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

Great. Well, good morning, everybody. Thanks for joining us for the next session. I'm Matthew Harrison, one of the biotech analysts here at Morgan Stanley. Very pleased to have Editas with us for the next session. Just briefly, before we get started, I need to read a quick disclosure statement. Please note that all important disclosures, including personal holdings disclosures are available at the Morgan Stanley public website at morganstanley.com/research disclosures. Now with that excitement out of the way, we can get down to the real business. So really pleased to have the team here with us.

I thought maybe a nice place to start is just, there's so much innovation in gene editing going on. And I think from an investor standpoint, there's a lot of different modalities now in gene editing. So can you talk a little bit about how you think about your underlying technology versus some of the other CRISPR companies versus the base editing companies versus the prime editing companies, et cetera? And just give us a context for how you think about technology and where your strengths are?

Sure, I'd be delighted to. I have been at Editas now as CEO for just the last 3 months, but this is one of the things that I really addressed in my diligence before joining the organization and spent a lot of time looking at this. And one of the things that stands out to me, and I'll ask Mark to comment as well, was that in the CRISPR space, Editas has an AsCas12a enzyme. In fact, it is the nuclease enzyme that we use to carry out specific edits in our 301 program, for example, and many of our discovery programs use the same enzyme. Why does that matter? It is actually distinguished for several reasons from the Cas9 enzyme, which is at the core of many of the technologies within the CRISPR, including prime and base editing. And the key thing is that it is an engineered enzyme that we have worked on to increase both its fidelity and efficiency. And why would that matter? Well, I think I'll pass it to Mark just to take us a little bit through what really distinguishes AsCas12a.

So the engineered version of the enzyme combines both high-on-target activity and specificity, together with a guide RNA that we can synthesize in a very high fidelity and pure way. And so I think what this means is that we essentially can very carefully control on-target editing and with a suite of bioinformatics and computational biology software know exactly where the editing is occurring and basically to define any potential off-targets or in many cases, by design, eliminate them. So this has been particularly important in our cell therapy-based approaches. EDIT-301 being the ex vivo autologous therapy for sickle cell disease. We have very high levels of control in exactly what's going on and we've got the data to prove that in both sickle TDT and control patients.

And there are a number of factors that actually drive the specificity and efficiency. One are the innate properties of the nucleus itself. But in addition, there are certain differences with regard to the guide RNA's use. The AsCas12a uses a smaller 41-mer on average guide, whereas the Cas9 uses a 90 to 100-mer. That in itself matters from a quality and purity point of view. And also, the AsCas12a guiding or targeting sequence is 3 Prime, which is where synthesis initiation starts, whereas the Cas9, which again is at the core of most of the CRISPR technologies, uses the guide sequencing of the RNA or the targeting sequences at the 5 Prime. And Mark, you may want to expand a little more about that.

Yes. I think where that becomes really important is the synthetic chemistry around the guide and the ability to control that. I mean, by the nature of the technology, there are some errors that can be introduced, but those errors tend to be amplified at the 5 Prime end. So when you're comparing the technologies, we have greater control over the exact specificity of the guide. As Gilmore mentioned, the binding of that guide to the enzyme and then the location of that guide next to the PAM sequence in the targeting region that you want.

Okay, great. That's very helpful and I think good context for everybody. So Gilmore, you mentioned that you recently joined as CEO, and maybe I should have started with this, but -- and you talked about Cas12a as one of the things that led you to the company. Can you just broadly talk about why you're excited to be here and what led you to the company?

Absolutely. So the technology itself, just in general, the ability to do dialable or programmable genome editing just has an enormous potential, and I want to very much be part of unlocking that potential. Editas specifically drew me in. AsCas12a was one differentiator. Another important set of elements included a significant investment and resourcing and expertise, which I would call, core different expertise in guide RNA chemistry and synthesis. In addition, on the CMC side, the organization has actually capabilities, both internal and through external collaborations and capacity growth to synthesize a number of different technology platforms, but very importantly, had, again, a significant resource commitment to analytics and quality, which I'm sure, as you watch the space, particularly when you talk about innovative therapies in line with a CRISPR like technology is incredibly important to make sure one can make clinical scale material that is frankly acceptable to regulators and quite particularly the FDA. In addition, I was drawn by some significant scientific expertise within the organization, some wonderful scientists here, and obviously, a great executive leadership team. I was also drawn by the challenges/opportunities. Every challenge is an opportunity. And one thing that really Editas has been very open about is really doubling down on clinical execution. And I saw that as an enormous opportunity, both with my past experience of bringing actually 6 compounds across the finishing line and multiple global approvals, but actually also an opportunity to bring in some real talent, which is I was so happy, I think within 6 weeks of joining to have recruited Baisong as our Chief Medical Officer, somebody who has brought 4 compounds across the finishing line for global approvals and actually has a broad experience across the value chain from Discovery, CMC and a rather unique skill set and indeed has invented no less than 2 compounds, one of which has been approved and the other of which is actually going through a review. So the combination of the opportunities and the challenges/opportunities and the differentiated capabilities and technology really what drew me in. And since I've been there, I've been happy to confirm those impressions, and at the same time, work with the executive team to really think about re-evaluating, re-focusing, re-prioritizing strategy, which we are planning to share in the coming months.

I guess, probably just the last sort of overarching question is just people are aware that there's a lot of IP back and forth in this space. And over the last, I would say, year or so, you've been able to sort of solidify your IP position in the space. So I think the question is less about freedom to operate and more about from a business standpoint. Do you think about monetizing that IP? Do you think about that being a potential revenue stream? Is that part of a potential business plan as you think about the company?

Yes, we do. We do think about it much rising from a revenue point of view. We look at it from an upside point of view. But notwithstanding cloning an upside, we are actually very confident about our position. We are exclusive license holders from the Broad Institute for the IP around Cas9. And we believe as a result that any sponsor, commercial or biosponsor, planning to launch a therapeutic using Cas9 will have to come to us for a license. You talked about the back and forth. There are 2 [ atoms ] to back and forth. The first is that we have -- the IP has been reviewed by PTAB twice where Broad and us ourselves, have prevailed. It has been viewed once already by the Federal Appeals Court. It is now in the Federal Appeals Court for one final time where they are focusing on the application of the law by PTAB. There is no dispute around the fact. They would not be reviewing the fact. And so we remain very confident that when the decision reads out mid-to-late next year, we will prevail. That's one back and forth. I think the other piece I want to be sure is that I think there's been talk we've heard of sort of quid pro quo. We don't believe there's quid pro quo, not least of which because we believe the United States is the dominant market for innovative medicines. And we also believe that our 301 program is differentiated and not at stake here because it uses AsCas12a. We do have Cas9 in our ocular programs, but those are smaller indications. And so where we actually see sort of a dominant or important source of potential value sits with our Cas9 IP within the United States.

And maybe just a follow-up on that, just to clarify a couple of things just for everybody's benefit. When you say quid pro quo, you mean that you might have to license somebody else's IP. Is that what you were talking about?

Yes. Sorry, just because I think people have talked about like quid pro quo for U.S. versus rest of -- or EU. We have claims in the EU, but we believe, certainly for Cas9, that we may need to actually have some other licenses. However, the important point is when you actually look at our 301 program...

You're saying for 12a you don't...

And we do not need.

That's helpful. All right. Good. So you talked about sort of doubling down on the clinic, you've got a couple of clinical programs. So why don't we flip to them and make sure we go through them in detail. So I guess, the first one is BRILLIANCE. Just sort of remind people where you are with that study? What we -- what you think you know about that program so far and then the update that we're expecting here in the second half? What should investors expect to see?

Yes, absolutely. And I may actually ask Baisong to add some to that. But I think the first thing I'd like to do is just pause for a second and actually make 2 important points. One is that BRILLIANCE is an interventional Phase 1 study. We also have a natural history study with nearly twice as many patients and we'll return to that because that will be important for contextualizing the BRILLIANCE data. The other key point is that the BRILLIANCE study is a Phase I study designed to do much more than many studies, largely because we are targeting and intervening in a rare, largely undescribed clinical disease, which is LCA10. And the objectives of the study, beyond just looking at safety of AV targeted Cas9 in the retina is to help us identify a segment or a subsegment of the patient population that is most likely to respond. And that is the patient population that we could identify at priority using baseline characteristics, including genotype, clinical, structural or physiological parameters as well as to identify endpoints that are meaningfully useful in a pivotal study. And finally to determine the magnitude of the effect and move beyond proof of concept and look at proof of product. Is there actually a path forward, not just for regulatory, from a commercial point of view. And all these elements we put together ultimately to help us design a pivotal study that we could bring to regulators. But maybe, Baisong, you could add a little more.

Yes, Gilmore. I think I'd just continue what Gilmore mentioned, and this is like a Phase 1 study. Of course, we have a focus on the safety, but we actually have a lot of endpoint to look into the efficacy of EDIT-101 in those patient population. So we're looking from life sensitivity to visual acuity as well as the vision function navigation score and all those in there too. Another important piece is actually the quality of life and patient reported outcome, because some of the fellow difference can be translated to the daily life difference in there too from a quality of life there. I think another important piece is we actually have a significant size compared to the size of population of natural history study. This will really allow us to contextualize, to see, okay, what the premium study mean after the treatment versus what has been in their nature history. We actually have a 12-month perspective observation of the natural history over 20 patients on that too. So those will be the important piece for our consideration, as Gilmore just mentioned.

Thanks, Baisong. And I think there are 2 key points we will be sharing. We will be sharing data in the October, November timeframe. And I think just to remind everyone that this is not a diabetic retinopathy DME or AMD study. That is because the vast majority of LCA patients, not surprising the congenital amaurosis, have profound visual impairment by the time they are 2 or 3. And so what is meaningful to them is the ability to live an independent life, to navigate a room as dark as this or as brighter of the rooms without injuring themselves. And so one of the points that you probably heard, I just want to make sure to emphasize it is beyond visual acuity as a clinical outcome measure. We look at things like a visual navigation course. And quality of life actually also helps us anchor those outcomes together. And we're looking at supportive measures such as OCT to look at structure, both at baseline and after treatment as well as physiological parameters and psychophysical such as the full field sensitivity test as a measure of retinal sensitivity.

And so just to remind everybody, you obviously have more dose levels than the previous data. And you've also dosed different age groups than the previous data. Any differences to think about either of those factors? And I guess, the ultimate question here is like given what you've described, this is not a study where you can have sort of one very clear output which tells you whether or not the therapy is clearly working. So how are you defining success for the study?

So just so people know what to expect from what of the data, we will be providing data -- safety data from all low dose, mid dose, high dose adult mid dose pediatric. Our efficacy data will focus on 12-month data from the mid dose adult cohort, 6 month data from the high-dose adult cohort. And what we would be looking for from a success point of view is identifying a segment of that patient population that responds. And we'll be looking to determine if we have a congruency of number of parameters to actually show a benefit -- a meaningful benefit to patients. The one other point I would just make is that we are being very -- we're using our precision measures, if you will, including genotyping, structure, physiology, et cetera, to really be as precise in describing patients as possible. Age is a good if somewhat crude surrogate. But what we really want to actually understand is the nature of the substrate that patients have preserved for us to rescue as well as other elements of function. That could again help us at baseline determine going forward at priority a kind of patient or subsegment that's going to respond.

And then probably a question you get a lot, obviously, there was a gene therapy treatment in the space which didn't sort of meet its primary endpoint in a study. What's the impact to you of that? I mean, is that relevant or is that not relevant because of the mechanism of action?

I think there are a couple of elements. I think first of all, BCVA was chosen as the primary outcome measure, which I think there's some risk associated to that when you're talking about a congenital amaurosis, where as I said, patients profound visual impairment before, particularly because even though you can measure BCVA across a wide range of logMARs, the precision and the dynamic range with the ETDRS, which is frankly, the cards, [ well ], based on your age that most of us are looking certainly 2 of us a pure look at, maybe others down there don't, is very precise. Once you move beyond that, the dynamic ranges get a little more challenging. So I think that creates a challenges from behavior. In addition, it's meaningful to patients. It's really something that we would question. And then finally, obviously, the mechanism of action. Targeting the transcript as opposed to targeting the genome are very different and the delivery challenges are different between the 2 therapeutic modalities. So design, modality, mechanism, I think all probably played a role, which is why we would separate that from what we think. And in many ways, I think the only point is that there are now frankly more patients who unfortunately are still waiting, but then actually are patients to whom maybe we could give some hope.

And then I guess just more broadly as we're talking about the eye before we move on to hemoglobinopathies, what's the level of commitment to investment in eye diseases? Obviously, when -- a couple of years ago, I mean, that was sort of the major theme. I think you've got a broader pipeline now, there are other options. So just maybe -- and maybe that's part of what your review is going to talk about later on this year, but maybe if you can comment?

Well, without I go into too much detail, I think if one is to look at the big picture or a vision for a company like ourselves which is bringing an innovative and novel therapeutic modality, and you'll hear this I'm sure from others, is to actually, first of all, have an ambition to scale to where you can treat genetically determined diseases in large populations, because that's truly transformative. But the best way to start, a prudent way to start is to start with small populations, in people where you can optimally manage the risk, while you fully understand the risk of a new modality, particularly one where you have to think about off-target editing, et cetera. And so the eye actually was a very good and interesting approach to actually determine that. And we have other programs which we haven't disclosed yet, which actually are in the eye. But actually, also the eye, we see as a stepping stone to beyond in the in vivo space. And we've talked about in the past about expanding beyond the eye for therapeutic indications and beyond AAV for delivery.

So why don't we jump to hemoglobinopathies. And probably the first question people ask is there are obviously a couple of programs, there's gene therapy programs in the hemoglobinopathy. There's another CRISPR program. As you highlighted at the beginning, you've taken a different approach from the Cas, from the location of the site that you're editing. I guess, why, because there's obviously a handful of reasons for that? And then second, how do you think that might play out clinically as we start to see some of the initial data here?

So I'll kick off and then I'll pass it to Mark and Baisong to take you through more granular detail on the science and the clinical implications. But the key answer is that we believe we have a differentiated approach, not just because AsCas12a and its higher fidelity and higher efficiency, but in addition, we are targeting not the BCL11A directly, but the binding site for the BCL11A suppressor on the promoter for the gamma globin genes 1 and 2. And that is because, as Mark will explain, expression of gamma globin through this approach is independent of stress erythropoiesis as well as we believe potentially better erythroid health. And we base that on both the U.S. So why did we choose that? We based that at an empiric experiments in the lab as well as published literature from other labs around the world. Why does that matter? Because in the end, we believe that will translate into more robust fetal hemoglobin expression and more durable fetal hemoglobin expression. Why does that matter? In the medium to long-term, we would expect to have an impact on quality of life, exercise tolerance, for example, as well as long-term end organ health around cardiac, renal, brain function. But I'll ask Mark to talk a little more about the elements of the science underpinning that. And then Baisong can talk about the clinical pull-through.

And Mark, just as part of your answer, could you maybe comment a little bit on whether or not you think that could also lead to differentiation in safety as well on the site that you've chosen obviously?

Sure. To answer your first question, the choice was really made on data. We did the head-to-head comparison. And in our hands, we felt that editing what we call the cat box of the promoter was superior to editing the BCL11A itself. And in particular, the approach we're taking is substantiated or supported by natural human genetics. So we're essentially trying to recapitulate a condition called hereditary persistence of fetal hemoglobin where these are sickle cell patients who fortunately for them sort of co-inherit another mutation which increases hemoglobin F and combats the sickling phenotypes. And so using AsCas12a, which has a staggered cut at that site, we introduced changes, which very effectively recapitulate the hereditary persistence of fetal hemoglobin mutations, and therefore, elevate HbF in a very consistent way. So that's the sort of the primary. And then your second question was around...

Safety. Is there any reason to think as opposed to primarily letting BCL11A, if you have a different whether short-term or long-term safety profile?

Yes. So there's some direct effects that you could imagine on editing BCL11A directly since it's a Rhopressa protein that's known to be involved in B cell leukemia. But specifically for us, again, going back to Cas12a, we know from our own work that we are only editing on targets. So we're only editing in the exact sites we want to. And we fully characterize that profile, which is actually recapitulated very effectively in both sickle cell disease, TDT and human CD34 cells. So we have a very precise editing approach that introduces the changes that we want to recapitulate the naturally occurring disease -- naturally occurring recovery that we would want to see.

And sorry, you obviously answered safety for you. I guess, I was asking to compare potential safety of other methods that directly edit BCL11A versus yours? And if you think there could be potential for whether short-term or long-term differential safety by that approach?

Yes. Maybe I can pick-up from clinical perspective. So as Mark mentioned earlier that our K12A, one of the factor I mentioned that is actually we have a shorter guide RNA. And that shorter guide RNA, not only that is shorter and have high facility from synthesis perspective, but also the binding side is on 3 Prime end because the thesis is actually also from 3 Prime end. This gives us high fertility of that. They will have the potential -- we want to do clinical -- there will always be a potential on this as we see the data that to have much less potential for off-target editing. So that's kind of one thing from a safety perspective. So of course, then we have the clinical data. And the other thing is that we're targeting the promoter region of the HPG 1 and 2, that is a nature process being validated in the nature occurrence in there. And then also that have -- do not require the stress anemia for the expression of fetal hemoglobin. This could also be from clinical safety perspective, that's another aspect of that too. Since I'm on this, maybe on top of that is to see we -- from a differentiation perspective, we are hoping that with this combination of Cas12a as well as finding -- manipulating in the promoter region, we will have higher and sustained durable phytoglobin expression. And this we hope will translate to better quality of life and minimize long-term organ damage from that perspective from clinical outcome.

If I might close the loop just in your question around the differentiation in sort of the family or the path of CRISPR approaches. Obviously, looking beyond just sort of an [ Indel ] approach, which we are using along with, for example, CRISPR. Again, the key differentiation I would -- sits with the AsCas12a, when you go to a targeted base editing approach, for example, there are a number of things that are important to highlight which -- where AsCas12a differentiate. First, at the core of that fusion is a enzymatically dead or kinetically dead nuclease Cas9 nuclease to guide. In addition, there is a conjugated deaminase which, while tied to or fused to a targeting is a little promiscuous from the point of view of which an example of an [indiscernible] it will edit it. So those are elements that are important differentiating elements. Obviously, we will see how they pan out in the clinic. But as I say, ultimately from a differentiated benefit risk, we believe that the parameters that we have designed based on both empiric data from our lab and others could translate into long-term benefits from patients from quality of life and organ health.

Maybe just to round us out because we've got about a minute left, maybe Michelle can just comment on your capital position. I know there's a lot of other pipeline, but unfortunately, we'll save that for other questions for another time.

Sure. So we ended Q2 with just over $500 million in our cash runway. That will take us into 2024 with our current program. And we'll continue to assess financing opportunities, both dilutive and non-dilutive in the rest of the year.

Well, thank you very much for being here. I appreciate the time.

Thank you very much.

Thank you.

Thank you.