CRISPR Therapeutics AG (CRSP) Earnings Call Transcript & Summary

Good morning, everyone. My name is Gena Wang. I'm SMID cap biotech analyst at Barclays. Welcom to our Fifth Gene Editing and Gene Therapy Summit. It is my great pleasure to introduce our next speaker, Sam Kulkarni, Chief Executive Officer from CRISPR Therapeutics. Sam, maybe I will hand over to you to give a brief overview and then we can dive into the Q&A.

Thank you, Gena, for having us at this conference. It's always a pleasure. We're very excited to give you an update of where we stand as a company. It's been nearly 10 years since the elucidation and development of CRISPR/Cas9 as a technology by Dr. Emmanuelle Charpentier and Dr. Jennifer Doudna. And what we're seeing is a rapid technology cycle evolution since the beginning, which leads -- which speaks to the potential of technology but also leads me to believe that in the next 10 years, we're going to have a significant number of drugs that are cell and gene therapies that are powered by CRISPR. I think CRISPR has the basis for new therapies, whether it's cancer, whether it's heart disease, whether it's diabetes. And so it's not just a platform that applies to rare diseases but also many more common diseases. My firm belief is that in the next 10 years, more than 1/3 of the pharma market will be selling gene therapies, and most of those therapies will be driven by gene editing. For us as a company, we stand at the forefront of this wave of new therapies using cell and gene therapies. We've been the first company to bring a transformative therapy, CTX001, in sickle cell and thalassemia to patients in a way that leads to functional cures. I'm happy to talk more about this therapy and the data we have to date, but that's something where we're pushing forward rapidly on enrollment. And we hope to be -- to file for BLA in the next 12 to 18 months. That would be the first CRISPR-based therapy to be approved in the Western world -- actually, the world, I should say. Sometimes, it's hard to say what's actually happening in some of the Asian markets, but globally, will be the first transformative CRISPR-based therapy. We then have an immuno-oncology franchise where we have a whole host of CAR-Ts targeting CD19, BCMA, CD70. And all these CAR-Ts have tremendous potential. As we all know, now nearly 25% of the population now is dying of cancers in the Western world, it's become a major issue and all the things we've done for it in terms of small molecules and antibodies have gone -- have had some impact but not curative impact. And ultimately, I believe that cell therapies, in other words, smart cells that have been edited and engineered to go after the cancers will be the way we're going to fight cancers in the future. Happy to talk more about those programs as well, especially our CTX110 program, where we hope to start a pivotal trial that's registrational-enabling in the first quarter of next year. Beyond that, we have our diabetes franchise or it's regenerative medicine franchise. In this franchise, the whole notion is that we take cells that are produced from iPSCs or embryonic stem cells and differentiate them into various organs of interest or cell types of interest. So you can take embryonic stem cells and make pancreatic islet cells to replace your pancreas, for instance. You can take stem cells and make them NK cells if you want to fight cancers with NK cells. If you want to, you can take iPS cells and make them into liver cells if you want to have artificial livers. And I think that's a whole new paradigm of how you think about treating diseases is simply by replacing organs. And that can be done in an allogeneic fashion where it's mass produced. And that's something we're quite excited about and we're investing more and more in that vertical, if you will. Type 1 diabetes is the first foray for us into regenerative medicine. We hope to be in the clinic with gene-edited iPS-derived data cells that are the form of the pancreatic cells that produce insulin in response to glucose, and that will be the first trial of its kind in the world. That's incredibly exciting for us. We're doing that together with our partner, ViaCyte. We're based -- who've been working on this for the last 18, 20 years. And then finally, we have our in vivo vertical where we have a number of programs. We have -- not everything is visible from a portfolio standpoint. We have half a dozen programs and we hope to have multiple INDs in the next 18, 24 months using in vivo approaches. And these are both rare diseases and common diseases where we can make edits using CRISPR/Cas9 that are delivered directly into the cells or organs of interest in the body using either AAVs or lipid nanoparticles. And that seems to be very promising in terms of how in vivo editing is working out. We've already seen some data from our competitors or from 1 competitor, I should say, that proves the concept. And I think you're going to see a lot more data in the in vivo space as well with -- across a number of disease areas. All that said, we're continuing to work on our platform and I think much has been made about CRISPR 2.0 and CRISPR 3.0 these days. I think what people forget is different doesn't mean differentiated. I think you really need to understand where technology improvements play. And I think it's really welcome improvements. I think the base technology is still the Cas9 attached to a barcode that directs a molecular machinery to a particular point in genome. And subsequent to that, whether you cut it, whether you replace a particular base, whether you insert something, those are all going to be improvements, much as we saw in the antibody space in the late '80s and early '90s. And we continue to see today with some of the bispecifics. So I think we espouse all improvements and all types and forms of technology. We have our own base editors. We have our own integration platforms within the genome. We have other forms of Cas9, whether they're small Cas9s that can be packaged into an AAV or HiFi Cas9s, which are high fidelity. So we don't talk too much about our platform but we have all these in our toolkit. And most importantly, we now have -- also have our manufacturing facility online in -- which is based in Framingham in Massachusetts. This is as state-of-the-art as it gets from manufacturing facility standpoint. We have capacity to manufacture not just at clinical scale but at commercial scale. So you're talking about thousands of patients, for instance, with the allogeneic programs. And this allows for a seamless transfer of technology. We can develop new platforms in our labs in Cambridge and quickly transfer them into manufacturing scale in our plant in Framingham. And what that leads to is a rapid innovation cycle. It basically means that we have next-gen and next-gen versions of the programs we're working on that would go in following the initial early generation programs. For instance, we are working on Gen 2 and Gen 3 CAR-Ts now, and we have been for the last year, year or so while we put the first CAR-T into play. And the new frameworks from the FDA that allow for multiple INDs within the same parent IND certainly make those -- make all that easier as we advance these new therapies to the clinic. And this notion of rapid prototyping is something that's happened in the tech industry. It hasn't happened as much in the biotech industry but we're bringing that into practice. And lastly, I'll talk about our platform where we do massively parallel screening. I think one of the advantages of CRISPR is also in drug discovery, where we've now identified, through screening thousands of mice, what would've taken in the past 1 million mice to do an experiment of different knockouts and different gene pairs, we can do in 1,000 mice now because we use AI and informatics. And through that, we found not only targets but other edits that would either lead to greater potency of CAR-Ts, for instance, greater self-fitness in our type 1 diabetes program. And these are targets that could be better than a PD-1, for instance, for -- in these cells. So there's quite a bit going on in the company. We're all excited, energized and we feel like we're at a pivotal point in our company's journey as we complete this 1 S-curve and move into the next. And we look forward to updating you with many more updates in the future across our programs, our platform, our capabilities. But I think, sky is the limit for this technology in general. And we continue to be in a fast cycle of innovation that would allow and enable this platform to reach its full potential. So Gena, I'll turn it back over to you.

Yes. Thank you. Thank you, Sam. So this is a very helpful overview. Maybe I will start with your lead program. Seems like moving forward very rapidly and also certainly the data so far is a very impressive data in the sickle cell and the beta cell as well. So we do notice that the BLA submission time line moves up to late 2022, which seems to suggest a 12-month follow-up from the last patient. Is that based on the FDA feedback? Or am I like over-interpret the time line regarding the pivotal trial design?

Well, I think the -- one, it is, as you point out, spectacular data. I think we've shown data from the first set of patients that we dosed both in sickle cell and thalassemia, 20-odd patients and almost all of those patients are receiving great benefit for treatment with CTX001. So the question when you see transformative data of that nature is how many patients do you need and what's the level of follow-up you need for these patients for a BLA filing, especially in a disease where there's really no other options and there are patients dying as we speak. Just 2 weeks ago, one of the biggest advocates for sickle cell disease, Hertz Nazaire, who is also an artist that brought the awareness to sickle cell through his paintings, died at the age of 42, and was relatively aware and active in terms of patient care and self-care as a patient. And that just speaks to the fact that this disease, people don't always talk about it, but there's early mortality. Most of these patients live with a lot of pain, a lot of comorbidities. And when we have a curative therapy that can change the lives of these patients, it's just an opportunity for not just us but the regulators and the system to come together just to enable it. So I think the exact number of patients and the exact follow-up, I think, are still being finalized with the agency. But what we've done on our end is to dose patients as fast as we can. We have incredible momentum in terms of patient dosing. And if you look at the time line between dosing of 2 or 3 patients to dosing the next 10 to dosing the next 20 to -- that speed has been doubling every time. And that gives us the ability to have a large number of patients in our cohorts. We disclosed in one of our filings recently that our -- the enrollment is complete in both the PAL trial and sickle trial that were designed up to 45 patients. And the interest from physicians, KOLs that participate in our trials are still pretty high to have more patients in there. But all in all, I think -- we do think that we can continue to have discussions with the regulators, of course, but that we can potentially get to a filing by the end of '22.

Okay. But when should we expect definitive answer from the FDA regarding the regulatory path?

Yes. I think unlike drugs that don't have an RMAT designation, because we have RMAT designation, we are able to work with the regulators in a much more seamless fashion. This is the U.S. regulators. And then the PRIME designation gives you the same ability in Europe to work with the regulators in a way that where you're trying to have much more regular meetings and more frequent interactions. So it's not like we have 1 major meeting where we're going to come out with all the answers and say, "This is what the regulator said." It won't be that kind of an update. There are some of these updates for other companies because they don't have RMAT designation, but we don't have that scenario. I think it's continuous dialogue to figure out that -- to sort of converge on what's required in the filing package. And I think the regulators have been very supportive in terms of helping outline what's necessary. So I think we will try to provide updates to the Street. I don't know that there's 1 update where all of a sudden, we say, "Here's the exact answer." But I think in the first half of next year, we'll certainly be able to give a lot more color.

Okay, okay. That's good. And also since you are not presenting any data at ASH, when do you plan to update the data before BLA submission?

Yes. We certainly will have data updates before BLA submission. I think that's something that I think is good for the entire community that's participating in the trials, the physicians, the patients, their families, and actually also speaks to the safety -- the building safety data set that we have with CRISPR-based therapies. I've said that before in a different forum. We've dosed over 100 patients now with CRISPR-based therapies across our entire portfolio. And 4 years ago, if you recall, people were talking about off targets and all these risks with CRISPR and how things may go haywire and I think that's not how it's borne out. I think what we've seen is that CRISPR can be a relatively safe approach relative to viruses and other modalities in terms of treating patients. So I think it's a growing data set of safety data as well and that's something that we do want to put out there.

Okay, good. Maybe 1 last question quickly on the safety part. You do collect the bone marrow sample every 6 months from the patient. Can you remind us what analysis you'll be conducting? And then will you share this data with investors or regulators?

Yes. I think the -- primarily, I think the notion of collecting the bone marrow samples at 6 and 12 months were to ensure that there's durability of response. And that is based on the long-term HSCs being edited. And I think you've seen that with other platforms of editing where you may get the early spike in HbF production. But because you haven't edited the long-term HSC population, you're not getting durability response. And I think so far in the data that we've disclosed in the 6- and 12-month bone marrow samples, we do show that there's editing of the long-term HSCs and that should lead to a very durable effect, hopefully, a lifelong effect of the editing and the HbF elevation. So that's the primary objective of collecting the bone marrow samples. We do some other analyses on the samples to understand the different cell types, the different clones, et cetera. But as far as sort of an understanding of the edits and what that does with HbF levels, et cetera, we do a set of assessments for safety purposes. That level of detail, I don't think we're going to disclose to investors at this point. It's something that will be -- we put -- we're going to put together for the BLA package and we do discuss often with the investigators, of course.

Okay, good. Now switching gears to the CAR-T program. You do have many different programs. And maybe before I start specific questions, maybe just big picture. Now we see quite a few data from your program, allergy, a few other allo CAR-T data out there. And then maybe from -- based on this data, what do you think is the most important? Is it number of the cells or duration of the cell expansion to achieve durable response?

Yes. I think I would add a third dimension in there. It's also the cell health. It's the number of cells, but you want to make sure those cells are not exhausted, and also the duration. So if you look at the PK curve, I think what Gena's question for the generalists out there listening to this, what the question implies is you're putting smart cells engineered to kill cancer into patients. And you're seeing some cell killing but you're not eliminating the cancer in every patient. So why is that? And that relates to the expansion of these smart cells inside the patient. And what we're seeing is a curve where the expansion happens consistently. Peak expansion happens around day 10 with our cells in patients. And then you continue to have a number of cells around for almost a month or more. In some cases, they're detectable even longer after initial treatment. But the tumor reduction is not as robust. And our belief is the reason you're getting this upfront tumor killing and then there is slow down is because the cells get exhausted. And I think if you can prevent cell exhaustion, and then this other really important concept is the effector to target or effector to tumor ratio, so you have enough number of cells compared to the tumor volume, then you're going to get very deep responses that can lead to durability as opposed to having cells hang around for 3, 4 months but they're exhausted and don't actually kill the tumor, right? So that's the notional difference in this -- in how we think about cancer killing. You want to go in with a big bang out there with all the soldiers going in and them being not exhausted and being fresh to kill the tumor. And once if you can eliminate the enemy very quickly, you'll -- they'll never come back. Whereas if you hang it on for a long time, I think you may not eliminate the enemy completely because cells are exhausted and that would lead to tumor rebounding.

Okay. So I mean, related question here is, you decided to choose the consolidation regimen for your next approach, right, so that based on the current data. So maybe several questions also related to the durable efficacy. So why you think a consolidation dosing will be the better way to go versus say, adding additional edits to the CAR-T to improve the persistency? We did see quite some of the redosing data from CTX110 trial and we didn't see, like an improved response, given the context those patients already relapsed. So maybe I will start with that.

Yes. No, I think it's not an either/or question for us. It's both. I think with CTX110 in its current form with the edits that we have, I think consolidation dosing makes a lot of sense. I think when we showed our data, obviously, you don't have the same dramatic impact with redosing but you did see benefits from redosing. And what's important is, I think again, this notion of effector to target ratio, if you have 10 CAR-Ts to every cancer cell, I'm just making the ratios up, but a big number, you were able to kill the cancer cell. But if you have 10 cancer cells and 1 CAR-T, it's unlikely you're going to kill all the cancer cells. And so there is this notion of effector to target ratio. So let's say you're -- a patient is starting with 100 million cancer cells and you reduce it down to 1 million by day 15 or day 20 after initial treatment, you want to hit it again before the cancer starts expanding and doubling and tripling again, right, before it grows back. So if you wait 4 months for a redose, again, your cell dose to tumor ratio is not dramatically high. But if you do this immediately after the first dose, where you've had a deep response already with the initial tumor burden and then hit it again with another dose, I think you have a best chance of success. So the fact that we have this E to T ratio notion and the fact that we have the ability -- you've seen some activity from redosing, this is confidence that consolidation dosing will be better. And I think you've seen some competitor data or I should almost call it peer data because other companies are doing the same thing as us where consolidation dosing has shown benefits. So that's one. I think we're going to do that. Second is we are going to make additional edits. So we have next-gen and next-gen versions of all our CAR-Ts that we've been working on that we hope to bring to the clinic as rapidly as we can. And that's not because we don't have confidence in our first-gen program. I think our first-gen program will be a product, will be an approved product, in my mind and we'll have a reasonable market share because of the convenience versus allo and the fact that it can go into community settings. And that's going to be a very important thing for our franchise, our immuno-oncology franchise. We don't need a $5 billion blockbuster to enable us to be preeminent in immuno-oncology. If we have a billion-dollar drug in CD19 CAR-Ts, that gives us a foot in the door that allows us to bring many more CAR-Ts and many more generations of CAR-Ts and other cell types to bear that is going to continuously fund a franchise that doesn't need -- that's not dilutive. So that's...

Yes, sure. Yes. Thank you, Sam. Sorry, like cut it short. I do got 2 questions, e-mail questions. One is regarding the beta cell sickle cell. Even if you would not present at ASH, will you still show update before year-end or should we expect an update in 2022?

Yes, that's something we are discussing with Vertex. I think the right forum is if we -- typically, ASH is a very good forum for these data because we have all the investigators together and our ad boards and PI meetings all in the same place. I think we still are in a regime where, I don't think everyone's attending ASH in person, I think there's a lot of virtual meeting. So it's not a great forum. We didn't think it was the best forum for us for these data at this point. I think -- but I think we will find the right forum, whether it's late this year or early next year to present subsequent data. I think we've dosed a lot more patients and we have collected a lot more longitudinal data here.

Okay, okay. Next question is regarding the redosing. Do you -- how would you know that 1 redosing is sufficient?

Yes. I think, again, based on this notion of effector to target ratio, we do think that 1 consolidation dose should get us a very deep response. There's nothing to stop us from doing a third dose. But I think if you keep adding doses, you take away one of the fundamental benefits of CAR-Ts, which is that you have 1 or 2 doses, you don't have something like bispecifics that need continuous dosing for a period of time. I think, especially as we move into earlier lines of therapy where the tumor burden is smaller, 1 or 2 doses would certainly do it. I think in the late line settings, I'm sure it maybe that some patients don't get CRs but you will still get a majority of patients, I think, having complete remission if you're able to implement the consolidation dosing at high dose levels.

Okay, great. Thank you, Sam. Thank you for the insightful discussion. Thank you, everyone.

Yes. Thank you.

We are running out of time. Thank you. Okay, bye-bye.