Editas Medicine, Inc. (EDIT) Earnings Call Transcript & Summary

Great. Good morning, everybody. Thanks for joining us for the next session. I'm Matthew Harrison, one of the biotech analysts here at Morgan Stanley. Pleased to have Editas with me for the next session. Just a quick disclaimer I need to read. Please note that this webcast is for Morgan Stanley's clients and appropriate Morgan Stanley employees only. This webcast is not for members of the press. If you are a member of the press, please disconnect and reach out separately. For important disclosures, please see the Morgan Stanley research disclosure website at morganstanley.com/researchdisclosures. And if you have any questions, please reach out to your Morgan Stanley representative. So very pleased to have the team from Editas this morning. We have Cindy Collins, the CEO; Charlie Albright, the CSO; and Mark Mullikin, who runs IR.

Cindy, I thought maybe just a good place to start out is you -- from a strategic direction, I think there's been a handful of changes -- broadly speaking, right, the partner programs came back to you early this year. You reworked your Celgene agreement over the course of the last year and you're moving some internal programs far. Can you just talk broadly about the strategic direction of the company and how you're thinking about your focus here in the near to medium term?

Sure. So at Editas, we're really focused on developing differentiated transformational therapies for diseases with unmet need. And we focus our efforts both in, in vivo CRISPR medicines as well as engineered cell-based medicines. And you're correct, we've continued to move forward with our strategy with both of those strategic pillars in mind. We're absolutely thrilled to have that [ actually ] the ocular programs from the company and AbbVie, and we'll continue to advance both the in vivo medicine for portfolio as well as the cell-based medicine portfolio.

Okay. Great. So I guess maybe if we can start talking about LCA10 and just a little bit about how that study is progressing. Maybe just give us an update there? And any issues that study has faced with relation to COVID?

Sure. So as announced earlier this year, we dosed the first patient in February. The sites then did go on a bit of a COVID pause during the pandemic period. We have a full site to be opened. During the pandemic pause, we continued to map patients to the various cohorts. And now that the sites are open, we are actually rescreening patients. They need to be rescreened because it's been more than 90 days since they were initially screened. We are on track to dose a second patient in the low-dose adult cohort and the first patient in the mid-dose adult cohort this year. And we expect to have the potential for data later this year. Just as a reminder, the Phase I/II trial is safety and tolerability.

And as we -- and I know we've talked about this before, but as investors think about what they can expect from those patients, just remind us the baseline characteristics of those kinds of patients, what their life perception and their ability to see a meaningful clinical benefit could be. And then, I guess, secondly, just talk about the dose ranges that you've picked and your expectations around efficacy with those different dose ranges?

Sure. For the first 3 patients that I referred to, they are light perception only. And this is a traditional gene therapy dose escalation-style trial. So we are starting at a low dose that we think could be therapeutically efficacious. What we anticipate seeing from the patients, as I mentioned earlier, is largely ground safety and tolerability. The first patient is now more than 6 months post the initial dosing and has cleared all safety hurdles and is off of all steroids. And so from a safety perspective, clearly, the first patient has done well. I'll invite Charlie to comment on the dosing.

Sure. And so we've chosen 3 -- it's a dose escalation study, low, mid and high dose. We chose the low dose to be one where we believe will -- has a potential therapeutic benefit. As one went for a gene therapy trial, we chose the top dose to be one that maximizes the pharmacology. Obviously, the middle dose falls between those. And I'm happy to take a follow-up there, if you would like.

Yes. I guess what I was trying to get at was, given your expectations, it sounds like what -- from a minimally efficacious dose, what would you expect to see, especially in light perception-only patients? I guess I was trying to make sure investors are correlated with what we might expect.

Right. So the low dose, we do believe crosses the therapeutic threshold. So based on a couple of pieces of data, we believe that as little as 10% functional photoreceptors should be -- should allow reasonably normal vision. Obviously, the challenge in the light perception-only patients as we -- that restoring the photoreceptors is only the first step in creating a vision. And so how intact are their visual -- especially their cortical visual pathways is unknown. And so that's part of what we'd be interrogating in the clinical trial.

And Charlie, any read-through from the data that's with sepofarsen in terms of correlating expectations for these patients?

Sure. They have seen benefit in some patients with light perception only, but it's less frequent than in patients with some visual acuity already.

Okay. Okay. Good. That's helpful. So then I guess the second question is, assuming you get through these cohorts, how do you think about next steps? And do you have a good sense for what a pivotal program here might look like?

Well, that's obviously a regulatory question and one that we need to talk to the regulators about. I mean, frequently, in the rare disease field, the -- if the data is compelling enough from the initial trial, you can engage in that discussion rapidly. And sometimes, it's just an elaboration on the original Phase I/II design. And so -- but that obviously depends on having very clear efficacy and meeting a high unmet need. So it's difficult to project that without actually having the data in front of us.

Okay. Okay. No, that's helpful. And then I guess the last question, I guess. As you get more follow-up and more safety data across this initial group of patients, does that change or allow you to move more quickly in some of your other follow-on candidates or other diseases? How do you think about what this initial study might allow you to do more broadly across the pipeline?

Right. EDIT-101 has already a significant read on the ocular portfolio. In particular, preclinically, we've had tremendous benefits. So there's only 40 nucleotides that differ out of the 5,000 nucleotides that go into the -- between EDIT-101 and EDIT-102. We've been able to use the same kinds of pharmacology models, the same thinking about doses and therapeutic reins are all applicable to EDIT-102. And we think they'll read into many, if not all, of our ocular programs. And you're right, we think that benefit is going to continue as we headed in the clinic because we expect and hope that, that 101 is going to buy down a lot of the safety risk with subcutaneous -- subretinal injection of the editing machinery. And we're also optimistic that we'll see some clinical benefit, which would also increase our confidence in the read-through on the clinical side as well as the safety -- on the efficacy side as well as the safety side.

Okay. I realized that one question I wanted to ask about doses that I didn't ask. Obviously, when you're doing this work in preclinical models, you can you can excise the eye and you can actually look at how many cells you've transfected and broadly what sort of expression you can achieve. You obviously can't do that in humans. So how do you sort of measure what I'll call broadly PK/PD markers here in humans and have a good feeling for -- that you've maximized the dose range?

Right. So we have -- excuse me. We have a variety of secondary end points in the clinical trial, because you're right, we can't take a specimen of the eye and do a molecular analysis. And we're hopeful that some of those secondary measures are going to provide a more quantitative measure of how -- of the editing in -- for instance, OCT, ocular coherence tomography, gives you a read of the structural features of the retina. And we hope that, that will show the regrowth of the outer segments, which is what's dysfunctional in the LCA10 patients. And if that's true, that will provide a more direct measure of the effect of the editing on the actual changes in the eye. But that's part of what we're going to find out in the clinic as well because there is no preclinical model that we can use to validate OCT as a pharmacodynamic measure for us.

Okay. Okay. Perfect. So you obviously have -- you talked about 102. So that's USH2A. Maybe just for everybody's benefit, if you could describe where you are with USH2A and what sort of work needs done before you can think about bringing that into the clinic as well.

Sure. So as I commented earlier, we're thrilled to get the ocular portfolio back in-house. And as we're transitioning those products back in, part of what we're transitioning is [indiscernible] as you can see, production buildup. So we haven't put forth a revised time line yet on a [indiscernible]. We'll be doing that shortly as we better understand the actual time line for transitioning all the CMC activities. We are obviously also quite busy in that we have the 101 trial ongoing. So we will be calling the IND for 301 later this year and then announcing the healthy-donor NK program. So we have a lot going on within the company generally, but we intend to progress [indiscernible] of the ocular programs forward and we'll close more on timing as we have better information to use.

Okay. And can you touch on CMC? And maybe just remind people what activities related to CMC AbbVie was doing versus what you were doing? And how that impacts broadly the work that you guys need to do to progress the ocular programs?

Sure. So the work they were doing internally was really a -- what was referred to as process due. It was the next generation of manufacturing, and they were internalizing that in their facility in Liverpool, and that would have served both EDIT-101 and EDIT-102. And so we'll be transitioning that activity to one of our CDMOs [indiscernible].

Okay. And just from an investor standpoint, I mean, is there still process development work that needs to be done? Or is this more a tech transfer kind of procedure?

So EDIT-101 is largely more just tech transfer. EDIT-102, a little bit of process development.

And then time lines on RP4, I don't exactly remember where you are with that, but I think that's the third program in the ocular portfolio.

That's correct. And so we originally had hoped that we would have a development candidate later this year, but because of reprioritization of resources internally due to the pandemic, deprioritized that program to really focus resources on the higher-priority programs. So we'll come back with revised time lines on RP4 as well.

Okay. Okay. Perfect. Maybe a good time to talk about 301 then. Obviously, a lot of interest in what's going on there with some of your competition in that field. I guess, probably a good place to start is just to talk about what do you see as the differences between your program and some of the competitors? And why did you choose to make those changes?

Right. So we clearly have a molecular basis for differentiation because we're editing in the beta-globin locus as opposed to the BCL11A enhancer. And that was a very intentional choice because there are mutations in people that have changes in the beta-globin locus actually in the region where we're editing. And those people have elevated levels of fetal hemoglobin. And when they're very high, they actually suppress all of the sickle cell disease symptoms. So that gave us tremendous confidence that if we can recapitulate that, our approach will be safe. And so we have several points of potential differentiation that we're eager to test in people. First, we believe we induce more in fetal hemoglobin. And while there have been encouraging results from molecules in the clinic already, we believe that more fetal hemoglobin is going to be beneficial from an efficacy standpoint. We also believe there's several points of potential safety differentiation. And asked 2 years ago, we talked about the lineage skewing that we saw in our preclinical mouse models. A year ago, John Tisdale talked about the editing he did at the BCL11A enhancer site in nonhuman primates and the failure of those edited cells to persist. And then more recently, we've seen a delay in engraftment for the BCL11A edited hematopoietic stem cells, and so it's about twice as long as the normal who had about 7 cell transplants. And so we don't understand the basis for that, but we think all of those offer potential points of differentiation, which we're eager to test in the clinic. So we're very focused on the -- getting the IND filed by the end of the year, and then getting the clinical trial up and going as rapidly as we can. So we've selected lead investigator, engaged the CRO to help with the clinical trial and begun site selection. So it's a tremendous focus for us as a company right now to be able to test those hypothesis.

And in terms of being able to demonstrate those differences clinically -- I guess in terms of engraftment, right, that's pretty easy to see if there's a difference, but some of the other points seem a bit more complicated. So I don't know, what are your thoughts on how you might see that clinically and what you're going to look for as you start the study or how you design it?

Yes. Yes. Clearly, starting from the safety and going backward up on efficacy. So you're right, looking at engraftment rates is very straightforward. Also looking at persistence of our edits, we expect ours to be highly persistent. I think it's going to take more patients and longer to figure out whether the BCL11A edited hematopoietic stem cells do persist as well, or would they have either the [indiscernible] lineage skewing that we talked about or the just general lack of persistence. That's going to take more patients and longer. And then I think that the elevated fetal hemoglobin, I think there's been a lot of progress on reducing vaso-occlusive crises. That's only part of the symptomology that goes with sickle cell disease. And so we think, for instance, that we'll be able to normalize the hemolysis markers and underlying different set of symptoms in the sickle cell patients. And again, in the long run, we think that will be tremendously beneficial.

Okay. And can you just remind us, I think there was also a zinc finger program in BCL11A that didn't really move ahead. What were the issues with that? And any differentiation there that is worthwhile to point out?

Right. I would say, based on my look, the extent of editing was not significant enough for that to cause a tremendous clinical benefit.

Okay. And then I guess, more broadly, right, you've talked about this. So sickle cell and beta-thal are clearly areas that are major focus for clinical development, right? You've got gene therapy programs, right? You've got gene editing programs. Just how do you think about the market there? And broadly, right, there's programs that are clearly potentially a few years ahead of you. So maybe just talk about the market and where you see it playing out and where you see the opportunity for yourselves?

Right. So this is a complicated market. It's a patient population that is distrustful in medical system. It's a patient population that's frequently on Medicaid. And for those reasons, we do think that the -- it's going to take a while to unlock the market opportunity here. And we think that time allows the development of these molecules so we can actually figure out which one is the best. And I think in the long run, the patients and their physicians are going to want to give the very best therapy they can. So I think this is a slowly evolving market that will likely expand significantly as the clinical data starts to roll in to show the tremendous benefit of these therapeutic approaches. And we feel good about our approach because we do think we have a potentially best-in-class medicine that could win in the long run.

Can you also talk a little bit about what needs to be done to prepare the marrow for these patients for engraftment? Obviously there's different ways that you can do that, and some of those ways have more potential side effects or longer-term effects for these kinds of patients, which may differentiate treatments. And any thoughts on how to make that potentially more accessible to patients?

Right. Well, there's -- as you referenced, there's a tremendous amount of work in that area. And I think that we are all going to benefit from the advances there. We've already benefited from the advances of some of the things that have happened because you now harvest with plexiform as opposed to harvesting by going into the bone marrow, which has tremendously made that -- made that process tremendously better for patients. I think you're going to see similar improvements in the preconditioning as you referred to, to allow the edited stem cells to re-engraft. Right now, we'll follow the standard procedure, but there's a lot of exciting things in the clinic, and we'll be looking at the opportunity to incorporate some of those in our clinical trial is the -- as it makes sense.

Okay. Okay. Good. Maybe one of the other points, and I know it's early, but you've got some interesting things that you're working on in oncology, especially with NK cells and some other cells. So maybe just touch on that, broadly talk about what it is you're working on and how you think about oncology as an area of focus for the company?

Yes. So we're very excited about the oncology area, and we're -- particularly about NK cells. And so as you probably realize, NK cells are part of the innate immune system. They're inherently allogeneic. They have receptors already on them to recognize tumor cells because the tumor cells express stress ligands that result from the process of becoming a cancer cell. They also recognize cells that have lost MHC. And so one of the major resistance mechanisms to PD-1 inhibitors is the loss of MHC. So we have the potential with these cells to recognize these MHC minus cells to collaborate with therapeutic antibodies such as Herceptin and Erbitux, and to inherently just recognize the cancer cells. And so of course, in a cancer patient, all of these properties are compromised. And we have the potential with gene editing to improve them and, in fact, make many of them better than they were in the first place. And so -- but to do this and unlock the tremendous opportunity that we see in solid tumors, we believe, is going to take an extensive amount of editing. And so our first entry is a healthy donor edited NK cell, EDIT-201, and we aim to file an IND in the second half of next year. We have a tremendous investment in iPSC platform, which we believe is going to enable us to make the extensive amount of edits we need to really unlock the true benefit of this platform.

Can you talk about number of edits, right? I mean, historically, people have talked about their ability to make 2 or 3 edits, maybe, max, especially people that are trying to make -- doing that work with CAR T cells to make universal CAR T cells. So what work is going on there? And how are you pushing that limitation?

Right. And you're absolutely right, and they're limited to a relatively small number of edits because the complexity of the resulting cells. And so you basically get a mixed population of cells, some have 1, 2 or 3 edits in that hypothetical. I mean you start to accumulate translocations. And so -- and both of those are going to limit the ability to do extensive editing in either allogeneic or autologous setting, they are not going to become a limitation when you go to the iPSCs because they're going to pick a clone. And that clone will allow us to control both the genotype and the phenotype. And so we will go in with multiple edits, more than the 3 you just referenced as the first product, and we have the ability then to basically add a similar number of edits in product 2, 3 and 4, and that is our plan because there are a tremendous number of interesting therapeutic hypotheses, some of which I outlined earlier.

Okay. Great. I guess, strategically, 2 major questions, right? As you start to push forward a broader pipeline like this, and that also, from a technical standpoint, is more and more complex, how are you thinking about manufacturing and your ability to control some of those features? So maybe you can just talk about the investment that you're making there.

We've recently announced a couple of collaborations. One is with Catalent, which is a large global CDMO provider, and we'll be working with Catalent to transfer certain manufacturing activities to them, including sourcing raw materials, vectors and drug product, and that will be across both the in vivo and cell-based medicines. We also are doing some parallel activities internally. We also announced that we had signed a lease agreement with Azzur to rent GMP a clean room space, where we're doing the preclinical and Phase I production of our engineered cell-based medicines, including EDIT-301 for sickle cell. And then we are also doing manufacturing at our Boulder facility, where we manufacture both guide RNA and RNP as well. So it's a hybrid approach. We are working with CDMOs where we need that level of assistance. And then in other cases, we're doing it internally, and it really is all about how to move the portfolio forward as fast as we can.

And I guess as part of that, this is a field that's moving forward rather quickly, right? There's all kinds of different kinds of editing platforms that seem to be popping up every few months. So maybe just talk about your investment in technology as well and how you are continuing to push forward your abilities?

Sure. Clearly, monitoring the technical space is an important part of building the business. And you've seen us invest already heavily in that area. And so the in-licensing early on in the company [indiscernible] or Cas9 for instance has enabled the AAV platform. That's why you don't hear other editing companies talking about in vivo editing using AAV because you need the smaller AAV that allows you to package everything in a single virus smaller Cas9 than it is. Likewise, we in-licensed the Cas12a, previously known as Cpf1, and that has been essential for us to make EDIT-301. So if you cut just next to the site, we cut out with Cas9, you cannot get the same level of fetal hemoglobin we get with Cas12a editing. In fact, it's a great enzyme. It's more specific than Cas9. It cuts really well, and it will become the foundation for our cell-based medicines. More recently, you've seen us bring in enabling technologies: BlueRock to get GMP-qualified iPSC lines; Sandhill to get binate technology to allow us to expand the NK cells better. And so we will continue to bring in technologies that allow us to make the differentiated medicines that we -- that are the guidepost for how we think about the acquisition of that technology.

And then, I guess, one question on technology as well. Where are we in terms of HDR edits as opposed to single cuts and potentially thinking about more complex kinds of edits?

Right. HDR and more broadly just called targeted integration works effectively well ex vivo. And so you will see that incorporated into modes, probably not all, but most of our ex vivo medicines. HDR or target integration in vivo still suffers from the problem that it works much better in cells that are undergoing light doses. And so right now, that's a biological limitation.

Perfect. So maybe just to finish up then. Remind us where you are in terms of cash position and your ability to prosecute the pretty broad pipeline that we've just talked about.

Sure. So after a successful raise in June of just over $200 million, we closed Q2 with $600 million, which gives us a cash runway into 2023. So we're in a good cash position.

Great. Great. Well, thanks very much for being here, Michelle, Cindy, Charles. Appreciate it. Thanks for the thoughts.

Thank you.

Thank you.

Thank you.