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

All right. Well, thanks, everyone, for joining us. I'm Terence Flynn, Morgan Stanley's U.S. biopharma analyst. For important disclosures, please see the Morgan Stanley research disclosure website at www.morganstanley.com/research disclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. So I'm very pleased to be hosting Intellia today. Joining us from the company, we have John Leonard, the company's CEO; and Ed Dulac, who's the company's CFO. Thank you both being here, really appreciate it. Looking forward to speaking with you.

I thought we'd start maybe just high level, John, to talk about in vivo editing and just the potential for the platform. I think, again, there have been a lot of technologies been in development for a long time now. We're starting to see impressive use cases here. And so as you think about the potential, maybe just talk to us about high level, where you think this can go over time? And then some of the outstanding hurdles to really effectively scale it, and then we'll get into your more specific pipeline.

For sure. Thanks for the question, and happy to be here. We pioneered the in vivo gene editing space. I mean, in the early days as CRISPR was coming to be, I think a lot of people went off into ex vivo and started off in that space. We bit the bullet and went directly to the in vivo editing space, where there -- that's where most of the actual targets reside in the body. The challenge there is solving for delivery, right? We benefited from people who have gone before us in terms of delivering RNA and set off with a lipid nanoparticle platform that we developed. And so we showed that you can open up the liver, which is here we are, end of Phase III with the BLA for our first indication, HAE, and then well into a Phase III trial for TTR cardiomyopathy and polyneuropathy. I think what -- the opportunities still -- there are several that reside in liver, but developing targeted LNPs to get outside of the liver to certain spaces and then finding other therapeutic delivery modalities that take you into the brain and the lung, that lies ahead. And I think as those insights come, there will be many, many very valuable targets to pursue. But at this point, we're really most interested in getting the first ones across the finish line and showing that we can successfully commercialize the CRISPR-based therapy.

Yes. Okay. Great. Maybe just moving on to your late-stage pipeline here, lonvo-z, the BLA filing for HAE, maybe just what are the gating steps here on the filing and then just overall confidence in approval?

Well, we heard from the FDA just a week ago that they've accepted the BLA, which is wonderful news. We had benefited along the way from our MAD designation and other work that we had done with pilot programs in CMC. As you know, many of the RMAT designated programs then benefit from a priority review, which we will have. So we ultimately got a PDUFA date now of March 10. One of the things we were obviously wondering about, given that we're the first example, was whether or not there'd be a need for an advisory committee, but the FDA has said that, that's not something that they're currently planning on doing. And we, at this point, I think, be surprised if that were to come. So from a confidence level, we think we have got a very, very strong package. The data are there for anyone to see. It's -- the compound has just excellent efficacy and a very, very clean safety profile. So we look forward to the questions, and that's what lies between now and March 10.

Yes. What -- and how do you think about like the scope of the label, like age, monitoring? Any tidbits yet at this point? And again, I think there's obviously some more to do here, but just what is our baseline?

Yes. We tried to develop the program as essentially an all-comers program minus the pediatric patient population below age 16. So there were no restrictions based on prior therapy, type of therapy, degree of disease, that kind of thing. And in fact, the patient population that ultimately came into the Phase III program largely represents what is the market in the United States, 70% LTP, 30% on-demand therapy, patients with varying degrees of control, and importantly, 20% of the patients in that Phase III trial with complete control. So we think that the product has broad appeal, and we would expect that the label will reflect that.

Okay. What -- maybe talk to us about just kind of some of the market access work you guys have done as you prepare for the launch? Any early insights from some of the payer conversations? And then just remind us as you kind of scale your commercial footprint, what is that going to look like?

I'm going to turn to Ed to speak to the market piece.

Yes, I'll talk to that. Maybe we'll start with the clinical data since that's the basis of a lot of these conversations. And we've all been trained to talk about attack rate reduction. We had 87%. That's sort of table stakes for today's LTP market, as we like to refer to it. But as importantly is the data that we have in terms of how many patients have an attack-free state at the 28-week primary observation period. And in our case, that also is accompanied by no therapy by definition. So we had 62% attack-free status. Both -- in both cases, that's as good or better than anything that's been reported. I think to extend that though, because I think there's 2 other bits of information as we think about the opportunity ahead that we're really excited about. If you take a big step back and you look at all patients we've treated, Phase I, Phase II, Phase III, that's in excess of 100 patients. All patients eventually get to an LTP-free state. I'll just say it again, every single patient has gotten to LTP-free, and none have gone back to LTP. So as you think about healthcare resource utilization, that's an important consideration. It is already a very expensive disease to treat. The reason being is, for the most part, that LTP therapy, which can be in excess of $700,000 annually. So when we show up to a payer conversation, it's very interesting because their question is, well, what is the right multiple to think about, right? And so we will test things like 2x, 3x, 4x, 5x multiple. Not surprisingly, when you get to the upper end, you're going to face a lot of resistance. So we haven't decided a price. We're obviously not going to communicate any price today, but somewhere within that range is precedent for a onetime therapy that is highly effective, but that's the other important part here. The durability of clinical benefit were now have already shown 3-plus years of data, those patients continue to mature were at 4-plus years in the earliest Phase I/II patients, and we're going to continue to follow the Phase III patient population. So we think in a relatively small market that relies on patient switches, we have an extremely differentiated profile. And the 1 thing I would say is that this is somewhat of a unique market in that we all talk to physicians. Their perception is my patients are pretty adequately served. There are lots of treatment options, and there are. The patient voice is the 1 to really focus on. They're actually uniquely educated. There is an advocacy group that they all participate in. They know what studies have been run. They know the clinical data, and they're very much a part of that conversation. So it's usually more joint decision-making. When you talk to the patient's perspective, they see a high degree of unmet need. In fact, go to our Phase III patient population and 70% were LTP users, 30% were on demand, which we think is really important. So it's more of an all-comer patient population opportunity. 20% of the patients [ to erase ] had complete control of their disease. So think about that for a second. They are adequately controlled on their existing therapy, are willing to wash off that therapy, establish a baseline number of attacks and run the risk of getting a placebo in the hopes that they can get a definitive treatment option. So we're really encouraged by the setup, and we've been working with payers for quite some time, doing it all again in essence now that we have the Phase III data, we've had very constructive conversations.

Okay. That's great. Maybe just remind us kind of the mix, like how much commercial, Medicare, Medicaid, what to expect here? And then again, sizing of the commercial footprint, again, it seems like this will likely be a very small targeted sales force?

It's a perfect starter indication for us, doing this for the first time. To answer your first question, about 70% of all covered lives are commercially insured, about 20% Medicare and 10% Medicaid. That's pretty important as you think about covered lives and what the curve looks like post approval, you can typically get to 60-plus percent in the first 6 months and then it will continue to advance it from there. So we've got a lot of folks in the field already. The medical team has been out there for quite some time, educating on the unmet need, educating on CRISPR, of course. And now that we have our Phase III data for lonvo-z talking about that, but we also have [ liaisons ] focused on authorized treatment centers. Do they have the right capabilities, making sure that they are prepared. We've been looking at, obviously, the market access, continuum, thinking about distribution, how do different institutions prefer to get the product? Do they want to buy and build, do they want a specialty pharmacy option? So we're doing a ton of work on a lot of this stuff will have to come post approval, which we can talk about. But you're right, the footprint is relatively concentrated. 250 prescribers, the top 250 in the U.S. cover about half of all U.S. patients. So we can be very targeted, and we think that's a good place for us to start. There will be a referral component to this for folks in the community or institutions that are not willing to take it on directly, and we have plans for that underway.

Great. And again, have you started to build out -- I know you probably have your leadership in place, some of the MSLs, but you started hiring yet for the regular field force? Or is that kind of more early next year?

We have. And so we have not -- we wanted to make sure we use the lead time we've had. If you look at 2025, last year was really the foundation leadership, really experienced people that have both HAE and onetime therapy experience. This year in 2026 has been more of the field build-out. So beyond medical, some of these liaisons to do the ATC assessments, for example, have been in place. But we've also actually hired the field reps that will be promotional in the market post approval, assuming that comes around that March 10 time line. So there's training required, but we're in a really good position. And should the agency surprise us to the upside with even earlier approval, we would be prepared to do that. Same to be said for manufacturing. We're in a really good spot there as well.

Okay. Okay. Great. I guess as we think about the early launch analogs, should we look at the [ Ionis ] product as kind of the most relevant one, just because it's a more recent launch? And again, I know it's a different technology platform, but is that the way we should think about kind of early ramp of patient numbers? Or what's the right analog to think about here for the early part of the launch?

Be disingenuous if I said we're so unique and different and then say there's a natural analog for that. I do think it's an opportunity to realize where we are different. In this case, I think it's important to know when you have a highly effective onetime therapy, we have no ability to take those patients on clinical supply to commercial, right? So we don't have that same playbook. If you have a small molecule or self at-home injectable, that's a different paradigm. We do not have that, right? So what you're hearing us saying is making sure we're going through great lengths to make sure we understand all the stakeholder needs, be in a really good position so it's a -- if and when we receive approval, we can quickly operationalize it. What that means, though, is we're not going to have that overnight, flip to revenue. So you're going to have to start judging us early on, on things like ATC and our penetration there. Probably things like patient start forms are still working our way through all that. The revenue will ultimately maybe be captured downstream. But it's going to take a little bit of time out of the gate for that to mature. So I'd be looking for a couple of quarters of revenue so you can get a better sense of what the real projections would look like for us in HAE.

Yes. Okay. Makes sense. Any other considerations for the launch that we should keep in mind here as we think -- as we look forward to March?

I think the way I look at it -- and John can chime in. It is a small market. It's a switch market, and we look like we have a very different profile in that to go back to some of my earlier comments that I don't want to repeat. So we think this is going to be very transformational for the treatment of HAE. I don't think every patient shows up on day 1. I also don't think there's a huge delay, and we see reason to believe that there's a nice curve associated with it. As a company though doing this, this could be profoundly impactful for capital needs and our ability to reinvest in the business. I'm sure we'll talk about TTR next, but we also have active research. We look at -- even if we had a mediocre launch, quite frankly, we are in the possibility of covering the operating cost of the company. So as we think about how well we're funded today, what the future capital needs, the real question we ask ourselves and what investors need to come to terms with is what is the lonvo-z opportunity. It's going to be a premium price product in an already premium-priced market with very attractive margins, which gives us the possibility of really bending the curve in terms of the capital needs. So there's many things going on, including for us, as a company, and that would allow us then to allocate capital to the TTR program, but also the early research priorities that we've outlined.

Okay. Great. Maybe we'll pivot to nex-z for TTR. A lot of focus, obviously, on the ongoing MAGNITUDE Phase III program here. Maybe just any more details on timing, interims, how are events tracking? Help us think about when we'll be able to see data here from this trial?

Well, I'd start with the data that's come out recently and how we think about that with respect to ESC, [ ePlantersen ] and even going back to [ vutri ], 1 of the things that we've learned about that. Because that guides how we think about endpoints and accrual, et cetera, et cetera. I make the point that based on what we've seen, we think we're in a really good position. What we've learned from the recent disclosures is the relationship between degree of knockdown and stage of disease and how that patient mix affects the ability to see an effect in an all-comers patient population, especially with widespread use of stabilizers now. And so as we look at the study as it's currently designed, we think we've got the right set of endpoints. We've got the right patient mix. We will encourage investigators to think very, very carefully about the patients that they bring in, recognizing that there's more and more information that suggests that patients who are early in the stages of disease will benefit from therapy. And we want to make sure that physicians understand that. We may tweak at the margins here somewhat as we go and look at all the numbers, et cetera. But generally speaking, as we look at coming back on after the clinical hold that we had, we feel really good about the ability to fully enroll the study, again, with the right set of patients. The more challenging point is that it's an endpoint-driven study. So it really comes down to that patient mix and getting the right number of endpoints that will set the ultimate time frame for this. I will say that as we've looked at the accumulating endpoints -- because this has been going on for some time now. And even during the hold, we continue to accrue them. We're largely in line with the assumptions that we made at the beginning. So that was gratifying, especially as we've gotten access to this additional data. So again, I would just make the point that I think we're in a really good position. And because a few hundred patients remain to accrue, we can still benefit additionally from the insights.

Okay. And what -- are you able to share anything about those tweaks at the margins that you might make?

I think it really -- yes. I mean, it's a study that looks at standard of care, increasingly stabilizes our [ that ] around the world. And this is a study that's superimposed on top of that. So the proportion of patients that are unstabilized is something we're probably not going to affect that much. But stage of disease, the degree of advancement in the progression of disease as measured by [ NT-proBNP ] is something that we can think about doing. And there may be things that we do to ultimately tap the distribution at different subsets of [ NT-proBNP ], but that remains to be seen. We're working through those numbers now.

Okay. When do you expect to have that?

Soon. I mean, timeliness is really important to influence patients coming in. The other point I would make is that we've learned a lot about the endpoints themselves and those that are more discerning for the benefit than others. And that's something that we take into consideration on how to measure, which can, I think, increase the power of the study.

Yes. And anything you can share in terms of that powering at this point?