Precision BioSciences, Inc. (DTIL) Earnings Call Transcript & Summary

Hello, everyone, and welcome to Precision BioSciences First Virtual Symposium. My name is Cassie Gorsuch and I'm the VP of Gene Therapy here at Precision. Today, it is my pleasure to be joined by 2 incredible key opinion leaders to discuss an unmet patient need as it relates to chronic hepatitis B, a leading cause of morbidity in the U.S. and deaths globally. Today, we'll go over the current treatment landscape a little bit about the virus that underlies chronic hepatitis B, the need for better curative options and then touch on Precision BioSciences' PBGENE-HBV program utilizing our ARCUS gene editing technology and think a little bit about what our Phase I clinical trial design might look like. With me today is Dr. Mark Sulkowski, Chief of the Division of Infectious Diseases at the Johns Hopkins Bayview Medical Center; and Dr. Geoffrey Dusheiko, Emeritus Professor of Medicine at the University College London School of Medicine and Hepatologist Consultant at Kings College Hospital. Thank you both so much for being with us today.

Thank you for the invitation.

Thank you, thrilled to be here.

So first, let's start with sort of a big picture of chronic hepatitis B. Dr. Dusheiko for anyone who may be joining us who is not familiar with chronic hepatitis B, could you give us a little overview about what hepatitis B is and its effects globally, please?

Thank you, Cassie. Hepatitis B virus infection is caused by the hepatitis B virus. It's a DNA virus. It's actually an RNA virus gone wrong. There's an important global prevalence of hepatitis B virus, which is not declining. And the morbidity of hepatitis B virus infection is actually increasing. There's thought to be over 250 million people living with hepatitis B. And the vast majority at the moment are unaware of their diagnosis. And again, even amongst those diagnosed, only a minority are being treated. So it's an important global health problem, which has been neglected. Times are changing. There's a new emphasis on combating hepatitis B at the present time, but it is important to understand the global epidemiology and morbidity caused by the hepatitis B virus.

Thank you, Dr. Dusheiko for sharing your perspective on really how this virus impacts on a global scale. Dr. Sulkowski could you please tell us a little bit about how this virus looks specifically in the U.S?

Sure. In many ways, United States reflects the rest of the world. We have about 1.5 million people living with chronic hepatitis B. Many of those people move to the United States from other parts of the world where the virus is more common. That's about 75% of the people with hep B in the U.S. Most of these people, 1.5 million, are really not diagnosed or in care. In fact, we estimate that only about 300,000 are currently being treated. So the consequence of that, a high disease burden, very minimal diagnosis and treatment means we have high rates of liver-related complications, including hepatocellular carcinoma. So a major cause of morbidity and mortality in the U.S.

Thank you both for painting that picture of what this really looks like on a global scale as well as particularly within the U.S. Dr. Dusheiko, you touched on sort of the underlying biology of chronic hepatitis B and that it's caused by the hepatitis B virus, recognizing that there's probably quite a diverse audience with us today. Maybe we can keep this a little bit high level, but let's talk a little bit about the viral life cycle and what this -- how this virus really leads to chronic hepatitis B.

I guess, the first thing to say is, for some reason, individuals infected very early in the life by mother to child transformation was affected in the neonatal period [indiscernible] an appropriate immune response to hep B and the child acquisition is the most important cause of instant chronic infection at present. For some reason, adults are less likely to develop chronic infection, they may develop acute inflection, although some adults may go into chronic hepatitis B. The replication cycle of hepatitis B is relatively well understood and briefly upon entry into the cell, the relaxed circular DNA is converted by cellular enzymes into the cccDNA. That's better known as of minichromosome because it is an episomal minichromosome responsible for subsequent replication of the pregenomic RNA, reverse transcription of the pregenomic RNA to minus and plus-strand synthesis and assembly of the viral proteins into the virion and subsequent space. There are a number of targets that have been identified within that. It's important to mention that one minor but critical aspect of the life cycle of hep B, is the formation of double-stranded linear DNA, which integrates at random sites into the host chromosome at breaks. Although those are linearized, they don't take part in the replication cycle of hepatitis B. It probably cited after the promoter, there will be continued production of large, middle and small surface antigen and that antigen excess over years, we think, is important in tolerizing the infant, but also exhausting the T and B cell response to hep B, thus impairing the likelihood of clearance of hep B. The integrins are also critical probably for the oncogenesis of hepatitis B virus.

Yes. Thank you for walking us through that Dr. Dusheiko. And Dr. Sulkowski, based on what Dr. Dusheiko just said, there's really 2 forms of viral reservoirs that exist in infected hepatocytes, the cccDNA and the integrated HBV DNA. Can you speak a little bit to the importance of both of those 2 viral sources?

Sure. And that was a fantastic overview. I think when you think about the active infection, this is really the cccDNA. This is driving the production of new virions that will infect other hepatocytes, keeping that infection going in an individual, but they're also going to be potentially spread to other people transmitted through mother and child transmission, through sexual transmission or blood-borne transmission. So the cccDNA drives the infection but this integrated DNA really perpetuates the reduction of surface antigen, which may serve as immune tolerance, but also drives potentially hepatocellular carcinoma and pathogenesis of clonal expansion of hepatocytes. So both are critical roles in terms of the infection itself.

Thank you. And I think Dr. Dusheiko you touched on the idea that there have been a number of different therapeutic strategies aimed at different parts of this viral life cycle, and we'll get to that in just a moment. I want to first spend a couple of minutes talking about these patients. And at Precision, we always try to put the patient first as we're thinking about developing our therapeutic approach. So I want to spend a couple of minutes talking about the burden and the impact that chronic hep B has on people on a personal level. And so Dr. Sulkowski, could you tell us a little bit about how this virus really impacts people on a day-to-day basis?

Sure. What I meet a person who is newly diagnosed with hepatitis B, there's really 2 major concerns that they share with me. One, is about their personal health, will they develop liver disease, will they develop liver cancer, can this be cured. These are the thoughts going through their head. And they carry that with them as they go through their lives, this idea that there may be cancer form in their liver. The second element that people share is concerned about transmission. How did I get this infection and can I spread it to others around me, particularly women of childbearing potential, concerned about mother-to-child transmission. So there is a tremendous amount of concern and anxiety people have both with their individual health as well as transmission and certainly a lot of stigma that they carry. This is not something they talk about with people outside their immediate family.

Thank you. And Dr. Dusheiko maybe you could share a little bit more about that stigma that patients face. And what sort of impact that can have globally?

I would just endorse what Mark has said. I think hepatologists have probably underestimated the stigma felt by patients living with hepatitis B. We're also aware that the level of activism amongst patient with hepatitis B is much lower than patients with HIV, for example. And there are a variety of reasons for that. It's often more prevalent in minorities, amongst immigrants, refugees, et cetera. And they've just not had the powerful voice of the HIV community that's changing. And I think it's up to us to address issues like stigma, stigma in many walks of life, occupational stigma, stigma in the military, immigration, visas, work permits, the ability to move from country to country, et cetera, transmission that Mark has mentioned. We have a lot of work to do in this area, and I don't think it's being addressed well up till now. But we are aware, I think, of a growing patient voice and would support and endorse that it is important.

Thank you for sharing that with us. It sounds like there's really a lot of unmet need and a lot of activism needed in this space to really promote good options for patients. So let's talk about what that looks like in terms of good options for patients. Dr. Sulkowski, you mentioned when you sit down with the patient newly diagnosed, what does that conversation look like from the perspective of treatment options and curability of something like this?

Sure. And certainly, as I mentioned, every patient I've talked to with hepatitis B wants to be cured. In fact, often here, well, there's a cure for hepatitis C, why is there not a cure for hep B. And actually, Geoff, shared exactly why there's not an easy cure. This is a more complicated virus. So actually do talk to patients about the virus itself, its life cycle and describe the current therapies in nucleoside/nucleotide that work to inhibit the polymerase, which reverse transcribes the RNA back to DNA in that viral life cycle. These are therapies that are safe, tolerable, once daily. They can suppress viral replication leading to less liver disease and potentially reducing the risk of liver cancer. But it is important that the patients understand that these are not likely to lead to a cure either a functional or a sterilizing cure, we'll talk more about this.

Yes. Thank you for taking us there in terms of what that functional cure and sterilizing cure is. And maybe I'll turn it over to Dr. Dusheiko to really describe what is the goal from a treating physician's perspective from a therapeutic field perspective in terms of goals towards cures?

We've used interferon quite widely in the past, but it's much less commonly used now because of toxicity and the lack of efficacy in large numbers of individuals. So the mainstay of treatment are nucleoside analogs. They're chain terminators. They affect late stage of that replicated cycle. They affect minus-strand and plus-strand synthesis, but they have no direct effect on cccDNA and they have no direct effect on [ integrins ] only to the extent that they reduce replication, but they will not eradicate those integrins. And so they are important drugs, they will effectively suppress hep B replication, but they're used as maintenance suppressive often lifelong therapy, and some of the patients have been on nucleoside analogs for many years. The problem is, as you'd expect, because of the lack of a direct effect on cccDNA and integrated viral genome, the majority of patients treated with nucleoside analogs remain HBsAg positive. That stigma persists and that probably represents an antigen excess impairing the immune response. So we need to think laterally about curative therapies there is a lot of effort in this area. Curative therapies are currently being defined as clearance of HBsAg using a sensitive accepted laboratory assay 6 months after stopping treatment together, of course, with production of undetectable HBV DNA. So it represents a finite treatment of period and after treatment cessation, individuals will be HBsAg negative, nondetectable HBsAg in the serum. And that will mean targeting both integrated and cccDNA to a better extent than we are currently.

Thank you. Yes, I think that really provides a nice overview of what the current standard of care is with nucleoside analogs. And really, I think, while it sounds like these are safe, well-tolerated, effective drugs, they are not offering that functional cure to patients. So what else is going on in this space? And as you think about new emerging therapeutics, what are your thoughts towards achieving that goal of functional cure? And Dr. Sulkowski, I'll start with you, please.

Sure. Well, I think the first thing I'll say is that we are seeing a number of different therapeutic targets being identified and drugs being tested in human trials. That's really important that we see these advances. Broadly speaking, they can fall into 2 categories. There's ones targeting the viral life cycle. We know that the current therapies nucleoside/nucleotide analogs work on the polymerase, but there are potentially other targets, and we've seen oral drugs targeting capsid assembly entering human trials and in some cases suppressing viral replication. And these look like they may have an option as antivirals. There are also drugs that are targeting the translation of the pregenomic RNA that is the viral RNA that gets translated into proteins like the surface antigen. We're seeing both siRNAs as well as antisense oligonucleotides including one that's made it into Phase III clinical trials. Now so far, these antiviral approaches have had relatively modest effects in terms of the ability to deliver that S antigen loss or functional cure. So that leads me to the second broad category, which is immunotherapies that is trying to harness the immune system to control the virus and perhaps using these in combination therapies. That's a 1-2 punch where we knock the virus down and then boost the immune system using strategies, ranging from checkpoint inhibitors to therapeutic vaccines. So all of these things are being tested with some success, but relatively modest success to this point in time.

And Dr. Dusheiko as you look at these new emerging therapeutic options and this idea of potentially combining antiviral with an immune modulator. What are your thoughts in terms of how that might lead to options for patients and progress towards that functional cure?