CRISPR Therapeutics AG (CRSP) Earnings Call Transcript & Summary

Hi, everyone. My name is Mitchell Kapoor. I'm a senior biotech analyst at H.C. Wrainwright. Today, I'm pleased to welcome CRISPR Therapeutics. And I'm going to have a fireside chat with the CFO, Raj Prasad. Raj, thank you for...

Yes. Thanks for having us.

So just to jump right in, maybe those who are not familiar with the story or who are not current, maybe you could just kind of give a company overview of what you're working on today.

Yes, absolutely. So CRISPR Therapeutics is almost 12 years old now. The company was founded on the now Nobel Prize winning work of Emmanuelle Charpentier, where they showed that they could edit human cells. And we've taken that initial technology and we've applied it to CASGEVY, which is a first-approved CRISPR product, which is now in 8 different country jurisdictions to treat sickle cell and beta thalassemia. And us and our partner, Vertex, are taking that program forward with Vertex leading the commercialization of that program, I'm sure we'll talk about that a lot more. But we're now in the second phase of our company where we basically took revolutionary technology, we were able to apply to get a medicine approved. And now we're working on getting the second, third, fourth programs approved. We are solidly financed with the $1.6 billion on the balance sheet. And what we really want to do now is focus on making transformative gene-based medicines that can change patients' lives. And we also want to do that in a capital-efficient manner, obviously, given the markets. But we were able to find an opportunistic deal which we announced yesterday, hopefully through this conference. But we did a deal with a company called Sirius Therapeutics on an siRNA platform with the lead program in Factor XI, where we have a 50-50 co-development, co-commercialization partnership, where we lead the U.S. commercialization, Sirius leads China commercialization. And we also have the ability to license 2 additional siRNA targets, which we'll disclose in short order. But we're really excited about what that program adds to the complementary suite of toolbox of modalities that we have now at CRISPR. And we really wanted to show the Street and obviously show everyone that we have this ability to think more globally about what we can do as a company, and we're very excited about the deal. I know we'll also touch on that as well. Aside from CASGEVY and the Sirius deal, we also announced positive top line data from CTX310. This is an in vivo LNP plus mRNA platform, the first program in our platform offering here, where we saw what we think is best-in-class data with 82% knockdown in triglycerides and 81% knockdown in LDLs, really best-in-class data from the early 10 patients that we put out data for. We'll have more data there in the medical meeting in the second half. And if that wasn't enough to do, we also have a CD19 allogeneic in CAR-T in autoimmune and oncology, which we'll have an update for in the middle of this year. And then we have a diabetes and a solid tumor program as well we'll have updates for. So really a value inflection next 12 to 18 months for us where, in addition to CASGEVY, we will have several readouts. And now we have the Sirius platform as well to integrate into the company.

Yes. That's wonderful. Hopefully, we can touch on as much of that as possible because there's so much going on in CRISPR. Okay. Great. So yes, starting with the most topical, the Sirius deal. Can you just talk about being a gene editing focused company, what does this deal do for your platform with siRNAs? Is this a diversification play? How do you see the future of CRISPR?

Yes. So I think we set out about a year ago to say, okay, if we were modality agnostic, if we were just looking at what we are some interesting assets out there? We have enough capital to get us, we think, all the way to profitability. We have the ability to look at sort of different assets in a what I consider a buyer's market right now with depressed valuations. What would be complementary to what we're doing internally? And so we found sort of Factor XI in sort of this broad strategic look at the landscape. And we've looked at Factor XI in particular, and we said there are certain indications where it doesn't make sense to have a onetime permanent knockdown. And we think anticoagulation is one of those spaces where we're going to be running a Phase II trial that we initiate in the second half in total knee replacement, where you don't want the patient kind of Factor XI gone forever. Factor XI is a great target in that it gives you this anticoagulation effect but it reduces your bleeding risk. So it's different than the Factor Xa inhibitors, the DOACs that are available. And so in this massive market, Factor XI gives us an interesting point where we don't want to have a gene edit, but we found Sirius and their long-acting siRNA, which gives you 6 months of durability, significant target coverage, getting 95% Factor XI reduction. And we think that it can compete with some of these massive products that we see in the competitive landscape. So the way that it sets up for us from a strategic perspective is we'll run our Phase II trial. And in that point in time, Novartis' [ Factor Xa ] that they acquired from Anthos, abelacimab, will be running some Phase III trials; Bristol and J&J, having milvexian, an oral molecule, that will be running some Phase III trials, where the target will be derisked in some of the larger indications. And basically, we'll have a good sense of how to clinically prioritize the siRNA asset, SRSD107, in that time frame. So I think it's -- if you're thinking about this 12- to 18-month time frame, it gives us an immediate value-creating catalyst that I think has been validated not only by pharma as well as by some deal activity.

Okay. So what are the key dates to watch for, for that program externally and internally?

Yes. So I mean, we'll obviously be watching the milvexian and abelacimab readouts. But for us, it's just an initiation of the TKA study or TKR study in the second half of the year.

Got it. Okay. Great. And then so moving to CASGEVY. Could you just talk a little bit about the launch performance to date? How has that been trending? What does that look like in terms of your confidence for uptick in demand? And when might we see some sort of inflection point? Is there something -- some gating items before we can get to that inflection? How would to 2025, 2026 look in CRISPR?

Yes. No, we're thrilled with the launch. We're thrilled with the job Vertex has done. 2024 was a foundational year where we're focused primarily on ATC activation. And so as of Q1, we have 65 ATCs. We had 90 cells collected and we have had $14 million in revenue. We're getting revenue in multiple geographies. So we're very happy with the way the launch is going. We're seeing -- we've guided -- or Vertex in their press release have guided to a significant inflection in patient initiation, which is the top of the funnel and the beginning of the demand curve that we see. And we're also making -- combine the manufacturing investments, [indiscernible] in their press release, but they're getting Lonza Portsmouth online as well to basically support this demand that we see. So again, we're targeting 75 ATCs, and we think that, that will be the right number to cover. We see a huge multibillion dollar opportunity. Again, we're not -- neither us nor Vertex is at a state where we're well capitalized. Again, we don't have to worry about a quarterly revenue number to raise money or whatever from a CRISPR perspective. So we're focused on the opportunity here in getting a transformative therapy to as many patients as possible. And we continue to have a tremendous amount of faith in both our partner, Vertex, as well as the value creation that CASGEVY has.

Okay. Very helpful. And then so the cell collection is just being kind of a leading indicator of that funnel that you're talking about, top of funnel. Talk a little bit about what -- how that's been trending and then in terms of geographies of where you're getting these cells. Is there anything you can say about that? Is the Middle East typically playing a big role in where the cell collections happen? Is that a big focus for the launch? Just kind of help out with that.

Yes. So I mean, the numbers I think that Vertex has put out, 35,000 patients in the U.S. and the EU5, greater than the 23,000 in the Gulf Coast countries. And then -- so we think that the Middle East is going to be a huge market for CASGEVY. I think that they obviously have a press release of some of the first patients that have been infused, and it's been phenomenal to see those patients get -- improve. I do think that at the end of the day, the 75 ATC coverage, we believe, is the right number. I think over time, you're going to see those ATCs get more and more comfortable with administrating the therapy. And so you're going to see this intra-ATC growth being the driver for revenue sort of inflection as the sites finally get online.

Okay. Got it. So yes, so getting close to that 75 number -- that target 75 number, what are those things you think with the intra-ATC growth that are going to drive that closing the gap between cell collections and dosing of patients? Obviously, that cell collection number is growing, but that transition point.

Yes. I mean, again, a lot of the -- at this point, a lot of what we've seen is going to be anecdotal because we're early in the launch. But over time, when we build scale, I think you're going to see cell collections, in some of the clinical trials, there's a low attrition rate to infusion. And so again, we believe in the multi-billion opportunity here. And so we're excited about the execution thus far and where we stand in this field.

Okay. And is there anything that you've been able to say on cell collections to infusion, that time line to get a patient on therapy, has that narrowed or lengthened at all? Or anything you can provide color on?

Yes. I mean, again, I don't -- I would love to sort of yield to Vertex on sort of the color commentary here. I think right now anything we would say would be anecdotal. It wouldn't be a trend at this point. But from what we've seen, I think we're seeing a steady increase in growth in ATCs. We're seeing a growth in cell collections. We're seeing a growth in infusions and revenue. So there's -- we're very excited about the trajectory and how it's going thus far.

Okay. And is preconditioning -- the preconditioning regimen that goes along with CASGEVY, is that something that you've heard is a barrier to uptake? And is there anything you're doing to help patients become more comfortable with that? Is it something where the more patients that get dosed, and they go through that, they're telling the field like, hey, this is how my experience was, and that's a snowball effect? How does the preconditioning regimen play into that?

Yes. I mean, there's -- I mean, the market opportunity is still big with CASGEVY as it is now. I think to expand the TAM, there will need to be a kind of conditioning regimen. We have a CD117 approach. Vertex has their own approaches. But both come into the collaboration, where we have the 40% net profit split for CRISPR. We're taking this CD117 ATC approach with sort of a short half-life, a quick hit, as we call it because you don't want the long half-life like you would for urticaria in some of the other companies' other programs. And so yes, we're advancing that program, but we'll have to wait and see to see how that all develops.

Yes. Makes sense Okay. So moving away from CASGEVY and into the pipeline now. You had some exciting data. You mentioned briefly CTX131, ANGPTL3, first in vivo data. Can you just recap that data, what it means for CRISPR? Just talk about the dose levels, the trends you saw, the dose response. Anything else that you think is important for investors.

Yes. So I mean, as everyone knows, in biotech, there's just a long lead time from when you make a strategic decision to build a program or build a platform or build a vertical and then seeing the clinical human proof of concept. So no different with this. I think there were some other folks in the gene editing field that have shown compelling data in the in vivo space, and we took the approach of going into cardiovascular disease where compliance is a huge issue. And we selected ANGPTL3 to be first just given we thought the competitive landscape there was preferable to, say, another target. And so we presented our press release top line data from the Phase I trial earlier this month. In DL3 and DL4, we're seeing robust reductions in both triglycerides and LDL. I mean, it's still early data, but numerically we think it's best-in-class. We're seeing an 82% reduction in triglycerides, 81% reduction in LDL. The triglyceride patient in particular -- or sorry, triglyceride reduction was in the patients with severe hypertriglyceridemia. And in this patient, they had over 1,000 mg per deciliter at baseline. And that -- if you look at that in a vial, it's a very thick layer of sort of milky white in addition to blood, right? So that patient now is down below 200 mg per deciliter and the consistency of the blood looks much more like blood. And so it's really a transformative effect. And if you think about the current standard of care in severe hypertriglyceridemia in particular, I think that, that makes it potentially pretty impactful. With regards to ANGPTL3, again, the fact that we have this dual impact on triglycerides and LDL means that you can take it into a hyper dyslipidemia population. The fact that we've seen these massive reductions in LDL as well is very exciting. Some of the siRNA products that have put out data recently have shown liver fat reductions via MRI, and so we think that bodes well as well for the target. And so we'll have a data medical meeting in the second half. Again, I think our strategy now is we really want to get investigators globally, more eyes on the data and more interest in the data and grow the platform. Again, as I mentioned, now we're in a stage where we're really looking to develop what the next drug is. We're really trying to figure out what are we going to take forward as the next asset to the commercial space for this company.

Okay. Very helpful, yes. And sHTG is obviously a focal point for the genetic medicines field in general right now. But you had a mix of different patients, different disease subtypes. So trying to interpret that. Obviously, it's early for us. Investors always want more, trying to understand it. When could we get more in terms of understanding what it means per disease? And what could that look like? Like how -- what should we set our expectations to?

Yes. I think the next step is finish the dose escalation study. Following that, there will be a dose extension study where we'll go into sort of disease-specific cohorts. I would just say from a high level that in severe hypertriglyceridemia, they don't have a good standard of care right now. As you mentioned, there are some later-stage programs in development that have a decent effect on triglycerides, but they don't impact LDL in the same way that our ANGPTL3 data looks like it does. So we think we could have a superior profile. And again, this mixed dyslipidemia population is multiple millions of patients where they have both elevated LDL and triglycerides. And so we think that, that could be another indication as well that are of interest. There -- we do have HeFH and HoFH as well in the Phase I trial. But stay tuned for -- again, I think we need to get more data, talk to our advisers, get the medical meeting out and then sort of take the holistic view and sort of decide what we want.

Okay. And when you present the data in second half, could you just set the stage for the numbers of patients we'll see, what could change from what we've seen so far in the follow-up time?

Yes. I mean, we'll obviously have additional durability. I think the data cut-off for the top line was in April. We're working to finish the dose escalations of DL4 cohort. But stay tuned. I think it's going to be pretty exciting. If we can, I mean, [indiscernible] this profile, we could have a best-in-class cardiovascular program.

Yes. Makes sense. And then in terms of your second LPA that's coming up, CTX320, how does this data risk mitigate that?

Yes. Yes. I mean it's always difficult to say they're exactly the same. You can't say that. Obviously different targets, different genes. But we do believe that the platform approach that we've shown, that we can develop an LNP mRNA product and meaningful reductions. I think the competitive landscape for LPA is a little bit different in the fact that everyone is waiting on the Novartis HORIZON trial to see whether or not can therapeutically reducing the LPA is going to lead to cardiovascular outcomes. And so I think us and the rest of the field, while we're propagating our trials or advancing our trials, that will be a very important readout, which is now in the first half of '26.

Okay. Great. So yes, and your in vivo data set is coming up in 2Q, which is today or tomorrow or the next day. Can you help us understand what to expect then? Is it still on track for 2Q?

Yes. I would just say the trial, we announced it about 3 months after -- publicly announced it was initiated 3 months after the 310 trial. And so yes, I mean, when we have it, it will be -- there, you're looking at how -- with LPA it's different than LDL, where you don't want to get -- the current literature says that it's more of a threshold effect than getting patients down to 0. So I think what we want to do with our therapy is to get patients in the range of control, which is basically [indiscernible] 25 per liter. And you want -- the fact that we can have a durable effect there, that does differentiate our gene editing onetime therapy from, say, another therapy where compliance is an issue. If you miss a dose, you all of a sudden get out of control until you get your next dose. So we think in these cardiovascular medicines that a onetime gene editing medicine can be -- at least lipid-targeting medications, that a onetime medicine can be extremely transformative. And that's the feedback that we're hearing from cardiologists as well.

Okay. And so to that effect, one of the questions we get a lot across our gene editing and gene therapy companies is about the applicability in broad diseases, vast diseases versus more rare diseases for gene editing specifically. How does CRISPR Therapeutics view that? How does that factor into your strategy, pricing dynamics, willingness for patients to undergo gene therapy -- I mean, gene editing in these mass indications? What do you think the thresholds are and things like that?

Yes. I think an underappreciated aspect of this next suite of programs in our pipeline is the fact that we've made significant investments to ensure the cost of goods is very low, in the low 5-figure range, which means the price point for these medicines is not going to be 7 figures. So this allows us to be competitive with whatever therapies that are going to be on the market prior to while showing potentially a more durable benefit. And this goes for not only in vivo pipelines but also for our allogeneic CAR-Ts, where if you're thinking about our autoimmune medicine -- our autoimmune indications, which we're very excited about, also a 2025 update. We're talking about low 5-figure cost of goods and we're talking about antibody type pricing. So we can be very competitive. Off-the-shelf modality, where we're getting 28-day B-cell trade -- 20-day PK from our oncology data, we're getting B cell aplasia. And we think we can have these durable responses as well. So yes, I mean, I think the key issue for democratization of genetic medicines is being to provide a high-margin product at a price point that can meet these primary care settings or these settings where current standard of care is in the low 6-figure range. So we anticipate fully to be able to meet that criteria. And if we're able to show disruptive benefit on top of that, I think we'll gain a significant market share.

Yes, definitely. And the compliance advantage in some of these indications, especially cardiovascular, a big factor for switching. Okay. Great. One of the last things I wanted to touch on is with the Sirius -- since the Sirius deal was announced, what is the appetite for business development going forward for CRISPR? And what kind of companies in terms of size or anything else you could talk about that might be of interest?

Yes. Again, it's -- I still think with depressed valuations, it's a buyer's market. So we'll be on the lookout. I think the feedback that we've heard thus far has been very positive on the deal. I think people are impressed at the price point that we were able to get a Phase II ready asset, especially for a market opportunity that can be multiple of millions. And Sirius is going to be a great partner. They've got a significant amount of expertise -- siRNA expertise for both Dicerna and Arrowhead. And so we're excited about that. I think we're also going to be very active in discussing with our sell-side partners as well. I think in the next 12 to 18 months, we could have 3 or 4 multibillion-dollar products from our wholly owned pipeline. And I don't anticipate we will be able to take everything forward. So we do anticipate having those discussions. And one thing that this company has done very well historically is we've been able to strike partnerships that can create significant value, as referenced by the Vertex relationship as well -- and not only in sickle and beta thalassemia, but we've done other deals with them to get the capital to be able to maximize the potential for some of our important platform. And I think we'll do things similarly as well. I mean, I think the -- again, the Sirius deal was not only a deal of economics and value creation. It is also a deal that we think is complementary and brings complementary expertise. So I think it's one of the things that we do extremely well and we're very thoughtful about it. And I think we'll be active on the buy and sell side in the near future.

Great. Last thing, if there's anything else you feel like it's important that we didn't touch upon. I know there's so much in the pipeline, but anything you'd like to highlight for investors.

Yes. No, I mean, listen, I think a question we do get a lot is what's your next potential approved product. Obviously SRSD107 is later stage. But we've seen some pretty exciting developments from some of the regulatory interactions that have been made public in autoimmune disease. So like 15 patients ready to get approved or a 100-patient safety database across indications, I think that is extremely bullish for the autoimmune space. I know it kind of -- the wave has calmed down, but think about long-term approvability and [indiscernible], building out trial sites. But I think that could be a huge multibillion-dollar opportunity in the pipeline.

Amazing. Thank you so much, Raj.