CRISPR Therapeutics AG (CRSP) Earnings Call Transcript & Summary

Okay. Welcome, everyone. I'm Yigal Nochomovitz, biotech analyst here at Citi in New York. This is our February event, which is our Virtual Oncology Leadership Summit. We've been doing this for a few years and have a great lineup today. And in this session, we have the senior management from CRISPR. So we have with us Sam Kulkarni, who is the CEO; and Naimish Patel, the Chief Medical Officer. So welcome both of you. And for those listening, remember, you can just e-mail me, [email protected], and I will relay any questions you may have over to Sam and Naimish, if you have any. So obviously, it's an oncology event, but it's obvious that you guys do have more than oncology. But that being said, maybe we'll focus the discussion there initially and then perhaps broaden it as time permits to some other topics.

So Sam, maybe if you could start talking about the oncology programs that you are engaged in perhaps with the ex vivo program in zugo-cel previously CTX112. Just tell us at a high level about the construct, about the design there, what you sought to achieve to improve the properties of that cell therapy and then we can move into some of the details in terms of the data you've shown in the plans for further development.

Yes. Thank you, Yigal, for having us, and it's always a pleasure. As you mentioned, at CRISPR, we're doing quite a bit across different disease areas. We have a commercial product for sickle cell and thalassemia together with Vertex. But beyond that, we have cardiovascular programs and the cardiovascular franchise. We have a franchise in autoimmune disease with our allogeneic CAR-Ts. And we have effort in type 1 diabetes with regenerative medicine approaches in addition to what we're doing in oncology. But I think oncology is remains core to our efforts, particularly because we have what I believe is a best-in-class allogeneic cell therapy platform. And I'll talk more about that with regards to zugo-cel and other efforts. And we also have an emerging platform for in vivo CAR-T, both transient and permanent CAR-Ts which can apply in autoimmune diseases and in oncology. So right now, what we have is our main area of focus or effort in oncology relate to zugo-cel, and zugo-cel was formerly known as CTX112, which was a next generation product after our initial efforts with CTX110 all this targeted towards CD19. And what makes zugo-cel special is that this is an allogeneic CAR-T. In other words, it's a CAR-T made from healthy donor-derived cells in our own manufacturing plant in Framingham, Massachusetts. And we've made advanced edits to these cells to make it much more potent than the first generation of allogeneic CAR-Ts and almost get autologous like efficacy with a better safety profile that could have meaningful impact in heme malignancies like DLBCL, but also beyond that.

Okay. I think it would be great if we could talk in some detail about those edits because they're obviously important and unique and what -- how you effectuated them and what properties they convey in terms of potency and durability?

Yes. I'm happy to start with the edits, and I'll ask Naimish to add some comments as well. But the main edits we make with zugo-cel, some are required, which is you want to knock down -- you want to insert the CAR-T, obviously, which is the primary function and primary way of making a CAR-T. But the way we do it is much more elegant than viral approaches. We actually insert the CAR into the TCR locus. So we get a double effect. We knock down the TCR, which prevents graft versus host disease. And we knock in the CAR into the TCR locus with endogenous regulatory control. Beyond that, we make edits for both potency and persistence. So we make an edit in the beta-2 M locus, which effectively knocks out the components of the MHC Class 1 presentation. So declaring these allogeneic cell as foreign. So if you knock out beta-2 M, you don't have a flag waving that says that they are foreign cells and gives you more persistence because your host immune system, particularly the T cells will not eliminate these allogeneic CAR-T cells as fast as they would if they didn't have the beta-2 M edit. And then beyond that, we have 2 proprietary edits that are really important in making this generation of CAR-Ts more potent than the previous generation. One is called Regnase-1. And this is a central mediator of cytokines and various factors produced by the cells. And by knocking out Regnase-1, what you're doing is making these cells retain a more naive phenotype, which allows for more expansion and more durable effect and reduces exhaustion in these T cells while at the same time, make them more cytotoxic. And that is an important edit that we validated, but others in the field like Carl June have validated as well. And the other edit is TGF-beta receptor 2, which effectively prevents TGF-beta-mediated cell exhaustion or prevention of potency from these cells. So those 2 edits confer significant potency. So I guess the overall strategy, we learned from our first-generation CTX110, which is the cells, allogeneic cells are not going to last forever in the patients. They're -- without any persistence edits, they last about 15 days with some persistence edits like beta-2 M, they last about a month. But the bigger issue was in the month that they persist, they were not active the entire time because the cells got exhausted by day 11 day 12. And what we did is by making these additional edits with Regnase and TGF-beta R2, we ensure that the cells are active all the way through the time which they have in terms of the persistence window. So we effectively increased the AUC or the activity under the area for these cells in the time that they have to kill the cancer cells.

Okay. And in terms of -- you mentioned it's donor-derived. So -- an allo. So how many -- how broad of a population can you cover with the set of donor-derived batches? And do you have to deal with HLA matching or things of that nature as well or not?

Naimish, maybe you can.

Yes, absolutely. So yes, our studies, we have not HLA matched, and we've seen no -- but we do sort of measure HLA subtypes of patients. We haven't seen any correlation either between HLA and cell expansion. And so basically, there's no requirement for matching. And so there's no limitation in that way. And we've also redosed patients. So some patients who had a partial response to the first dose might get a second dose to deepen the response. And we don't have any evidence to suggest that there's any immune response or anything like that. So it's a pretty nice system because of the immune evasion edits that we've put in, that doesn't seem to be an issue.

Okay. And anything special on the lymphodepletion regimen that you need to do? Or how does that work?

Yes. And part of the reason we did this is because we didn't want to what other folks have done in this area is to get better expansion and better persistence of the cells, they basically had greater levels of immunosuppression. So larger doses of the LD regimen or adding some sort of biologic to produce a long-lasting cell depletion. We use a standard CAR LD regimen that's used with autologous in oncology as well. And that's all -- that's a very sufficient. And just to add on to what Sam was talking about, if you look at the expansions from the prior generation CTX110 to now zugo-cel CTX112, dose for dose, we're seeing a significant level of increased expansion at every dose and at the highest doses at the doses that we're taking forward to Phase II, we see cell expansions akin to what's seen with autologous CAR, which was really the objective in making these edits. So we're very happy with what we have now that we can at least equal the efficacy of autologous CAR and -- but have the same treatment regimen.

Okay. So maybe, Sam, if you could talk -- just -- we got through the basics of the structure of the asset. But what about the strategy in oncology. Where do you -- and you mentioned autoimmune, where do you want to take this asset? What is your goal for how you want to develop it? Obviously, the allo market is extremely interesting in the United States to expand the reach of cell therapy to a much broader population. And we've seen those arguments made quite broadly by not only you but others. So just kind of just walk us through the strategy here in terms of where you're going to focus. I mean we have some early data. We can talk about that in a bit. But before we get to that, what's the kind of the long vision here for this program?

Yes. I think for zugo-cel, we're very bullish in the program, and we believe it's going to have impact in both autoimmune and oncology. At this point, in autoimmune, we're all in, in a way that we're rapidly enrolling patients. We're expanding the number of indications we're treating from lupus at myositis and scleroderma where we started to now include ITP and wAIHA, and we're probably going to add more indications because we just think allogeneic CAR-T is going to be the winner in autoimmune. The reason is as follows, which is the cost of goods of allogeneic is sub-$10,000. It's very scalable relative to autologous cell therapies where we've seen remarkable data. Second is, it's very convenient. You don't actually have to stop the treatment that patients are undergoing to harvest T cells like in autologous therapies and that which may cause flares. So here, you can just continue them on and then treat them with the allogeneic therapy and then pull off all the medications once the CAR-T has done its work. And the third is we think the efficacy and potency is going to be equal, if not better for allogeneic CAR-T without any of the safety risks like ICANS that we've seen with some of the autologous therapies. And that's because these cells will get eliminated eventually after they've done their work, but you've caused the immune reset. And the reason in autoimmune, we feel very good about it is even if you get 99.9% of cells in autoimmune disease, you basically reset the immune system. In oncology, you have to get 100% of the cells because even one cancer cell may come back as a cancer later on to get durable efficacy. But autoimmune, I think it's very clear that allogeneic CAR-T can do the job, our allogeneic CAR-T can do the job, just as well as autologous therapy, and it will be a very safe option for patients because the cells disappear after they've done their job and you have lower safety risk in terms of ICANS or CRS at the dose we're expanding in. So in autoimmune, I think where all systems go. In oncology, what we need to demonstrate. One is, yes, we get very high CR rates, but do you get durable CRs. And with CTX110 when we started off with the first-generation allogeneic CAR-T, we did get about 40% CR rate at the beginning, the first month. And then -- but if you look at 6-month CR rate, that number dropped to about 20%, because half the CRs were not -- the cancers come back and that's because the cells were not as potent. Now what we see with zugo-cel is that we pushed up the initial number quite a bit, almost 70%. And I'll talk a little bit more about the data in DLBCL and we've potentially pushed out the durability as well because you're getting very deep reduction, almost MRD negative in almost all cases in terms of eliminating the cancer. And so we feel good about what the durable CR rate is likely to be. And we have this additional weapon now by combining with a BTK inhibitor for pirtobrutinib that actually can ensure the durability because if there's -- let's say, we eliminate 99.99% of cell there's 1 cell left, that it will get taken care of by the BTK over a course of maintenance. So overall, we think the -- on autoimmune I think we'll have more data to show, but we feel very, very confident that this thing is going to work and it's going to be a very transformative product for patients. In oncology, we have to show a little more data, especially with this combo. We've already shown that the CR rate is much higher for 112. But if we can show that it's durable, then we have a winning product in oncology as well. I want to invest...

Sorry, just one -- and of course, the field is moving forward, right? So there's bispecific autologous CAR-Ts that are showing even better in oncology, even better response rate. So there's also some evidence that suggests that BTK inhibitors might enhance CAR-T cell activity during the expansion phase. So we're really targeting for even a higher efficacy bar with the combination than even our early mono data shows data that might be at least as good as an autologous CAR, a monogenic. But really, the bar is getting raised. So we're really looking towards something even better.

And just when investors think about this program. I mean, you're kind of going parallel track here in oncology and autoimmune or are you going to make a determination, which one to do? It seems like autoimmune is very much happening. Oncology, is that still -- you'll evaluate, you'll see how the data would be [ thiore ] potentially and then make a decision? Or can you just talk about which -- how you're going to pursue both or one of these programs with this asset?

Yes. Yes. We're pursuing both in parallel right now. I think the key not catalyst, but the key determination of how to move this forward is going to come after regulatory discussions. And I think typically, our math is an important designation that these programs get that allow us to have very fluid discussions with the regulators as to what the path forward is. At this point, what we've seen is that the FDA -- in the U.S., the FDA have given very favorable guidance to companies in the autologous CAR-T space for autoimmune indications, small trials that can get them to registration and approval. And for oncology, I think the -- we're going to ask the same question. Can you do a single-arm trial that can get us to registration? Or do you need to get -- do RCTs, which obviously make it harder to get to approval. And I think so in autoimmune and oncology, we're parallel processing. And by the end of the year, we hope to have these discussions with regulators to understand what the path forward is. And at that point, we have to make the decision based on each indication individually, how do -- what is investment required and how can we get to the finish line. But at this point, I do believe that it's likely that regulators are -- allow a path forward that's not too burdensome in terms of registrational trial for both oncology and autoimmune indications.

Okay. So then let's talk about a bit on the autoimmune in terms of which indications you've explored. You've had some data, obviously, in SLE, but then there's some other studies you mentioned, ITP and wAIHA as well. So which -- where do you see the most promising potential amongst these different autoimmune indications? Or again, is it just -- it's a data-driven question, clearly, too?

Yes. No, great question. I mean I think just to add a little bit of same, I think the data we have today, both in oncology suggest that zugo-cel is as active as an autologous CAR-T. What that means is in the autoimmune space, that the efficacy is good enough to provide long-term remissions in a number of different diseases. In oncology, I think because the field is sort of now even moving ahead there. We're looking for something a little bit more the combination therapy. But on the autoimmune space, the key breakthrough, I would say, with CAR-T is the fact that Sam mentioned, immune reset, we're able to deplete the B cells so that the pathogenic B cells are all gone and the B cells that return with CAR-T cell therapy are naive B cells and they're no longer pathogenic and patients can get long-term remission without any background immunosuppression or any therapy, and that's been shown very well for a number of years and follow-up and Georg Schett's group in SLE and a number of other diseases. So we have a rheumatology basket trial where we're looking at SLE, inflammatory myositis and scleroderma. And we're now recruiting actively in all 3 indications. We've shared some first couple of patients were recruited in SLE, and we've been able to achieve a 0 disease activity to SLEDAI of 0 in both those patients. And in 1 of the patients we have up to 9 months of follow-up now off any background therapy with complete remission. So -- and all the biomarkers, there's complete B-cell depletion at day 28. There's a good CAR-T cell expansion. It's all pointing in the same direction that we're getting the immune reset. So that's very exciting. So the -- we've already also started a second trial in ITP and wAIHA and there's been some case reports both from China and outside of China in ITP showing patients that are heavily pretreated and have failed multiple different MOAs having lasting durable return of platelet counts after CAR-T cell therapy. And similarly, there is a recent patient also published in warm autoimmune hemolytic anemia. And these are spaces where we're not seeing other CAR-T players actively advancing. So it's a bit of a white space for us as well, but also there's evidence to show that CAR-T cell therapy similarly provides that immune reset and long-term remission. So that's another exciting study that we've now kicked off and look forward to data in the second half of this year.

You have -- from looking at the data now, it looks like you have, I mean, a very strong asset, right? I mean even in these 2 SLE patients, it seems like you've achieved what you want to achieve unless I'm missing something, it seems very good.

Oh, absolutely. We're -- there are a number of different places we could take the rheumatology side. There's SLE, there's inflammatory myositis and scleroderma, each in their own are high unmet need indications. And then there's things like interstitial lung disease that cuts across all 3 of those things that are also incredibly high unmet need. We're definitely trying to target places where we could potentially be first. And so we're thinking very deeply, but we're very happy with the results we're getting, absolutely.

Okay. So for a first sort of registrational trial, you want to offer any thoughts as to where you might go first. As you say, look for something that's less competitive, like an ITP or wAIHA or scleroderma perhaps?

Yes. I think all those things are on the table for us. I think the data readouts that we'll have in the second half of the year, we'll have more patients across those things will help guide the direction, but all those things are fairly exciting. I don't know, Sam, if you're going to say something as well.

No, one of the differences as we look at the autoimmune space versus what happened with oncology, autologous and allogeneic are moving almost on par in terms of timing, right? In oncology, what happens -- autologous has started about 6 years before allogeneic approaches started. So it was a little bit hard to show in that patient population, how one is better or worse. But right now, we're seeing both of these move on par. The second dynamic that's very interesting is that there are trials out of China generating data that are almost like signal seeking that we can follow. So we'll follow our own data, but we'll also follow data that we're seeing from others. And as Naimish mentioned, data on ITP and wAIHA coming out of China. So in lupus, we're already getting sort of our best case, which is one patient is already a month 9 at SLEDAI 0, second patient at SLEDAI 0 and coming off the meds that they were on originally. And so I think we're already seeing that. We just needed a larger end in some of these indications and we look forward to sharing that data second half of this year. And we have a lot more centers now enrolling as well. So that should pick up as we go along.

Okay. Okay. So data for some of those sub studies or those -- the basket trial in the second half of the year.

Yes.

Yes.

And then as far as doses and things of that nature, although are you still in that exploratory -- I know with these 2 lupus patients, you did $100 million. Are you looking to change that? Are you happy with that?

Yes. No, absolutely. I mean the things we're looking at is beside -- because the clinical response piece takes a little bit longer, is looking at both the T cell expansion as well as B-cell depletion. And for both of those patients, it was great in terms of especially 0 B cells detected at day 28. So it certainly is a very active dose. I mean the questions that we need to answer is that will that dose be the same dose across these indications? Or would certain diseases require a different dose in other diseases. Right now, we we're all -- everyone starting at the same dose, all indications and the data will still drive that, but we're certainly happy with the B-cell depletion we're getting at $100 million, and that aspect of it should be similar across diseases.

Okay. And then maybe, Sam or Naimish, we're in the Lilly partnership on [ thiore ], just tell us a little bit more about how that came about and you have not generated any data there yet.

Yes. There is a paper an abstract at ICML this past year by a group at the MGH in Brigham where they combine a different CAR-T, an autologous CAR-T with ibrutinib, another different BTKI. And they were able to show in LBCL CR rates above 80% in that study. And that really got us excited about the prospects of the combination. And there is some data, as I mentioned before, that inhibition of BTK enhances the CAR-T cell activity, preclinical data out there. And so they made mechanistic sense as well. And so we approached Lilly, who also was interested. And as I mentioned, the oncology, it's -- and Sam mentioned, it's a bit of more moving target, right, where the autologous CARs have been out for years. And now people are coming forward with bispecific CARs and doing RCTs against monospecific CARs because the efficacy is that much better. That combination, I mentioned, that efficacy is on par with a bispecific CAR. And so if we can reproduce that with zugo-cel and pirto, I think we'll set up better to actually compete against what's coming down the pipe in oncology. And so we -- the studies are ongoing. We don't have data yet to share, but we're really excited about it.

You would do this study in the patients that are the second-line LBCL patients? Or who would you target initially for this combo?

Right now, the study that we're doing is largely third line plus patients that are being studied, and that's very similar to the population that was studied in that Brigham MGH investigator-sponsored study.

Okay. And then if you were to move forward with an approval with this, say, with this combo, that would be in that setting? Or would you potentially do go earlier and try to go up against maybe the second line people that had failed in auto CAR-T in the frontline? Would that be a consideration or not?

Yes. I think this is where I think we'll have to -- it's going to be driven by the data and the regulatory discussions. I think, Yigal, I guess this strategically, what we could do is pick off a lot of the niche areas in this space because it's still a big market. For instance, what we could do is try to get approval with a single-arm study in relapsed/refractory setting in third line. But then do trials, for instance, in frontline ineligible patients or patients who are ineligible for CAR-T or TCE. And there are a lot of them that can't tolerate even 6 cycles of R-CHOP, for instance. There are patients who are ineligible for CAR-T in second line. Because I think the alternative, which I think some of the other -- one of the other allogeneic CAR-T players are doing is if you try to go head-to-head against established standard of care in second line, it's going to be a very expensive trial. If you have to do an RCT versus either a TCE or an approved CAR-T. And given the wealth of opportunities we have at CRISPR and our -- the number of things we're developing, we want to be very thoughtful about resource allocation. So at this point, where we may try to get to is third line plus or relapsed/refractory setting, get that approval, get certain pockets of patients, such as the elderly population that cannot tolerate full cycles of approved frontline therapies, other patients that are ineligible for CAR-T for various reasons. And I think that will expand the areas where -- once we get a label, we can always expand where we go. And especially in Europe, once we get a label, I think we'll get a lot of adoption because odds are we're going to price this much lower than autologous CAR-T. And for systems that -- for the European systems, that's a huge benefit. We'll actually get a lot of traction. We're actually getting a lot of traction even in Middle East, for instance. And you saw another allogeneic therapy approved in the Middle East recently, and that's because some of these systems cannot afford to provide an autologous CAR-T for every patient. And also there is an issue of availability and turnaround, whereas an allogeneic CAR-T can get them similar efficacy for these patients but much more convenient and cost-effective. So I think we just want to get on label. In fact, we're actually dosing patients in oncology in India. And that could -- that would never be possible with an autologous therapy or even the first generation allogeneic therapies because the cost of goods are too high and you wouldn't have any profit margin. But given where we are with our cost of goods, it's actually a thing that's possible. And so there are significant markets outside the U.S. as well where we could develop zugo-cel. And for us, it's all marginal returns because we're investing in zugo-cel anyways across autoimmune and oncology from a platform perspective, we're going to be making a lot of the drug. So if you can get on label carve-out niches in oncology that eventually could add up to a couple of billion dollars of revenue that, I think, would be a very good strategy.

And you mentioned pricing, you wouldn't price like the auto CAR-Ts, how would you approach the pricing question, if you get approval for zugo-cel in both the oncology space and the autoimmune space, what would be the approach there to harmonize.

Well, we think is that current autologous therapies in oncology price around $350,000 to $400,000 effective price. And the chatter is that in autoimmune disease, these therapies are likely to price even higher in the $700,000 to $800,000 range. And I think for the systems, that's a pretty challenging setup. I agree that there's cost of treating these patients is high, et cetera. But if we're able to price our allogeneic CAR-Ts in the $200,000 range or slightly lower, I think we just increased access quite a bit. And we still preserve margins that will return -- provide returns for shareholders and for the company and fuel further innovation. But I think we just will be able to access that many more patients if we're able to do that in the Western markets. I think our pricing in India and parts of Asia and other markets, we'll have to think of even lower cost manufacturing there which we're in the process of doing, if we establish manufacturing there that allow us to price even lower.

In the last few minutes, can we just touch on the in vivo CAR-T, you mentioned the 2 flavors, the transient and the permanent. Can you speak to those a little bit and then where you're going there?

Yes. I mean, this seems to be a very hot area right now. I think the unlock essentially has been that you can deliver these cargo, whether it's mRNA encoding the CAR or editing machinery into T cells in the body using either viral vectors or LNPs. And our strategy in this space has been twofold with -- we're firmly entrenched on LNPs versus viral vectors because I just think that eventually, LNPs are going to win out. These are much more deterministic in how you manufacture them, much more reliable. And the biological effects that you see are less stochastic than viruses where you may have safety events or you may have unwanted integration or unwanted activation essentially. So we're firmly putting efforts into LNP mediated delivery and then we have 2 efforts. One is LNP mediated transient CAR, where we've engineered the mRNA that encodes the CAR in such a way that it's much more persistent and durable. So instead of a lot of competitors who have 3-day or 4-day detection of CARs, we're likely to see much longer detection of CARs, potentially even greater than 10 days. And that will lead to a more deep depletion of B cells in this case, the CD19. And so that's our transient CAR strategy. We actually have other engineering elements as well on the transient CAR that improve the persistence of these CARs and enable expansion. But transient CAR is likely to be more effective for autoimmune indications than oncology. In oncology, you may not get the level of expansion with transient CAR to see complete elimination of tumor cells. So for oncology, we're developing permanent CARs. In other words, we're actually going to deliver the CAR as a donor template plus the editing machinery to create fully integrated CAR-Ts in vivo. And that's actually moving nicely as well. So we can -- we have engineered elements where the DNA donor template is not immunogenic when we deliver it and integrating machinery is efficient enough that we get a certain percentage of T cells with the integration of the CAR. And that will be game-changing in oncology, right? If you can do no conditioning, 1 injection and have permanent CARs, you will completely eliminate the tumors and that actually could work for a lot of solid tumors as well because you could potentially think of more than 1 target in that case that you go after. And in a way that's relatively safe as well. But I think data will tell over time. But we're pretty excited about both these platforms, and we're doing the engineering to make them best-in-class on both fronts.

With the nonviral integrating, you would get essentially stable CAR production indefinitely in the lineage in the immune lineage? Or would you still have some erosion over time if you lost it -- if it was lost from the genome or something like that? Or what is the time frame?

Yes. I mean I think you will -- there is a risk of B-cell depletion because you will have permanent production of CAR from these T cells. Now what you've seen with autologous CAR-Ts, is yes, you get permanent T cell editing of T cells. But eventually, if the target is gone, they kind of go away. The T cells quiet down and they just get eliminated and they die and you don't have permanent B-cell aplasia. In this case, you have to make sure that the same effect is what you see with the permanent CARs and that they do their job if it's in the case of CD19 or whatever they get it of all the CD19-positive cells. And when there's no antigen, the cells either go through autophagy or something else to just get eliminated and you won't have a permanent B-cell depletion effect.

And then -- but you can still do all the edits, the revenues and the base probably, all that can happen with this in vivo approach. Is that correct?

Yes, we probably will pick different edits than Regnase because I think we want to be -- safety is our most concern. We want to make sure that we don't turbocharge these CARs either given they're permanent. But we can actually make those edits in a slightly different way. These include using shRNA and other elements to affect -- have the same effect on editing without multiplex cutting of the genome.

Got it.

I mean in some ways, it's not that different from say an autologous CAR, where you have permanent integration of the CAR. And -- but over time, the T cells do exhaust. So even if they might be detectable, they're not actually active in some patients, they're not even detectable anymore. And because they're actually now native cells or not allogeneic cells, you don't necessarily need the potency edits that you do with allogenic cells, but the data will sort of drive things like that.

Yes. Okay. Okay. Well, this was a short session. We didn't cover a lot of other things. And in the world of CRISPR related to your cardiovascular programs and your other -- your diabetes programs and others. So we'll have to come back to that on another session. But this is a good -- very, very helpful and enjoyable. So thank you both.

Thank you for having us..

Thank you for having us.