CRISPR Therapeutics AG (CRSP) Earnings Call Transcript & Summary

Hello, everyone. Welcome to the morning session of -- Day 3 of the Bank of America Virtual Vegas Health Care Conference. I'm Greg Harrison, U.S. biopharma analyst here at BofA. And I'm joined by my colleague Jason Zemansky . And today, we're very excited to have CRISPR Therapeutics with us. And here to speak on behalf of CRISPR is CEO, Sam Kulkarni. The format is a fireside chat, so feel free to send questions, and I can ask them anonymously. So Sam, let's just jump right into Q&A.

Maybe you could just give us a brief update on recent developments, and then we can get into some of the programs, specifically.

Yes. Thank you, Greg and Jason. It's a pleasure to be part of this conference in this format. As an overall update, I think we're about 5 years post the formation of CRISPR Therapeutics. And we're -- as we look back, we're very proud of what we've accomplished. We've taken a platform that could be transformative in medicine and brought it to the clinic. And last year was certainly momentous when we announced the data for the first thalassemia and sickle patient that we had treated with the CRISPR-based cell therapy. We continue to make progress with our full pipeline, whether it's the hemoglobinopathies program or the programs that we have in immuno-oncology with our allogeneic CAR-Ts or other pipeline programs, such as regenerative medicine and in vivo programs. So all in all, I think we continue to march along in spite of COVID. COVID has not had a significant impact on our operations. If anything, given our strong balance sheet and our continuing operations will come out stronger on the other end from a competitive standpoint. We will -- I'll provide more details on each of our programs, but we continue to manufacture cells in 001 program. We continue to enroll patients in our immuno-oncology programs. And we'll have a -- we'll have updates on all those programs this year. So overall, we feel quite good about our situation in spite of COVID, and we look to strengthen our franchises in this current situation.

Okay. That's a good intro. Now I know a lot of investors are very interested in how clinical trials are progressing with COVID. So maybe if you could just take us through some of the milestones that people can look forward to? And if there's any effect there, just so we can kind of have a good idea of what's coming up for the company.

Yes. Happy to. I think we'll have a number of things to look forward to this year. I think I'll start with the latest. We just disclosed our EHA abstract today or I guess the conference disclosed it. And we will have a presentation at EHA on our hemoglobinopathies program where we discussed not just the first 2 patients in thalassemia and sickle cell, but an additional patient in thalassemia, and we'll have a much more -- much longer durability data on each of these patients. So we're we're excited to put that presentation out there. And then towards the end of the year, we'll have another update, which involves a larger cohort of patients that we've dosed. We haven't said what the exact number of patients are, but we've dosed additional patients in both thalassemia and sickle, and we'll have a data update for that cohort at the end of the year. We'll -- in our immuno-oncology programs, we've committed to having data by the end of the year for our CTX110 program, which is an allogeneic CAR-T targeted towards CD19 malignancies. And then with our 120 program, we've started the trial, and we said that we've begun treating patients. And with our CTX130 program, we announced the acceptance of the IND and we'll be starting that trial shortly as well. So a number of things to look forward to on both our hemoglobinopathies and our immuno-oncology programs.

Okay. And then when it comes to CTX001, you've top line data in 2 patients, 1 sickle cell and 1 beta-thal in November. What have you seen in these patients that would suggest that there's been successful editing and engraftment? And what does that mean for the clinical end points in these indications?

Yes. I think in November of last year, we presented data for the first patient in thalassemia and sickle. And frankly, the data were remarkable. And even more so than the expectations that the investigators had on that program. In the thalassemia patients, what we saw was a patient that required more than 1 transfusion a month significantly anemic, a form of beta thalassemia, with an IVS-110 mutation that is akin to a beta zero mutation, which means that they had very small amount of endogenous beta-globin that they were producing. And this patient was dosed with CTX001. And very shortly after dosing, the patient had become transfusion independent. And as we look at some of the PK/PD markers, we found that there is a significant level of fetal hemoglobin being produced in this patient. At this point, in the abstract that we disclosed today in that patient, there's 99% of the cells are F cells or cells that contain fetal hemoglobin. And we see that level being maintained in a durable fashion. So that was pretty exciting data. I think in sickle cell, we disclosed data in November for a patient where the level of globin -- fetal hemoglobin was up to 45% or 46% within 4 months of dosing the patient. And in our abstract today, we disclosed that, that holds up and is durable over a longer period of time. We'll obviously have additional data cuts before we present at EHA. But what we see is a durable effect of elevated fetal hemoglobin. And the expectation -- the primary end point that we have for the trial is 20% fetal hemoglobin because that's what's been shown in natural history studies to be curative in these patients. And we were at 45% fetal hemoglobin with this first patient. So we're well above that bar, and that's what gives us so much excitement about these programs. We did see some SAEs that are typically associated with bone marrow transplant. But nothing that we see is extraordinary that's drug-related versus generally related to bone marrow transplants.

Okay. And then that kind of leads into the safety profile. And it seems like the adverse events were generally as would be expected given the myeloablative busulfan conditioning. Do you agree with that? And when would we be able to see data on engraftment time in additional patients to kind of fully evaluate the regimen?

Yes. I think the side effects that we saw were very much those associated with myeloablative preconditioning or conditioning. And nothing that we saw was untowardly on that -- in that data. I think in terms of time to engraftment, the first 2 patients had 30 and 33 days to full engraftment. We'll get a better sense of the time to engraftment as we've disclosed data for the next set of patients in the end of the year. But that's again typical in terms of time to engraftment with these types of therapies. Over the long run, I think the notion is that we're going to get to lower intensity conditioning in these patients. We are working on a number of different approaches and so are a number of other companies in terms of targeted conditioning of the marrow and that would reduce the overall toxicity profile of these types of therapies and make it much more palatable for a larger fraction of the population, not just the serious patients. So at this point, we're comfortable with the adverse event profile as it fits within what's seen with myeloablative conditioning. And we'll get more information on engraftment time over the next few months.

Okay. Great. And then do you think the preconditioning or transfusions at all had any impact on the data and the ratio of hemoglobin to fetal hemoglobin?

Yes. This question was raised after we disclosed data in November with our first thalassemia and sickle patient. With the sickle patient, we only had 4 months of follow-up. And you do get a temporary bump in fetal hemoglobin when you condition with busulfan. And that's been seen. But that's usually within the 0% to 5% range and not the kind of fetal hemoglobin increase that we saw with our therapy. But I think this current data set in the abstract that we just disclosed today will show that -- provide further evidence that it's a durable effect in terms of the elevation of fetal hemoglobin because any preconditioning related increase in HbF does not last past 2 or 3 months.

Okay. That makes sense. And then for this program, conditioning has been paused for now because of COVID. So just wanted to get your thoughts on when that could resume? Or what conditions need to be in place to get it going again?

Yes. I think what we disclosed in our earnings release is that we've -- we continue to manufacture cells for patients. But we've stopped the conditioning and dosing given COVID because we don't want to immuno-compromise a patient in the middle of this pandemic. And the lot -- one with the patient safety is utmost importance to us, but what I'll say is it ultimately doesn't impact our timing to filing. For filing purposes, you need a certain number of patients with a certain amount of follow-up, and the critical constraining factor is when you get the last patient in and how much follow-up is needed for the last patient. So whether we dose serially or whether we dose in a bolus, it doesn't ultimately affect us. So we've just been very conservative, but we see sites opening up again, and we're keeping an eye on it as we continue to manufacture cells, and then we can get a bunch of patients dose in a bolus at the right time.

Okay. And then how are you looking at gene editing competitors, their approach to treating sickle cell and thalassemia? And just how are they different? And how you think the competitive environment could play out?

Yes. So let me lay out the competitive landscape and the market opportunity here because there's questions on both the next gen as well as the existing competitors. So what you're looking at, while there's a number of companies that are in the sickle cell space, like Global Blood and others, they're playing in the space of the less severe sickle cell patients. If you have patients that have mild disease, some of those drugs can have impact and help those patients. But for the patients we're talking about, which is a serious disease, where they have 5 to 7 or 8 hospitalizations a year, for them, changing their hospitalizations from 7 to 5 doesn't meaningfully impact them. We're looking at what's going to meaningfully impact them as curative therapies like ours. So we're looking at about 1/4 of the sickle cell population that are in the severe bucket. And in this space, you really, at this point, have 2 players, Bluebird and ourselves, that have shown that the approach of engineering these cells and infusing them into the patients is actually potentially curative. And so we're neck and neck with Bluebird. In terms of getting to the market, and we continue to shave off that lead as we progress. And my expectation is we may end up with 2 therapies that both work in this space. And these are going to be supply-constrained launches where I'm not sure you're going to have a 90-10 market split or market share split. You'll have an even split between the players that are -- that get there first. Now there's a number of other players behind that are also doing editing and are in -- some of them are in preclinical stage. And while some of these approaches, we have to -- it's early to say whether they'll work or not work. But I would say that these are markets where if you're 2, 3 years behind the market leaders in getting to the market, you're going to have a tougher sell in terms of making an impact in terms of market share or making a commercially viable product. The launches here and the market dynamics are going to be akin to the medical device world, where you have procedures, for example, with heart procedures or heart valve procedures, for example, where the market is formed and you get sort of a distribution of market share between the first 2 or 3 players. And everyone else has a very tough time making a dent in the marketplace. So we're watching the next gen competitors very closely. But at this point, we're very pleased with the data that we have with our trials. And our focus is on execution to make sure that we get to filing and get to a launch in an accelerated or expedient fashion.

Great. This is Jason from the team. In the time we have left, I'd like to switch gears away from the hematology programs and more towards the immuno-oncology side of your portfolio. One of the questions that we get a lot from investors is on the subject of redosing. I know a number of companies are exploring redosing. And Allogene recently mentioned that they'll be expecting redosing data soon. What are your thoughts on this strategy.

Yes. I think it's -- one of the promising very promising aspects of allogeneic cell therapy or CAR-T is that there are a number of degrees of freedom to optimize as opposed to autologous therapies, where you have limited degrees of freedom. In allogeneic therapies, you have essentially 3 axis. You're playing with the lymphodepletion regimens, and you want to see what the extent of input depletion you need is. You can actually vary the cell dose in terms of your own CAR-Ts very easily and go up to very high doses, and then you can redose as you -- to get durable responses. Ultimately, what you're trying to get are -- is not just the response rate but durable responses. And to get durable responses, it's very conceivable that you may -- you could dose every 3 to 4 months with these allo CAR-Ts, and that could lead to relatively long duration of response. And so that's something we've built into our protocols. We're starting, obviously, with our standard dose escalation to make sure our therapies are safe. And as we get to higher doses, we will optimize a number of aspects. And we're -- all the companies are going to learn from each other. We're going to learn from Allogene and Precision, and they're going to learn from us as we start dosing patients and seeing what the response rate is, what the level of -- what percent of patients actually achieve complete response and what the durability response is.

Excellent. That's very informative. I think that's actually a very good segue into my next question, which is, can you tell us a little bit more about your program? And where you see it differ and differentiated from those competitors you mentioned, Allogene and Precision?

Sure. The big picture view is we're quite bullish about the allogeneic approach in both heme malignancies as well as solid tumors. If you just take the heme malignancy space, you're going to have a $40 billion market in the next 5 to 7 years. And I believe at least 1/3 of that market could be allogeneic CAR-Ts. And we believe that allogeneic CAR-Ts have a significant advantage over autologous CAR-Ts. So how do we -- what's the fundamental requirements for making allogeneic CAR-Ts? There are 2 conditions. One is you want to make sure these allogeneic CAR-Ts are safe, and there is no graft versus host. In other words, you don't want the CAR-Ts attacking any tissue except the cancer in the patient. And especially since these allogeneic CAR-Ts are coming from a healthy donor and are pretty robust, you only want them to kill the cancer. And the second is you want them to hit the cancer hard, but be around to make sure that the cancer doesn't come back very quickly or bounce back. And so in terms of eliminating GvHD or the graft versus host, which is the first condition, I think all the players are doing the same thing, which is to eliminate the T cell receptor in these CAR-Ts or T cells that we start with from a healthy donor. And that's done with different forms of gene editing or gene engineering between the 3 companies. But ultimately, we're doing the same thing. In terms of persistence, though, which to ensure that the host immune system doesn't kill the CAR-Ts and the CAR-Ts can survive and proliferate for a while, while they kill the cancer, there's different strategies. And I'm actually very glad there's different strategies because we're all learning from each other, as I have mentioned before. What we do is directly engineer the cells where we remove what's called the major histocompatibility complex class I, and or in other words, MHC class I, by knocking out a gene called beta2m. And what this does is essentially it makes the CAR-T stealth. It's knocking out -- it's basically removing a flag that these CAR-Ts may have that's says I'm foreign and mark themselves for destruction by the host immune system. So we're taking that flag out, and we believe that should give us greater persistence of cells. What Allogene, for example, is doing is removing a separate marker called CD52 in these CAR-Ts that renders them protected against a severe lymphodepletion agent similar to alemtuzumab or Campath, and they deplete the host immune system severely, so they don't kill the CAR-Ts. There are 2 different approaches. For us, we believe the cell engineering approach is a superior approach because it allows for expansion into community settings. With the more severe lymphodepletion regimen, you generally have to do it in patient or do it in major medical centers. And from a commercial standpoint, I think the cell engineering approach is superior from a scalability and accessibility perspectives. And just that's the axis that we ultimately want to move forward in many ways, which is we already have second gen and third gen CAR-Ts in our labs where we do 4, 5 different edits on these cells because as we discover how these CAR-Ts work, we are finding that making more edits in the targeted fashion actually improves not just their persistence, but also the robustness with which they kill the cancers or cytotoxicity, in other words, as well as prevent exhaustion in these CAR-Ts. So these are all edits we're making. And over time, you're going to have more and more powerful allogeneic CAR-Ts. But even the early data that we got a glimpse of from Allogene gives me great hope that allogeneic CAR-Ts are here to stay and will end up being much more superior compared to autologous CAR-Ts.

Got you. Let's move into some specifics here. Let's talk about CTX120, which is specifically targeting the B-cell maturation antigen, aka BCMA. Can you talk about how these dynamics play into this specific product? And how you see this and its differences, again, versus your competitors?

Yes. I think you're going to have a relatively crowded space in multiple myeloma, which is a very large market with a number of CAR-Ts targeting BCMA. But largely, they fall into 2 classes, autologous and allogeneic. In the autologous world, you have Allogene and Bluebird/BMS product. In BCMA that has shown encouraging data. But -- and the big difference between those products is really the BCMA antigen that they use as well as the manufacturing process to a certain extent. But then you have allogeneic products, and you're going to have Allogene, ourselves and other players all try to develop allogeneic products targeted towards BCMA. And then at -- there's competition from the bispecifics and T cell engagers that also rely on sort of the host immune system killing the cancers. But even in spite of this competitive space, I feel very good about our approach in multiple myeloma and BCMA because we're starting with a healthy donor, CAR-T, which is much more robust than autologous CAR-Ts. We have strategies for editing that allow for persistence in these cells. And the persistence should be even greater in these cells because generally, multiple myeloma patients are relatively immune compromised. And we have many more degrees of engineering that we can do. Ultimately, it's going to become an engineering problem. We can tailor the lymphodepletion regimen, the cell dose, the edits, as well as titrate the redosing schedule, and I think at every time, we're going to see improvement in data. And I have no doubt that the allogeneic CAR-Ts are going to move into earlier and earlier lines of therapy. And the interesting thing about this engineering notion is the limit -- these improvements are going to be asymptotic. And similarly for autologous and allogeneic, but the limit of the asymptote in autologous is a lot lower than the limit of improvements you can make with the asymptote in allogeneic because there's many more degrees of freedom. And if you fundamentally reduce this to an engineering problem, I feel like over -- it's just a matter of time before you can get superior data over autologous, even though the bar is relatively high with the data we've seen from Legend with their BCMA autologous CAR-T. So I'm very bullish on our BCMA program, and we've started dosing patients there, and we'll provide updates as we go along through the year.

Great. Let's -- again, let's switch gears a little bit and the time we have left and talk about CTX130. If you think about CAR-Ts, they've had a lot of success with a more of a hematological oncologies, less so in kind of that solid tumor landscape. Can you tell us a little bit more about your approach with 130 and kind of where your optimism for the program comes from?

Yes. I think, ultimately, we were very serious about moving into solid tumors and making a dent there. There's a significant unmet need. For example, in renal cell carcinoma, where we're targeting CTX130. The -- it's -- you barely get into double-digit CR rates with these patients in the second or third line of therapy. These are very difficult tumors to sort of kill, and it's not just a matter of finding the tumors, it's a matter of these tumors cloaking themselves and exhausting the CAR-Ts. And so there's more -- the challenge is greater with CAR-Ts and solid tumors. But again, from a core competency standpoint, the fact that we can make 5 or 6 different edits in these CAR-Ts, give us great confidence that we're eventually going to solve that problem. Right now, with CTX130, we not only make edits to overcome the persistence problem with our beta-2 m edit, we also make an additional edit to prevent exhaustion in these T cells. And we haven't disclosed that it yet, but we'll disclose it over time. And I think renal cell carcinoma is a good place to start because we -- it's a very tumor -- it's a very immunologic tumor. You see a lot of trafficking of T cells into those tumors in other trials, such as a PD-1 and PD-L1 trials. And we believe CD70 is uniformly expressed on these cancers. So it's a great place to start for solid tumors. But if you look at what's happening in our labs and we recently had posters at ASGCT, and we'll have posters eventually as well that disclose more data there. We can get up to 10 edits in these cells. And so we have a number of edits that we're making to prevent exhaustion of these T cells that are -- that could even be better than the PD-1 edits. We're making edits that encourage trafficking to the solid tumors. And we're making edits that make these cells more robust, eventually, in addition to edits that we make to prevent host versus graft or increased persistence. So over time, while the big paradigm is, you've gone from antibodies to cell therapies in cancer and ultimately, you may reach synthetic biology. I think in the next 10 years, you're going to see more and more and more sophisticated constructs, utilizing the CRISPR/Cas9 platform in cell therapies that ultimately could pave the path for synthetic biology in these therapies as well. But the possibilities are there because of CRISPR and the ability to multiplex edit and the speed of discovery is the other thing. We took about 3 years for an IND for CTX110. It was less than that for CTX120. And we had -- we got an IND with CTX130 in less than 2 years, which is a remarkable pace of discovery relative to other modalities. And all that's going to give us that core competitive advantage of ultimately being the superior player in this space.

Great. That's really helpful. So at this time, we're up against the end of our session. I'd like to thank you, Sam, for joining us today, and thank everyone on the line for listening. And stay safe, everyone. Thank you.

Thank you very much.