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

Okay. Good morning, everyone. My name is Gena Wang. I'm mid cap biotech analyst at the Barclays. So welcome to Barclays 27th Global Healthcare Conference. It is my great pleasure to introduce our next presenting company, Avidity Biosciences. Sitting on the stage with me, we have Mike MacLean, Chief Financial Officer; Steve Hughes, Chief Medical Officer; and Mike Flanagan, Chief Scientific Officer. So before I dive into the specific questions, maybe, Mike, do you want to give a quick overview of the company?

Absolutely. First of all, Gena, thank you for inviting us to the conference. We're always happy to be here at the Barclays conference. Basically, at Avidity, we've got a very busy year ahead of us. It's a catalyst for each year, but probably the best way to kind of give an overview is just to talk about the fact that we're going to have data readouts in each of our 3 late-stage clinical trials. We are executing on a regulatory pathway across all of our late-stage clinical trials. Most notably, we are on track to file our first BLA to be commercial in 2026, an accelerated pathway for our del-zota drug that treats DMD44. And in the second quarter of this year, we will provide clarity of the regulatory pathway for our drug for FSHD, del-brax, and that we expect to have global full approval for clinical -- I'm sorry, global full approval strategy in clinical design for our del-brax drug as well as a update on the pathway for an accelerated approval in the U.S. for del-brax. And lastly, we're becoming a commercial company. I mean we have been a research company and development -- then added development. Now we're adding commercial. So we think of ourselves as an RDC company that does all 3. And we've been spending the time already being coming commercial by putting in place an infrastructure that includes U.S. and ex U.S. processes, systems and people, and we're actually scaling up things like manufacturing to handle the commercial opportunity ahead of us. So we're really excited about 2025. It sets us up for potentially our first commercial launch in 2026.

Okay. Great. And can you remind us your cash and then the runway?

Yes. So we reported -- I guess, last month in February, we reported on our 10-K that we had $1.5 billion of cash on our balance sheet at the end of 2024, and that is cash that provides one way through mid-2027.

So what are the assumptions building for the runway?

Yes. So basically, that's essentially the opportunity to launch potentially 3 drugs through the mid-2027 period. It brings along our neuromuscular pipeline with additional potentially DMD products as well as the precision cardiology -- therapeutic area. And it also is sufficient to help us build the commercial organization and have a product for 3 commercially available drugs without mutation for potential to exceed our expectations for patients.

Great. So I would dive into the DMD, and Steve also wanted to thank you. Earlier today, you were at our DMD panel. Hopefully, you had a fun discussion. And so later this week -- weekend or early next Monday, you will have a DMD data update at MDA. So maybe help us understand what should we expect to see? And we know that your early lower dose already shows super impressive data. And then FDA already basically checked the box, that's good enough. So what will we see at the MDA update?

Okay. Thanks, Gena. Yes. So indeed, we're presenting data next week from the top line data from the EXPLORE44 study. The data we presented last year was the 5 mg per kg cohort, where we showed very high levels of delivery to muscle. In fact, 3 to 5x higher than the other targeted delivery mechanisms. We saw extremely high levels of exon skipping and dystrophin levels of over 32%, which is unprecedented, a really, really high dystrophin. And in association with those really super high dystrophin levels, we also saw near normalization of creatine kinase across all of the patients as well. Subsequent to that, we've shared our data on the 5 mg per kg placebo patients when they switched over to active drug in the open-label extension, where again, we've seen near normalization of creatine kinase. So we've replicated that 5 mg per kg data set. At MDA next week, we're going to be including the final data from the EXPLORE44 10 mg per kg cohort, where the focus, again, is going to be on safety and the biomarkers. So no surprises on the safety side. The safety still looks really, really good for del-zota. On the biomarker side, we'll be sharing, again, the dystrophin levels, exon skipping and tissue concentrations. A win for us on that given that we've already shown really unprecedented levels of dystrophin are going to be, again, to once replicate the data showing very high delivery to muscle by high exon skipping, very high dystrophin levels, and again, a very attractive safety profile.

Okay. And will we see the correlation data between say exon skipping versus the protein expression level?

[indiscernible], Mike?

Yes, we've -- it's a great question. We've talked about it a little bit. What I can tell you is that there's a really tight correlation between exon skipping and production of protein. We have -- it will be a presentation, so trying to pack in all the data. You may not see all of that, but there's a tight correlation. If you skip better, you're going to make better dystrophin at least for our del-zota program.

Okay. Very helpful. And then the other question is, should we see those response if you penetrate in theory? And of course, the dosing frequency is slightly different than just 100% 5 milligrams to 10 milligrams, right, because the dosing frequency is slightly different. But still at the higher dose. So should we see higher protein expression at the 10-milligram cohort?

Steve, do you want to [indiscernible]?

Yes, sure. So at 5 mg per kg, we were dosing every 6 weeks. So traditional PMOs have been dosed weekly. So we've managed to push the dose interval out to something that's much more family-friendly every 6 weeks. And then with 10 mg per kg, we actually dosed every 8 weeks. So the actual increase in dose isn't really that much between 5 and 10 mg per kg because of the increase in dose interval. So we may not see an increase in -- or a dose response on the exon skipping or dystrophin as we go from 5 to 10, just because the cumulative dose really doesn't change very much between those 2 dose levels. But what we would anticipate seeing is very high levels of dystrophin production, very high levels of muscle tissue concentrations, very high levels of exon skipping. And again, commensurate with the fact that we're producing a near full length dystrophin that we would see near normalization of creatine kinase again.

Okay. That's very good. And then regarding the dose that you will move forward to the next one. I know internally, you already decided that you will announce to us. So given what you described, am I right to picking like 10 milligrams once every 8 weeks, giving the convenience of dosing and if similar protein expression, but at least that will be the better dose to move forward.

Yes. So we're going to provide the information on dose and dose regimen soon, potentially as early as next week.

Okay. Okay. But what would be -- okay, I know you cannot answer like which dose, but what are the key factors you're thinking for you to make a decision to pick which dose?

Steve?

So I think really, the important thing around dose for us is that even at 5 mg per kg, we're seeing extremely high levels of dystrophin production. It's a near full length dystrophin and we're seeing near normalization of the CK. It's going to be difficult to improve upon near normalization of CK. So in the dose selection, we're factoring multiple things into that and regulators have their own expectations as well. So we've actually already agreed to go-forward dose with FDA. They've been in full agreement with our thoughts around dose selection, and it's only a few more days until we'll be able to share that publicly.

Okay. And then a related question. I'm pretty sure safety is a very important component there. What would be considered good safety? What kind of measurements you will be looking for that consider this is a good safety?

So we've seen great safety across our entire platform. And all of our drugs are delivered using exactly the same monoclonal antibody. So we've got hundreds of doses across the platform now. We're seeing excellent long-term safety for all 3 of our programs and patients with being retained in the open-label extension studies for very long durations of time, able to tolerate the doses that they've been started on. So we're really pleased with the safety profile that we're seeing. And we leverage the safety across the entire platform when we're having regulatory discussions as a consequence of the platform technology.

Okay. Good. And I think 4Q, you also will have open-label extension study. So what should we expect to see from that data update?

Yes. So we're planning to disclose the data from the open-label extension study, EXPLORE44-OLE in Q4 of this year. So that will be a longer-term follow-up on the patients. We've already got sufficient dystrophin data to satisfy the requirements for the accelerated approval. So there will be no additional dystrophin data at that point in time. But because of the longer duration of follow-up, we will be sharing functional data.

What kind of functional data will you be sharing?

So we haven't given too much away on the exact measures that we'll be sharing. We're measuring quite a lot in the clinical trial, all of the usual things that you would see in a Duchenne study, factoring in that we -- the study enrolls both ambulatory and non-ambulatory patients across a wide age range from 7 all the way up to 27. So we have measures of mobility. We have quality of life instruments. We have measures of upper limb function. We may not be able to squeeze all of the measures into a poster or a platform presentation. But the way that we do it is that we work with our KOLs and investigators that have been involved in the clinical trial to agree what are the most meaningful endpoints for a presentation.

Importantly, Gena, our mission is to profoundly improve people's lives. And so we want to show that this drug would be available to patients, whether they're ambulatory, non-ambulatory across a wide age range.

Okay. And then should we be worried about safety with a longer follow-up? Any, say, scientific reason could lead to any concern or should not be any concern with longer treatment duration?

Though I guess that's a safety question.

Right. Right.

So we've dosed our platform now for very long durations of time. On our myotonic program, the vast majority of patients now are through 2 years of continuous dosing. Every patient through 18 months of continuous dosing. On our FSHD program. many patients now through more than a year of continuous dosing. We've got patients on the DMD program for over a year of continuous dosing. We really haven't seen any safety issues at all across the platform. And because it's a platform technology, we can leverage all of the exposures to inform us about the safety and really long-term safety is looking very attractive.

Okay. Very good. Now switching gears to your other 2 very exciting programs, FSHD, [ where ] you do have tons of data update -- or updates. So maybe if you can run through the second quarter, the milestones and then how would you -- like the [indiscernible] how would you share that catalyst?

Yes. So I'll kick off here. We call Q2 the quarter of del-brax, right, because we have 5 milestones or catalysts that we see as important to this program. And they're across data execution and regulatory pathway. So as you know, we have a global full approval study strategy for this program, right? So our overall strategy is to have this drug approved in the U.S., Europe and Japan and other markets. And so that is what we are actively engaged in discussion with global regulators on right now. And so we expect to share the clinical trial design in Q2 as well as initiate that global full approval study. In advance of that, as we talked about at the end of 2024, we've already started a biomarker cohort because we think that this is a perfect target, and we have the perfect potential drug to treat this disease, and it should squarely fit into the requirements and expectations of the FDA for accelerated approval. And so that is cohort is well underway, and we expect to complete enrollment on that cohort in the second quarter. We'll also be -- once we have agreement with the global regulators talking to the FDA about the accelerated approval pathway, and we'll be providing an update on where we are in alignment with the FDA in Q2. And lastly, so the fifth catalyst is that we'll be reporting out the Phase I/II A and B cohorts for the FORTITUDE study. So we'll be providing the complete information there. As you know, we've already selected our dose, 2 mg per kg every 6 weeks. So we did provide some of the 4 mg per kg data earlier this year so that people can understand why we chose the 2 mg per kg every 6 weeks.

So will we see all this in one press release and conference call or we will see as it comes?

We do get this question a fair amount. We would like to provide an omnibus type update. And without kind of trying to manage the release of data. We'll try and give everybody a lay of the land. But if we think that something is material or meaningful, we'll disclose it when it becomes apparent that it is a certainty. So I think it would be helpful to the market to kind of understand it altogether, but we'll disclose it as it's appropriate.

Okay. And what could be the scenario that could be material that you have to disclose that individual event earlier?

Yes. So it's probably a question for someone who has a legal degree. But look, I mean, if we have a global full approval in advance of the accelerated approval, that might be material and have to be disclosed.

Okay. So more the regulatory front?

Yes.

Yes. Okay. Good. And then -- so maybe a little bit more color on those 5 catalysts, maybe starting with the Phase I/II update in terms of data -- sorry, number of patient follow-up and also the data point, biomarkers, slicing. Also, should we expect some functional data?

Steve, do you want to answer that?

Yes, sure. So the data update in second quarter is the top line data from the FORTITUDE cohorts A and B. So the cohorts that aren't the accelerated approval cohort. Those patients will all have completed the 1-year study enrolled over into the open-label extension. So we'll have the 1-year follow-up looking at functional data for those patients, also looking at safety over 1 year of treatment, and, of course, some biomarkers as well.

Okay. And then regarding the accelerated approval path, do you think FDA also will require some kind of correlation data, like what kind of analysis you will be thinking to get a higher chance? And also, do you think that you need to show some statistical analysis or some trend that will be sufficient?

Yes. So we covered this a little bit at the panel this morning relating to Duchenne. There's no requirement to show a correlation. If you're correlating your biomarker with your functional endpoint with properly statistically correlating, you have a surrogate endpoint. Surrogate endpoint stand-alone for full approval. So the burden of proof for accelerated approval is reasonably likely to predict. And largely, that's based upon having biological plausibility in terms of connection with the underlying disease, that changes in the biomarker are reflected by downstream changes in the disease that kind of thing. So we do anticipate that, that is the burden of proof that we're going to need. But in addition, we've already seen that patients treated with del-brax do see functional improvements at least directionally as compared with placebo. And so we would expect to reproduce those directional changes in the biomarker cohort as well as -- and that will be provided as supporting data in the package.

And then if thinking forward, the confirmatory study, the primary endpoint function, do you think more likely is RWS?

Reachable workspace has been a nice measure in this disease to capture upper limb mobility and upper limb function. Patients with FSHD in the early to mid stages is primarily the upper limb that's affected. But we've seen in the data that we shared already last year that we see improvements in other measures as well. So we've seen improvements in quantitative muscle testing, improvement in multiple patient-reported outcomes, clinician-reported outcomes. We've seen improvements in other measures that we haven't disclosed yet. So reachable workspace certainly isn't the only endpoint that we can use as a primary endpoint. Ahead of concluding our discussion with the regulators around what's primary and what secondary for the clinical trial, I can't really say too much more, but we do have a lot of choice.

And Mike, maybe I wanted to ask you why I think both DM1 FSHD, you all using splicing index in a way. So why you think FSHD, you will have a chance to get accelerated approval based on the splicing profile while the DM1 should not be?

Yes. So for FSHD, just to -- the key things for accelerated approval is that we have a really safe drug. And there's a high unmet medical need. And we have a really good, like Steve said, a plausibility between really the circulating biomarker as well as transcripts all the way to functional improvements. So we know that DUX4 is the underlying cause of disease in FSHD patients. If you don't have DUX4 turned on, you don't have FSHD. So if you can turn off DUX4, then you should at least halt progression and possibly improve disease outcomes. So really, what we're looking for is that link and that direct link. And we have that in that we have a circulating biomarker as well as downstream transcripts that are dependent on DUX4. So our circulating biomarker is one of the ones that we're really leaning on. And the reason that we're leaning on it is that you can measure it longitudinally. So I don't have to have like a little snapshot of a biopsy in your leg, but I can look at it over time. So I can see that once I deliver del-brax, and see knockdown of DUX4. I see a decrease in that circulating biomarker that correlates with a decrease in CK levels that factor in muscle damage. And then what you see is you can see that last for a long period of time. It doesn't wane, which is an important part of the treatment paradigm, right? And one of the reasons that we picked 2 mgs per kg every 6 weeks. So it's all those together that just link the plausibility to the disease to improvement that we think it's a really great way forward for FSHD.

So the DM1, do you think that -- why DM1 is different? Why DM1 cannot -- based on the slicing index would not have a chance to get accelerated approval?

Yes. So DM1 is really different. So if we just talked about FSHD, DM1 is very different in the sense that there's thousands of genes that are misspliced to -- for DM1. Selecting a small set of genes, for instance, 22 genes that you've had a biopsy in your [ AT ] in the front of your leg doesn't get reproduced by a biopsy in your quad or a biopsy in your bicep. So there are just so many different genes that are affected in DM1. So there's not a good link between that. So that's the first thing. The second thing is when we look at vHOT, so video hand opening, which is the measurement of myotonia across the body. Myotonia is devastating for these patients with swallowing and a number of different things. vHOT is so fast to measure. It's such a tight measurement. We can measure it faster, get it into the database, analyze the data faster than we could do a biopsy, and it's tighter data. So if we're really looking to get drugs to patients as quick as possible, that's the path forward.

Good. We have less than 1 minute. Maybe one last question on DM1. If you can quickly talk about powering assumptions for the Phase III study. And anything you think that could affect the standard deviation or like why you feel confident you designed the Phase III study this way?

Steve?

So first of all, the power across all of our endpoints, the primary endpoint, the 3 key secondary endpoints, we got very high levels of statistical power. And we've looked at data now from the MARINA program over 1 year as compared with natural history and seeing good separation over a 1-year period. So we believe that we've really derisked the program from an efficacy perspective. Specifically relating to power, we've used natural history data. We used the data from the MARINA study to power the study. We had statistical significance with 12 patients in the MARINA study. We've got 150 patients in the HARBOR study. So loads of power there. We take -- we do things like baseline stratification on the key endpoints to make sure that we're well balanced between active and placebo. We've got a 1:1 randomization, which is the most efficient randomization for power. As you move away from that, you erode power. And as compared with the MARINA program, we've moved the dose interval from 13 weeks to 8 weeks. So if there's any extra efficacy to get out, we believe that we can -- that would be manifest through the increased dose frequency. So we're really confident in a positive outcome for the study. And then we've also seen great safety as well as the long-term safety is looking really, really clean. So on the safety side, we think we're derisked. And of course, we fully negotiated the Phase III study with multiple global regulators. So from a regulatory pathway as well, we believe we're derisked.

Very good. Well, thank you very much, and we look forward to the second quarter, the FSHD update and then also a lot of other progress as well. Thank you.

Thanks.

Thanks so much.