Avidity Biosciences, Inc. (RNAM) Earnings Call Transcript & Summary

Good afternoon, everyone, and welcome to Barclays Global Healthcare Conference. My name is Gena Wang, I cover U.S. mid cap Biotech. It is my great pleasure to introduce our next presenting company, Avidity Biosciences. With us today, we have Sarah Boyce, President and Chief Executive Officer. We also have Steve Hughes, Chief Medical Officer. Sarah, maybe before I want to dive into the questions, why don't you give a brief overview of the company?

Yes. And first I'll say thank you so much for inviting us to this wonderful conference. And it's nice to be in Miami, and have a bit of fun. Although, we're based on San Diego, so we got the sun anyway. All right. So Avidity, we are -- if you look at our vision, there's 2 things that we're aiming to do. Firstly, is revolutionize the RNA space. We are an RNA delivery company. And through our technology, which is the Antibody Oligonucleotide-Conjugated technology, we have shown more than once that we can effectively deliver [ SIs ] or PMOs to muscle cells. As also part of our delivery technology, we can also deliver to the heart. And we have a physician in cardiology portfolio that is preclinical. And we have a collaboration with BMS as part of that. And we also, with our partners, Lilly have a collaboration where we look at genetic targets in the immunology space as well. So we are an RNA delivery company, and we've been able to revolutionize actually already from an aspect of opening up new therapeutic areas for RNA by cracking what has been one of the fundamental challenges in the space, which is that of delivery to tissues and cells outside of the liver. The other aspect of our vision is that we're looking to make profound improvements in people's lives. That speaks to where we direct our technology. You'll find us in spaces where we lead the field and where we are the first in what have been previously untreatable diseases, where there is a very high level of unmet need, where we know our genetic target, and where we can precisely deliver our siRNA or PMO. Today, very excitingly, we are now transitioning into our first pivotal study, which is in myotonic dystrophy. And I know, we'll -- I'm sure we'll talk about that more, as well as also over the course of this year, we're also seeing read out for our FSHD program in the second quarter, where we are the first people to directly target the underlying cause of the disease, which is Aberrant Expression of DUX4. And then in the second half of this year, we're really looking forward to sharing for the first time or data in DMD in patients and in boys and young men, who are amenable to exon 44 skipping. So a lot happening from our pipeline perspective and some really exciting spaces where there are very high levels of unmet need.

Great. So, Sarah. So maybe like the Antibody Oligonucleotide-Conjugate platform, like what is the uniqueness of the technology and key modifications for muscle target RNA delivery?

Yes. So firstly, this is a -- this is a technology that we've developed entirely in-house. So by our team of scientists at Avidity, and think of it like we have the GalNAc for liver. What we were looking for, having sort of developed the Antibody Oligonucleotide Conjugate technology is what other professional transport systems in the body can we tap into to deliver our siRNA. And that led us too transferrin. And so we conjugate to the transferrin antibody, that antibody, think of it simply as a delivery vehicle. The [indiscernible] or our PMO to our target cells, and in this case, muscle cells, both skeletal, and we also use the transferrin antibody to deliver to cardiac tissue as well. It's a really simple concept. And I mean, when I was first introduced to the company I was like, why has no one thought about this before? And in actual fact, people hadn't -- couldn't get it to work. And what we were able to do at Avidity is apply our bioengineers or chemists or biologists to figure out precisely how to do it. And every single component matters, both the antibody, the linker and the [ si ] or the PMO. But it's really looking at -- think of it, it's like the GalNAc approach for liver, but we're doing it for other tissues and cell types, and we're using an antibody as a delivery vehicle.

So can you give a quantitative description, how much more improvement by using this target delivery to the muscle?

No one has been able to deliver [ SIs ] to muscle cells before. So it's not an aspect of a -- I mean, it's a complete change of the game in that -- this delivery challenge had never been cracked, and that's what we did.

And I think on the PMO side, we do have a comparator. So we're delivering 50-fold more drug into the muscle than the PPMOs, and the PPMOs have also targeted delivery technology compared to the PMOs we have many multiples above that as well. So really not able to get lots of drug into the tissues. So really a giant leap forward in terms of muscle delivery.

Okay. And then kind of thinking regarding the safety, and we know PPMO, first gen has some safety issue. And PMO, because this is not really targeted, passes the intake and then the uptake rate is pretty low. So like in your case, how do you address also ones that tissue specificity and also the safety part?

So we've got a good amount of safety data now. We've got 3 programs that are in the clinic, 2 with siRNAs and 1 with the PMO. All 3 have been very well tolerated. We presented data very recently for our lead program in myotonic dystrophy, where we've given over 265 infusions. We've got over 61 patient, years of continuous treatment. Many patients now who -- or we have a majority of patients beyond 18 months of continuous dosing, many patients through 2 years of continuous dosing. We looked at the most frequent adverse events that are related to the technology. So adverse events basically that are occurring in more than 1 person, and they were headache and nausea, really common adverse events that you see in any clinical trial. So it's been incredibly well tolerated and has got a great long-term safety and tolerability profile as we move forward into Phase III.

Okay. Very helpful. So I mean, you do have important Phase III study about to start. And so maybe before that, we wanted to discuss about the DM1 as a disease, and also the Phase II data.

Yes, so maybe if I start on the disease, and then Steve, I'd love for you bring in your clinical perspective as well. So for myotonic dystrophy, it is an area where there are no approved treatments. So for people living with myotonic dystrophy, they've not had anything available to them. In many ways, because it's been ideal for an siRNA approach, but no one's been able to deliver. It's estimated there are about 40,000 people living with myotonic dystrophy in the U.S. and about the same in Europe. So a large orphan disease, it means bigger than cystic fibrosis. And when we look at part of our vision about making a profound improvement in people's lives, we'll get on to that with our data, but it was a program that was ideal for an siRNA approach, and what we hope to be able to make a transformative difference. We're the first people ever to move into a pivotal study for myotonic dystrophy. So we're incredibly excited and proud to be playing such an important role in the community. And from a market potential, we view this as being a multibillion-dollar indication. But maybe, Steve, talk more about the devastating impact on people's lives and those living with myotonic dystrophy today.

Yes. So it's a neuromuscular disease. The myotonia in the myotonic dystrophy is prominent. Myotonia is an inability to relax muscle once it's contracted. That actually affects just about every muscle in the body. So it can affect speech, swallowing, breathing, ability to just do day-to-day activities, it affects the gut. So it really does have multiple different impacts on the patients' lives. And then along with the myotonia is a progressive muscle weakness. I guess, that deteriorates over time. And with that comes all of the deterioration of quality of life. It ends people's lives early. The most frequent causes of death are cardiac, so it also can affect the heart, but also with its impact on respiratory aspiratory muscles increases the frequency of pneumonias and other respiratory complications that can be fatal. So really a devastating disease because it's genetic, many members of the same family are affected and it has something called anticipation, which is where subsequent generations have the disease worse than the previous generation. So within families, you'll find 1 member of the family that's caring for their children and maybe their grandchildren that have the disease as well, and we certainly have people on our patient advisory board that are in that situation. So really a devastating disease. We've recently released data showing that we can have a dramatic impact on the disease. So we showed really profound improvements in the myotonia, improvements in muscle strength and also improvements in patient-reported outcomes of how they can go about their activities of daily living, all of which were extremely positive. We showed those improvements first in the MARINA study, which was our Phase I/II study, where we disclosed data to [ IIN ] and at World Muscle last year. And then more recently, we've shown the longer-term follow-up of those patients in the open-label extension, where we've shown that the substantial improvements that they had in the MARINA study actually continue to improve for that duration of the open-label extension. We're very lucky in this disease that there's a well-organized treating community where they have an ongoing natural history study called END-DM1, and we were able to compare our clinical trial data with a max group of patients from the END-DM1 natural history data set. And there we showed substantial improvements. In fact, the reversal of the course of the disease as compared to natural history. So this is -- the endpoints that we showed there were myotonia and grip strength, quantitative muscle testing across upper and lower limb muscles, and the DM1 active patient reported outcome. Those are the primary and the key secondary endpoints in our Phase III study. So that data, combined with the really great long-term safety and tolerability data that I mentioned earlier, really, we think, has derisked the Phase program, Phase III program for us. We really have a great -- a really good idea of what we're going to see as we run that Phase III study out.

Yes. And just to add, and I would say to people, if you haven't seen it, on our website, if you go to the Events section, you'll see our latest corporate update as of March. And yes, we are still in March. I'm like, what month is it? As of March. And there's a video in there, it's of the video hand opening time, that tells you almost everything you need to know from the disease because you'll see and imagine from what it's like living with the level of myotonia that -- that the study participant had. And then you'll see after del-desiran where it's pretty much a normal hand opening. And then also in the presentation, there are quotes from patient interviews that really no one can articulate better the impact of any drug than someone who is receiving it. And you can see direct growth from participants in the study around how their lives have been impacting. It really is quite profound.

Very good. So for the -- regarding the video hand opening time, and also you have the muscle strength endpoint, so maybe if you can elaborate a little bit how you measure that and then how consistent the outcome will be?

Okay. So the video hand opening time is how we measure myotonia. It's measured in the hand. But of course, myotonia, as I explained just now, it doesn't just affect the hand, it can affect just every muscle in the body. But we do know that what we observe in the hand is also improvements that are occurring in the other muscles as well. The video hand opening time was actually developed by experts in the disease, and is one of the endpoints that's being measured in the END-DM1 natural history data set. We've adapted it slightly not in terms of the video of the hand opening element, but we use an independent adjudication panel to actually score the hand opening. So that removes any subjectivity in terms of the hand opening. We have 2 independent adjudicators that are blinded to the patient's treatment assignment. They have -- they each score their hand opening time and they have to score within a certain range. Otherwise, it goes to an adjudication panel where they meet and actually get consensus around what the actual hand opening time was. So there's essentially a time break procedure. At each assessment time points, patients have 2 measurements of hand opening taken. And there's a rest period before each of those assessments so that there's no warming up effect that can be had. And then those 2 results are averaged to get the overall hand opening time. You don't measure it for the whole hand. We're measuring it for the middle finger. And so it's the time taken for the middle finger to go down flat to the table. Other things are to make sure that the hand is identically placed for each of the assessments. So you'll see on the videos on our website that the patient's hand is on a piece of white card in a certain position, and there's a line that's been drawn along the edge of their hand, and that was done at the baseline assessment, and they position their hand exactly up against that line for all subsequent assessments to make sure the hand isn't exactly the same position, again, to remove variability from the test.

Yes. It's a very systematic, rigorous methodology around how it's done. So that's in the clinical study, right? And from the natural history data, were they also done under similar rigor for you to collect the data?

Yes. So the test is performed in a similarly rigorous fashion in the open-label and the natural history study as well.

I see. Okay. Okay. So then I was thinking about your HARBOR Phase III study. And the primary endpoint, like regarding the study design, was that aligned with the FDA?

Yes. So the -- we actually have been in communications with multiple regulators because it's a global study, and we have alignment with FDA, with EMA, other regulators as well on that about the study design. So the primary endpoint, the secondary endpoints, the duration of follow-up, the timing of the primary endpoint assessment, all of those we have regulatory agreements on.

Okay. That's very good. And then what is your, like you say powering assumption for this? I know you do have a placebo control arm?

Yes. So the primary endpoint and the secondary endpoints are all incredibly well powered. We were extremely lucky. We had the data from the MARINA study, but we also had the END-DM1 natural history data set that we could use to inform our assumptions about placebo response rates and things like that. So we've been able to do a very reasonably sized study, 150 participants, but we still maintained very good power, certainly the sort of power that you would expect for a Phase III pivotal study.

So what is your placebo assumption there?

We haven't given guidance on all of the elements of how we maintained our -- of how we did our placebo assumption. One key difference between the MARINA study and the HARBOR study was that in the MARINA study, patients were randomized in a 3:1 fashion. So your probability of getting active drug was 3x greater than your probability of receiving placebo. We know for multiple other studies that the higher randomization ratio, the greater your placebo effect because people will assume that they're on active drug. And as we move into the HARBOR study, it's a one-term randomization. So the calculations that we've used and the data set that we used from the MARINA study will almost certainly have a higher placebo effect than what we will actually see in the HARBOR clinical trial. So that adds on to our calculated power as well.

Okay. And then regarding the dose, do you have a first dose like 2 milligram per kg before you're scaling up to 4 milligram per kg?

Yes. So the dose in the clinical trial is 4 milligrams per kilogram ongoing throughout the study, but the first dose is at 2 milligrams per kilogram. The other thing that we've been able to do in the HARBOR study is to move the dose interval up to 8 weeks. In the MARINA open-label extension study, the drug was given every 13 weeks, but because we've got a really great safety profile, we were able to compress that into approximately every 2 months receipt of drug. And we're hopeful that by giving the drug even more frequently, that we'll be able to see even greater clinical benefits in the HARBOR study that we saw in the MARINA [indiscernible].

Yes. So -- and just the first dose 2 milligrams, all subsequent dose is 4 milligrams given every 8 weeks, we have also aligned with global regulatory authorities on the dosing and the dosing schedule, and that includes FDA and the EMA.

Okay. And what's the reason why you start at the lower dose, the first dose of 2 milligrams per kg?

Essentially, that was the quickest route to getting into a Phase III clinical trial. And our goal is to get the drug to patients as quickly as possible, particularly seeing -- given the really great data we've seen in the MARINA or MARINA open-label extension study. So it was really just about getting the Phase III pivotal study up and running as quickly as possible.

Okay. Sorry, maybe I didn't make my question clear. Why did you give a first dose as a 2-milligram and as subsequent is a 4-milligram?

We -- if you remember in the MARINA open-label extension study, we've already dose-escalated half of the patients that were at 2 milligrams per kilogram up to 4 milligrams per kilogram. And earlier this year, we announced that we were dose escalating the remaining patients up to 4 milligrams per kilogram now that we've selected our Phase III dose at 4 mgs per kg. That was an already tried and tested dosing paradigm of starting at 2, moving to 4, and that's why it was really the quickest route to getting into a Phase III study. We'd already negotiated that dose measurement with the regulators.

Yes. And maybe also I can add here in that we do have a very narrow partial clinical hold, which is around initiation of 4 milligrams. So think of it as you have the HARBOR study and you have a partial clinical hold. So those 2 things have completely separated. The HARBOR study is not on hold. So we are -- all systems go, getting the HARBOR study up and running as fast as possible, getting the study, we'll cruciate it as quickly as possible, and getting del-desiran to people who need it. We then have the very small, sort of narrow, what we view now is really an administrative technicality on first dose of 4 milligrams, and we expect to resolve that in the summer, but the HARBOR study is not in any way impacted, and the HARBOR study is not on -- the HARBOR study is not on hold. So it was a very elegant way for us to separate the 2 factors completely and for the HARBOR study to be able to move as swiftly as possible, which is what we're now doing.

Okay. Okay. I think that makes sense then. So then you do have a primary endpoint of 30 weeks and then 54 weeks, and maybe rationale to have early assessment?

Well, maybe we'll start with the 54 weeks first. So regulators like a year of placebo-controlled follow-up for safety reasons. So measuring -- running the placebo-controlled period out through week 54 allows us to give the regulators that 1 year of placebo-controlled safety data. The reason we cut the primary endpoint at week 30 is because we see very early improvement within the MARINA study, within weeks of starting the drug, we were already seeing separation from placebo in the active treated groups. And so because we're essentially reversing the course of the disease, improving the patients, we don't need to wait for the placebo patients to get worse in order to see that separation. So we're able to measure it early, and we got agreement from the global regulators. So we cut the primary endpoint at that week 30 time point. The -- so we would plan to file at that week 30 time point, and then provide the safety data during the review period. There's a natural point at day 120, it's called the day 120 safety update, where you provide your updated safety information, and that's the point at which we will provide the full data from the clinical trial. So it essentially allows us to move the filing up considerably by almost half a year, and that's aligned with our goal of getting the drug to the broader patient community as quickly as possible.

Yes. I mean it's -- I think just to build on what Steve said, it's pretty unusual where you see a drug that's actually reversing the progression of disease and where you see movement on these functional measures so quickly and so consistently in treatment. And our goal is to get del-desiran to the myotonic dystrophy community who very much need it, and we're very acutely aware of the responsibility that's on us around that and to move as quickly as possible. It's a pretty simple study from an aspect, there's no biopsies, there's no MRIs. It's a global strategy, and we're extremely well-powered for both the primary and the key secondary endpoints. And if you can see what we already did in MARINA and the MARINA open-label on the comparison to natural history as well. This is a really important drug.

Thank you very much for your time.

Thank you.

Thank you, everyone.

Thank you.