CRISPR Therapeutics AG ($CRSP)

Hello, everyone. My name is Alec Stranahan. I cover CRISPR Therapeutics at Bank of America. Thanks for joining the session with CRISPR. And Pleased to introduce Sam Kulkarni, the Chief Executive Officer at CRISPR for this 30-minute fireside. Thanks for being here.

Thanks for having us.

Yes. Great. Well, maybe just to kick off, you've described 2026 as kind of a stepping stone year, some pretty important early readouts from 6 programs in the second half. I guess, how do you sort of prioritize the focus within the company on the earlier stage versus supporting CASGEVY? And where are you sort of directing investors sort of in the remainder of this year?

Yes. It's an exciting time for the company. We've been around as a company for about 11 years. And the first phase of the company was all about CASGEVY and bringing that to the market to patients that really needed a drug that were suffering from sickle cell and thalassemia. And upon the completion of that phase or have got that to the end of the clinical trials and to commercialization, we started a number of other programs. And at this point, we're in the second phase of the company where these assets are starting to mature, and we're seeing more data. So we have 6 assets, as you said, that will all have data in the next 12 to 18 months, and those are One bucket of that is in cardiovascular. That's with CTX310 that targets ANGPTL3. This is a program that could reduce your LDL cholesterol and triglycerides by almost 50% with a single injection. We have Zugo-cell , which is a cell therapy for autoimmune disease and a single infusion of that can reset the immune system and treat not just 1 or 2, but several autoimmune diseases. We have CTX-611 which is a long-acting sRNA that basically is a promise of a blood thinner, efficacious blood thinner without the risk of bleeds. So that's another powerful concept, that could be a $20 billion market. And then beyond that, we have the extension of some of these programs, like CTX-340, which is a program that treats hypertension by targeting angiotensinogen which is upstream of the ACE R pathway. And that is an important target that can actually reduce our systolic blood pressure by over 10 millimeters of mercury. So that's a powerful concept. And of course, we have Lp(a), which is a highly watched event in the industry. This is the HORIZON trial from Novartis, that can form which way Lp(a) and finally, we have forray into rare diseases with alpha-1 antitrypsin. And we think we have a best-in-class product for that program. So yes, our plates are full a number of these assets. And by the way, we have preclinical platforms as well that we're moving forward. How do we think about resource allocation? I think CASGEVY, over time, we expect the spend on cash to keep going down at some point will turn profitable. And then we have to get to what the Phase IIIs are for these assets that we just talked about and then advancing the preclinical to clinical. So it's hard to put exact numbers on this, but -- right now, it's 40, 40-20, it probably becomes more 30-50-20 over time, but I think we're keeping a careful eye on all this. And we gain tremendous efficiencies by doing a portfolio of products versus one.

I guess when you think about CASGEVY and sort of how that's helping you build a growing base on the top line for supporting the rest of your clinical investments. I guess maybe at a high level, like how is that launch tracking with your expectations? What are sort of the trends you're seeing end of last year and the beginning of this year sort of on the scripts and any other comments coming out of the 1Q print that you highlight?

Yes. It's gaining a lot of momentum. It's very different from typical launches. Typical launches, you can start tracking new Rxs or total Rxs right away and patients are getting treated right away. Here, we're talking about a 1-year lag between a patient coming into the program per se and saying I want a CASGEVY, treated and then for revenue recognition. And the reason for that is we have to collect the cells manufacture it, get them back. Now that causes a sort of -- it takes time to build up. So initially, we build the ATCs up and you have this time period between initiation and infusion, revenues sort of take a while to start ramping up, but you're seeing that ramp now. And if you think about the funnel in terms of 3 different parameters. One is the number of patients initiated. And what that means is the patient has gone through a referral, expressed an interest in getting Casebia, Oftentimes, they're already preauthorized from an insurance standpoint. Then those patients then move to the next step of the funnel, which is cell collection and then finally to infusion. And there is a time lag between all these. But if 1 starts inflecting, if initiation start inflecting, you're going to see quarter -- 2 quarters later, you're going to see an inflection in collections in a quarter or 2 later, you're going to see inflection in revenues. And what we said in this recent 1Q, as you called it, which is in the first year of last 2024, we initiated about 100 patients. This is our partner Vertex leading commercialization. The second year of launch, '25 was 300 patients, over 300 patients. So it's a 3x increase. And in this 1Q update, we just said that we have over 500 patients initiated. So you're seeing almost exponential progression in terms of patient initiation and that momentum continuing, which should translate to greater revenues. And the other thing is we're establishing this around the world. We're continuing to get tailwinds. For instance, we've now submitted for a pediatric label. Right now, the approved label in the U.S. is 12 and above in terms of age, we'll get it down to 5 and above because you want to treat kids early before there's any damage to their vascular system, any damage to their organs, that's a tailwind that's going to help. The second thing is reimbursement. We just announced reimbursement agreement in Germany. And that, of course, was one of the hardest ones where a competitor of ours have tried to go in there and then withdrew their product because they couldn't get reimbursement. But with CASGEVY, we have a reimbursement agreement. So those tailwinds will start to add up and continue the momentum well beyond what we're seeing right now.

Great. And I guess when we think about the conversion of patients in the funnel to revenues, I guess, what kind of visibility do you have? And what's sort of the timing around that exponential growth, as you said, in the new patients going on or getting the cells extracted right, for the manufacturing. How does that acceleration kind of then accelerate the top line growth?

Yes. I mean I think that's why I said it's probably -- there's some lag, whether it's 2 quarters or 3 quarters from initiation to the revenues. It's hard to say at this point. But it's a certainty that it all falls through because you're not seeing patients drop out of the journey. So it's just a matter of time. And over time, that time line won't matter because you're going to have a constant shape of the funnel, if you will, is equilibrium around that time line from initiation to launch or to getting infused and recognition of revenue -- so overall, I would say we have forward visibility. Our partner Vertex was very bullish on the expectation -- or I guess they didn't guide to the exact number, but generally a positive guidance around how they expect case do. And I think from what I hear from physicians and patients, the word's getting out there. This is without sort of a classic DTC marketing and all that stuff. All the patients know about it. and more patients are interested in getting the therapy, which is great for the entire population.

Yes. No, that's great. And I know you're also developing, I guess, or conditioning agents and pursuing in vivo HSC editing to sort of broaden the access further. I guess how material a difference could gentler conditioning make in real-world uptake? Has this been sort of a barrier from your experience? And I guess, when could that data be available?

Yes. I mean we haven't guided to when gentle conditioning might come into play, but it will be a major tailwind for the product. And the reason for that is it expands the population you go from just the most sickest of sickle cell patients to saying even the ones with moderate disease should actually get caster. And what you're looking at then is just potentially a 3-day hospitalization, so it's -- that's why it's called enter conditioning and it's very targeted depletion of the cells of the -- as to make room in the marrow. So we feel very good that that's going to be the next leg in the life cycle of the product, and that's going to expand the addressable market almost 3x if we can show that this using gentler conditioning can lead to the same results that we saw with the full busulfan conditioning. And I would expect that the value of the product would significantly go up whenever we fully disclose the time line of gene conditioning that's coming into play.

And I guess as we think about the commercial landscape, there are, I guess, alternative distributions with beta val in sickle cell disease. in practice when physicians are choosing between CASGEVY and say, like a lenti-viral approach, what are sort of the key decision factors there? And is CRISPR winning those conversations?

Yes. think right now, ex U.S., CASGEVY is the only option, right? You don't have any other products available for patients. So that conversation is different, obviously. It's just do you want to do a curative therapy and when do you want to do it? In the U.S., in some of the sites, both CASGEVY and the gene are available. And you're seeing some share split at the moment. But generally, what we're finding is that the physicians now that they understand that CASGEVY has a lot of manufacturing support. There is strong companies behind it, with Vertex and us and it's a reliable sort of partner and deliver the drug product to patients, I suspect that you're going to see more and more patients shift towards CASGEVY. And 1 simple reason because when you have a viral versus a nonviral product, I mean, you're safer picking a nonviral product because you just don't know the unknown of having a retroviral space product. Now not every patient will care about that nor every physician. But I think you're going to see a share shift towards CASGEVY, that will be palpable.

I guess circling back on the pediatric review, you've got the commissioners and care, I believe, for that. So that could be available soon, right? If they're true there word on sort of the expedited review there. How do you think of that as a TAM expander getting patients? Like is there a higher demand in younger patients for sort of a onetime treatment like this from your experience?

Well, it's just another bolus of patients. Right? And I hope with the agency we get that approval soon to go into these younger patients. The other thing is you're going to get a number of other centers into play in a big way. A lot of children's hospitals are actually very good at doing these type of procedures. And they can start bringing their patients into the mix and become some of the higher prescribed centers. And so the pediatric expansion definitely will be a tailwind, not just from expanding the number of patients available in the bolus, but from a center activation standpoint as well as or the center velocity of treating patients. So we expect that to be a major positive.

Okay. Any other tailwinds or headwinds that you think could impact CASGEVY this year? I know we saw $43 million in 1Q, but is sort of the way that the Street is thinking about the escalation in sales, is that -- is that realistic?

We don't see any headwinds at this point, really, it's -- our partner Vertex doing a wonderful job executing against the program and a lot of it is operations with supply chain, with all the patient handling and everything else. So they're doing a great job. And I think I only see positive momentum of the program. So it's hard for me to say what the Street expectations are and there's different analysts who cover CRISPR versus Vertex, et cetera. But generally, we feel comfortable about the trajectory of the product.

Okay. Great. Well, I do want to maybe shift gears here and talk about the pipeline, which I'd say is equally or even more exciting for sort of the future growth for the company. But maybe just starting with CTX31-310. This is your LDL-lowering ANGPTL3 asset. I guess you showed a single dose reduction LDL, triglycerides safe early profile, what sort of response thresholds in homozygous FH and severe hypertriglyceridemia would be a sufficient to design a registrational trial? Like what do you think is sort of the bar for investing further in this program.

Yes. For those who are not familiar to the program, we showed some landmark data in a late-breaker at American Heart Association last year. And these data were for 15 patients that are CTX-310. And one, the LNP-based delivery was very safe. We rarely saw an elevation of liver enzymes. And even if there's some elevation in self resolves within a very quick period of time. So it's very safe. So you have this prospect of going out there and get sitting in the chair or 3-hour infusion, and your liver cells are edited, and you're going to have a 50% lower LDL or triglycerides for the rest of your life. And that's a pretty powerful concept in how medicine may evolve for cardiovascular to treat cardiovascular risk or prevent cardiovascular events based on some of the risks that are seen earlier. So where does this take us on the program? Obviously, something like that is moments, but people are still trying to get their handle around how is gene editing perceived by the physicians, et cetera. I see a big disconnect. If you look at our inbox on the info at CRISPR, we get so many requests from patients around the world who want to do gene editing for their triglycerides or LDL cholesterol. Physicians are universally excited about what the prospects are here. And by the way, this is not going to be an expensive million-dollar therapy. It's going to be much -- actually going to save the system money at the end of the day by doing it 1 and done. So I see something 310 having unlimited, uncapped value, but it may take some time for the value to be recognized. And I think a lot of that will be based on going to the FDA or the international agencies to say what is a path forward for Phase III. And to your question, for HOFH, which is homozygous familiar hypercholesterolemia, I mean, the bar is very low. All you have to show is that there's further reduction of LDL cholesterol post agents like PCSK9. And we already showed that for 2 patients in the initial data set. For severe hypertriglyceridemia, which is a large population, by the way, much larger than people think, again, the bar is not very high because you've already seen a lot of triglyceride reduction. We just need to do it a few more patients and put the data together and go to the FDA and say, this type of registration trial makes sense here or not. And I suspect you're going to see a favorable opinion from the FDA in terms of how big a trial needs to be and how fast we can go. So I think that will be the unlock on 310 and similarly for 340 is to get regulatory guidance around what the path to registration might be. And that will come sooner.

Yes. And I guess on 340, different target here, but I guess when this enters the clinic in the first half, what is sort of a twice yearly or what does a CRISPR edit offer over like a twice-yearly RNA in this indication? And is there kind of a minimum efficacy or blood pressure reduction that you'd want to see?

Well, the benefit of a gene edit for blood pressure is, let's say, people have varying degrees of high blood pressure, you can just basically reduce everyone's blood pressure by 10 to 15 millimeters of mercury and still modulate with a different medicine, right? The problem with siRNAs, that's every 3 months, you may have 1 that are or 6 months or whatever, right? But towards the end of the dosing period, you're going to get a creep up in their blood pressure. And that's kind of dangerous for these patients because all it takes is 1 hypertensive event and something fatal could happen or something bad could happen to the patient. So what you want is consistency of blood pressure so you can manage these patients. And that's what -- that's the promise of CRISPR gene editing. Even with the best sRNA out there for Lp(a), you saw that after 2, 6-month cycles, only 80% of the patients were -- remained in control for the entire period of time. So towards the end of the dosing period, you're seeing people be on control from what's recommended. So I think at some point, this question is going to flip and say, why not do gene editing, because it's safe? And why would you take your -- if you're a high LPA for instance, and you realize that when you're 15 years old. Why would you take twice a year sRNA for the rest of your wife when you could gene edit? It does not make sense. You could have compounded toxicity for putting a lot of RNA material into your liver over a long period of time. Like you don't know what the effects of that those are. So I do think that this question will flip and primarily led by the physicians because they all see this as a better way to treat patients.

Yes. That was actually something I was thinking of, too, is like which patients actually derive the biggest benefit. These are large disease areas. This is -- a patient with 30, 40 years of life ahead of them, is that kind of the ideal patient group versus say, a 60-year-old with hypertension or ILDL, like, is there a way to sort of like break down the market opportunity here? Would you even want to do that at this point?

Yes. I think we're doing a lot of work on that. I think it's going to -- 1 of the access is going to be attitudinal as well, whether it's a 30-year-old, a 50-year or 70-year old, there is an element of patients saying, "I'll take the risk and do gene editing, right?" And that this will happen in our sickle cell patients and trials. It wasn't that all the patients that came in were the sickest of patients. Some people who said, "I'll take a chance because I can't live with my disease anymore." And you're going to see that, I think, over here is more of the access. The other access is you're going to get for genetic conditions like LPA, even though pretty early in your life that you have ILPA -- and if you have ILPA, some people have LDL levels above 300 milligram per deciliter. You probably want to take it even sooner rather than later. So you want to do it as young as possible. With hypertension, you're likely to get it more later phase of your life. So you're going to be older. But some people have very high blood pressure that's uncontrolled and they won't have a choice but to do it, right? And then you have LDL, which is a different follower segment of the population in any different ways. Do they have high LDL and high triglycerides, do they only have LDL, have they tried PCSK9, what it's going to be. But the thing is, whichever way it slice and dice, it's a huge market. And so we're playing in major markets in a way, a global scale where we could benefit all sorts of people at different levels of risk.

It's not like you'd have to break that down preemptively to run like a papal study that you could wrap your arms around, right?

Yes, we don't have to. I mean I think like if you can do a severe hypertriglyceridemia trial based on pancreatitis events, that is a registrational path that could get us there and get us a label. And beyond that, I think you can -- the label and the marketing will -- we can obviously influence it. But I don't think we need to a priority determine exactly what the market sizes are and the market potential.

Yes. Makes sense. Maybe shifting gears to autoimmune and oncology, I think Zugo-cel, great name, by the way, that's a new name.

At no coincidence because we're based in Zoom, Switzerland, but I just haven't.

I see the connection. Yes. I guess are the CR rates in DLBCL sort of tracking with what you would have hoped and you're expanding into multiple autoimmune indications. I guess how do you prioritize these different arms of development? And is there maybe a minimum data set you need where you have registrational conversations with the FDA?

Absolutely. I think Zugo-cel is the best-in-class allogeneic CAR-T for CD19 because of the edits we made to it. And it's autologous like efficacy, but with the convenience of allogeneic and the cost of goods like allogenic. So in oncology, we showed nearly 70% CR rate with Zugo-cel, with at least 2 of the patients at the time of data cut who were past 12 months, it's durable. Now what we've done also is start dosing patients with a BTK combination for tubernnib. And it's seen from some of the investigator-initiated trials that somehow the BTKs actually potentiate the CAR-Ts even more. So we end up with -- in that study, it was almost 80% CR rate. So if we can push that up even more, we can be better than autologous therapies. But I think our strategy in oncology is to potentially get an approval of a single-arm trial in late stage and then pick off patient populations in front line that would perhaps cannot or not eligible for auto, that are failures on bispecifics, et cetera, because we did show a really good response rate on bispecific failure patients as well. In autoimmune, our goal is to lead the pack and become the predominant or preeminent player in autoimmune disease. And that's our #1 focus. Our Chief Medical Officer whose name is Patel, came from Sanofi, where he was leading the autoimmune franchise there. And we're translating a lot of the learnings into how fast we can move in autoimmune indications with Zugo-cel. This could be an argenx-like platform. Any disease that's B cell mediated, you could have a onetime reset that gets out of the disease. And so we're we start with this trial called the AID500, which we were dosing patients with lupus, myositis and scleroderma. Now we've expanded into 2 other diseases, ITP and AIHA where we're dosing patients -- and now we've opened an IND for neuroimmune because we've seen hyper on in vivo CAR-T, we haven't seen those CAR-Ts go into the CNS system, where Zugo-cel, we have evidence that it goes into the CNS system, actually can eliminate B cells in the spine or in the brain. So that has tremendous implications for indications like multiple sclerosis. NMO, et cetera. So we've started that trial for neuroimmune indications as well. So it's literally all systems go for us on Zugo-cel. And we announced a big dose 14 patients for our 1Q update, and we'll provide further updates as we go along.

That's great. Obviously, autoimmune CAR-T space is heating up and it's quite competitive. Do you see -- is that kind of a fire lit under you guys to really accelerate things and push forward? Or -- how do you sort of maintain your lead given the wealth of development going on?

Well, I think we're in a good position because the auto CAR-T you can only go so fast, right? There's a natural governor on how fast you can go. And so you've seen that where there's a big company like Novartis or BMS or a small company like Coventor Cabaletta, even though they had a 3-year lead, they can only go so fast and more patients. . I suspect that by the end of this year, we'll have those more patients than some of the autologous companies because we can go that much faster. And so we'll catch up to the autonomous players. Now you have a second set of threat in terms of the TCEs and they can equally -- move equally fast. And you've seen some of that. But we don't think it's going to be a onetime reset in an elegant beautiful way that we can do with CAR-Ts. So we have competitive edge or TCEs that may require multiple dosing and they still come with the risk of CRS, et cetera. And then finally, the in vivo space, in CAR Ts, we're working on that as well. We have our own in vivo transient car -- redoseable CAR-Ts that showed complete B-cell depletion in monkeys with the 1 or 2 doses. But I think it still has -- there's more work to do to get that to patients and see what the effects are in patients. So at this point, I do like -- I think we're in pole position. And as long as we execute, we can actually lap everyone else but we'll have to show that over the next months to a year in terms of execution.

Okay. That makes sense. I want to ask about your siRNA collaboration with Sirius. I know we talked about the benefits of a onetime gene editing approach of siRNA and like LDL and those indications. This is a different application. Is this -- is this more just a right tool for the job? Or anything to read into sort of your leaning into siRNA through the fraction.

Well, I think the wins came out as we were building a cardiovascular franchise with ANGPTL3 and LPA, and we were talking to all our station company members about what else is exciting in cardiovascular medicine. And Factor XI kept coming up. The promise is you have a very effective blood thinners out there in the market. These are Factor Xa based drugs, but they come with high levers if you're on slot dinners, like especially if you're old and -- you're taking it for stroke risk, whatever you have an injury, you can bleed to death. So is there -- what's the holy grail is to have the same level of blood thinning without the bleed risk? Now you don't want that for life, so you don't want to gene at it. Factor XIa because that would be something that's unnecessary. Let's say you're doing this for an acute phase out for surgery or something like that. But we do believe that all of medicines moving towards long-acting I don't think in 10 years, you're going to be taking a pill a day. You're going to be taking one every 6-month injections or once a year or generating for life. And that's going to be the majority of medicines. And so we are going to place that long-acting aspect with this factor of siRNA that right now seems like best in class. It's -- it could be once every 6-month dosing. This is with our partner, Sirius. And there's so many indications you're going to go in, whether it's secondary stroke prevention or there's patients that are not eligible for DAX, whether it's patients that are -- that have peripheral artery disease post revascularization. So all these are trials that we can do. Now of course, there are some -- any attractive space, there's going to be competition. There are some antibodies from Regeneron and Novartis that are also playing in the same space and a couple of small molecules. But I think an sRNA approach could be the most powerful approach, especially with its dosing convenience.

Okay. Great. Well, looks like we're out of time, plan going on at CRISPR over the next 12 months. So looking forward to seeing the updates. And Sam, thanks so much for the conversation.

Thank you very much.

Thank you.