CRISPR Therapeutics AG (CRSP) Earnings Call Transcript & Summary

Okay. Welcome to the second day of the Bank of America Healthcare Conference. So my name is Geoff Meacham. I'm the senior biopharma analyst. We're thrilled today to have CRISPR Therapeutics. And speaking on behalf of CRISPR is CEO, Sam Kulkarni. And so Sam is going to give a talk, and then we'll do a little bit of Q&A afterwards. Sam?

Thank you, Geoff, for having us here. It's always a pleasure to be at this conference. Good to see a lot of you, there are new faces here. We'll talk about this year and so the full fireside chat, we'll do this presentation format. And tell you about everything that's going on at CRISPR. It's been an incredibly busy year. We have, by the numbers, if you look at CRISPR, we have CASGEVY, which we're very proud of the approval of CASGEVY late last year together with our partners, Vertex and that's off to a great start in terms of commercial launch. But beyond that, if you look at the numbers, we have 5 programs in the clinic right now across oncology, autoimmune, cardiovascular rare diseases and diabetes. And we have 10 preclinical programs. And we'll talk about a couple of them today that we just announced, targeting AGT and ALAS, but we continue to expand the platform and together with our strong balance sheet, our very efficient resource allocation and efficient way of running the company, we're able to prosecute that much more. And we feel like we're in a really good position to advance not 1 or 2, but multiple of these candidates that are in the clinic now towards pivotal trials and ultimately towards approval. So just a historical context, it's our seventh year coming to the Bank of America Conference. If you look at the stages of growth of the company, we were in our stage where the first in stage 1, the thing that helped us was relentless focus on the first asset. That's one of the truisms in biotech. If your first asset fails, you're in a deep hole. It takes a long time to get out of it. But we had this focus on sickle cell and thalassemia and we were able to advance it pretty rapidly, much faster than everyone else, doing -- developing these programs. And that allows us to establish capabilities and expand our portfolio. And now we're in the second stage, which is diversification, and we have all these programs across different therapeutic areas, oncology, autoimmune, cardiovascular, diabetes, et cetera. And we'll see which of these assets play out. But once we've established an operating model and once we see what the parlay is, that leads us to the next stage, which will be a $20-plus billion company where we're a fully integrated company and to have an engine that's producing -- continue to produce 1 or 2 INDs per year. So over the next 5 years, we expect that we'll announce at least 2 programs -- new programs a year, given the productivity of our scientific engine. CASGEVY, I'm sure it's a very scrutinized launch, and there are a lot of people watching how this goes because it's a bellwether for the industry. And the #1 question we got when we were at JPMorgan conference this year was what makes you think you're going to succeed where Roctavian completely failed. And what I told people it's a very different situation. These are indications where there's no other medicine for people with severe sickle cell and thalassemia. They live a life of pain. They can't even wait 2 weeks more to get their doses. They want to get rid of the disease as soon as they can. And what you've seen is tremendous enthusiasm from all the centers, not just the centers that did our clinical trials but new centers as well in adopting this therapy. In fact, they already have plans to sort of market it to their patients and bring patients on board. And Vertex is doing an amazing job expanding the number of ATCs, not just in the U.S. but globally. The Middle East can be a big market for this therapy as well, given the incidence and prevalence of sickle cell disease and thalassemia particularly in countries like Saudi Arabia. So I think a lot more to come on CASGEVY and Vertex's last earnings call, they did mention that 5 patients already had their cells collected. The number of centers were activated. And what we're doing beyond that also is to say, what's the life cycle of this drug. And while we have busulfan-based conditioning now, we're developing targeted conditioning. Both Vertex and us have our own assets that we are putting forward into animal studies, and we're going to pick the best one. And what targeted conditioning will do is expand the market at least threefold, if not more, and increase the penetration of the market. Very good progress so far in target conditioning. And we're also doing this collaborative effort with the Gates Foundation on in-vivo HSC editing. It expands not only the sickle cell and beta thalassemia addressable population, but expands into other diseases as well that you can treat with in-vivo bone marrow editing. Beyond CASGEVY, we have 3 additional franchises. We have the in-vivo franchise, which is modular and scalable within its own set of indications of diseases where we have established an mRNA and LNP platform that we think is safe and effective. It's different from what some of the other players have disclosed data on recently. And we're very confident that this mRNA LNP platform provides a good therapeutic window to have very high efficient editing in the liver. We're doing editing in vivo beyond the liver as well in our research efforts, and we'll talk more about that. And then we have this very strong CAR-T franchise where arguably, we have the most potent allogeneic CAR-Ts out there among the 15 or so players that are developing allogeneic CAR-Ts. And not only do we have this amazing opportunity in oncology, we now have this opportunity in autoimmune where we're positioned to be the best-in-class in indications like SLE, and we've begun clinical trials there. We also are in solid tumors with our CTX130 program, which was a precursor to our current CTX131 program. We showed the world's first confirmed complete response in a solid tumor in the renal cell carcinoma setting. And that bodes well for the CTX131 trial where the cells are that much more potent. And then in diabetes, we have a multipronged approach, but we are steadfast in investing in this vision of creating allogeneic stem cell-derived hypo-immune cells that produce insulin and can eventually make you insulin-independent. So the in-vivo platform, what we've done is we showed this has moved very quickly. I think to a certain point, we'd focused on ex-vivo therapies, and our in-vivo platform took a little longer to develop, but we've gone pedal to the metal on in-vivo platform. And we showed nearly 70% editing in NHP studies in the liver, which equates to about 100% hepatocytes. It basically means we've saturated the editing in the liver for hepatocytes. And we quickly translate that into 2 indications, ANGPTL3 and LPA. Now you have to think about these 2 indications very differently. ANGPTL3 is more for a rare disease type development approach and LPA is the large population with 11 million patients in the U.S. alone. And there are good reasons why we pick these 2 indications, and I'll talk about that. But we've quickly expanded beyond that. We just announced a program with angiotensin. Angiotensin, AGT, and then we announced a program with ALAS1, which is a rare disease. So we're going across both common and rare diseases with a modular and scalable platform. ANGPTL3 is one of the most validated targets in cardiovascular disease. Large studies were done showing that, if you had ANGPTL3 knockdown, and there were patients or populations, which had a naturally occurring SNPs that you were -- it was cardio-protective. And what we showed is by recapitulating that using CRISPR, we can get very high liver editing in monkeys, and we showed the same 70% editing with ANGPTL3 that resulted in a very sustained reduction in triglycerides. Not only do you get triglycerides reduction, you also get LDL reduction with ANGPTL3 knockout. So we're in the clinic with this program. We're quite excited about this and so are a lot of physicians of KOLs, there is an approved product called Evkeeza from Regeneron, which is an antibody against ANGPTL3 which is doing reasonably well in the rare disease population, but One-and-done editing approach is going to be transformative for these patients. Some of these patients, you won't believe triglyceride levels are over 1,000. So it's very high triglycerides, but nothing else they can take to control their triglyceride levels. Then we have CTX320, which is targeted towards LPA or as some people call it LP with little A. Now this is an emerging target that I would say at least half of the pharma companies on the top 10 are interested in. This -- if you look at what is one of the top targets that the pharma is looking at, LPA is up there. And in fact, when we went to -- when we have these BD meetings at these types of conferences or JPMorgan or other conferences, the amount of interest there was in CAR-T, autoimmune and LPA was significantly higher than all the other programs. And for a reason, LPA, there are no small molecules that can easily target LPA. It's very hard to develop. There are some siRNA programs, but if you have a sustained onetime intervention that can lead to sustained reduction in LPA, I think you're going to have a dramatic impact on outcomes. Now that outcome data -- outcomes will be demonstrated through the clinical trials that Novartis and Amgen are doing with their siRNA programs or ASO programs, and that will come out in the near future. But again, we've shown durable reduction of LPA in the chart here in NHP studies that is as high as it can get effectively. And you won't have the burden of doing in every 1 month or every 3 months injection with siRNA or ASO, if you have an editing approach. 340, this is a new program we announced, and we've got a lot of questions since we announced it, but it's based on some of the data that was seen with an siRNA from Alnylam Zubirán. And it showed that if you knockdown angiotensin, which is upstream of angiotensin 1 and 2, you were able to effectively reduce blood pressure by 15 to 20 millimeters of mercury. That's a pretty significant reduction. And again, the first reaction people will have is, gosh, you're going after this broad population of hypertension, what was it going to do gene editing for? Again, we're going to take an approach where we're going to take this in layers. If you take refractory hypertension, there's about 1 million patients with that. They are on 4, 5 agents, and they just cannot get their blood pressure under control. They take diuretics, they take 5 different agents, ARBs, ACEIs but they have no control. Then there's treatment-resistant hypertension, which is another population. Again, these patients have like 3 plus agents that they're taking and they still have a significant risk. And so what we can do with the CRISPR-based therapy is the onetime intervention and outreduce the blood pressure, it could reduce it as we showed in these mouse models by up to 30 millimeters of mercury in a very established model, which is called a spontaneously hypertensive rat model. And these are very exciting data. I mean we talked to some of the key experts in the field, and they're seeing this excess of cardium metabolic, the world is going to change in terms of how we think about paradigm of medicine. On one hand, you have cardiovascular risk reduction, and then you have medicines like these with AGT that can really change how you think about the progression of the class of medicines patients may take and how you eventually control their hypertension. And then we have a rare disease targeting ALAS1. Now this is acute hepatic porphyria. This indication is getting diagnosed more and more. It used to be a small number of patients in the U.S. per year. But after Alnylam got their drug approved with their ALAS1 targeting siRNA, what you're seeing is greater and greater diagnosis. At the same time, Givlaari, which is a drug that Alnylam has approved, doesn't have great uptake and there's a lot of dropouts because there's some talks associated with that drug. And the safety elements are an overhang on the uptake of the drug and increase in penetration. So what we have is a onetime edit again for this acute hepatic porphyria is targeting ALAS1, which is an enzyme in the heme biosynthesis pathway that effectively reduces these neurotoxic byproducts of heme biosynthesis, PBG and ALA. And we've shown again in models where this is an artificial model where you induce the model to produce high levels of PBG and ALA. And if you have the edit, you see that there's no increase in PBG and ALA in this model, which again is an established model working with the top KOs in the field. And that is very indicative of how this may work in humans potentially as we go into those clinical trials. So then let me move on to allogeneic CAR-T. What we have is -- are probably the most potent allogeneic CAR-Ts out there. And this is because we made these edits targeting Regnase-1 and TGFBR2. And Regnase-1 is not a well-known target in immuno-oncology until recently. And we did this massive screen to say, let's edit every possible gene and see what makes these CAR-Ts better. And what we found is this target Regnase-1. Incidentally, 3 years later, Carl June, who is the, many call the founder and father of the CAR-T field, did the same empirical screen and came with Regnase-1 as the edit to make CAR-Ts better. And what we've done is paired this with TGFBR2, which is a well-known receptor blocker where you don't want to have TGF-beta-induced suppression of the CAR-Ts. And when you combine the 2, these CAR-Ts are 10x better than the first-generation CAR-Ts. And we've shown some data here where we show, for instance, the left side, CTX112 compared to our first-generation CTX110 in these mouse models and you see a dramatic difference. The mice that have CTX-112, the tumors are eradicated. With 131, which is targeted towards CD70, again, we have these TGFBR2 and the Regnase edit, combined with the CD70 knockdown. And again, you see a dramatic difference. It's not always obvious unless you play with these mouse models a lot. But you see a big difference between how CTX131 is doing versus CTX130, which again, bodes well for the trials we're doing in humans against tumors where we already saw responses with the first-gen programs. And then all of a sudden, we've had this breakthrough in the last 6 months in autoimmune, I mean -- and this is -- the world was a buzz when ASH happened last year and these data were disclosed from [ Dorset ] and Fabian Müller's lab in Germany. And they showed durable remissions in patients suffering from SLE and some of the lupus nephritis patients where they were -- they had no treatment available to them and they failed everything else. And it was just remarkable. And that then led to people saying, "Oh, maybe auto-CAR-T can have tremendous impact with these patients." The problem with auto CAR-T is, again, you're going to have a huge scaling issue. You're not going to able to reach all these patients. It's going to take a long time to the clinical trials. But also, what you have is a smaller B-cell burden compared to tumors with SLE or autoimmune diseases. So allogeneic CAR-T should be able to get deep durable B-cell depletion in these patients. What we show here on the right side on the chart is that data from our patients that we treated in the oncology trials that had B-cells. And you see that the B-cells are completely depleted and stay depleted, whereas their NK cells and T cells come back, which shows the mechanism of action of CTX110 in that case. And it shows that with our allo CAR-T, you should be able to get that deep depletion, which should result in durable remissions in autoimmune indications. So that's the -- we're very encouraged. And not only that, for various reasons, it puts us in position relative to all their modalities in autoimmune therapies. One is we have site-specific car, which when you use lenti, there's always a risk of secondary malignancies, not in oncology, people shrug it off, but I don't think you can shrug it off in autoimmune diseases. And so any therapy that uses lentivirus are going to have that much more scrutiny. We don't -- the other thing is we are more potent than all the other allogeneic CAR-Ts and NK cells in our opinion with these potency edits. We also have a commercial-ready manufacturing. We have a ton of inventory. We can get these trials going very quickly. And then there's a lot of buzz lately about T-cell engagers in autoimmune diseases. But there are papers that have come out in KOs who said this. It's going to be harder to get durable responses with T-cell engagers or antibodies because they're not going deep into the tissue and getting rid of the tissue resident B-cells. CAR-T is having an ability to migrate and find their targets unlike T-cell engagers or antibodies. And so all these advantages come into play. There is obviously a question of how much lymphodepletion you need and what's the condition that you might need for these patients, and you can titrate that down over time. But it puts us in a position where we could be the leading agent in autoimmune diseases. And we're going to go beyond SLE as well in short order. In diabetes, we have 3 parallel efforts. We have -- we had our first-in-class edited cells derived from stem cells, CTX211 that went into patients. It was actually a big deal for the field. In the investor circles, probably didn't have the same impact. But if you go to the academic circles and I was just at a big stem cell conference. It's the world's first edited stem cell-derived product going into humans. And we're continuing these trials. We had a partnership with Vertex, and we kind of reshape that partnership where we have 2 different efforts now. So we provided our licenses to Vertex. So they, as you see in this Slide #3, they will advance their programs. They haven't yet gotten to all the additive programs yet, but they will get there. And then we're going to parallel process our programs going forward, which is namely CTX211 and other programs. We're also doing a lot of innovation on sort of the deviceless approach. Eventually, we want to be able to do these cells naked that we inject directly into patients, assuming we're going to get a safety switch there because if you ever have a negative event, we want to be able to turn these cells off. So we're going to have that safety switch with our deviceless approach. This is our manufacturing facility in Framingham, Massachusetts, we kept it close to our R&D headquarters that there's a huge interplay between the process development and research folks with the manufacturing folks. But this is one of the most state-of-the-art facilities. And in fact, we won the FOYA or Facility of the Year Award, which typically every year, it's been big pharma winning it. For the first time a biotech company won that award, not because we're spending a lot of money, but because it is designed in a way that really allows you to multiplex and process a significant number of cells through this facility in a very efficient fashion. And then next-gen editing, a lot of noise about all this. Ultimately, the notion of CRISPR is changing where we had molecular scissors to depict CRISPR, right? And now it's sort of a cast line guided cargo bus that takes you a particular place in the genome and then you can make -- have any effect or protein make a cut or a nick or a base change or whatever else. And so we've redoubled our efforts with next-gen editing. We may, in fact, I don't know, it's hard to predict these things, but we have programs with gene writing that may get to the clinic faster than some of the companies dedicated to gene writing. But we'll only announce those once we get much closer. But combined with our LNP efforts, where you do need bespoke LNPs for next-gen editing because the mRNAs are a lot bigger, the guides are different, so you do need to do that work. So we've established a huge LNP group as well to enable all the next-gen editing, including gene writing. And we'll talk more about that. Some of it is based in Boston, some of it is based in San Francisco, and we're trying to get the best talent in the world to add to these groups. So where does that leave us? It leaves us a very broad and diversified pipeline across our franchises. We have CASGEVY on the market now but also have this life cycle plan for CASGEVY with targeted conditioning and in vivo, that could make it a multibillion-dollar opportunity even with the first gen, but with targeted conditioning can be much, much larger. We have our CAR-T efforts across automate oncology with the best CAR-Ts, allogeneic CAR-Ts in the world. We have an in vivo platform that we continue to scale with more and more indications, and we'll have data after distant future. We have our type-1 diabetes franchise. And then we have a number of licenses, which also provide us milestones and economics as we go forward that we've licensed to Vertex. And many of you are -- keep asking us about catalysts, and I always say it's hard to predict exactly when we're going to disclose data. But we have guided to data with CTX112 in B-cell malignancies this year. We'll see -- we'll be accruing data across all these clinical trials, whether it's SLE, solid tumors, heme malignancies with CTX131, 310, 320 and 211, but we're trying to figure out when we disclose all the data, what's the appropriate conference, what's the appropriate form for all these. But it's going to be a catalyst-rich 12 to 18 months for us. And finally, what is the bigger vision? I think with every touch comes the next Genentech. But you have to take this in stages. You have to say, how do you become a $5 billion to $10 billion company first. And then you have the right to say and become a $20 billion company and then the right to say, you're going to be $100 billion company. But if you look at our -- what tailwinds we have, if CASGEVY continues to grow and expand, that by itself can get us in that territory of a reasonably large biotech company, that's the industry leader, not just a sector leader. And then if any of these click, CAR-Ts in oncology or autoimmune or in vivo platform, we're easily in that territory where we're as big or not bigger than some of the siRNA companies that are at the top of the sector right now. And if they can get gene writing working and open up a whole host of indications there, I think the sky is the limit. We're feeling -- this is my ninth year at CRISPR, hard to believe it. And the company is about 10 years old, but I'm feeling as excited as I've ever been at the company in terms of what the prospects are and what we're looking forward to in the next year or so. So we look forward to a lot more updates over the months. And -- but thank you for this opportunity here today to present this for you.

So Sam, we have just a few more minutes. Do you want to -- we'll do some Q&A. I think one of the things that investors are looking for with CASGEVY, you had the initial adoption, which is 5 patients is pretty good for first quarter out of the Gates. Give us some metrics though about the time lines for the optimized condition regimen that targeted conditioning. Are there points along way that you'll say, okay, we now have solved for that and file for approval? Or is this sort of a kind of a 1- to 2-year process where you're optimizing and optimizing and then you have a new regimen?

Yes. I mean I think we're very pleased with CASGEVY launch, and it's amazing to see Vertex in action. They're just the best executors you could ever have as a partner in terms of commercializing a rare disease. And globally, not just in the U.S. And a lot of, I would say, in biotech, we're not used to modeling these but there's this installed base model, where you got a double driver acceleration. A lot of the device players do it. If you look at it in alumina in the early days, people were like, "Oh my God, why are the sales growing so much?" Because they were installing sequencers and each install, they were using more and more. And so it's the same phenomenon here. You have more ATCs installed effectively. And each of those centers are doing more and more patients, right? So you get this accelerated growth and having 5 patients collected in the first quarter is a really good sign of how that may go up. But you need 2 to 3 quarters of data to see what the trajectory is. And then you can probably predict where this may end up. So we're extremely pleased with that. On target conditioning, obviously, Vertex, we're not going to talk too much about it because what we don't want to do is impair kind of launch with people warehousing, et cetera. But what I'll say is the companies in 2019, if people -- if they asked you, they said, "Oh, yes, conditioning is going to be solved. They're all these companies, Forty Seven, Next-Gen, they're going to figure it out." The problem is all those companies were developing these assets for oncology. And it's a different PK/PD profile than what you need for a transplant procedure or for sickle cell. And so we're designing it with the blank slate, and that gives us the ability to develop the right PK/PD profile to have these agents come in, deplete the bone marrow and then disappear and not impair your drug product. And so we're -- we picked c-Kit, Vertex will pick other targets. We're going to put them all head to head and see what's the best. But we're going to take our time to find the best agent here that we want to bring into the clinical trials.

Okay. That makes sense. On the cardio metabolic portfolio, you're in the clinic, we're going to be in the clinic for a number of the indications. And so I imagine once you turn that card over, what informs the decision to sort of partner versus go it alone? Because these could be -- I mean, even if there are more refractory populations, they're still meaningfully large investments, right, to make in a Phase II or a Phase III?

Yes. I mean the beauty of it right now is we have the ability to prosecute these ourselves, right? In the next 4 or 5 months, we're going to have -- be sitting on the -- it's the early data, but we'll know internally how the LNPs are working, what's the trend in terms of dose escalation. And the question is, do we want to retain all the value or do we want to partner? And it's much better to think about partnerships beyond that point where we have some data, but there is tremendous interest, especially in AGT and LPS targets. These are -- pharma companies are searching and saying, what's the next big thing that's going to give them a $5 billion drug, right? And there's not that many places you can say, oh, in cardio metabolic, we're going to make a difference. And LPA and AGT are those targets. So we're going to see where this is going because I don't want to over-partner because that's going to impair our M&A value, that's going to impair our own prospects in terms of growth, but we may partner one or the other depending on what data we see.