CRISPR Therapeutics AG ($CRSP)

Good afternoon, everyone, and thanks for joining me at the first day of the [indiscernible] conference. My name is Gil Blum senior analyst here. I specifically cover immuno-oncology, and it is my pleasure to have Sam Kulkarni, the CEO, CRISPR Therapeutics with me today. So Sam, maybe you don't need much of an introduction, but maybe a good place to start as a 2025 early market transition for the company. Maybe just looking forward, how this company think about the pipeline as we move past case. And maybe for those who are unaware, maybe a quick overview across therapeutic areas, so where you guys are making progress.

Yes. Thank you for having us, Gil and we're very excited with where we are as a company. The first -- for those who are new to the story, CRISPR was founded about over 10 years ago now, and the first phase of the company was about getting in the first this platform to patients, and that's what we did with CASGEVY, which is the first approved CRISPR drug in the world that's treating a number of patients with sickle cell and thalassemia today our partner, Vertex. The second phase was to then use the same platform, both ex vivo and in vivo to advance a number of different programs forward. That's where we are today, where we have potentially 6 programs that would read out in the next 6 to 12 months. And then there's obviously [indiscernible] that, which I won't talk about today, but it's really how do you create even more transformative therapeutic once we have this phase parlay from 1 drug in CASGEVY to multiple other clinical readouts. Where we're focused today, I think we're very committed to building 2 franchises. One is a cardiovascular franchise, and we have a number of programs there. And the second is an autoimmune franchise, where we have a number of programs. We also play in oncology and we'll talk about that a little bit with [indiscernible] that applies across both autoimmune and oncology. And with -- obviously, within the cardiometabolic realm, we have a type 1 diabetes program as well. and we're expanding into rare diseases like alpha and antitrypsin. So all in all, we're -- in this period of time, we've been expanding the portfolio quite a bit -- we believe we have best-in-class programs across a number of areas, and I look forward to discussing those with you today.

[indiscernible] so we're going to start with [indiscernible] generated over $100 million of sales last year, sizable chunk in the fourth quarter. What should be expectations for 2026? And should we foresee the momentum carrying forward?

Yes. I think CASGEVY had a nice uptick or trend in the last couple of quarters. I think what's important to realize is after we launched CASGEVY, this is not a typical medicine where people get initiated right away and get a medicine and you see revenues right off the bat. This requires a lot of an installed base build, if you will, where we have authorized treatment centers that can actually deliver this medicine to patients. And that's similar to some of the more complex medical devices but that also forms a competitive moat because once you build that, it's very hard for others to do the same. At this point, we have over 75 authorized treatment centers around the world, and Vertex has established those in all the jurisdictions in which we've been approved. And if you look at the trend line of patient cell initiations, collections and infusions, the initiations is a leading indicator of where we may end up with infusions. And what you're seeing there is a significant number of patients were initiated in the last quarter in over 100 patients. And I think at that rate, what you'd see is a clear path if those patients translate to get their cells collected and then ultimately to get infused, you're looking at a multibillion-dollar opportunity. And that's what Vertex and us have been saying about CASGEVY and why we're so excited about the prospects and why we continue to invest so much in making this a drug that can bring cures to many, many patients.

All right. When do we think that we're going to start seeing these revenues hit your P&L?

Yes. I think what -- we haven't commented on when the franchise will become profitable for CASGEVY. The one thing, as you look at our collaboration expense right now, it's hard to disaggregate what's true CASGEVY profitability versus investments we're making towards gentler conditioning and also towards in vivo editing for sickle cell and thalassemia. And so we are with the long-term mindset. We continue to invest in the overall franchise, if you will, together with Vertex. And -- but we're confident that the franchise will turn profitable in the not-too-distant future. And I think it will start buffeting not just our overall R&D spend at CRISPR, but our entire enterprise-wide spend in a meaningful way.

So maybe you should spend a second on mitigating transplant-related mortality. And what do you think are the lead strategies? And where do you guys think you're going with this [indiscernible] market access?

Well, I think from an access standpoint for CASGEVY, it's been very heartening to see very good coverage across regions and jurisdictions. So I think in the U.S., we have the CMMI pilot, which all the states have seen on to, which has been terrific in terms of supporting these patients and giving access to these medicines patients ex U.S. as well, I think there's been good broad coverage for CASGEVY across both thalassemia and sickle cell. So I think as you compare what options these patients have, which is whether to go for a [indiscernible] transplant, where they do no matches or to take medicines that don't really change the underlying disease like [indiscernible] I think this is the 1 option that patients have to return to normalcy. So I think when you look at comparisons and the payers recognize that, which is why you have such good access to this medicine or this therapy across all these regions.

I do want to spend a pretty significant portion of our time on in vivo program. One point of contention that we hear a lot is this idea that gene editing should be preserved for your dangerous fatal indications and that nonfatal chronic conditions, physicians and patients probably prefer chronic therapy over an expensive one-time gene therapy with the reasoning centering under reversibility of chronic dosing. So how do you guys counter this kind of thinking? And where do you hear feedback that contradicts this?

Yes, absolutely. I mean I think there's a big delta between what physicians are saying to us and what the investor community is asking, right? This question that the investor community is asking is very different from what we're hearing from not just KOLs but even regular physicians. And there's always going to be this disconnect because even in 2007, people were saying there's always iPhones going to be better than BlackBerry, right? It just takes time for investors to catch on to certain things that are inevitable in terms of trend. And the question is going to flip to why not gene editing. Take the example of some of these patients. NBC just published a story about this father [indiscernible] the father had its first quadruple bypass at the age of 29 and have had several cardiac events very high triglycerides and LDL. The son was diagnosed with hypercholesterolemia and the age of 14. For these patients or people at the very young age you're saying you're going to give them siRNA or medicines all through their life. And it's just not the best option for these patients. And in fact, even those medicines don't provide full control. I mean these -- the 2 patients we're talking about here, we're on anti-PCSK9 antibodies and couldn't control their LDL. And after one shot of gene editing, their vitals looking or their LDL, triglycerides and all the lipids are looking much better than anything they've seen before. And the reason for that is with gene editing, it's permanent. It's -- there's no issue of compliance once you've done it. And you don't get this sort of soft effect that you might see with sRNA towards the end of the dosing period. And so this question at some point, will flip to why not gene edit, why would you do chronic therapy, if you can just gene edit once. And you don't even have the question of being a very expensive therapy. In many ways, gene editing is going to save the system money because if you think about when it's going to be priced, it's going to be priced at around potentially 4, 5 years worth of sRNA therapy, and you're looking at people who potentially might take 25 years of RNA therapy which is a very high cost of the system. So all in all, I think the arguments are very clear why you do gene editing. The bigger question is, how is this going to unfold? Is it going to go from more serious patients to moderate patients to everybody? Or what is the rate of acceptance of gene editing. But it's eventually an inevitability that a large majority of patients are going to be gene-edited.

A big portion of the ability to conduct this technology well is selective in vivo delivery, can you tell us at least a little bit about what -- how CRISPR's strategy is different maybe than some others. I mean I don't know if you've a lot regarding your [indiscernible] delivery system, but now being able to target specific tissues is key to some of these indications.

Absolutely. I think this is a major vector for us. I think if you ask us in a world where you have this typical hype phase cycle, right, people had -- there's a lot of hype on gene editing and then there was a bit of a bottoming out, and we may be past that phase. But in that period of time when a lot of others have reduced their investment in the platform, we're actually increasing our investment in the platform. And the 2 vectors that we're most focused on right now, 1 is extrahepatic delivery. So we already have shown some promising animal data for bone marrow editing with LNPs, and we're going to use LNPs for other organs, including CNS delivery that we're working on. These are all conjugated LNPs. And the other vector is gene correction, or gene insertion. We've gone from gene just disrupting genes to potentially correcting a few genes with single base pair anomalies to now being able to correct or even insert entire genes into the -- into various tissues [indiscernible] cell types. And so as those vectors develop, you're talking about a number of large rare diseases, it's an oxymoron, but some of the more prevalent, I guess, rare disease diseases that can all be targeted, whether it's muscle or CNS or or other organs. And so I see the platform unfolding the way we expected it to and the power being of the platform unleashed across different diseases.

And speaking of is, we're going to walk a little bit indication by indication here. So starting with 310 and PTL3 targeting. So really encouraging on a signal for LDL-C reduction and triglycerides. How are you thinking about the total addressable market? Who do you think is the patients that are best amenable for something like this?

As we spoke about before, I think all the markets will unfold as there's more and more data, especially around safety. If you look at the homozygous FH population, that's only about 1,000 to 2,000 patients in the U.S. So it's a small population, but that's probably the most straightforward path to doing a Phase III and getting approval, especially because ANGPTL3 to be synergistic with PCSK9. And then you have the SHTG population, and that's about 3 million patients or people in the U.S. alone, of which nearly 1/3 of them have acute pancreatitis. So if you look at those 1 million patients and the fact that you don't need a full outcome study here, the endpoint could be a reduction in pancreatitis, gives you a path for approval in about 1 million people in the U.S. And [indiscernible] I think, can be a better target than [indiscernible] in these patients, especially because [indiscernible] has been shown to increase LDL. And then finally, I think you're looking at various forms of mixed dyslipidemia starting with there's heterozygous familial hypercholesterolemia, there's about 1 million patients. They have different types of mutations, especially around -- there's several mutations being described now with LDL receptor genes, and so they have various dyslipidemias of either triglycerides or LDL. And then you have just refractory hypercholesterolemia, those that don't respond to PCS, et cetera. So you have several million more people that could actually be eligible for a therapy like this, not to mention someone who's saying, or family history of heart disease, and I just want to control my LDL now. So I think you're going to see eventually millions of people being treated with therapies like [indiscernible], which targets [indiscernible] and it's a built-in bispecific in a way because it addresses both LDL and triglycerides.

What should we expect for disclosures from this program in the second half of the year?

Last year at American Heart Association, we disclosed data for 15 patients in our dose escalation part of the study. Now we'll disclose data for -- obviously, there's durability data from that initial set of patients dose, but also now what we're doing is a Phase Ib, where we're showing the specific effect in each of these subpopulations. And we'll show data from as it applies to subpopulations at different -- at the right dose level to figure out what the go-forward dose is going to be in a Phase III. And I think this is also data that we would take to the regulators and hopefully, that's the basis for some of these designations like [indiscernible] that allows to have a seamless dialogue with the agency about how to develop this for the broader population. And so that's something that we intend to do in the later part of this year and should be part of the broader update on this program.

I want to spend a minute also on the [indiscernible] programs. Where do you guys stand on this given we haven't seen any of the [indiscernible] data are highly anticipating us now.

The data for [indiscernible] from the HORIZON study is one of the most anticipated readouts for the entire pharma industry. And this is a trial for those who are new to the LPA field. It's very clear from population studies that high LPA equals high risk of cardiac events or high MACE risk. And it's better to have low LPA, but is pharmacologic reduction of LPA sufficient? And will that actually reduce your risk on a go-forward basis, is something that has not been shown before and the HORIZON study attempts to do that. And I think we'll see what the level of benefit is that we'll see from HORIZON that inform our go-forward path for CTX321 or 320. We have 2 assets that both reduce LPA levels, and we want to get the most potent asset, which could be CTX321. But based on what we see from the various subgroup analyses of Horizon as well, we'll decide what the cutoff should be for our Phase II studies for LP going forward. So to be defined to be defined based on horizon, which makes -- I mean, I think that's what happened is we had CTX320, we completed dose escalation. We had a pocket of time here before HORIZON trial read out in terms of deciding what the go-forward path is. So that's why we're parallel processing, a second asset, CTX321, and we'll make the decision based on HORIZON data.

Great. I do want to also talk about treatment-resistant hypertension. Just to remind people what this program is, what the target is, what kind of patients are we thinking about here?

Yes. So 30 which we said we committed to starting a clinical trial in the first half of this year, and we're on track. CTX340 targets angiotensinogen. Angiotensinogen is a substrate for the entire RAS pathway that regulates your blood pressure. And it's been shown through sRNA trials that are being conducted by Roche and Alnylam, that reducing the level of [indiscernible] angiotensinogen, which is mainly produced in the liver can have a profound effect on your blood pressure. In fact, they showed across 3 trials, systolic blood pressure reduction anywhere from 9% to 19% in various other populations. And so what are we trying to solve here? We're trying to say is there are patients with refractory hypertension that are on 4 or 5 different medications. They have some combination of ACE inhibitors, [indiscernible] that block the an angiotensin receptors, you have [indiscernible] and you have lost pathway drugs as well. So people are in different drugs to try to manage their blood pressure. If you can just reduce the angiotensinogen in circulation and get a baseline reduction that's meaningful for these patients. Not every patient may come back to normal blood pressure, but you've basically brought these patients back from 4 or 5 different agents a day to potentially 1 agent a day even if they're not fully normalized. And that's a pretty meaningful improvement for these patients because, one, not ever is compliant. Second is all these drugs have side effects that compound as you take on many different medicines, and so this will be another paradigm shift where you could potentially completely alter the blood pressure profile and reduce the toll blood pressure, while keeping it safe. By the way, there have been no hypotensive events in the cardia trials reported to date with the sRNA. So people say, why not just take a once every 6-month injection if you can -- or once every 3-month injection if you can -- but I think gene editing again, gives you the baseline that doesn't have a sawtooth effect. God forbid, you take patients off their regular medications because they're an sRNA and towards the end of their dosing period, they have elevation of their blood pressure and something bad could happen. And so it's better to sort of have a nominal -- but have a consistent control that's predictable in these patients so you can titrate everything else.

Okay. Just given that the data is out there, where do you think the bar is for eleclinical study?

For the reduction in state blood pressure. Well, I think even high single digits, low double-digit reduction of solid blood pressure is a pretty meaningful win for these patients. I think some of these patients are severely higher than what normal is in terms of lot pressure, but if you can reduce it in double-digit levels, you brought probably much closer than normal. That's a very major improvement for these patients.

And we'll spend a second also on your own 4 rate for sRNA that CTX611. How does this vertical fit in with all the other things you're doing -- is there like cross program synergies or learnings here?

Yes. That's how this program started in a way the idea for us, which is we're committed to building a cardiovascular franchise. And 1 of the other areas that's very exciting in cardiovascular medicine is the anticoagulation space, which hasn't seen much innovation for a long period of time. And it's very synergistic with what we're doing with all the other cardiovascular trials. But Factor XI is not a target that you want to permanently edit. And so an SRN it makes a lot more sense, and we're talking about potentially a once every 6-month siRNA because you're only using this sort of for a certain period of time, we're not lifelong going to use this drug against Factor I. You're going to use it when you need anticoagulation after surgeries, but you don't want to have bleeding risk, you may need it if you have certain conditions where you may take it for a long period of time. such as secondary stroke prevention or you could do it if you have certain conditions like afib. But I think this is something that you want to use when needed. And sRNA actually is -- could be far more beneficial than an antibody, which some companies are developing or small molecules. And the reason for that is by effectively eliminating Factor XI at the route source, you never give it a chance to form Factor XIa, which then ultimately forms Factor Xa, which is the central node in both the intrinsic and the extrinsic pathways of coagulation. So what we're doing here with Factor XI is effectively shutting down one of these pathways, which is important for thrombus formation. But at the same time, allowing the preventing bleeding by allowing the tissue factor pathway to continue to remain active. And so that sort of logic behind this program. It fits in with the rest of what we're doing in cardiovascular medicines. And the sRNA vertical is still genetic medicine is still nucleic acid medicines that fits from a capability standpoint as well, whether it's manufacturing, analytical, et cetera.

You have guided for some data in the second half of 6% this program. just maybe a brief for capital for the trial design and what should be looking for?

Yes, an important trial in this space for Factor XI therapies is the TKA study. It's a total knee orthoplastic surgery. And when you -- when people have their needed placements, for instance, they're not very mobile. And during the recovery, there is a very high chance of DVTs. And some of these could be even be fatal. And so they -- most patients get some sort of agent to prevent DVTs [indiscernible] at the same time, you can't use DAX in this setting because you get a lot of bleeding if you use [indiscernible] after you're recovering from a surgery. So that's not possibly there. So even with agents like [indiscernible], you've got a 1 in 5 chance of forming a DVT, some more severe than the than others. But can you prevent that from happening with the Factor XI agent, and that's what we're trying to test here with our trial and see if you can reduce that percentage. And that's what some of the other Factor XI agents have shown. But it's a good trial where you have a control arm and you can actually see where you stand in the kind of pecking order of different therapies for Factor XI and allow informs to a large extent, we're going to invest in trials going forward. Some trials are obviously very large, like the [indiscernible] secondary stroke prevention trial was thousands of patients. Others will be smaller like cancer associated reduction, for instance. But we have -- we'll determine our path forward on a Phase -- for Phase III based on this TKA study and also forms the basis for going to the regulators because we'll have a much better sense of the PK/PD and how the drug is acting in patients.

Great I don't want to skip [indiscernible]. I know you guys have like a lot of subjects. But I'm going to ask something that is out of order for me just because it's from fresh off the process this morning. Any thoughts on kind of the utility, nonfutility data from allogene is one very interesting study looking at frontline deal BCL as it relates to MRD positivity.

Yes, absolutely. [indiscernible] for thinking of this paradigm of consolidation post standard frontline treatment. And the data tells you that there are we always think of some of these frontline therapies as curative like [indiscernible] et cetera, but they're not. There's still some cancer cells left and you want to consolidate those. And I think it shows that cell therapies can get to places that biologics may not. And at the same paradigm carriers were into autoimmune disease, which is why I'm so excited about it for cell therapies in autoimmune diseases. And whether it's this paradigm or the paradigm we're doing where we use cells to deplete all the cancer cells and then consolidate with something like [indiscernible] continuous dosing. I think both these paradigms can be very meaningful. And I think I hope it brings back investment for cell therapy in oncology, which has largely been out of favor to a certain extent at this point. For us, our -- we're fully committed on the autoimmune front with [indiscernible], and we're progressing multiple indications in parallel, but we also have this portuburdenib combination, which I think could be very interesting in the oncology setting.

Spending a second on the value proposition for autoimmunity. You guys did see, I don't know, about [indiscernible] in your studies, again, this is in oncology. I mean is this an issue or there's a different tolerance first CRS not a new disease.

In autoimmune, you probably will not see the same level of CRS. And the reason for that is because the B cell burden is a lot lower. In a cancer setting, the [indiscernible] burden is probably almost 10x that of what you're seeing in autoimmune disease. You don't have an overabundance of B cells, you just have pathogenic [indiscernible]. And so unlikely that you're going to get the same level of CRS and also the doses we're exploring in autoimmune disease are lower than what we're doing in oncology settings.

So let's talk a little bit about the autoimmune direction. You've mentioned this multiple times in recent presentations. Just trying to understand the investment and kind of -- where do you think you're going as it relates to an indication? I know there's a pretty large basket study that's ongoing, but if you can give us some broad strokes here.

Absolutely. I mean we're expanding indications as we speak, we're going from the room basket Initially, we were going after myositis and scleroderma. We've now expanded it to [indiscernible], and we're looking to further expand into other indications, particularly in the CNS realm. So we're quite encouraged by what cell therapies are doing in general in the autoimmune arena. And this is where we don't think that typical biologics or even TCEs can have this one-shot cure that we could get with cell therapies. And that's where [indiscernible] why we're so bullish on the whole opportunity. across all these indications.

And as it relates to data disclosures in 2026?

We'll have an update on [indiscernible] second half of this year. We'll tell you where we are in both autoimmunooncology -- and hopefully, by then, we also have forward from the regulators in terms of what a pivotal trial might look like in some of these indications.

Maybe in a personal note, I mean -- hopefully not another SMA study like we seen too many of us.

Yes. I mean that is a conventional thing you were saying that there are too many studies for SLE, and it's hard to enroll patients. But we continue to see a lot of unmet need even in SLE. And particularly because some of the biologics and even some of the TC trials may not be doing doing the trick of immune reset. So -- but we'll provide more information on how we're taking this forward.

Okay. And a little bit of other category, just what updates can we expect this year from CRISPR's generative medicine portfolio.

Yes. On [indiscernible], I think we're taking bringing for CTX213, which is our IPS-derived multiple edited cells. We're -- we haven't said exactly when we're going to get into clinic with that. It's more likely to be next year. But at the same time, I think the edits we have on there may be best-in-class. You have 3 or 4 companies that are pursuing this sort of approach, but the market is huge and it's really going to come down to whose data are better. But the edits we've picked for immunoagent as well as making the cells more robust. We're very confident in that I think it was going to work the best.

Great. Maybe I'll use the last few minutes just discussed. What do you think people are missing about Mister what would you highlight as something that people should be paying attention to, but maybe or not?

Well, I mean we have a very huge pipeline. In fact, we didn't even talk about [indiscernible] and that program is going to the clinic soon. So we have 7 assets outside of CASGEVY that we're advancing. And we'll have data for at least 6 in the next 12 months. And yes, I think a lot of the attention is on CASGEVY. I mean that's typical human nature is to focus on the lead asset. And we're confident that as CASGEVY going to turn the corner and flex here. And we meaningful contributor not just to us, but also the Vertex even though they're a much bigger company. And as that happens, I think the focus will shift towards our other programs. And we'll be in a position with data across a lot of other programs to say what's the next leg of the company. And I think we're doing all this from a sum-of-parts perspective, there are other companies in each of these spaces. And if we -- we're doing all of this in a relatively lean fashion that all the other companies are doing singular with singular focus, but we can potentially best-in-class across all these. And so as cell and gene therapy comes back in favor, we're poised to lead it from the front, in fact, sort of consolidate some of the [indiscernible] various pieces of the space to become the leader in the space by far. And I think that's sort of the goal. And Phase 3 of the company will tell we'll be now we're going from becoming a $5 billion company to a $15 billion company in the next 3 years. Phase 3 of the company will be how do you go from a $15 billion company to a $50 billion company or more and I think that's also something we're working on now, which we won't talk about. But obviously, there's transformative medicines out there that we can create that could completely change how we think about therapies even for common diseases.

It doesn't hurt to have a strong balance sheet either.

Absolutely. I think that's the advantage we have is we have a strong balance sheet, yet we're efficient and that allows us to invest in multiple areas, especially when others are retrenching.

As always, I appreciate your time.

Thank you.