Intellia Therapeutics, Inc. (NTLA) Earnings Call Transcript & Summary

Hello, and welcome to Intellia Therapeutics Second Quarter Conference Call. My name is Chloe, and I will be your conference operator today. Please be advised that today's call is being recorded. I would now like to turn the call over to Jason Fredette, Vice President of Investor Relations and Corporate Communications at Intellia. Please proceed.

Thank you, operator, and hello, everyone. Earlier this morning, we issued a press release outlining recent business updates in our second quarter financial results. This document can be found on the Investors and Media section of Intellia's website at intelliatx.com. At this time, I would like to take a minute to remind listeners that during this call, Intellia management may make certain forward-looking statements. We ask that you refer to our SEC filings available at sec.gov for a discussion of potential risks and uncertainties. All information presented on this call is current as of today, and Intellia undertakes no duty to update this information unless required by law. Joining me on the call are John Leonard, our Chief Executive Officer; and Ed Dulac, our Chief Financial Officer. With that, I'll now turn the call over to John to begin our business discussion.

Thank you, Jason, and good morning, everyone. We're excited to be speaking with you to recap the tremendous progress we made in our Phase III development programs of lonvo-z in hereditary angioedema or HAE, and nex-z in transthyretin amyloidosis or ATTR. The full results of our Phase III HAELO trial in HAE position us very well for a potential approval and launch of the world's first in vivo gene editing product in the first half of next year. We also have gained important new genomic insights that further our understanding of nex-z's profile and could help position us even more favorably within a large and dynamic ATTR market. Let's begin with lonvo-z. Simply put, the second quarter was a momentous period for this program. In April, we reported positive top line results from HAELO and got our rolling BLA submission underway with the FDA. This was followed by our late-breaking oral presentation at EAACI and a concurrent publication in the New England Journal of Medicine, Intellia's sixth manuscript in this prestigious journal. HAELO was an unequivocal success as we achieved statistical significance for the primary and all key secondary endpoints. More specifically, during the 6-month primary observation period, we reported an 87% reduction in mean monthly attacks for lonvo-z versus placebo. 62% of patients were entirely attack-free and therapy-free in the lonvo-z arm. A 23-point improvement was observed for the lonvo-z arm in the total angioedema quality of life score from baseline. For context, a change of just 6 points is considered to be clinically meaningful. The New England Journal manuscript also contained compelling figures and analyses underscoring the unique value proposition that could be afforded by this onetime therapy if it's approved. For instance, patient-level data demonstrated that all patients in the lonvo-z arm experienced attack rate reductions from baseline for weeks 5 to 28. In other words, every single patient received a clinical benefit, including those who are not yet fully attack-free during that 6-month period. A subgroup analysis demonstrated meaningful attack rate reductions in the lonvo-z arm regardless of age, sex, race, weight, geography, baseline attack rate or prior therapy. The publication also included a figure depicting the mean number of HAE attacks over time. It traced patients from when they were on prior therapies before screening through the entire efficacy evaluation period and into crossover. And it showed that mean attack rates for the lonvo-z arm dropped well below the prescreening attack rates by week 4. Attacks continued to decline in the months that followed and approached 0 in the crossover period after week 28. In the placebo arm, not surprisingly, mean attack rates didn't drop below prescreening levels until patients crossed over to lonvo-z. At that point, they dropped steeply and approached 0 within a few months. Also, notably, all patients who received lonvo-z at baseline or in crossover remained free from long-term prophylaxis therapy as of the data cutoff. And finally, favorable safety and tolerability data were observed. The most common treatment-emergent adverse events were infusion-related reactions, headache and fatigue. All treatment-emergent adverse events were Grade 1 or Grade 2, and there were no serious adverse events observed in the lonvo-z arm as of the data cutoff. These results are unsurpassed by chronic long-term prophylaxis therapies or LTPs. We believe it is clear moreover that they truly stand alone in the HAE space given that this is a onetime treatment. Most patients were attack-free and therapy-free for the entire 6-month efficacy observation period following a single lonvo-z dose. Based on our preclinical work and observations from our Phase I/II trial, our expectation is that this percentage will increase further over time as patients who have lived with HAE their entire lives adjust to their new normal. So what's next for us? Well, we expect to be in a position to announce the FDA's acceptance of a BLA filing for lonvo-z by the end of this year. In the meantime, our pre-commercial readiness efforts are advancing well as we prepare for a potential U.S. launch in the first half of next year. Most of these efforts are well underway, including work streams across medical engagement, payer outreach, treatment center readiness, distribution planning and access strategy. We completed hiring for our field medical, reimbursement and strategic accounts teams, and they're now engaging with treatment centers around the country to ensure they are well prepared to address patient needs shortly after approval. We're also building awareness of the many burdens associated with HAE. During the second quarter, we launched haereframed.com, a disease awareness initiative designed to elevate understanding of the challenges patients face, including those related to lifelong chronic therapy. Together, these efforts reflect meaningful progress in building the infrastructure, awareness and access pathways needed to support our planned launch. So, let's turn to the progress we made with nex-z, our potential onetime treatment for patients with ATTR cardiomyopathy and polyneuropathy. We were pleased to have resolved the clinical holds in our Phase III trials quite rapidly earlier this year, and I'm excited to report today that we were able to resume enrollment and dosing in both trials in Q2. Investigator engagement and enthusiasm remain high and our screening rate is rapidly increasing globally once again. ATTR is a large, growing and highly underdiagnosed market with significant unmet needs. Today, patients are predominantly served by stabilizers, silencers or a combination of the 2. About a month ago, disappointing top line results were shared from CARDIO-TTRansform, the pivotal trial of eplontersen, a TTR silencer for patients with ATTR cardiomyopathy. Since then, there's been some debate about whether a silencer can work on top of a stabilizer. We and others believe the negative outcome is specific to eplontersen in this particular trial, and it does not speak to combination outcomes in general. We remain firm believers that combination therapy will work, but only with the right agent. This belief is based empirically on clinical evidence. First, we would point to the fact that another chronically dosed silencer, Vutrisiran, has already shown a directional benefit on top of stabilizers in a well-controlled trial. But even more importantly, we would point to what was observed in the monotherapy data for each of the chronically dosed stabilizers and silencers. If you go back and look at the readouts for approved stabilizers like tafamidis and acoramidis and approved silencers like eplontersen and patisiran, you'll see that patients continue to progress while they're on those therapies. Why is that? Well, we and others are convinced it's because they adequately reduce or control TTR protein. Focusing in on the approved silencers, you'll see that mean TTR reductions for each of them are about 80%. However, the details behind that number matter. For instance, it takes many months for those silencers to achieve their 80% of reduction. There's significant variability in TTR from patient to patient with some achieving a 90% knockdown and many others receiving reductions of only 50% or 60% and even within an individual patient, the knockdown fluctuates due to issues with PK and issues with dose interruptions and adherence, whether due to patient behavior or toxicity. Simply put, it appears today's silencers and stabilizers are leaving efficacy on the table and a progressive disease with high mortality like ATTR-CM every day and every microgram per milliliter of TTR counts. Nex-z has demonstrated its ability to deliver an unsurpassed knockdown of TTR protein for patients in both relative and absolute terms. Our Phase I data demonstrated a mean TTR reduction of 90%. While that percentage is impressive, we believe the absolute TTR reduction is even more clinically relevant. When nex-z is provided as monotherapy, mean serum TTR was less than 20 micrograms per milliliter, about 1/3 of the absolute level seen with leading chronic silencer. That knockdown was achieved rapidly within 1 month of the infusion, and it was extremely consistent across all patients. Best of all, patients began receiving therapeutic doses of nex-z in 2021. And as of our latest data cutoff, intra-patient TTR control was constant and was maintained across all patients following the onetime nex-z treatment. We look forward to presenting updated long-term durability data at future congresses. We believe nex-z's distinct TTR knockdown is why disease stabilization or reversal is observed in most patients in our Phase I, while our would-be competitors have observed disease progression. Additionally, the response has been consistent across patients of all New York Heart Association classes, those with either variant or wild-type disease, and it also includes patients who have progressed on past silencers. And so we continue to have significant confidence in our ability to show a benefit on top of tafamidis and MAGNITUDE. Additionally, unlike CARDIO-TTRansform, which was a time-bound study, MAGNITUDE's primary endpoint is strictly event-based. We've enrolled well over 650 patients in MAGNITUDE. We've been accruing events for quite some time, and those events continued unabated through the clinical hold. While still premature for us to guide us to data timing, what I can say today is that the blinded event rate in the trial remains within the range we had projected internally. We're looking forward to reviewing the detailed CARDIO-TTRansform data later this month at ESC. And of course, we have the opportunity to consider changes that further optimize MAGNITUDE's design based on what we learned. Now let's move on to one other encouraging update we're able to share today related to nex-z. As we reported late last year, Grade 4 liver transaminase elevations have been observed in less than 1% of patients enrolled in MAGNITUDE. These were transient and in most cases, they resolved without any intervention. Based in part on the fact that the observations consistently occurred 2 to 5 weeks after dosing, we hypothesized they were caused by an adaptive immune response. As a result, we implemented mitigation measures to enhance monitoring for transaminase elevations and intervene if they are observed. These measures are very straightforward and could easily be implemented in a real-world commercial setting if required. We also went further, working with Regeneron and other external experts, we sequenced and analyzed data from over 600 patient samples across all nex-z clinical trials to date. Our goal was to understand if there were subpopulations that might be most susceptible to higher-grade transaminase elevations. This work focused on HLAs, which are proteins on the surface of cells that play a key role in regulating the immune system and helping to distinguish native and foreign peptides. This blinded analysis revealed one statistically significant finding. Patients carrying specific HLA allele that's known as C*05:01 had a significantly higher rate of Grade 3 or greater transaminase elevations than the broader population. In fact, each of the 5 highest elevations observed following dosing occurred in patients carrying this allele. Now some important context on what this does and doesn't mean. Only 12% of the 600-plus samples we analyzed carry this allele and the strong majority of C*05:01 positive patients did not experience severe transaminase elevations. So we continue to see the potential for a favorable benefit risk profile even in the subgroup, particularly with the mitigation strategy that is now in place. What the finding gives us is valuable, a mechanistic explanation for a general signal we had already flagged and a way to identify patients who are more likely to be affected before it happens. In doing so, it further increases our confidence in nex-z's ability to deliver on its long recognized potential. So here are our next steps. We're engaging with FDA to review the findings. In the meantime, we already have updated our protocols, investigators' brochures and informed consents to incorporate HLA typing for all patients in the Phase III trials. These documents are in the process of being rolled out to regulatory authorities, IRBs and sites globally. Following the reviews, investigators and patients will be informed about the HLA results during screening or prior to crossover so they can make more informed treatment decisions. And so to close, I'm exceedingly proud of all the team continues to accomplish here at Intellia. We're marching towards the world's first potential launch of an in vivo gene editing therapy with lonvo-z. We're on track to complete enrollment in MAGNITUDE-2 later this year, and we're demonstrating precision medicine at its finest with our HLA work on nex-z. These achievements layer on top of all the other pioneering work we've undertaken as we seek to harness the power of gene editing to deliver optimal treatment outcomes for patients with just one dose. So with that, let's now turn the call over to Ed to share some financial color.

Thank you, John, and hello, everyone. In addition to the tremendous clinical, pre-commercial and scientific progress we made in the second quarter, we also kept the company on sound financial footing. In April, we completed an equity financing that yielded approximately $195 million in net proceeds for the company. Cash, cash equivalents and marketable securities were $628.4 million as of June 30, 2026, compared to $605.1 million on December 31, 2025. We believe this cash balance will be sufficient to get us at least into 2028. Importantly, while we expect to obtain approval and launch lonvo-z in the U.S, in the first half of 2027, our cash runway guidance is conservative in that it excludes all product revenues. Collaboration revenue was $7.7 million for the second quarter of 2026 compared to $14.2 million for the prior year quarter. This change is primarily due to a reduction in revenue from Regeneron. R&D expenses were $82.6 million for the second quarter of 2026 compared to $97 million during the prior year quarter. The decrease was primarily driven by lower external costs related to lonvo-z and nex-z and reduced stock-based compensation, partially offset by higher employee-related expenses due to increased headcount. Stock-based compensation expense included in R&D was $9.4 million for the second quarter of 2026. G&A expenses were $37.8 million during the second quarter of 2026 compared to $27.2 million for the prior year quarter. This increase was primarily driven by costs associated with the ongoing build-out of our commercial infrastructure, higher legal expenses and stock-based compensation. Stock-based compensation expense included in G&A was $8.6 million for the second quarter of 2026. And finally, net loss for the second quarter of this year was $106.6 million, which compared with the $101.3 million for the prior year quarter. With that, we are ready to begin our question-and-answer session. Operator, would you please open the line for questions?

[Operator Instructions] The first question today comes from Maurice Raycroft with Jefferies.

Congrats on the progress. I'll ask one on the allele finding, which is interesting for that C*05:01 allele, can you talk about the implications for the 12% of patients where there could be some added risk? And is there another parameter that you could use to help fine-tune patient selection? And lastly, is there more you can share on the biologic relationship for what exactly is triggering the immune response?

Thanks, Maurice, for your question. So we think that the finding confirms our initial thinking about an adaptive immune response as many will know, HLAs are deeply implicated in cell-mediated immunity. And this would be an important part of understanding what we saw with our early observations with timing of the immune response. So it gives us significant confidence that the mitigation measures that we put in place are appropriate and are on target for what seems to be going on. With respect to the patients that carry C*05:01, as I said in my comments during the earlier portion of the call here, we're making that information available to all investigators and patients. There's a relationship that's significant, but many of the patients that carry C*05:01 do not have LT elevations. So the first order of business is to make sure that if patients have that, they're aware of it, and they can discuss the elevated risk with their physicians and make a determination of what's appropriate for them. Our expectation just based on conferring with our steering committee members and people, the experts that we've been working on this during the course of our findings is that many of the patients may choose to self-exclude and that's appropriate for them. But for those who believe that the state of their disease and the other opportunities available to them were continuing to receive the therapy and advancing the trial, we're making the drug available for them. As we continue to learn during the course of our trial, we discussed with the FDA these findings and any further implications. But in the meanwhile, we think that this will give enhanced confidence to the physicians and patients who are entering that they can drive the best possible outcome, all things considered.

The next question comes from Joseph Thome with TD Cowen.

This is Jacob on for Joe. Just sticking with the HLA allele. I wanted to confirm that this is something specific to nex-z and not lonvo-z. And then also, you said, I believe that it was 12% of the 600 samples that carried the allele, but only a fraction of that 12% actually had elevations. Is that correct?

Yes. In my comments, I said that across the study, there's about 12% of patients who carry the C*05:01. And that broadly reflects what's seen in a North American, Western European population. There will be some variance across different ethnic groups with numbers sometimes lower than that, but that's what we've observed in the study. With respect to specificity, almost certainly, this would be specific to nex-z and not have any implications for lonvo-z. And there's a couple of reasons for that. When you think about what an HLA molecule is, it binds to a very, very specific short peptide, and we wouldn't expect those peptides to be implicated in any way with the lonvo-z treatment effect. So that's further supported by the fact that as shown in the New England Journal publication that was recently released, there's no signal in patients with lonvo-z. And at this point, we think that this is just a finding that's going to be limited to nex-z.

And I'll just add one thing, John. I think there's a comment about just the vast majority of those patients that had C*05:01 did not experience severe transaminase elevations. So 12% of the samples do represent those that are carrying the allele, but only a small subset have had these higher grade elevations.

The next question comes from Luca Issi with RBC Capital Markets.

Congrats obviously on all the progress. Obviously, we have yet to see the full CARDIO-TTRansform trial. I was looking forward to that data, European Society of Cardiology. But I think, John, you already mentioned potential to maybe optimizing your trial to maximize the probability of the success. Can you just talk about what are the options that you're contemplating at this point? Can you enroll more patients? Can you extend the minimum follow-up longer than 18 months? I don't know, can you limit the use of SGLT2? Like just walk us through big picture, how you're thinking about potentially tweaking your trial.

Thanks for the question, Luca. I mean the first order of business is really understanding the data that comes from the CARDIO-TTRansform study. As I said in the prepared comments, we believe, based on everything we know thus far, that the findings are likely specific to eplontersen and not generally applicable to how we think about treatment of patients with TTR disease or patients with receiving combination therapy. What we think is going to be the most important information is the degree to which TTR is reduced. The variability or lack thereof as we see in our own patients, the speed with which treatment effect is achieved and then obviously, the durability as patients go through the many, many months of observation that -- where variability may be attributable to pharmacokinetics or interruptions for toxicity, for example. All of those elements will erode the overall treatment effect. And it's important, I think, to really understand that before we jump to conclusions about combination therapy and how best to use it. But with an understanding in hand, and we will, of course, work with experts who are deep in the data. We'll consider if there's anything that we need to change, we remain open-minded. We adapt as necessary, and we certainly try to learn at a prodigious rate as information becomes available. The factors that you mentioned are possible to change, but we don't start with a thesis in mind until we have a really good understanding of the data. And like you all on this call and many others, we're very, very anxious to see what that information is before we make any changes.

The next question comes from Salveen Richter with Goldman Sachs.

Can you remind us of the background stabilizer used in the study? And if you expect that to change given recent CARDIO-TTRansform results? Also on the HLA filing finding, do you see enrollment changes just given screening for HLA?

Thanks for the question, Salveen. Background stabilizer use is running around 80%, which is what we projected when we set out and what we've been confirming on various data releases along the way. And so that does not appear to be changing one way or the other. I think it reflects how stabilizers are broadly used around the world and obviously, in sites where we're doing the investigation. With respect to HLA, as we talk to investigators and people who are working with in this trial, most of them view this as confidence building in terms of how to think about patients and who to enter and potentially who to exclude should the patient or the doctor think that, that's the most appropriate course of action for any particular patient. But across the board, as we've gone through the data with people who are practicing cardiologists and experts in the field to a person, all of them have viewed this as a very, very favorable finding that enhances overall confidence. And our job now is to make that information available to those doctors and physicians in the trial and patients in the trial as quickly as possible, and that's well underway.

The next question comes from Silvan Tuerkcan with Citizens.

Maybe can you talk a little bit about the patient gateway that you're building with HAE reframe? And kind of is that more to get data points to you for potentially their marketing? Or is that to kind of push your message out around some of these endpoints where onetime treatment could be helpful? And if so, what are those? And maybe related to that, what can we see as the driving symposium data that's coming up here?

Let me speak first to the symposium that you referenced. You'll remember that across the entire HAE program, virtually every single patient at some point gets to something that resembles no attacks and no therapy. It takes some patients longer to get there than others. But virtually everybody ceases to use long-term prophylaxis and almost all the patients no longer require on-demand therapy. They may carry it with them, but the overall utilization for these patients really plummets, which we think is exciting for the patients, for the doctors and certainly for the payers who are supporting these patients. At the symposium, we'll go through what we think is very important information for -- how the drug behaves from a molecular level and how you can trace that with respect to a high molecular weight kininogen. And that has specific reference to one particular patient who had a significant benefit from the drug but did not reach an attack-free status. And the long and short of it is the patient probably has a second process unrelated HAE and we'll speak to that. So I think that's really exciting information that speaks to one particular patient who stood out from the vast majority of patients who have all done very, very well. With respect to the website, we're trying to make sure that people have a good understanding of what the burden of HAE really is. We typically talk about disease attacks and the efficacy and safety of drugs that they receive. But what's left out of the discussion many times is what patients have to go through just to get that and stay on their therapy and still how HAE continues to affect their lives because for all practical purposes, they continue to suffer from the disease. So by having a better understanding of what patients need to do to get the drug on a recurring basis, sometimes requiring prior authorizations even twice in a year, we want to make sure that payers, patients and doctors have a really good understanding of what that burden is. And then when they see the profile of lonvo-z, they will be -- the contrast will be very, very apparent.

The next question comes from Leah Cann with Brookline Capital Markets.