Entrada Therapeutics, Inc. (TRDA) Earnings Call Transcript & Summary

All right. Good afternoon, ladies and gentlemen, and welcome to the 45th Annual Goldman Sachs Global Healthcare Conference. My name is Karishma Raghuram, and I will be your moderator for this panel. I am pleased to present Entrada Therapeutics. On stage with me is Dipal Doshi, President and CEO, as well as Natarajan Sethuraman, CFO. Welcome.

Thank you. Thanks for having us.

Absolutely.

So I think to start, we should begin by perhaps level setting a little bit with our audience. And before we dive into some more specific assets and progress points, let's discuss your EEV platform. What were the early signs of preclinical data that really gave you confidence in the efficacy of the platform?

Sure. I'll start, and Nataraj can fill in the blanks. So first of all, thanks, again for having us. The EEV platform, so EEV stands for Endosomal Escape Vehicle. So the entire premise of this company was really to start to target intracellular targets that had never really been mined before, mostly because of the inability to get to those targets. And so the EEVs are a family of cyclic cell-penetrating peptides, which have these really unique characteristics that allow us to not only get into the cell, but really get out of the early endosome and then direct the payload essentially to go where it wants to go. So many years ago, when we started this company, we started to look at a bunch of different ideas and a bunch of different areas where we thought that we could make a difference with the EEV technology and Duchenne muscular dystrophy or DMD was one of those areas. And so what we have seen since then from an early efficacy perspective is a plethora of data within both mice and nonhuman primates. And now we're in the clinic that show a remarkable amount of muscle penetration, ultimately dystrophin production within the relevant species and the repeated integrity of the ability to be able to target the muscle, including the cardiac, which is really important for DMD patients because ultimately, that's the cause of that. So those early data points really gave us a lot of conviction in that we were able to hopefully profoundly change the life of the patient.

Absolutely. That was great. And I guess just to kind of add on top of that, compared to other mechanisms of action in the DMD space, namely gene therapy, what would you say is the differentiator for your EEV platform?

Sure. Let me start again. Okay. So gene therapy is another great tool essentially to address these types of diseases. However, when you're a growing boy, your body obviously is going through a fundamental change, and you're growing and your -- the ability to take gene therapy has limitations. There's muscle turnover, there is the inability to redose. There's the inability to change the dose. And then there's a wear-off effect as well, right? And so in the short term, it might sound like a great one and done, but what we believe and we strongly believe is that you need to have the flexibility and modularity of an approach that allows you to do what exactly gene therapy cannot do, which is to repeat dose, to titrate the dose to stop the therapy if need be. So we feel as though there's room, of course, for gene therapy. But within DMD and another program that we're focusing on, called DM1, the limitations around gene therapy are actually essentially provide an opportunity for exon skippers and other new generation technologies to better serve the patients.

No, that was lovely. Perhaps a question for Natarajan. So you've previously commented that the data for your EEV-PMO is competitive with other PMO in the landscape, namely R6-PMO. What in the data has indicated thus far? And have you perhaps explored the potential use of PPMOs to perhaps drive further cell penetration?

Yes. So we have done extensive studies in various models, vitro and in vivo, and we show that not only are our EEV-PMO is better than the PMO, naked PMO but actually better than the PPMO. So for example, in mdx model, we have shown after a single dose, the exon skipping difference in skeletal muscles is about threefold. And in the heart, it is very day and night. We have badly about background for PPMO, but a EEV-PMO has over 50%, 60% Exon-skipping. So it's very differentiated, not only from the first generation of Exon-skippers, but also the second generation.

Great. I think now to delve a little bit more into your DMD franchise. So ENTR-601-44 is Euribor skipping. And so what incremental data should we expect with the October data release that, in your view, solidifies Entrada scientific leadership in the space and validates the EEV approach as potentially best-in-class modality for Exon skipping?

Yes. I mean it's a big data point that will -- that we that we're all guiding to right now. And really, at the end of the day, there's 3 significant components to how we measure success within that trial. First and foremost, it's safety and tolerability. I think what we've seen across the landscape of programs that are going after DMD is some safety issues and concerns. And so for us to take that next step and put this treatment into patients, we want to make sure that the profile from a safety perspective is clean. So that's first and foremost, probably by like a mile, right? The second, which is really important, goes to the validation of the technology itself, and that's muscle concentration. We want to make sure that we're able to -- now these are healthy patients, but we want to make sure that we're able to get significant muscle concentration so that it starts to marry the thesis of the company, which is getting out of the endosome and getting into the muscles and tissues. And so that's the second most important thing. The third, which is not as important from a company perspective, but we also acknowledge the fact that investors are looking at it is target engagement by way of Exon Skipping. And Nataraj can explain a little bit more about it, but exon skipping within healthy normal volunteers is not exactly the best marker for translatability to patients, right? But it is something that we will continue to measure. But those are the 3 key characteristics or 3 -- the top 3 components of what we plan on sharing in October. Anything else about the Exons Skipping?

No, I think as Dipal said, in the healthies, when we skip an Exon, we actually throw the reading frame out, the resulting mRNA will be unstable, compared to patients where we restore the reading frame, and these mRNAs will be a lot more stable than the un-skipped. So as Dipal said, it's not even indication of whether it's going to be more efficacious or not. It is just a target engagement biomarker. So we are more looking at is that -- is that a target engagement or not, that I'm looking for specific numbers.

But the key really is -- the key really is those first 2, safety, tolerability and multiple concentration that would give us the confidence to move to the next step.

And you know that's a lovely segue. So competitors in the landscape have cited potential for hypobagnycemia and separately immune-mediated myositis. And so is this something that you're aware of and working to mitigate actively, could you perhaps elaborate what you're seeing in the PK/PD profile for the data thus far?

Yes. So in terms of hypomag, in our task studies, we have not seen for the 601-44 program. So we are actively monitoring it in the clinic. So we'll have more to say about that in October. In terms of the immune-mediated misstates. So it is -- we have done extensive products, both surrogate models like MDX, 32MDX as well as the specific models in the dystrophic models, we take human dystrophin and then delete an Exon to create a situation similar to patients and then correct it. And then when we look at it to see the muscles, the muscle function actually restored when you look at group strength, for example. So you don't see myostatus, you actually see the muscles getting restored. When we look at immune cell infiltration, going back to the inflammation and immune cell-mediated inactivation because you don't see dystrophin earlier on in these muscles and then you now restore it. We actually see the immune cell infiltration is greatly reduced. And also the cytokine when we look at cytokine profile, it is much lower compared to -- before treatment. So we, in fact, think that the muscle function will get better not worse after the treatment.

The good thing is that based upon the question that you just asked, we haven't seen those types of effects within our preclinical model. So once again, it goes right back to the safety profile that we're anxiously waiting for.

Great. We have seen very strong data thus far for the 601-44 program. And however, we do want to note the ongoing clinical hold with the FDA for this asset. So what kind of readout would be perhaps sufficient proof of concept to advance this asset in the U.S.? Or in other words, I guess, to simplify, what are the key gating factors to a U.S. trial?

Sure. That's a good question. Let me address the hole in a different way for a second. So we've been -- I've been on record by saying we are only doing one healthy normal volunteer study. That was always our plan for our 44 program, and we achieved that by the U.K. trial that is ongoing and about to wrap up. And so for us to put a lot of effort into getting off of clinical hold in the U.S. would have almost been disingenuous because we had never -- we didn't have plans to run a trial in the U.S. for a healthy normal volunteer study. So we haven't paid a lot of attention to that. However, now with that said, it is important for us to -- when we think of the next step around this MAD, the Phase II trial, it is important for us to be able to open up sites in the U.S. And so we feel as though the data that's going to come out of this healthy normal volunteer study, coupled with additional data that we've been running just in a normal course of activity will allow us to be able to open up sites in the U.S. And so we're pretty confident about that, and we'll take these data back to FDA along with other regulatory agencies in Q4 this year, and we'll have those discussions, and hopefully, we'll be able to open up this trial globally early next year.

Great. Any thought given to perhaps trial structure design for a Phase II, specifically in regard to patient cohort size, primary, secondary end points, dosing, statistical methodologies, et cetera?

Yes, lots of good questions and a big TBD there, right? So I think a lot of that's going to get influenced not only by the results of this Phase I trial. But also by our conversations and discussions with the different regulatory agencies. So hopefully, we'll have more to share in the months to come around the Phase II design.

Great. I guess looking at the translation of this to the broader DMD portfolio that you have, what should we expect? What kind of derisking can we see between 44 and the rest of the franchise?

So, we use the same EEV for all our neuromuscular program. This includes Vertex's 640 program. So each time we can predict the PK/PD, the distribution because most of the distribution is governed by the peptide and not the oligonucleotide. So that way, we'll have a better idea to predict the efficacies going forward and the doses that are required for minimal efficacy, et cetera, and the task profile, if there's any.

So great segue again over here. I would love to dig in a little bit into your collaboration with Vertex for DM1. So in the past year, we've seen a lot of incremental progress here, noting the ongoing Phase I/II trial, what are the main responsibilities for Entrada regarding the progress and development of this asset versus what is under the jurisdiction of your partner?

Yes. It's a very clean structure and a very, very highly collaborative relationship with our partners at Vertex. So essentially, the way that we structured this was that we would be involved in and responsible for all 3 clinical activities. Vertex would be responsible for all regulatory, clinical and then hopefully, commercial activities as well. So really clean and clear lives of delineation of responsibilities between the 2 companies. And so we're at that point, right? So the program itself is in the clinic. They have multiple regulatory clearances to move that study along. They've enrolled patients. So we're excited about the progress that Vertex has made within this study.

Right. And with this in mind, can you expound upon perhaps patient enrollment for the trial?

Yes. So that's a tough one, right? Because once again, of the clear lines of delineation of responsibility and part of that is just a materiality question, right? What's material to us around DM1 is -- we may or may not be material to Vertex. But we know that they have 7 sites that are open Canada, U.K. and Australia, and they're putting all the weight of Vertex behind enrolling this study as responsibly and as fast as they possibly can.

Any time lines here as to perhaps when enrollment will complete?

We don't know, to be honest, once again, it's one of those questions of materiality that we don't have the answer to.

Got it. Makes sense. So I think taking this and extrapolating a little bit broader, learnings, right? So collaborating with such an established biotech company like Vertex, have there been learnings that your team is incorporating into your R&D process and decision making on the forward? Give us a little bit of color here, perhaps get into this.

Yes. Yes, you interact. So I'm also from a background, where I went from a small company to a large company. There are a lot of learnings, right, when you have very mature developmental teams on the other side, when you interact with them, you learn a lot. And anyway, for a nascent company like ours, every program we learn and the learnings are incorporated into the next program, and Vertex is no different, right? And it is just that they have a more mature term a lot to learn from them as well.

And I would also add that most of us have had experience in large companies, as Nataraj mentioned, and I'm sure that they go back to their roots at times and think about what it's like to operate as a smaller company, right? We're both subjected to obviously public company, disclosure and whatnot. But I think it's -- I think they've also had fun working with a smaller company, too.

No, that's lovely. I mean given the success of the partnership thus far and perhaps the enjoyment that you both mutually share, do you anticipate pursuing other partnerships in the future? Or are you attempting to perhaps deepen your existing ties with Vertex? What does the forward outlook look like for Entrada and can you kind of dig in there a little bit?

Yes. I mean when you look at the space that we're operating in, with 75% of all intracellular targets not being really readily accessible the opportunity for us within diseases and then, of course, within modalities, right, like different modalities that we're exploring in conjunction with these EEVs like gene editing and other areas, we can't do it all, right? As much as we would like to do it all, we just can't. And so I think business development is going to be something that continues to surround the company, whether it's with Vertex, whether it's with another company. At the end of the day, what matters to us is the ability to go after a disease as quickly as possible to be able to service the patients who are so desperate for a treatment, right? And so -- and I think that cuts across a wide variety of companies.

Okay. Any in particular that you're perhaps hiring? I know I'm pressing a little bit here, pushing my luck...

I think the Vertex of the world are few and far between, but there's a lot of companies out there that are extremely patient focused. And I think that becomes really important for a company like ours, right, where speed and the quality of the data becomes really, really important, right? And what we've seen with Vertex is a fundamental commitment to what they said during the negotiations, right? They're moving as fast as they can. We would like to see that with another company if we go down this BD pursuit.

Okay. Makes total sense. I'm going to push my look 1 more time. Can you help us perhaps frame our expectations for milestones from Vertex for the balance of the year?

Sure. Yes. So we -- so the structure of the deal was $226 million from a licensing or upfront fee and then $24 million of equity, and then there was up to $485 million of milestones and then a royalty structure, just to kind of frame the entire deal. In our last earnings, we reported that we achieved a $75 million milestone that was for clinical development. But beyond that, we have not broken up for the public to see what the different milestones look like. What I can say is that we were not interested in huge, as you can see about the number, we're not interested in huge back-end milestones. We wanted to have very achievable milestones, clinical milestones, commercial milestones. So it's very akin to what you would structurally see within an early-stage collaboration. We just try to push that as much forward as we possibly could.

Makes sense. I guess, again, zooming out a little bit more. You've previously commented a lot on your burgeoning pipeline, which expands into different disease areas, therapeutic verticals, modalities such as Pompe's disease, ocular immunology antibody and protein delivery, gene editing, the list goes on. And so is there any incremental commentary that you have for us today on progress in this wide variety of disease areas and perhaps modalities? And when can we expect more updates on this front?

Yes. It's an ambitious company, right? And once again, with all the opportunities that we have and I affectionately call Nataraj the Wizard, I mean under his leadership, the science -- science teams have done so much. I think I'll point to ASGCT, where we were just at where we shared some of our LNP data, which was very, very positively received because once again, it's a delivery issue. And so I think that from a modality perspective, is something that perhaps we'll spend a little bit more time on. From a disease perspective, looking at ocular and looking at metabolic diseases like Pompe also are a very, very high interest to us. And the early data that we've generated to date is extremely positive within those diseases because once again, it's the same fundamental issue. It's the ability to get to where you need to go, right? And Pompe, it's the ability to get to the lysosome and the ability to knock down glycogen or inhibit the production of the glycogen. And once again, these are all areas of high unmet clinical need. Where we will display these data is still to be determined. As you know, and as you guys have learned to know, we speak when we really need to speak. Otherwise, we kind of are pretty quiet. But we do look forward to sharing these data outside of our neuromuscular franchise this year.

Natarajan, any additional comments here?

No. He got it covered.

He says less than me. So ...

Man of a few words. Still waters run deep.

The wizard, yes.

I guess taking a step into the more financial aspects of your story. Can you remind the audience of your cash position and how the company is thinking about namely the management of cash runway?

Yes. I think that's one place where we've really excelled. I mean we went public in November of 2021, we haven't raised capital since then outside of the Vertex deal, right? So -- and our ability to maintain and stay consistent with our cash runway, which goes into -- or goes through the second half of 2026 -- sorry, second quarter of 2026, has been something that we've used as a strength. So kudos to our finance team for keeping us on track. Now with that said, we're going to have to raise money, and we know that. And once again, the investor community has been very receptive to the data to date, and we'll see how that goes. But we will continue to maintain our guidance with cash as it stands today through the second quarter of '26.

Great. Now on capital allocation, what are the main things that you're looking towards the balance of the year? Perhaps 1, 2, 3. If you had to rank things and really give us some discrete characterization there.

Yes. I mean I think it's really getting ready for these global clinical trials. I think that is a -- both from a people perspective, a CRO perspective, just an overall cost perspective, and that is the -- probably one of the most significant drivers of cost for us, which makes sense. I think the second really is continuing to advance in the pipeline and continue to advance whether it's in a disease area or a modality area we want to make sure that Entrada is built to be a stand-alone biotech company. We want to make sure that we have a wide range of focus that is in line with our view of going after intracellular targets. So I think that investment and continued investment in the research side of the R&D aspect becomes really important. And the third really is people, which kind of gets covered between 1 and 2, but continuing to invest in talent, continuing to invest in best-in-class talent and retaining those folks in a very highly competitive Boston environment. We're really excited by the fact that our turnover is one of the lowest in the industry, and that takes commitment and that takes perseverance and we hire well, and we want to maintain -- we want to keep that and keep that culture intact.

No, that was lovely. Well, I'll give you a few minutes back of your days. But thank you so much for joining me today, and enjoy the rest of your day, everyone.

Thanks, Karishma.

Thank you.

Look at that.

Standing ovation.

Awesome. Thank you.

Thank you.

That was great.

Thank you.