Metagenomi Therapeutics, Inc. (MGX) Earnings Call Transcript & Summary

Everyone, thank you for joining us in the room and online for TD Cowen's 46th Annual Healthcare Conference. I'm Joe Thome, one of the senior biotech analysts here on the team at TD Cowen. And it's my pleasure to have with me today the team from Metagenomi Therapeutics. We have President and CEO, Jian Irish; and CFO, Pamela Wapnick. So thank you very much. And the presentation is going to start with Jian providing a few overview slides, and then we'll kind of get more into the conversation.

Thank you very much, Joe, for hosting us today. Let me start with a few -- a quick introduction with a few slides. So this is our forward-looking statements. So I want to start saying that recently, we have rebranded as Metagenomi Therapeutics. That is the reflection of our evolution into a clinical stage company. Metagenomi Therapeutics is an in vivo genome editing company, capitalizing on our proprietary technologies to create curative genetic medicines. Last year was a milestone year for us. We achieved proof-of-concept data with the best-in-class potential of a curative onetime treatment for hemophilia A. We named the program as MGX-001. With that, we made the strategic decision to prioritize our capital allocation and focus on advancing the program towards the clinic and establish additional programs, leveraging the approach of MGX-001. In addition, we're advancing our partnered programs in cardiometabolic indications. The company was founded on a deep discovery platform with a vast library of over 20,000 signature gene editing systems. This systems from our metagenomic database and through our preclinical translation efforts, we have demonstrated high specificity, broad genomic targeting and a durable large gene integration. These attributes are overcoming the limitations of CRISPR/Cas9. Furthermore, we have achieved highly efficient multiplex editing with exquisite specificity profiles. With these proprietary technologies, our lead program, MGX-001, for hemophilia A has achieved the curative Factor VIII activities from nonhuman primate studies of both dose range finding and durability study last year. Our goal is to enable endogenous Factor VIII production for hemostatic regulation, demonstrate the potential to effectively treat both adults and children with -- by normalizing Factor VIII activity with onetime treatment. With the robust data in our hand, we have advanced our regulatory discussions and expanded the KOL engagement, and our organization is laser-focused on tracking towards IND submission in Q4 this year.

Great.

So now we can go to the questions.

Excellent. And maybe thank you for the introduction. You did indicate, obviously, all of the preclinical work you've been doing for your lead assets. So maybe can you walk us through maybe the key findings of the dose ranging and durability studies that you've accomplished and the target factor levels have kind of changed over the years as therapies kind of got better and better. But where do you think the target is for your program?

Excellent question. So first of all, we're extremely pleased by the results of both studies, demonstrate normalizing Factor VIII activities with the durability. So the normal Factor VIII expression range is generally regarded between 50 to 150 IU per deciliter. That is our goal. So in our dose range finding study, all the animals in the targeted dose cohorts have achieved normalized Factor VIII activity levels. The Factor VIII expression is clearly correlated with the dose levels. Notably, the doses for those activities are relatively lower for both AAV that delivers the Factor VIII DNA template and the LNP that delivers the gene editing payload. Furthermore, we observed no thrombosis risks even with the highest doses we studied. Now the key to a durable therapy is to achieve not only therapeutic but stable activity. So let me show what we have here. This is a durability study we conducted early on, give us the confidence that our approach is effective. The result was exactly as we predicted. All the animals in this study demonstrated stable activity all the way up to 19 months, even though this study was conducted with less optimized AAV and LNP payload. Most importantly, the effectiveness of the results is a reflection of our mechanism of action.

And obviously, with the upcoming regulatory submission, it has evolved kind of what the agency wants in order to clear an application to go into patients. I guess, can you kind of give us your level of confidence that you have everything addressed? And one particular aspect of that is the on and off-target editing for some of these candidates. Can you kind of walk us through maybe what you've done on that front as well?

That's great. So I -- first, let me answer the first question is our confidence in the translation. We're very confident about the translation into the humans. Why? Because the preclinical gene editing therapy animal models have been predictive of the performance in clinic. And we have achieved normalized and durable Factor VIII activities in our animal models. We believe not only with the efficacy but also the lower dose that we demonstrated in the [ DI ] study gives us an advantage for the favorable safety profile. So with both the efficacy and the safety profile, we feel very confident to go into the clinical study. In terms of off-target risk, of course, genotoxicity is a unique safety aspect of gene editing therapy. We have took the industry standard approach with 3 orthogonal methods, including in silico prediction, in vitro editing and in cell editing to identify potential off-target sites. And then we evaluated all the potential sites in human primary hepatocytes that those are [ liver sites ] were added with this treatment. We observed no detectable off-target site even with oversaturated -- super saturated -- saturating doses and no evidence of translocations. So we're very pleased with the profile. We feel good with the efficacy and the dose dependency and the safety profile to move forward with IND submission subsequent first-in-human study.

Great. And maybe on that point, what would the study look like in your mind? Maybe how many patients? And do we need to stagger doses? And should we use gene therapy as a convenient guide or anything different that we should be expecting for a gene edited approach?

While I'm not prepared to discuss the specifics, I can confirm we plan to conduct a global first-in-human single-arm Phase I/II study. The goal of a Phase I/II study is to identify the safety -- to establish the first safety profile and identify the dose level capable of achieving the target Factor VIII activity level. Again, the safety profile is so favorable, and we're very happy about it. The industry has learned a lot from gene therapy, the programs in the past, but FDA requirements are product specific. Durability is really important. We will -- we plan to have discussions with the FDA and will include the durability data in our registrational study.

Great. And in terms of manufacturing, obviously, manufacturing is a big topic for genetic therapies. Kind of where do you stand with your manufacturing process? And is the process that you take into the initial study is going to be sufficient for a registrational study? Or will you need to change it a little bit?

I'm happy you asked about this because we feel we're really good about the position we're in now. Manufacturing is so critical to deliver the therapies to the patients. Throughout this journey, we have kept an eye on the needs for -- by both pivotal and commercial stages. I can tell you that we believe we are already at the scale for pivotal stage.

Great. And maybe when you think about either the patients that you're enrolling in the study or the patients in the real-world setting, who is the ideal patient for a gene edited hemophilia product?

We will start with adult patients first, then quickly move into the children. In our KOL engagement, we have learned there is a great desire to advance into treatment for the pediatric patients, especially with the understanding of our approach, the mechanism of action, the KOLs really urged us to start the clinical trials in pediatric patients as soon as possible. That is the patient population who can benefit the most from a onetime treatment. Giving a onetime treatment for a lifelong effect could really benefit the children by leading to less bleeding events in early years in the life. With that, it can prevent more serious complications and organ damage while enabling a more normal lifestyle and improve the quality of life during the critical developmental years. We do believe the pediatric patients can benefit the most from a permanent gene integration, a lifelong effect of the therapy.

Perfect. And obviously, a lot of clinical development remains before you get to the market. But obviously, gene therapy approaches for hemophilia A and hemophilia B have been challenging, and we heard Roctavian kind of is leaving the market soon. So how can you differentiate the product with payers and almost prepare that market for a gene-edited therapy to maybe do what they didn't?

Yes. This is a really important aspect that we have given a lot of consideration to. So hemophilia A and B have been treated for decades, but the disease will only be managed, not cured. The patients are still experiencing bleeding events. The treatments are inconvenient. There are so many choices and makes the decision very challenging and trade-offs for doctors, patients and their families. Even more, those treatments are very, very expensive. For instance, it's more than $0.5 million per year for each patient just for the treatment cost without including any other additional cares. These patients used to -- in the '90s, they only live up to 20, 30 years, but now they have the normal life expectancy. So over a lifetime, the treatment costs could amount to $18 million to $24 million per patient. So the health care burden is significant for this group of patients. Our goal is fundamentally different, to provide a onetime treatment by normalizing Factor VIII activities for the patients, and that could be a durable cure for them. Ultimately, for the patients and their families, that is unmet medical need, and they're looking for a hemophilia-free mind. We have experienced drug development team that we want to ready the market early. We have initiated engagement with the hemophilia community, including the KOLs, the patients, the patient advocacy. We plan to engage the payer discussions early as well. As the market becomes more familiar with gene editing therapies and sees more consistent success, the adoption will accelerate. I do believe every successful launch will shorten the path for the next.

Great. And obviously, there's a lot that the company can do both internally and through partnerships and you indicated at the beginning, focusing the pipeline. But maybe we'll start on the rest of the internal pipeline. The company presented some preclinical data on ATIII deficiency. Maybe how are you thinking about the rest of your internal pipeline and how maybe the advancement with 001 can help kind of derisk that?

Great. While we're preparing for our MGX-001 advancing into the clinic, ultimately, with a clear development path and well-established endpoints, we are thinking really ahead beyond just the IND and generated data proof of concept in human as well as having the commercialization in our mind. In addition to that, as you heard, our site-specific gene integration approach is effective and powerful for hemophilia A. But we believe the tremendous potential beyond MGX-001. In fact, we tested this approach with another therapeutic transgene for antithrombin III. The result was equally validating and evidencing the potential to expand the application for additional gene editing payload constant, there is the efficiency in regulatory pathway, and we can follow. So beyond that, obviously, we're working on identifying optimal applications beyond MGX-001 to leverage this approach. With regards to our partner programs, we are very pleased how we work with our partner, Ionis team. Last year, we disclosed the third collaboration target in APOC3. And we also presented a joint research data for APOC3 at the Nature Conference last December. We're very pleased by the collaboration and the advancement we're making together.

Great. And maybe when we think about advancement of the gene editing sector over the past several years, funding of the programs has obviously been a key point to address. And many other companies in the space have done similar things where they kind of focused the pipeline that maybe started a little bit more broad. I guess how do you think about expense management? And when we look at the gene editing sector in general, is there sort of an inherent sort of pay-to-play cost that makes maybe some of these platforms more or less expensive than a traditional therapeutic?

So thanks for that question, Joe. I'll take that one. I think the key for companies in our sector is really to focus. And so as Jian became our CEO last November and really focused us on the key programs and technologies in our platform with her background that she brought from Amgen and Kite and Sanofi, we made a really strategic decision. She mentioned this earlier, to reallocate our capital to our most important programs. And as a result of that capital reallocation, we extended our runway into the fourth quarter of 2027. So we had about $184 million of cash on our balance sheet at the end of last quarter, and we'll be updating that very soon as we release our 10-K. The important point here is that we have enough cash to file our IND later this year and then to proceed into the clinic. And that was key for us in our capital allocation thinking.

Great. And when you kicked off the IPO for Metagenomi, there's a lot of different things that your platform can do and a lot of different aspects of the toolbox. I guess, is this just scratching the surface? How do you think about maybe interrogating some of the other opportunities the pipeline has? And are those potentially more opportunities for partnerships, I guess, to fund the company?

That's a really good point. We do have a broad and differentiated library of proprietary gene editing technologies. And we firmly believe that represents a significant long-term value driver. Strategic partnerships is an important lever to unlock the value. Our collaboration with Ionis is a strong example of that how we pair our gene editing capabilities with complementary expertise to accelerate the development. We are exploring additional business development opportunities where strategic alignment we see. Right now, we are focusing on the initial indication of hemophilia A. We do believe that's where gene editing can provide a durable cure. This indication does provide us with a clear development path, well-defined regulatory and clinical endpoints, and we can measure clearly. So the path is so clear in the front of us. We really want to focus on drive the clinical data with this program first. But importantly, the strength of our platform goes, of course, beyond MGX-001. We do see the tremendous potential of our site-specific gene integration approach why I not disclosed any specifics today, but we do see the optionality embedded in this platform and more to come and stay tuned.

Perfect. And maybe just last question, looking forward at sort of the next catalyst for the company. Obviously, we have the Q4 regulatory submission for 001. I guess how are you thinking about when you could see initial data from the program? Obviously, you can -- in these therapies in the preclinical data, you saw a response pretty quickly. So is this something you'd want a few patients dosed? I guess how are you thinking about data disclosure? And then any updates from the Ionis partnership that we should be keeping our eyes on?

Great. So let me start answering, then I invite my -- Pam join me in responding to that. So early on, you asked whether gene therapy could be the reference for that. The last 2 approvals were about gene therapy for hemophilia, both A and B and the regulatory agencies is obviously very clear about what they are looking for. So in terms of the development plans, and those are good examples in the front of us. So what we are looking at is because the clear activity is measurable, we're not looking to start with healthy volunteers, of course, and we'll initiate the study with minimum efficacious doses. And with measurable activities, we will see the effect. And we do plan to conduct a global study. So there were patients -- in fact, in my own experience going to the conference is, it's not only the U.S. patients are looking for cure, it's all the hemophilia A patients are looking for hemophilia-free mind. So we're excited about that. We're excited about the patient being very educated about their diseases and the patient advocacy is very established out there. In terms of collaboration with Ionis, as I said, we bring the gene editing technologies and Ionis has the disease biology and the cardiometabolic space, they are really bringing the expertise, and we work together. We do have 3 programs in the works, and we'll continue to provide updates as we make progress. Pam, anything to add?

Yes. I think the only thing I would add is picking up on the latter part of your question. It is the case that even though we're not prepared to give guidance on when we will have clinical data today, what you can see in our nonhuman primate data is that we see efficacy very, very quickly in nonhuman primates after we dose. So it's only a couple of weeks that we wait before we determine where we are in that efficacious window. And again, we would hope that, that would translate in the clinic as well.

Perfect. With that, we're just about out of time. So thank you very much for joining us today. We appreciate it.

Great. Thank you, Joe.