CRISPR Therapeutics AG ($CRSP)

All right. Thanks very much for joining us here this afternoon. Last cab off the rank, but certainly one of the better ones, I think. Welcome back to the William Blair 46th Annual Growth Stock. My name is Myles Minter. I'm a senior biotech analyst here at the firm. I cover the neurosciences and genetic medicines. I also do cover CRISPR Therapeutics, which will be the topic of today's discussion alongside Sami Corwin, who can't be here today. Before we do get started with this chat, I do have to point you to important disclosures that are available at williamblair.com for people in the room and also people listening online. And with that, it's my pleasure to introduce Raju Prasad, the Chief Financial Officer of CRISPR, joining us here from Boston. Maybe we can start with just a sort of brief overview of the company. Obviously, you're a leader in the genetic medicine space here, first CRISPR-approved therapy with CASGEVY, which is well and truly on its way into launch. Maybe talk a little bit about the product profile there and then also what you're working on in your pipeline, that would be a good place to start.

Yes. Sounds great, Myles. Thanks for having us again this year, and it's always great to be back in Chicago at the Blair Conference. CRISPR Therapeutics now is over a decade old as a company, and it's been almost 15 years since the first discovery of CRISPR as a technology and the seminal paper came out in 2012. And so we're really hitting this sort of adolescence as a field of gene editing. And we do believe that we're one of the leaders having the only approved product to date in CASGEVY, which is partnered with Vertex Pharmaceuticals. And right now, as a company, we're sort of going through the growing process of determining what is going to be our next second, third and fourth programs that will end up pushing towards commercialization. And what we've done is we've taken several therapeutic area strategic bets. And so we've got clinical programs in cardiovascular disease, in autoimmune and oncology as well as in siRNA franchise, which we did to not only diversify our product portfolio, but also to provide us with an additional clinical catalyst that is going to come in the second half of this year. So going into the back half of '26, we actually have a very active catalyst calendar, which will help chart the trajectory of the next phase of this company, but we'll have 5 clinical readouts. And on top of that, we're also putting 2 additional programs in the clinic, which we're hoping to have data in the next, say, 12 to 18 months. And so this is really an active period of clinical development for the company. And this is all layered on the foundation of CASGEVY, which, as you mentioned, is really starting to produce meaningful revenues, and we anticipate growing over the next several quarters.

Yes. I appreciate that. Maybe we can start with CASGEVY. I think it's roughly 500 patients that have been initiated down that treatment path. But there's potential where the geographies are currently approved for 60,000, I think, was the number that yourself and Vertex have put out. So talk to us about how 500 goes towards that 60,000 number and the evolution of that product profile, that would be helpful.

Yes. I think one aspect of the launch where we think we've done a very good job, we think, of building the foundation in 2024, but maybe the investor community hasn't appreciated it fully of the infrastructure that needed to be built before the more sort of normal metrics of revenue recognition reporting comes out is the fact that with a therapy like CASGEVY, which has the transformative impact and the clinical benefit risk profile is fantastic for patients is that there was a foundational year where we had to onboard what we call ATCs and bring sites up and then patients start a journey where they -- as you mentioned, they're initiated, they get their cells collected, they are then manufactured and then we receive revenue -- or Vertex received revenue recognition on infusion. And so as we built the foundation of these ATCs, and we're now well over 75 ATCs, we've now brought in 500 patients, as you mentioned, into the top of the funnel of the patient journey, and we've infused about 100 or a little over 100 patients where we've recognized revenue over the past several quarters. We're now entering this phase where we can start growing the funnel and do so in a global manner, which we are the only therapy that is globally approved and commercializing outside the U.S. And I think what you're now going to start seeing is some of these numbers grow. And the good thing that we're seeing in the funnel is that we're seeing a very low dropout rate. So once patients contribute to -- or sorry, they join the journey, they're really going to see it through to the finish. And I think as we've seen in sickle cell development and in the sickle cell population, this is a very devastating disease. CASGEVY now as of the latest update has patients free of their crises for 5-plus years. And as we've seen from some of the development candidates and even one fairly recently, it's very difficult to get a product approved and keep a product on the market that has a significant disease-modifying potential that CASGEVY has. So we're -- we think we are just at the beginning of what we continue to believe is a multibillion-dollar opportunity, and we're very happy that we have a worldwide leader in Vertex leading the commercial launch.

Yes. Makes sense. I believe Vertex has said that CASGEVY at least for this year is going to be a meaningful contributor to their $500 million ex-CF revenue. You're in a 60-40 profit-share split there. What's the cadence of getting CASGEVY to meaningful profitability for CRISPR as a company?

Yes. And we get this question a lot. I think our stance is it's not a question of if but when. Again, we see significant demand. Patients are doing very well. The ones we've -- that are self-identified from the trial are running marathons now, they're climbing Mount Everest. And so we're very happy with the clinical profile of the asset. I think from our perspective, we see there's various layers to our collaboration with Vertex. We've got the CASGEVY partnership, but then there's also targeted conditioning, which is going to help hopefully expand the TAM of CASGEVY. And then we also have an in vivo HSC collaboration where we're 50-50 partners and not 40-60. And we put some data earlier this year from an NHP study where we're seeing a good editing, over 50% editing that is durable. And we think that as we continue with sort of with the patient in mind and sort of expanding the TAM and the potential opportunity to treat as many sickle cell patients as possible, we'll continue investing in those with CASGEVY. So from a CRISPR perspective, the collaboration expense item includes all of those contemplated activities. So if we are later showing that flip to profitable is because we're investing significantly in some of these other efforts. And I think that's obviously a good thing for us and sickle cell patients.

Yes. Makes sense. So definitely sounds like more patients are going into that cell collection phase. They're highly committed to see it through to infusion of the product, which is a curative therapy here. How do we think about layering on more patients or more geographies? I know we've had the BLA submission from Vertex in the pediatric population that's under the Commissioner's Priority Review Voucher Program there. How do we think about expanding geographies, layering more patients to build that number on top of that sort of organic growth curve of just patients where it's already approved coming in for that collection and then infusion?

Yes. I think we're excited that the 5- to 11-year-old BLA application was submitted or sBLA application and that we're also very excited that the FDA bestowed the Commissioner's National Priority Review Voucher on that and discussions are ongoing between Vertex and the agency. I think when you think about that population and you think about the degenerative nature of sickle cell disease, you want to treat patients earlier. And I think hopefully, if it is approved, we'll see patients getting the benefit earlier in their lives and living a healthier life from earlier. I think as far as -- we've got approval in the Middle East. We think that there's 23,000 patients or more in that territory with CASGEVY under the current profile and roughly 35,000 patients in the U.S. and EU5. We think that the demand is there for this therapy. And 60,000 patients, it is priced at $2.2 million. It's a very meaningful TAM with the product profile the way it is right now. And as I mentioned earlier, the ways to expand this TAM are the target conditioning as well as the in vivo HSC profile. And again, those are very important priorities for the company at this point.

Yes. And then just maybe talk a little bit about the competitive landscape. There is another product out there that is approved. Just what you're seeing from those dynamics. And then you've obviously made mention of some earlier data that 5 years out, durability, it's not an easy thing to accomplish. So maybe how you're seeing [indiscernible]

Yes. I mean I think it's best to sort of subquote Reshma, the CEO of Vertex, saying that it's very -- knowing what they know now as a very large organization and some of the complexities of getting up to scale and getting the foundation built for CASGEVY, it's very difficult for a small company. And I think we could even say this from our vantage point of being a smaller company and seeing Vertex execute -- to be able to execute on a launch like this. And so again, we're very happy we made the decision to partner with Vertex. We think they've done a fantastic job. But we do think that, that does give us a competitive advantage versus some of the smaller players that are coming to market or perhaps come to market.

Yes. Makes sense. I'd be amiss to say when the CLIMB-151 study data came out, we talked about the pediatrics, there was, unfortunately, a death in that trial, likely due to the busulfan preconditioning. You mentioned it earlier, but maybe you can give us a little bit of an update as to how you're working on next-generation sort of preconditioning regimens for products like CASGEVY and how important that could be for potential uptake?

Yes. I mean I think there's inherent risk with busulfan conditioning, and it's unfortunate, obviously, that occurred with the patient. But yes, I think it just highlights the importance of finding a regimen that you can take the busulfan out or have a targeted approach or even the in vivo HSC approach where potentially there's no conditioning. And I think there's an in vivo CAR-T space that has seen a lot of positive news flow recently where I think there are learnings that you can take over -- take from in vivo CAR-T development to in vivo HSC development. And we're trying to utilize some of those approaches as we do have an in vivo CAR-T program, and we put some data out on. I think from a target conditioning perspective, the way that it structurally works with Vertex is we have our own efforts. They have their own efforts. They've done several deals around this -- the target conditioning landscape with other players. And we sort of come together and sort of bring the best of both worlds and sort of decide a program to take forward. I think when that update does occur, Vertex will be able to provide that. But we're excited about the opportunity to do that for, obviously, some of the risks you mentioned that are inherent with busulfan conditioning.

Yes. Makes sense. We're jumping around a little bit, but you did mention in vivo CAR-T, and that's all in the headlines, particularly from an M&A perspective as well, a couple of very large early-stage deals but important ones. Most of those, I think, have been focused in the oncology applications. Maybe you can talk to us a little bit about how you're looking at an in vivo CAR-T program and the data you put out there.

Yes. I think when you think about our company and our scale and our know-how, because we have a liver-targeted pipeline that uses lipid nanoparticles and we're able to manufacture those in-house, we sort of had the components internally to really progress an in vivo CAR-T effort. And I think we're looking at it both from a transient mRNA perspective as well as looking at nonviral permanent CAR approaches as well, given we have gene editing technologies that can do that in a site-specific manner. And so on the transient side, this is -- we're able to deliver mRNA focused with targeted lipid nanoparticles. We put out some data with our first quarter earnings release where we're seeing depletion of B cells, a repopulation with a naive phenotype at pretty low doses, I think similar to, I think, some of the competitors that have been acquired. And then one aspect that we think is differentiating is that we're getting mRNA expression for 14 days. And we think when we're thinking about a best-in-class approach, we think that there's optimization that can be done on the binder, on the lipid nanoparticle formulation, on the payload, but also the CMC and the manufacturing. And I think the company that can figure out those 4 aspects is going to win in the long term. And we do think that, that there is still room for differentiation. And so we're advancing that pretty -- based on our preclinical work, we're advancing that expeditiously given the competitive landscape.

Makes sense. Makes sense. Moving maybe to the in vivo liver-directed pipeline. I cover numerous companies in the space. And I think the one question that it's very top level, but it always comes up is you're going after a permanent editing solution here and maybe in indications where there are available chronically dosed therapies, so like in cardiometabolic, like a PCSK9 inhibitor, we get a ton of questions from investors, like how do you choose the right indications for a technology like this? And are patients willing to put up with the theoretical risks that are associated with that if there are other chronically dosed therapies available like siRNA, monoclonal antibodies, that sort of thing. So how does CRISPR think about indication selection for your liver-directed programs?

Yes. So I think we're taking a -- with our clinical programs, both 611, 310 and zugo-cel. I think with 310 and zugo-cel, we're taking modality risk. I think that the target is pretty well defined. We think that there's a high PTRS that it's going to work. If we knock down the target, it should have a therapeutic benefit. With 611, we think we're taking a target risk and the modality has been proven out, right, or is more well accepted by investors. So for 310, we do believe that there are indications like severe hypertriglyceridemia where if we're able to get in the range, so say, 50% to 70% triglyceride knockdown, right, in the range of the ASOs and siRNAs, we do believe that in SHTG, where acute pancreatitis is a pretty severe endpoint that there will be patients that are amenable to a onetime treatment. And we have the benefit in this modality of basically seeing the pivotal trials for Ionis as well as the pivotal trials for Arrowhead and sort of understanding the powering behind those trials and sort of -- and hopefully, that will guide our development as well as our Phase I data that's going to be out in the second half. So we're really in the mode right now of putting our clinical data out. It will be a meaningful data set in patients with SHTG as well as some other of the indications, but then looking to see how we take that learning as well as the landscape to power our trials to put us in the best position to advance this asset into Phase III.

Yes. Yes. I followed the APOC3 inhibitor story for a while now and pretty game-changing looking data coming out of that class. This obviously slightly different, but related to the triglyceride lowering in SHTG. Questions that are coming up for that opportunity is 3 million patients or so in the U.S., but maybe not every single one of them is at really, really high risk for AP. How do you look at that population when you're talking about 310 and where you're actually going to run these studies?

Yes. I think we are focused on patients with AP just given that, again, it's a severe endpoint that if we're able to produce a onetime and you never have to have an event again, similar to sickle cell in some ways, that, that would be a tremendous benefit for patients. I think where we see differentiation from the APOC3 inhibitors is that ANGPTL3 programs don't increase hepatic fat fraction and then also they do not increase LDL. We actually decrease LDL pretty meaningfully. So we think that there is an area of differentiation. And then I think we do believe that, again, we are -- there's -- inherently with any new modality, there's going to be commercial risk. Right now, it does seem the way that our valuation is geared. We are taking the commercial risk right now, but we do believe that. And based on the profiles that we're seeing for patients in the clinical trials, we had the -- I actually had the pleasure of being at a site and talking to a patient. And there are patients out there that fall in a couple of categories, but I'll just highlight a couple for case studies. So there's a 35-year-old patient where this is in a major media article where his dad had significant triglycerides and he did too. And so his dad is older, and he knows that he's staring down the barrel of looking at 40 years of chronic therapies. And so he said, why not, right? Why not take this onetime therapy and sort of hopefully have a lifelong benefit. And then there's patients that are older that have had a couple of heart attacks. They've had events and they're worried about, oh my God, if I miss an infusion or if I miss a pill, like am I going to have a heart attack like the next week because I don't have the same triglyceride-lowering or LDL lowering. And so you can imagine in a -- in something like cardiovascular disease where there's millions of patients that are afflicted by these, these patient profiles, I'm calling them out one, but it's a pretty meaningful market opportunity. And so if you're thinking about a onetime therapy, and we're not talking about a -- this is not CASGEVY where it's going to be a multimillion dollar price. Our cost of goods is relatively low in that $10,000 to $20,000 range per patient. And so you're talking about not a significant price to treat these patients.

I see we've got 7.5 minutes. So we're going to switch from gene editing, and I found this a really interesting move from your company, your collaboration and licensing with Sirius and stepping into the siRNA frame. So a couple of questions on that program. Why Factor XI with the target for siRNA and why not do a CRISPR approach for that? That's the first one. And then questions that I get is, is this like a diversification away from CRISPR's roots here? And should we expect more of those sort of deals and becoming more of a modality-agnostic company? Or is this more -- this is a unique target. This was a unique application for this siRNA. We thought it was a good opportunity and then our roots are still with the CRISPR/Cas9 technology.

Yes. I think from a from a research perspective, we'll continue to be a CRISPR company, right? We've built the flywheel. We can go from idea to DC to IND in about a year, right? So that will continue to be the flywheel. And we've got CTX460, which we can talk about for alpha-1 antitrypsin disorder as well as CTX-340 for refractory hypertension. So those are homegrown candidates. What happens-- so with the Sirius deal, again, we are -- now we're a $5 billion-plus market cap company. And we're trying to get ourselves to $15 billion, $20 billion, become one of the leaders in biotech now instead of just the gene editing leader. And so we are making this transition from a -- just being a technology-focused company to a therapeutic area company modality agnostic. And when we were doing our CV work, cardiovascular work, we came upon Factor XI as a target. But this is a target that we felt that you don't want to knock it out permanently. You want to knock it down. And so we did diligence in the space. Sirius Therapeutics has -- their CSO came from Arrowhead. Their -- one of their Board members is the CEO of Dicerna. And so we had some connections there, and we felt that a 50-50 partnership in this space was a good way to attack it, just given how big the markets could be, and there's a few competitor readouts from some pharmas that could determine whether this is a $3 billion market or a $10 billion market. And so yes, we're -- this is the lead asset for siRNA. It's a first-in-class. We think it has a best-in-class profile as well with well over 90% Factor XI knockdown. And so yes, we're guided to a second half Phase II readout in total knee arthroplasty, which should tell us the anticoagulation effects of our siRNA asset as well as the bleeding risk compared to enoxaparin. And in this time frame, these other trials from Bristol and J&J for Milvexian will read out. Novartis will read out the abelacimab program with which they acquired Anthos for. And so we'll have a very good sense going into next year of where we're going to take this Phase III trial or if we're going to run multiple Phase III trials. Obviously, we were happy to see asundexian from Bayer have a very positive result in secondary stroke prevention. So we do know that this is going to be a large market opportunity. It's really just understanding how many billions the market opportunity will be.

Just given your interest in the target, I have to ask the question that the data has not all been positive with Factor XI, a lot of debate in the space whether a certain company may have underdosed their oral inhibitor in one of those AFib trials in particular. What's your viewpoint just kind of putting it out there, like I think it works in stroke, doesn't work in AFib, like do you think that it was just a trial design malfunction? Like how broad do you think this opportunity could really be?

Yes. I mean I think -- again, we sit at a privileged vantage point where we'll see both the Bristol J&J trial that is against DOAC as well as the abelacimab trial, which is against placebo and DOAC-ineligible patients. And so the way we view the market, again, the milvexian trial is the whole pie, right? It's all patients with atrial fibrillation. And then the abelacimab trial is about 30% of patients that are ineligible for DOACs because of bleeding risk. So again, for a company of our size, 30% of this market is probably still a $5 billion to $8 billion opportunity. The whole market is Eliquis-like numbers. And so either way, I think for us, it's a significant value-creating event.

I do want to touch quickly on zugo-cel predominantly in autoimmune indications, just given the widespread interest with CD19 CAR-T for autoimmune diseases. I was just at the American Academy of Neurology. There were 2 companies there presenting some pretty interesting data in myasthenia gravis. You've kind of mentioned some indications that you go after, and you've got a basket trial ongoing. Maybe just give us an update on that program and where you see the company going given the plethora of indications that it could be applicable for.

Yes. I think this is going to be one where there's clearly from seeing in the autologous programs and the academic study out of Germany, this is clearly a transformative moment for B-cell targeting and B-cell depletion and B-cell reset in autoimmune diseases. And I think the level of investment that's come is commensurate with how important of a finding that happened in Germany about 4, 5 years ago. I think from our perspective, we've shared some early data, but encouraging data. So we shared that 2 patients with lupus are now in remission from disease. One is out a year, the other one is out 9 months. And then we have a basket trial, as you mentioned, but we're doing actually 3 basket trials. So we have a rheumatology basket, which is lupus, scleroderma and myositis. We've got an ITP and WAIHA trial, heme basket; and then we've got a neuro basket, which we just initiated as well. I think when we think about what we want to prove with our data readout in the second half of this year, one, we want to recapitulate and show, which we've shown early data, but with additional patients that we really are having the same impact on B-cell depletion, on B-cell repertoire on -- with our allogeneic therapy, which, again, our cost of goods is significantly lower, $10,000 versus autologous therapies. So we want to show that. We also want to -- and we want to show that the expansion profile that we have is enough to produce durable benefits. And I think we're showing that now with some of the data we've shown to date. The last piece that we need to answer is which indications should we take this therapy into where we think we can win. And there's 2 areas where we think are green spaces for us. I think one is areas of severe disease where the benefit risk profile will reward something that can get really deep B-cell depletion. For example, scleroderma has a pretty significant mortality risk. Myositis is a pretty devastating disease. So we think -- and those are areas where we think the trial sizes could be relatively manageable to get a fast approval as well. The other area that I think you alluded to is in the CNS, where we think cell therapies can cross the blood-brain barrier. We don't think TCEs can -- will have as good of an effect there. And I think in vivo CAR-Ts may not, at this point, have the expansion to get the B-cell depletion in the CNS. So we're pretty focused on running that CNS basket. Again, I think in areas where autologous has proven it out, we do think allogeneic does have several meaningful benefits over, obviously, supply chain, obviously, cost of goods. But then there's also the ability to not have to take patients off their concurrent medications because you don't have to harvest their cells, right? So there are areas where we think that we are very competitive with allogeneic -- sorry, autologous therapies if we're able to recapitulate the same efficacy. And so that's what we're going to have in the back half of this year. We're going to have 20-plus patients in this [ neuro ] basket. And so we're able to be really able to hopefully answer the question, are we producing the same efficacy as autologous and where we're going to go and how -- and what our pivotal trial design is going to look like. So next year's -- second half of this year, we're going to have 5 clinical readouts. We're going to be positioning 310, zugo-cel and 611 for pivotal development in 2027. And on top of that, we have line of sight to a pretty significant ramp in CASGEVY based on the 400 patients -- 400-plus patients that are in the funnel right now waiting to be treated. And so we're setting up to have a very catalyst-rich 6 to 12 months, and we're very excited about the opportunity for CRISPR to really become a leader in biotech.

Makes a ton of sense, and thanks very much for joining me today, Raju. Really, really appreciate it. We will now transition to the breakout, which will still be in this room.