CRISPR Therapeutics AG (CRSP) Earnings Call Transcript & Summary

So welcome everyone to 30th Annual Healthcare Conference for the Suisse. Tiago Fauth here, I'm a Biotech Analyst here at Credit Suisse. We're joined today by CRISPR Therapeutics. We have Samarth on the line. He's going to give a brief presentation. We're going to follow that with some Q&A. Feel free to e-mail me at [email protected], and I'll try to work those in toward the end. But you can take it away for now.

Well, thank you, Tiago. I think it's our pleasure to be at this conference. I will do a short presentation to give you an overview of the company and an update and happy to answer any questions you may have after that. So hopefully, you can see the slides that I'm sharing here. I will state that we're going to be making some forward-looking statements. I encourage you to go look at our website for a full list of risks and caveats around what statements we'll be making. At a very high level, I think many of you know the story of CRISPR, the technology and CRISPR Therapeutics, the company. It's been -- it's nearly 10 years since Dr. Emmanuelle Charpentier and Dr. Jennifer Doudna had the original vision and then developed the CRISPR/Cas9 technology for gene editing. The company, CRISPR Therapeutics, was subsequently formed 3 years after that seminal discovery and development. And we've been leading the path in terms of translating this powerful technology platform into therapies that patients can benefit from. We've now dosed over 100 patients with CRISPR/Cas9, which is remarkable considering that just 5 years ago people were unsure about how long this can take for this technology platform to mature, to become something that's more mainstream. But in a very rapid technology cycle, we've taken this CRISPR/Cas9 platform and translated into very transformative data in the clinic with CTX001 that's targeted towards beta thalassemia and sickle cell, and I'll describe more about the program. But this is a program where we're getting a lot of momentum in terms of dosing patients. We're seeing some transformative data in terms of how we think about treating these sickle cell and thalassemia patients. Again, I'll describe some of the data that we're seeing. And this could be something that -- where we file a BLA in the next 12 to 18 months. And that could be the first approved -- potentially approved CRISPR-based therapy that patients can benefit from. Beyond that, we have our next-generation immuno-oncology platform. And we'll talk more about our data there. But we had -- we've shown that we can parlay the ex vivo editing that we developed with CTX001 into a whole host of allogeneic CAR-Ts. I think allogeneic CAR-Ts are T cells derived from a healthy donor that we then added using CRISPR/Cas9 to go target various types of tumors. CTX110 targets CD19-positive tumors; CTX120 targets BCMA expression, mainly seen in multiple myeloma; and CTX130 targets all tumors that overexpress CD70. And we made other edits to this -- to these cells that allow for longer persistence. And this is just a start for our immuno-oncology platform. We have a number of other things behind that, that we're developing in terms of next-gen edits, next-gen cell types, that's just going to create a very strong franchise for us in immuno-oncology. We're also getting closer to the clinic with our regenerative medicine platform. And this is our first foray, uses CRISPR/Cas9 to edit stem cells that have been differentiated into pancreatic islet cells or precursors of pancreatic islet cells. And this is something where we essentially have engineered cells in a device that are implanted into patients to overcome the damage that their own pancreas have had in terms of -- and lack of functionality in terms of producing insulin in response to sugar. So essentially, we're implanting artificial pancreas into patients to serve as their new pancreas. And this method of treating patients can actually extend into other organ systems like liver, kidneys, et cetera and just a start for the regenerative medicine platform that is essentially now being enabled by CRISPR/Cas9 gene editing. And finally, the fourth leg of our platform is in vivo applications, and we have a number of candidates that are advancing. We've said in our latest quarterly earnings that we expect to have multiple INDs or programs in the clinic with in vivo approaches in the next 18 to 24 months. And so that's something that's a big focus for us now as some of the other platforms have matured and are on their own in terms of development. I don't have to spend too much time on the actual technology itself. CRISPR/Cas9 is a very versatile tool for editing genes. You can disrupt genes. You can delete genes and correct or insert genes. And now you have a whole set of new technologies that are being developed to tack on to the CRISPR/Cas9. So you essentially have CRISPR/Cas9 as the base system to have a ZIP Code on the genome where the protein latches on and then you can add deaminases, you can add integrases and other sort of functions on top of it as improvements and improve our editing functionality with CRISPR/Cas9. Those are all things that we use and develop on our own as well as we advance the number of applications that we can address with CRISPR/Cas9. So let me talk a little bit about the portfolio here. I described the 4 pillars of our portfolio, which is hemoglobinopathies, immuno-oncology, regenerative medicine and in vivo approaches. Obviously, this is the sort of a visible portfolio. We have a number of things we're working on within each of these pillars to further advance it. We have next-generation versions of each of these programs that have more edits, that have more engineering and are better than the first generation versions. And out of this portfolio, obviously, I think we're proud to have 5 different programs in the clinic and across a number of different clinical trials, by the way, because CTX130, which is our CD70 CAR-T actually has trials ongoing, both in heme malignancies as well as solid tumors. I think there haven't been much data for CAR-Ts and solid tumors to date. And if CD70 CAR-T, which is our CTX130, shows any efficacy in solid tumors, that just heralds a new -- a completely new wave of growth for CAR-Ts in cancer. So let me describe also our business development strategy. You've seen us do a couple of different BD deals recently. I think we've matured as a company, and we've gone from selling to big pharma to more of being buyers and being in a position to bring in new technology. Our partnership with Nkarta is a 50-50 partnership where we've made a foray into NK cells, which could be important in killing cancers, and we bring our gene editing platform to Nkarta. And together, we create NK CARs that are gene edited to be even better than [indiscernible] NK CARs. This also opens the road in the future for a potential paradigm where we use both NK cells and T cells to treat cancers. This is something that would double the power of each of these cell therapy platforms. You've seen advantages of CAR-Ts, and you've seen advantages of NK cells. And I think you put the 2 together, you could get double the efficacy and still have relatively safe side effect profile. We've done a similar partnership with Capsida on the in vivo delivery aspect. This is using AAVs. Capsida are a company that have developed technology to make the next-generation AAV vehicles based off of different types of AAVs like AAV9. And then we bring gene editing to it. We can take gene editing cargo packages in the Capsida vehicle, and they're targeting programs like ALS and Friedreich's ataxia with this approach. So this is something that's also transformative on the in vivo end. So let me talk briefly about our program in sickle cell and thalassemia. Both thalassemia and sickle cell are diseases of the bone marrow and red blood cells. And in the case of sickle cells, the red blood cells are forming a sickle shape that prevents them from flowing normally in the arteries and veins, and that causes many different comorbidities and early death. In case of thalassemia, you just don't have enough hemoglobin for oxygen transport leading to a lot of anemia that requires a lot of blood transfusions that ultimately lead to a lot of comorbidities and early mortality as well. And in both cases, the approach we're taking to "cure" the disease is one of elevating fetal hemoglobin. And this -- I won't spend too much time on it, but these are population studies that have been done to show that if you elevate fetal hemoglobin, you kind of eliminate the comorbidities and even early mortality of patients suffering or that have these mutations in their red blood cells or in their bone marrow cells. CLIMB-111 and CLIMB-121 are our trials that evaluate thalassemia and sickle cell. These are open-label single-arm studies where we've shown some data. The studies were designed to enroll up to 45 patients. We've actually now disclosed that we fully enrolled both studies, and we've dosed majority of the patients. And these patients are patients that come in with severe disease. The sickle cell patients are coming in with a number of different vaso-occlusive crisis here. The criteria are greater than 2, but there are patients that have up to 7 VOCs per year. There are patients in thalassemia that have significant transfusion burden that they're dealing with as well. And for each of these patients, I think I'll just jump to the key data slide, we took their bone marrow cells essentially and sent them to our manufacturing facility, where we edited the BCL11a gene -- enhancer gene and that leads to elevated fetal hemoglobin. And here, we showed data on Slide 12, where there's patients coming in to the study with high level of HbA that's mainly from transfused blood that decays over time, and you see a decay curve there, and you see it replaced with HbF, which is the fetal hemoglobin that starts to get produced once you make this edit to the BCL11a enhancer gene. And basically, what you're seeing is a significant amount of HbF being produced in these patients that's well above the bar that's necessary for normal functioning of hemoglobin and oxygen transport within these patients. So what's remarkable is most of these patients, and this is for a number of thalassemia patients that we showed the data here, within a short amount of time after treatment with 001, they become transfusion independent, meaning they've all become transfusion independent and remain transfusion independent with the longest duration of observation going for one of the patients that's out more than 2 years now without requiring a single transfusion who came into the study requiring 34 units of transfusion per year. So that's a dramatic change for these patients in how they lead their lives, and we hope that this also leads to a longer life span for these patients. In sickle cell, similarly, all these patients came in with a high number of VOCs, and I'll jump to Slide 17 that shows the data for these patients, where these patients came in with a number of VOCs. But after treatment with CTX001, they become VOC-free. So essentially, they don't have any more episodes of VOC, which is a big marker for how many crises they're having and what the disease could be doing to their organs and also what their chances of mortality are. And I think it's -- while it's too early to use the word cure, most of these patients have attained a functional cure essentially and don't have any of these VOCs, but they probably also don't have any of the chronic pain that patients suffer from that have sickle cell disease. So I think what I'll say overall is we're moving rapidly in this program. We have a lot of attention to scale up of manufacturing so we can treat not just tens of patients per month but -- per year, but hundreds of patients per year, and we're gearing up both Vertex and us to potentially launch this therapy in the next 2 years. And I think we've also made comments, I think, our partner Vertex has made comments that we'd like to target a BLA filing for this drug CTX001 at the end of 2022 that's not too far away. And we're all systems go at this point, all hands on deck to make this therapy a success, and this could be one of the most transformative therapies that have been developed in these diseases in the last 50 or 100 years. There have been no medicines developed that could come anywhere close to a cure in these diseases, and these are patients that deserve a therapy like CTX001. In conscious of time, I'll go to immuno-oncology where we have our allogeneic CAR-Ts that -- where we take cells from a healthy donor as opposed to an autologous model. And these cells are then engineered in our manufacturing facility where we produce thousands of doses. And these are CAR-Ts that are being manufactured from these cells where the CAR construct is inserted to target a particular type of cancer. In this case, in Slide 20, we show that this T cell has an anti-CD19 CAR inserted into the T cell. We disrupt the TCR locus so that the -- they don't attack the host beyond the cancers. And we also take out the MHC Class I so the host immune system doesn't immediately eliminate these CAR-Ts. And we've shown data now for CTX110, which is our CAR-T targeting CD19. And what we've shown is that every patient that actually comes into the study, almost every patient, is infused with CTX110. So you don't have the issue with autologous CAR-Ts where you have a number of patients enrolled but not all the patients can be treated because they're either manufacturing failures or the cells are not able -- we're not able to manufacture the drugs for the patients or the patients progress before they get their cells manufactured. I think we've shown the design of our CARBON trial, where we dosed a number of patients. We recently disclosed data for 23 patients that were above dose level 2. And what we showed for these patients is shown on Slide 24. We had a 61% overall response rate and a 39% CR rate for the 23 patients that were treated above DL2. On -- that's an mITT basis, which means that it's -- the patients are actually treated, not the patients are enrolled. If you look at the total number of patients enrolled, there were 24 patients because, as I said earlier, almost every patient that was enrolled is treated. Out of the 24 patients, you got a 58% overall response rate and 38% CR rate at day 28. And that's in line with autologous therapies. The other question then was how durable are these data? And when we show our swimlane chart, as it's called, what you see is there are a number of patients that are going a long time without cancer. So these therapies can be durable. I think we have at least a couple of patients that have gone above 10 months now without -- with a single dose of CTX110. There's a patient that's close to 18 months with 2 doses of CTX110. And then some -- a couple of other patients where they have the potential to go beyond 10 months based on how they were continuing to follow up, and they could be long-term cancer-free. And so I think people get lost in the technicalities of data, but the notion that an allogeneic CAR-T with a single dose can produce durable responses is a significant advance for the field and do all this with a safety profile that's relatively benign. I think what we showed is, there's very little CRS compared to autologous CAR-T. There is almost no ICANS except for one case that doesn't show those ICANS at DL2 and above, and very low rate of infections compared to other conditioning agents used with these CAR-Ts. So for -- if you look at a risk-benefit profile, this is a drug that's -- are not to prescribe to relapse/refractory patients, given the amount of benefit you could see or a significant proportion of the patients and the very favorable safety profile. I think what I'll do here is I think I'll just go quickly through it. There's a lot of these data available on our corporate presentation in terms of the pharmacokinetics and the mechanism by which it works and also an important concept that the effector-to-target ratio is really important, which is the amount of CAR-Ts you put in relative to the tumor burden, but I won't go into all those things. But at this point, we are all systems go on CTX110. We're moving CARBON into a potentially registrational trial, pending some regulatory discussions in Q1 of next year. We've implemented consolidation dosing in that trial, which is bound to improve the data and maintain the safety -- hopefully, maintain the safety profile that we see right now, expanded into outpatient community settings, start manufacturing it in our state-of-the-art manufacturing facility in Framingham. And then beyond that, we're not stopping. We have a number of next-gen programs in each of these tumor types that are only going to be better than the original version. So we're quite excited about CTX110 and what we may bring to patients. And similarly, we have CTX120, which is in BCMA; CTX130, as I said, in CD70 -- anti-CD70 cancers. And that's both the heme malignancies and solid tumors. And we have a number of new targets we're going after as well in terms of our CAR-Ts with a number of next-generation edits. In some cases, we go up to 5, 6 edits in these CAR-Ts, especially as regards the solid tumors. Last thing I'll say and then I'll close, which is on our -- the other 2 pillars, our regenerative medicine. We hope to provide an update this year. I think we -- our hope is to start a clinical trial with our type 1 diabetes program this year, which is in collaboration with Biosite, a company based in San Diego. And with our in vivo programs, again, we're getting closer to the clinic. And I think there's encouraging data out there, both in mouse models and NHP models, using both AAVs and lipid nanoparticles. I think it's just only a matter of time before a number of these programs also get into the clinic across a number of indications, whether it's muscle, liver or other organ types like neuronal that we're trying to target with the in vivo purchase. So I'll stop there and happy to answer any questions. But overall, I'll say we're incredibly energized as a company. We're over 500 people now. We have our new manufacturing facility. We have our new R&D headquarters in Boston -- in South Boston that we're moving into. We have capabilities at scale. We have a number of collaborations that we're doing beyond the programs we're working on ourselves. We have a significant cash balance to allow us to continue doing this work over a period of time. And we're excited to continue maturing as a company and continue to progress the CRISPR/Cas9 platform further to bring maximal benefit to patients. So Tiago, I'll turn it back to you.

No, that's perfect. We actually got a few questions, most on the immuno-oncology platform. So I'll just try to work those in. When you're talking about the safety profile so far, it does seem to be differentiated relative to auto products for sure. How much of that do you think is a function of the product itself and the edits versus just the evolving standard of care and perhaps better awareness of some of the AEs that can emerge from cellular therapy?

Well, I think the important thing is the fact that allogeneic therapies are eliminated by the host immune system after a period of time, actually, is a feature, not a bug. It actually allows you to titrate in a way where you don't have CRS. In autologous therapies, because there's nothing eliminating the CAR-Ts that are put into patients, you get a lot more CRS. So sure, in the field, in general, CRS management is improved and ICANS management is improved. So you don't get patients dying from it. But you do get a lot more Grade 3 CRS with autologous therapies. And one of the things you see in the dynamic is doctors do care about that. Even though Yescarta efficacy is a lot -- is better than Kymriah, you see an equal split in the market because Kymriah has a safety profile that's better. So I think with the safety profile that we have in play, we have a number of community oncology practices that are reaching out because, ultimately, they want to get these CAR-Ts in their own hands and use it on their patients.

Got it. No, that's perfect. And early findings and learnings from the redosing strategy, you also alluded to a consolidation dosing potentially for the registrational trial. Is that where the field is heading on the allo side, given that you can do it, basically, right? So...

Yes. No, absolutely. I think everyone's heading in that direction. I think you -- we have our data on redosing, and it's shown benefit. I think there was a recent abstract from another company in the space Allogene, which showed that a number of PRs were converted to CRs upon the second dose. So there's definitely a lot of data that points to the fact that consolidation dosing is going to be better than a single dose for patients, obviously, that have been tolerated. And it doesn't cost us anything to do it. As we have -- these are off the shelf and available. So it's very easy to redose the patients. We may even do it at a lower lymphodepletion schedule in the second time around, but that's something we'll determine as we launch our pivotal trial.

Got it. And have you guys outlined the disclosure plans for 120 and 130? And what exactly is the hurdle rate there for data disclosure? Is it a simple size number? Is there a specific [ medium to ] follow up?

Yes. Typically, I think what we're trying to show is initially there's activity, right, is the drug active? And do you have these CAR-Ts that are doing something to the targets? Especially interesting is CD70 because in CD70, that's a novel target in terms of CAR-Ts. What is that doing against these tumors? Whether it's solid tumors or heme malignancies. The second piece is, is it competitive to autologous CAR-T? And I think one of the things we want to do in BCMA, where the autologous CAR-T has shown a lot of good data is, again, incorporate the consolidation dosing to see how -- where do we stack up against competition, right? I think that's an important part of this. And in CD70, I think the question, again, is redosing is likely beneficial. The bar is quite low, to be honest, which is -- even in frontline trials in RCC, only 10% of the patients responded with a complete response with the PD-1 trials, right? And then we're talking about third-line patients here. So if the bar is quite low, the question is how much can we push the efficacy while maintaining the safety profile? And that's what we want to do and get a complete read on that before rushing data out. And so at some -- first half of next year, we'll have a bigger data set, and we'll have, more importantly, a more solid understanding of not just the activity but how it stacks up versus everything else out there.

Got it. And [ something ] related to the CD70 program, perhaps a broader question is just relative to CAR NK cells versus CAR-T cells, you do have the Nkarta collaboration. So what's kind of -- what are some of the puts and takes between having an NK-driven platform versus a CAR -- a T-cell-driven platform?

Yes. I think what we do know about NK cells is that they seem to be relatively safe from a safety profile standpoint because you don't have CRS like some of the auto CAR-T. And there is activity. You've seen early activity in the NK cells. The open question in my mind is, is the activity from NK cells durable? And how long is it likely to last? And so while we don't know the answer, and that's the big question around T cells versus NK cells in cancers, we don't know the answer on NK cells. What we've shown is there's durability with our allo CAR-T. So what we want to do is develop these therapies with Nkarta, particularly as we go into some new tumor types and solid tumors. CD70 is one of the targets, by the way, that we're working on with Nkarta. We're bullish about the target. And eventually, 3 to 4 or 5 years, we may see a product which is NK plus T because if you are able to manufacture in a way where they're not killing each other, the NK cells and T cells, then you could harness the efficacy of both in fight against cancer, which is what our bodies do, by the way. We use both T cells, NK cells and other cell types in killing pathogens. So why not unleash the power of both the artillery with the [ depth ] charges that go with it in fighting the cancers.

Got it. That's perfect. So perhaps a last one, and that's -- so a question we get fairly often overall. So if you're looking specifically at CD19 and BCMA, those are fairly crowded targets, right? So you have several therapeutics, different modalities. Even within cell therapy, you have multiple programs. What is kind of your vision for the allogeneic CAR-Ts for these targets? Is there enough room for differentiation? Or is it more about establishing proof of concept since you know what success and failure, what that looks like for those targets, right?

Yes. No, I think we absolutely think that our therapies in these heme malignancies can be billion dollar drugs if we can execute effectively against these -- against -- with our programs and get approval of single-arm trials. And the reason for it is this, the following, which is autologous CAR-T have shown good data, but they haven't gained traction in the market, right? And 80% of the patients are treated in community settings. And a lot of the autologous therapies have suffered from not being available and off the shelf in treating these patients. And so they're not -- while there's some increase in sales for autologous therapies, they've not reached their full potential, and they're only treating a small portion of the whole market. ADCs and bispecifics have shown some promise. I would say that bispecifics have all the tox issues that autologous CAR-Ts have, plus it's not a single dose, right? You have to continue dosing it for a period of time. And so there's a limit to how much better it's going to be even though it's available off the shelf. And whereas this whole notion of smart cells that are edited to fight cancer has a lot of [ lives ], right, I think the next-generation versions and the next generation version is going to be better and better and better, and you have more proliferation of cell types that would allow a multivariate approach into these cancers. And so I think there is significant potential for allo CAR-Ts if you can get there first and establish a marketplace and continue to improve upon the initial product. I think not everybody may see it at this point, but I think as I project forward over the next 2 years, it's very likely now. We've done a lot of work with community oncologists in terms of market research and surveys. They would love an allo CAR-T that's available to them because they don't want to lose patients. They want to treat their patients with the most state-of-the-art therapy. And I think these -- the potential is huge. I mean it's probably not going to be a $5 billion product, but it could easily be a $1 billion product.

Got it. And just one follow-up on that. I know I told you it was going to be my last question, but I think part of that equation is moving to an outpatient facility, and you actually did allude to that on your planned registrational trial. So what does that actually look like from a trial perspective and perhaps in the future in clinical practice.

Yes, I think...

How feasible is it? I mean it did show a pretty amenable safety profile so far. So I think that plays a bigger role on that. But -- yes.

Yes. Quite feasible, quite feasible. I think you'd treat the patient as outpatient. And if the patient has any issues around either CRS or infections, they would come back in for some management. And what we've talked about with a lot of these community cancer networks is that they will have -- treat patients in the distributed network but have some centralized facilities available for patient management should they need it. And so if there's a small -- 1 in 6 patients or 1 in 7 patients have CRS, they come in and they get managed in this central location in a way. But infections can be managed as outpatient as well. So all in all, I think it's quite feasible with the profile that we've shown. I don't think it's ever possible for Yescarta, for instance, to become a completely outpatient drug. It's just not possible and allo CAR-T give you that potential. And that's going to be the key to significant uptick.

Got it. No, perfect. I guess with that, we can wrap it up. But again, I appreciate the time. I appreciate you answering all the questions. Thanks, everyone, for participating, and have a good rest of your day.

Thank you very much.

All right.

Bye.