this is not a problem for our programs. I mean we're using BCVA, which is the gold standard functional endpoint and for cystic fibrosis, we're looking at a lung function through FEV1 and lung clearance index, both of which are tried and true and not surrogates. So I think we're well positioned.

Okay. Great. And then maybe as you get closer to commercialization, how are you thinking about manufacturing? And there's been a lot of talk in terms of potential tariffs to the biotech industry. How are you thinking about that? And how you -- what's your plan for manufacturing at this point?

Do you want to speak to that, Chris?

Sure. Yes. I mean our -- currently, our manufacturing is all in-house. I think as we get closer to commercialization, we'll look to outsource and tech transfer that to the right third party. But all of that we would expect would occur inside the U.S. So if there are tariff effects on supply chain, we don't necessarily believe that we would have exposure there.

Okay. Great. And so David, you mentioned you have some readouts coming out later this year. I think you'll have 2-year data and 18-month data for 4D-150 and wet AMD. I guess can you maybe set expectations for that? And what should we be looking to see for those data? And what do you think are going to be sort of the key learnings from that?

I think there's great data with AAV and the retina from other programs showing anywhere from 5 to 10-plus years of durability, and we would expect to see the same. We have very little of any inflammation. So we would expect very durable expression. So we expect to see that. And we expect to see then consistent reduction in treatment burden over time. It's not to say that every single patient is going to be injection-free. Patient may every year or 2 need a bolus in marked contrast to on average, 8 to 10 a year. But we expect to see good long-term safety and good long-term injection burden reduction that does not drop off over time, that is consistent over time.

How are you thinking about sort of the balance between injection burden reduction and injection freedom, which is something that I think has been a focus for investors for previous readouts you've had. What do you think is important for those two different endpoints? And how do you think physicians might look at those two different things and when they're thinking about choosing this therapy for their patients?

Yes. The physicians that we talk to, and Chris can speak to this as well, and patients injection-free never comes up. These patients are getting dosed every 4 to 8 weeks in the eye. And they say -- if you can say I can decrease that by 80% to 90%, your need for that. They're like, that's a win. I don't need perfection. And so that doesn't come up with them. It's an investor-specific thing. If I had to guess where it comes from, I would guess it comes from the fact that they assume gene therapy is going to be dangerous, which ours is not, and they assume gene therapy is going to be very, very expensive, which ours is not. So a very different situation. But Chris has had hundreds of these conversations. You want to take it away?

Yes. No, not much more to add. It's -- listen, if you can be injection free, of course, that's ideal. No one would say no to that. But we think -- certainly, we believe our data would show that some patients were certainly well fall into that category. And some patients are going to need occasional supplemental therapy. The good news is that there's a great number of really efficacious supplemental therapies that are out there that physicians are very well accustomed to. So we have those options, but I think it's really important, and we see this already in our Phase II data that even if you do need a supplemental therapy bolus injection, following 4D-150, it doesn't mean that you now need them at the same frequency that you would have otherwise. It may be -- we think it would be occasional. So that treatment burden reduction that you see in year 1, we think that proportional rate would extend long term over time. Certainly, patients will still need monitoring. They'll still need to see their physician. But there's a big difference from a patient perspective, at least between going into the office for monitoring and an assessment versus going in for an injection.

Got it. And how are you thinking about sort of the competitive profile of 4D-150 as it relates to other gene therapies in development for wet AMD, and also other long-acting treatments sort of like TKI inserts that we're expecting to go into -- enter the market in the next few years.

Yes. I mean, as David has shown, as you all know, it's a large market that's growing. And we actually estimate by the time we get to our launch window, the value of the market globally is well over $20 billion. So it's gotten room to accommodate a lot of different, I think, assets with different profiles. We think our profile stands up and is really differentiated from a number of perspectives. First of all, relative to TKIs, TKIs seem to show an efficacy, I think the question remains as to how efficacious they will be in a harder-to-treat patient population, which, by the way, every time you launch a new medicine in this space, the first patients you're going to get used upon is patients that have a high treatment burden, which makes perfect sense, right? You're going to -- as a physician, you're going to consider patients that have the highest treatment need as the patients to be considered for new therapies. So I think there's a question there. But we believe that should they be successful in Phase III, there's room for them in this space. However, we think of, listen, long-acting bolus injections today like VABYSMO gets certain portions of patients out to 3 or 4 months. So if you're an asset that's going for a 6-month profile, we see them as in the same category of each other. Our goal with 4D-150 is not to add an extra month or 2 to durability. Our goal is to actually set a new standard where many patients have months and if not years of durability. And we think that's a completely different paradigm versus some of those assets in development.

Got it. And can you maybe talk about sort of your expectations for initial uptake just based on your conversations you've had with physicians, you've shown data in sort of more severe patients, you've also shown data in more mild-to-moderate patients. Where do you think 4D-150 could be used initially? And how do you see that evolving over time as physicians get more comfortable with the profile?

Yes, for sure. Good question. First of all, I think a good proxy for interest and uptake is enrollment in our trials, and we see that in our Phase II trials, enrollment was quite strong, and we would expect that would continue as we get further a few months out with Phase III already starting last month. And the first patients that are going to get considered for these therapeutics are patients I mentioned earlier, these patients that are on 8, 9, potentially 10 injections per year with current standard of care. I think all new assets that are approved are going to get first tested with that patient profile. What makes us feel really good and confident is that we actually have really good data that we showed earlier with that exact patient profile. Our Phase I/IIa patient profile were hard-to-treat patients with an average injection rate of over 10 per year. So we think we'll perform well with that patient population. And then as the launch progresses, I think expanding it to consider patients that are maybe of lesser treatment need or more naive in their diagnosis is probably where we would see the adoption grow.

Great. All right. I think with that, we're out of time. So thanks again for joining us, guys, and we look forward to our updates later this year.

Sounds great. Thanks, Daniel.

Thanks, Daniel.