Prime Medicine, Inc. (PRME) Earnings Call Transcript & Summary

All right. I think we'll go ahead and get started. Thank you for joining us on day 3 of TD Cowen 46th Annual Healthcare Conference. I'm Joe Thome, one of the senior biotech analysts here on the team at TD Cowen, and it is my pleasure to have with me today the team from Prime Medicine. And up here with me, we have the CEO, Allan Reine.

And maybe just to kick things off before we go into the individual programs, if you want to provide just a brief kind of state of the company overview, recent progress and maybe what should investors be looking at for the rest of 2026?

Yes, sure. And first off, Joe, thanks for having us at your conference this year. So sort of state of the company, this is a really important year for Prime. I couldn't be sort of more excited to be in the seat that I'm in today, kind of watching, one, all the progress that has been made last year as we really get ready to put our first 2 in vivo liver-directed programs into the clinic, and that's going to be Wilson disease and alpha-1 antitrypsin deficiency. And we have both regulatory IND/CTAs going in. We said for Wilson disease, the first half of this year. And for alpha-1 antitrypsin deficiency, we said middle of this year. So both of those are coming soon. So ultimately getting those into patients and generating some clinical data. We continue to make progress across the company. So our cystic fibrosis program, which is being predominantly funded by the Cystic Fibrosis Foundation, making good progress there. Hoping to get to some preclinical proof-of-concept data this year and then with our collaborators at BMS moving forward with our ex vivo CAR-T therapies. I think beyond that, we announced yesterday that we are going to -- we are planning to file a BLA for our chronic granulomatous disease program. We've treated 2 patients to date and believe we've seen data that's been published in the New England Journal of Medicine back in December that really, I think, transformed the lives of these 2 patients, and we think this could be a very important therapy for that disease.

Perfect. And maybe we'll start there because obviously, after the first 2 patient data, you suggested that you wouldn't really take this one forward on your own. So I guess, what would the FDA recently and any sort of communications or guidance from them kind of led to this decision? And then is this something that, I guess, that you would launch? Or would you still look for a partner to kind of commercialize it?

Yes. So a couple of things I'll say there. So we announced the decision to discontinue the program back in May of last year. At that time, as we thought about taking that program through commercialization, what's the cost of getting there? And then what's the commercial opportunity? So if you think about CGD, there's maybe 1,000 to 2,000 patients in the U.S., let's just take the low end of that, say 1,000 patients. About 25% have the mutation that we're targeting with this product, so call it 250 patients. But the majority of them have actually had allogeneic transplant. So that might leave 50 plus or minus patients left to treat. So it's hard to make a great commercial argument to bring that forward, especially given what the cost is to get a therapy like that to approval. It could cost you $50 million to $100 million as you think about the CMC requirements, clinical requirements, the people that are needed to do that. So we made that decision, unfortunately. And it was unfortunate because we have really strong data. It's really exciting data, and we would love to get this to these patients that -- where there is a really strong unmet need. These are either patients that can't get an allo transplant, so they really have no other option. And if they can get an allo transplant and they're a younger patient, this is a therapy that is a much better option than an allogeneic transplant where you don't have graft versus host and other issues that come with that type of procedure. So I think what changed is we were listening to all of the FDA rhetoric over the summer. They talk about plausible mechanism. They talk about faster path to approval where there's unmet needs or high unmet needs. They talk about these ultra kind of rare indications and offering more flexibility. So as we kind of listen to that, it was like, all right, well, maybe it would cost us a very small fraction of what we thought before to actually get this through to licensure. We've got great data. We believe that should be supportive of taking something like this forward. And yes, so we don't talk about maybe specific conversations or FDA dialogue. But what I can say is on the sort of clinical side, as we think about 2 patients worth of data, they're supportive of us taking that forward. There's still some other things. There's manufacturing, other things that we still want to get final alignment on. But in every scenario, we feel like there is a path forward here that makes sense from a spend standpoint where it's somewhat minimal spend. And ultimately, we can get this important drug to patients.

And maybe if you could just let us know what's next? I guess, have you requested a pre-BLA meeting, kind of what's the next we'll hear maybe on the next steps for CGD?

Yes. I mean we've already had conversations. So there's always formal informal conversations that obviously go on. We haven't kind of commented what the next communication will be. We'll kind of update people as we go. But I think I just want to make clear, we are going to file this BLA. I think we're still figuring out timing. So whether that's something that happens this year or sometime in the first half of next year will depend on a couple of things. But this is -- it's going to happen. It's just a question of when.

And maybe just based on the data, we don't have to go into the individual details of the data. But I guess, what did you see overall in reference to kind of how that could reflect on the broader Prime platform?

Yes. I mean, look, when you think about Prime Editing, I come at it from -- there's 2 ways to come at it. So one, can I get high levels of editing efficiency in the cell type that I'm trying to target, so this is can I get to high levels of editing efficiency in HSCs and hepatocytes and all these different cell types that we've looked at going after certain tissues. And so what we've shown in HSCs is we can get very, very high levels of editing efficiency. And that high level of editing efficiency is translating into clinical studies into humans. It then also becomes about delivery, right? And this is always going to be a delivery question when you're talking about gene editing. We always say we've got the best cargo, but you also need the best delivery vehicle to get that cargo to the tissue type. So for our ex vivo HSC program, we actually use electroporation to get the editing machinery into the cell. For our liver-directed programs, we'll be using LNPs -- lipid nanoparticles that target the liver. So to me, it's -- we've sort of derisked, can we edit at very high efficiency in human cells. We've answered that question. We've got great preclinical data now when we go to in vivo, and we've got to show that translation as well ultimately.

Great. Maybe we'll jump over to 2 of the other programs, but maybe we'll hit on Wilson's first. Maybe just what is sort of the unmet need in Wilson's? Why would a prime editor candidate be specifically applicable here?

Yes. So I think what's underappreciated for Wilson disease is really how high that unmet need is. I think there are some other companies that are working in this area that have done a little bit of work for us and kind of shown people how high that unmet need is. There's actually a recent patient-centered FDA meeting where you can actually get the transcript. And these are patient testimonials so you can get an understanding of the need for a therapy like this, how it could really transform these patients' lives. So if you think about Wilson's disease, this is a disease of impaired copper metabolism. So copper builds up in the liver, ultimately spills out into the bloodstream. You get copper accumulation in the eyes, in the brain. The main symptomatology tends to be around neuropsychiatric disease and predominantly liver disease. And it's the liver disease that can ultimately lead to liver failure, and it's one of the most common reasons for a liver transplant. There are copper chelators and zinc salts that patients can take as standards of care. These are difficult medications to take. They have to take them either some are fasted, some are with food, you have to take them multiple times a day. They have very short half-lives. And so it's a high burden to the patient even on those medications, even if you're well controlled, you are still not metabolizing liver -- copper normally in your liver. So you can still progress even on those standards of care. You can still have a shortened life expectancy. You also have to be on a very low copper diet, another kind of difficult thing for these patients to kind of go through. So compliance on these medications tends to be very low. It's about maybe I think 1/3 or more of patients tend to be noncompliant with their medication. So again, this is a high unmet need, and this is something where we can really transform the lives of these patients. And I think the idea here is, obviously, we're going to treat any age to start, but how do we get to these patients early? How do we get to them so they never develop any symptoms or any consequences from this disease.

Can you kind of walk us through what remains to be done before submitting the initial IND or CTA? And any specific considerations, I guess, related to an in vivo prime editor versus either other in vivo gene editor approach or ex vivo?

No, I don't think there's other considerations when you're thinking about a prime editor versus a base editor versus CRISPR. We at least have shown preclinically, we have less off-target than some of these technologies. So there might be additional things that we maybe don't have to show in a sense. But I think in general, it's we're not kind of giving the play by play, I guess, on all the IND and regulatory preparedness. But I would say we're well on track to -- we're well on track with our guidance of IND/CTA for Wilson in the first half.

And what would an initial trial look like? You've guided to data in 2027. What would that, I guess, data package kind of include from a number of patients address perspective?

Yes. So if you think about what dose escalation looks like here, typically, companies have done, I'll say what they've done in the past, like 2 to 3 patients per cohort. The number of cohorts is going to depend on a couple of things. So one, what's your starting dose and how high is your starting dose to your optimal biologic dose. So you hope to start at a minimum at a biologically active dose. So assuming we can start at a biologically active dose, there'll be some number of cohorts of that optimal biologic dose. Once you get there, you'll likely expand that out and treat more patients at that dose or sometimes you'll select a couple of different dose levels. In this initial study, we're going to look at a number of different biomarkers. But one that I think is going to be really important and give us a really early read of preclinical -- or sorry, clinical proof-of-concept is looking at a radio labeled copper PET study. So what we do here is we're going to do this study in patients before they get the treatment, and you'll be able to see the amount of copper that's being -- that's kind of loaded into the liver. So they have impaired or now are they going to have normal copper metabolism. We have some really, I would say, striking images you can look in our investor deck on our website where you can see a liver that has the mutation that you're going to load with radiolabel copper, that is just bright yellow, right? That liver -- that copper is staying there. It's not being metabolized. If you kind of look at a similar animal mouse that's had our treatment that's gotten our prime editor, they're back to completely normal copper metabolism. It looks just like wild type. You can see those images in the deck. And so we'll be able to get -- if we can recapitulate that in our clinical study, we can get a pretty early read looking at proof-of-concept. In addition to that, we'll look at other measures. We'll look at urinary copper, which is really elevated in patients that have Wilson disease because they're not excreting copper through the normal route through the fecal route. So you can really see urinary copper come down if our therapy is effective. You could look at different enzymes as well. Ultimately, you can take patients off standard of care and be able to show that they have sort of normal copper.

And do you think in these patients, obviously, it's going to be a liver-directed therapy, but you indicated some of the CNS neuropsych kind of complications of the disease. I guess is that an expectation that you'll be able to see benefit on some of those along with the reduction in copper? How do we think about that?

Yes. I mean the answer is yes. So you'd expect to see improvements in both. I think there are some neuropsychiatric deficits that are unrecoverable. And I think that's just the reality of the disease. That's why you want to get in and treat these patients earlier. So they never get these neuropsychiatric issues. And one of the downsides of standard of care is you can actually get an increase in neuropsychiatric symptomatology at the start of treatment. So this is obviously something that we think you can avoid. There's also some data. You can look at liver transplant data that can show some improvement in neuropsychiatric disease. So fixing the liver disease can fix the brain disease, so to speak. But I think when you -- as I think about it, like once you have sort of neurons that are essentially dead, those can't -- aren't necessarily going to come back, but I think you can improve or at least halt the brain disease.

And how clear is the registration path for Wilson's or the approvable endpoints? Is this a situation where an accelerated approval based on some of the biomarkers that you're looking at, obviously, not next year, but would be an avenue to pursue? Or do you think you're going to need kind of a more traditional pivotal study looking at some of these endpoints?

Yes. I mean I think for Wilson disease, there haven't been drugs really approved in a very long time, I think, in a decade or more in the disease. And those have been sort of copper chelators, very different mechanisms. I think there -- it's going to really depend on the strength of the data, right? The stronger your data, the more consistent the data is amongst the patients that you're treating. I think the more amenable a regulatory body might be towards an accelerated approval and endpoints that can be maybe novel or where you're trailblazing kind of what you're doing. Think about copper PET as an example. We'll see what that looks like when we ultimately get to the clinic. But if you see incredibly strong data across a number of patients with copper PET, could that be something you could use as an endpoint. I think ultimately, I think about this as removing standard of care because that's going to be your goal here. You want to get these patients off standard of care and show that they have normal copper metabolism on standard of care. And whether you're showing that at 3 months, 6 months, 12 months will probably be the negotiation with the FDA. But I think that could serve as the basis for an approval.

And can you talk a little bit about the proportion of patients with Wilson's that you can address using this specific therapy? And if you do see success here, are there other mutations that you can address? Or kind of how do we think about that?

Yes. So we kind of break it down based on different populations. So if we think about the U.S., Europe, Canada, Australia and New Zealand, we think about the Caucasian population, the first editor we're going after targets a mutation called H1069Q. That's about 30% to 50% of that population. We'll go after additional editors that target different mutations. So we think about it as maybe a handful of editors will get us to 60% of the population. We'll have to then decide, does it make sense to make investments to go after some of the smaller segments, and that will really be sort of a commercial question that we'll have to ask at that time. But I've sort of guided people to about 60% of the population. When we go into different regions, so if we think about Asia, we think about Japan, it's actually a bit of a higher prevalence there and the mutational backdrop is a little bit different. So there, the first mutation we're going after is the most prevalent. It's called R778L. That's about, again, 40-plus percent of patients, and we think a handful of editors there can maybe get us to even 70% of patients.

And maybe we'll jump over to AATD, the next program. The space has heated up a little bit in AATD over the past several years. I guess, where do you see your therapy kind of fitting in? Obviously, there's the liver and lung manifestations. What's the ideal here?

Yes. I mean there's still nothing really new that's been approved yet, right? So there's a lot of development and drug development in the space. The standard of care is still replacement therapy, which I think is still questionable in terms of what is the benefit of that therapy. And there's some different reasons we can talk about. I'm sure it does something, but how much is it doing to really protect these patients. And so there's a lot of different approaches. There's the RNA editing approach. There's the gene editing approach. There are base editors, there are prime editors. When I look at this disease, I believe patients, physicians are going to want to take these patients back to wild-type protein back to normal protein. The best technology to do that is Prime Editing, right? It's taking a normal mutated gene and taking it back to just wild-type normal -- normal gene normal protein. So given that this is the best technology to do that, I really believe a Prime Editing approach has the ability to be a best-in-class here. There are 3 companies that I know of that are including us that have Prime Editing approaches. We're one of those companies. There's another company that just got into the clinic and another that's going into the clinic middle of this year. Again, we believe we've got a very strong patent estate. We believe we've got great foundational IP, and these companies are all going to be infringing that IP, and we can deal with that at a later date. But we think we're going to own the space one way or another.

Maybe on that latter point, just to kind of address it. Obviously, Beam is approaching this as well, and there's a little bit of a litigation going on. I guess, what are the differential components between your therapy and theirs? And what are sort of the next steps in that dispute?

Yes. So the dispute there -- and it's not a litigation, it's an arbitration. And the dispute there is we are doing Prime Editing and Beam has rights to do Prime Editing for transition-only edits. That's something that's sort of written in the contract that's public and how it says it. And so we believe our approach is sort of well within our rights. They're contesting that, and we expect to have a resolution of the arbitration in the first half of this year.

Perfect. And then when we think about initial clinical data for this program as well, you have also guided to having some initial results in 2027. What are sort of the outcomes here that you are guiding towards?

Yes. I mean I think for this program, it's a little bit different than Wilson, where here, you've got a very clear biomarker that you can look at. So you're looking at AAT -- levels of AAT in the blood and you can look at levels of mutated protein versus normal protein in the blood. So these are measurements you can take. You can take them frequently. They're easy to get. So you can see what it looks like at 1 week, 2 weeks, 4 weeks, where you should have a maximum starting to get to that sort of maximal effect. You'll know very early what this looks like. You hope to get patients as close to or into the normal range as you can.

And can you talk a little bit about safety for both of these programs? What sort of preconditioning do you think these patients will need, if any? And what are things that you're going to be looking for just given some developments across the genetic medicine space?

Yes. I mean there's -- you can for some of these -- it's a onetime therapy, but you can give -- there are some medications you give to tamp down inflammation, et cetera, which I don't know the final protocol yet, but there are things that you can do. That being said, we've got a very strong preclinical profile. We believe that we may have a wider therapeutic index as we think about our LNP formulation and our ionizable lipid. We've benchmarked to many other lipids that have been in the clinic and even lipids that we think others are using that haven't been in the clinic. And we see that, again, this could have a wider safety margin. We'll have to prove that out and time will tell. But we've seen a lot of companies sort of cap at mg per kg or around that range. And I'm not saying we need to go above that, and we definitely develop drug candidates where we can dose below that, but it's always nice to have that flexibility if you do want to go higher.

And maybe next, the company has indicated that it's going to start work on -- or has started work on an in vivo therapy for cystic fibrosis. I guess, why is cystic fibrosis an attractive target, maybe particularly for Prime Editing?

So I'll start with the unmet need. There are 10% to 15% of patients that have cystic fibrosis that, for whatever reason, can't take standard of care, they can't take TRIKAFTA, either they have mutations that can't respond to that therapy or for whatever reason, they can't tolerate the therapy. So even though that is a drug that has transformed the lives of a good chunk of this patient population, there is still a high unmet need here. And the cystic fibrosis donation is very focused on how do we cure these patients, right? What's happened for these other patients is incredible, but how do we really get to something that can cure or really improve the lives of those patients. And I think if you -- if you think about what we're trying to do, we're trying to get to the right cell types, and we're trying to convert that mutated protein back to normal. And so think about how powerful that is. And not only are we turning that back to normal, we're doing it under what we call endogenous control. So the body is going to make the right amount of CFTR -- you don't want the body to make too much and you don't want the body to make too little. And this isn't a very abundant protein. So getting this under endogenous control, we think, is very important. And we think this is really the only treatment that can do that. So there's been a lot of approaches that use mRNA and other things that are trying to -- genetic or gene therapy that are trying to get expression of CFTR in the relevant cell types. But then the question is how much expression do you want? And I think that's sort of almost an unknown, like people are still unclear what the right amount of expression is. Are they getting too much? Because you can see through some of these studies like they're getting expression, but we're not seeing functional improvements. Well, we don't have to ask that question because the body is already doing that for you. So we're just turning that gene back to normal, let the body decide how much CFTR should be expressed.

And what's the status of the program? Kind of when we'll see next preclinical or early clinical data?

Yes. So we're making good progress there. We're in, I would say, lead optimization now. We're getting high levels of, I would say, editing, and now it's really putting that together with delivery, getting the right delivery vehicle and again, proving that we're getting to the right cell type in the right models. I think once we get there, then it's like how do we move this as quickly as we can to a DC and IND-enabling studies.

And you've had the deal with BMS now a couple of years. Maybe why were they the right partner? And if you can go into the decision really to partner up the Prime Edited ex vivo CAR-T product platform?

Yes. I mean I think that's a platform that we weren't necessarily working on towards developing a clinical candidate ourselves. The goal at that time at least was never to build an oncology, immunology infrastructure. But we believe, again, we've got the best cargo if you're going to edit CAR-T cells. BMS through their acquisitions is one of -- Celgene ultimately is one of the leaders within that field. And so they are an obvious partner for this. They're still investing heavily in this, obviously, and I think it's a very important modalities as they move forward. And again, we've got the best cargo. So it's putting, I think, the best cargo with one of the top companies out there. And we're making good progress. There's -- when you partner with a large pharma, there's not a lot that you can say when you give away the program like that. But I would say we're making good progress. They're great partners, and we're very happy with the status of the program.

And maybe can you talk about any milestones coming your way in relation to that or at least kind of maybe what they're tied to, whether it's candidate identification, entry into the clinic? Anything that would be helpful.

Yes. So what I could say is there are pretty significant preclinical milestones. We said as part of the collaboration, there's up to $185 million in preclinical milestones. We haven't broken it down more than that, but you can think about what preclinical means. And you would think about that as call it, before you get into IND-enabling studies. So there are milestones that we think are very achievable. And hopefully, as we get through to the first, if you think about the ones that are subsequent to that, once we've delivered a lot of the reagents that could go a lot quicker as well potentially.

And how do you think about partnerships in general? Obviously, the company has a lot of different areas where Prime Editing could be effective and over the years has kind of streamlined the initial pipeline. But how do you see what you want to keep internally versus working with a partner? Obviously, the ex vivo CAR-T was clear. I guess, but what do you see outside of that?

Yes. I think I'd break it down into different buckets. So I think one bucket is there are certain things that we're just not going to do ourselves. We know we're probably not going to do ourselves, at least with our current build. And so I think about cell therapy. And there's a lot that can be done in cell therapy. I think Prime Editing could be one of the best technologies that you take to different types of cell therapy. So this is something that I'd love to see in someone else's hands. I think another area would be in neuro. I think there's probably the greatest opportunities as I think about a genetic disease standpoint within neurological disease. I think there's still some delivery challenges and other things. So I don't think it's necessarily the best use of our capital today. I hope -- but I hope it's an area we're in 3 to 5 years from now. And I hope there are companies that are going to be willing to kind of work within that space and take this technology forward. And then I think beyond that, if I look at our current assets, I think nothing is sacred, right? We're always open to partnering. I think it's going to depend on what makes the most sense for Prime. We're going to do the similar analysis and determine if based on terms, if it's better to keep something or it's better to work with a partner. We think we've got an incredible technology, and it's what's the right way to sort of shepherd that forward. And I think it's going to continue to be a healthy mix of BD and other means as we think about financing this company going forward. I think lastly, I'll just say there's so much opportunity. I mean what's great at being at a platform company like Prime is there are so many different places we can go. When I joined the company, as you know, we had like 18-plus programs because we were trying to figure out where to go. We've shrunk that down, and I think we're focusing on the right things today, and we're focusing on places we really believe can generate a ton of value for the company. But as we think out a year or 2 years, there's going to be a lot more to do, right? It's -- I don't want to say it's endless, but there are so many opportunities. So there's always going to be things for us to develop, and that's why nothing is sacred today.

And maybe can you talk a little bit about your current cash runway? What does that get you through for some of these catalysts? And obviously, time and money is maybe particularly a focus in genetic medicines. Is there sort of an inherent pay to play to be in the genetic medicine space? Or how do you think about how much you have the actual ability to kind of cut when you can?

I'd hate to be a gene editing company starting out today from scratch. I think the reality is it's been capital intensive to get where we are today. But now that we are where we are today, we have built so much institutional knowledge. We've built so much value in terms of what we can do within this platform and pipeline today. That's very hard to replicate. So there's sort of this barrier to entry now that I think we and others might have. When we think about our current runway, we've got cash, we've said into 2027. It's not Jan 1, '27, but we've got cash into '27. We haven't said exactly when. As you know, our 2 big data events are going to be in '27. So we're funded through obviously getting our INDs into the clinic, obviously, getting through the arbitration that you mentioned, pushing forward with CF. And when we talk about a runway, that doesn't include other things that could help fund the company. So it doesn't include BD. It does not include BMS milestones, does not contemplate the CGD approval, et cetera. So there's other things that can help really fund the company as we think about going forward. And the -- we're at a burn rate now where the amount of money we actually need to get through '27 is not significant. So there really isn't a big funding overhang as we think about the company today, which is nice.

Awesome. Well, thank you very much for the great discussion.

Thank you.