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

Thank you. All right, good morning, everyone. My name is Chris Yu. I'm on Terrence Flynn's team covering biopharma and biotech companies. I'm delighted to host Allan Reine, CEO of Prime Medicine. Before we start, for important disclosures, please see the Morgan Stanley Research Disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. So, Allan, thank you for joining us.

Thank you for having me here.

Maybe we start with some high-level questions about a company. In the past two decades, we have all witnessed the amazing evolution of gene editing technologies. And you guys are at the forefront of that. So maybe talk about how prime editing is different versus kind of the earlier gene editing technologies.

Yes, and I think you said it right. It really is a revolution. I think we're all very to kind of be alive to see these technologies and others as they advance. I know they're just incredible as you think of where we were 20 years ago and where we are today. So I always think about the evolution of CRISPR kind of nuclease-based editing kind of to prime editing. And nuclease-based editing, we're looking at Nobel-winning technology, incredible for the first time. You could, with very high efficiency, go to a very specific point in the DNA and with a double-stranded break really make that cut. And the result being very effective at knocking out targets, very effective at knocking out proteins or changing regulatory patterns. Elements like they do in sickle cell, and an incredible technology. We have an approved drug now. We have others that are likely looking like they're close to approval. So this is becoming sort of that dream of 10 plus years ago is now becoming a reality for patients today, which is obviously what this is all about. That nuclear space editing with double strand breaks, there are some liabilities there obviously. Some of the both on-target but also off-target consequences that can happen, chromosome rearrangements, translocations, some off-target editing that can occur. But in general, really, really promising technology. And then out of David R. Liu's lab came another type of gene editing called base editing. And now for the first time you can you can not just knock something out, but with high efficiency actually correct something, right? Make a change to the genome, a very specific change. And with base editing they use what's called a deaminase enzyme. And you can change kind of one base pair to another. So you can do an A to a G, G to an A, C to a T, T to a C. Those are the four base changes that you can make with base editing. And very effective for certain diseases where you have that very specific type of mutation, to really only correcting those types of mutations, or like CRISPR, you can use that to knock things out as well. It also uses, instead of a double-stranded break, you're using what we call kind of a Cas9 nickase, which is creating a single-stranded break, which is a lot gentler on these cells and ultimately doesn't lead to the same rate of, of chromosomal rearrangements, translocations, and other off-target issues. A nice step forward in doing things that nuclease-based editing could not do. With prime editing, we can do everything in the kind of first-gen genetic technologies can do. We can do everything that base editing can do, but not just those four base changes. We can do all 12 changes, but we We can also do so much more. So, we have the ability to, instead of using a deaminase, also out of David R. Liu's lab, he came up with the idea of, well, let's use a, him and Andrew Anzalone, who are scientific co-founders, came up with, we can now use a reverse transcriptase and actually create a template that goes right into the guide. That gets transcribed right into your DNA. So instead of changing one base pair, we think about this as a word processor. Instead of it going after one letter, we can put in whole new sentences. So the first time we can make very much larger kind of full insertions of anything from, you know, 10 to 15 base pairs. But with our PASSIGE technology, we can actually do almost full gene insertions. So it's a really powerful technology. I like to say it's the most versatile gene editing technology that exists, given the number of different changes we can make. But it's also the safest as you think about the limited kind of off-target, on-target, and other consequences that you see with some of these other technologies.

That's a great way to start this conversation. Certainly there are a lot of potentials for prime editing based on what you just described. The way I see it, like with gene editing, a lot of efforts have been focused on delivering to the liver. Can you kind of talk about what are the remaining hurdles to kind of expand the technology kind of outside the liver to other organs and other diseases?

Yes, so you're asking the $billion, $hundred billion question. You know, I think the, you know, initial promise as we looked at gene editing was the There are just so many different diseases, both genetic and non-genetic, that would benefit from this type of technology. And it was just a matter of, okay, let's get the delivery technology towards all of these different tissue types. Well, that's proved, I think, a lot more challenging than probably initially thought. And I think today we've shown that these And it's not just gene editing, it's other technologies too that are RNA-based that require delivery. But I think we can very effectively today get delivery into the liver for gene editing. We've seen that proof of concept for both nuclease-based editing, base editing, to be prime editing. We've obviously seen this done with these technologies, both prime-based and nuclease-based editing, ex vivo, so it can obviously be done in cells. We've shown that with chronic in our Chronic Granulomatous Disease program. Obviously, it's been shown in sickle cell with those two other technologies. But as you go beyond that, So, it gets more challenging. I think we've seen good delivery to the eye. And I know Editas had an earlier program where they could at least effectively deliver, and we've got some early preclinical data showing that we got really good eye delivery as well. We think we can get delivery to the ear. Becomes like are there real opportunities there to go after from a commercial standpoint. But where I see kind of the biggest opportunity for prime editing would be if we can get successful delivery to the brain. I think there are a couple of maybe AAV-based approaches today that may work, but I don't think there's anything today that we've said that we've seen to say we think this is a solved issue. I would say we continue to scour the world for advancements in these types of delivery. Because I do strongly believe this is a case of when, not if. But I don't know if that when is in 1 to 2 years or in 5 to 10 years. But as soon as that that that gets solved, we are going to be there to explore those areas because again there's a tremendous amount of unmet need in the brain where prime editing can make significant impacts in the lives of patients. And if in 5 to 10 years I hope to be treating many of those diseases with prime editing. And then beyond that obviously there's heart, there's muscle, there's kidneys, there's other organs that we'd like to get to as well. And there's varying levels of advancement. Again, we're staying very close attention to those so that when we do see something that looks promising, we can jump right on it. I think the lung would be a good example. Where in collaboration obviously with the Cystic Fibrosis Foundation here, we've got programs in cystic fibrosis that we're developing where we think lung delivery looks very promising. We've seen AAV. We've seen HSV with other companies. And we've seen LNP be successful, at least in delivering that cargo. And we think prime editing has the potential to be a best-in-class therapy as we think about cystic fibrosis. So that's an area we think, you know, is in the process of being solved, where others we think are probably more in the future. Tons of opportunities that delivery question gets solved. But it's a great question and one we spend a lot of time talking about and thinking about.

Yes, that sounds good. And recognizing that in the past year, there has been a lot of changes at the FDA, And now I think we have seen some stability there. Just how supportive in general is the FDA on gene editing? That's part 1. And then second is, like, how has your interaction been with them recently?

Yes, I mean, I think in general the FDA, and I know that we've all been through a lot over the last year, in terms of kind of what's gone on there. But I think even over that entire period of time, even with all the changes, it's been in the right direction, I think, when it's at least come to cell and gene therapy for the most part, especially when it's come to, I think, gene editing. They seem very supportive. There's a lot of different measures and endeavors going on at the FDA. Where they're trying to help these companies create more products for patients in need, especially when you go down to the rare and ultra-rare indications. So I think that's going to continue. And these efforts are both on the CMC side, the ease of getting to the clinic. I mean, for us, I mean, we went and the FDA, you know, essentially gave us alignment that we can file for approval on two patients' worth of data. I mean, that's incredible flexibility. Obviously, it's an unmet need. We showed a really strong data set in curing two patients. But that's showing a lot of flexibility in that real desire to get these these these drugs to patients in need. In terms of of recent conversations, like we don't comment, you know, on specifics on our dialogue with the FDA. What I would say is we continue to have constructive conversations across the board with the FDA. And for the most part it seems like business as usual. I think it's nice that we have leaders that are, that are not interim that are now been that are now in place at CBER, well, for us CBER but also CEDAR. I think Kareem is going to do a fantastic job there. And we're sort of excited that that whole agency can now go in the right direction going forward.

That's great.

So let's kind of talk about the specific programs that you are running right now. Wilson's disease is your most advanced in vivo program, and the IND recently got cleared. Can you kind of walk us through the phase 1-2 design specifically and then kind of what are the key biomarkers that you would be measuring?

Yes, so the IND was cleared back in July. We also had a CTA cleared back in New Zealand in June. This is going to be a global study, so we'll be enrolling in other geographies ultimately as well. The design of the study is going to be a dose escalation. Be looking at a few, call it initially planning for three cohorts. You can always add cohorts if needed. We'll be looking at three different dose levels. The lowest dose is potentially a biologically active dose as we start to get to the second and third dose levels. There could be a lot of biologic activity if the preclinical data translates well to the clinical data. And I think from everything that we've seen from other programs across different gene editing approaches, we've seen fairly good translation as you kind of look even just mouse to human. And so we'll, within those studies, we'll obviously be assessing safety. I think safety is paramount. We, with our LNP, and this will be the first time this LNP has gone into the clinic, we've got, appear to have a very wide therapeutic index, much wider than some of the LNPs that have gone into the clinic that we've actually benchmarked doing experiments internally. Excited about the the prospect there then obviously looking at efficacy I think the good thing with gene editing if you're in the right indication is and if if you have a good biomarker, you can get a really early read. Right, if you're making that performance correction and you're doing it with high enough efficiency and you have a good biomarker you know pretty early if your drug is working for Alpha-1, which I'm sure we'll talk about with which investors are very familiar with because there's a number of programs out there. Obviously you can look at, very simply look at, blood levels of AAT and look at the differential between MAAT and Z in the systemic circulation. Wilson doesn't have a biomarker that's that easy because most of these patients are on standard of care so we can't just look at copper. But what we can do, another way to do that, is we're going to be doing radiolabeled copper PET scans. We'll be doing those scans both at baseline and then about six to eight weeks after treatment, again, And we have really nice images that are in our deck that I encourage people to go look at, which are these mouse models showing what the copper PET looks like. And in a diseased mouse, which you'd expect to see similar in a diseased human, and there's some publications that actually kind of show what this looks like in a human as well, you could see these livers completely lit up with copper because they lack the ATP7B enzyme and the ability to effectively shuttle it into the bile for normal fecal excretion. If you look at what a wild type mouse or human would look like, you have very normal copper metabolism. You don't see that copper lighting up in the liver because it's been normally metabolized. And if you look at even just a lower dose of 0.4 mg/kg and a somewhat higher dose of 0.8 mg/kg, if you look at the images that we have, we look very much like that wild type mouse. And completely normalizing copper metabolism. And you really only need to get to a heterozygote level. You only have to get to that level, a heterozygote level, within a copper PET study, which isn't quite normalized copper metabolism, but those patients don't have disease. So even if you can get to that level, you could feel very comfortable removing standard of care and knowing that these patients won't have a copper burden that is going to continue to add to their disease.

So just to follow up on that point. I mean, obviously, everything is going to depend on the data. But is it reasonable to assume that if the data looks good, the kind of the radiolabeled copper biomarker could potentially serve as an endpoint for accelerated approval? Or it's still early to say?

Yes, I think it's still early to say. I always like to say things, it's always dependent on, everything's always data dependent, and the better your data, the the more flexibility that might get awarded to you. I kind of use a base case as, hey, let's, get patients off of standard of care for some period of time as a potential registrational endpoint. If your data looked incredible, that you're getting all these patients to vastly improve copper metabolism, and that's very predictive of getting patients off standard to care, there's always an upside scenario where the FDA can be a little bit more flexible there. But we're kind of using our base case as some period of time off standard to care ultimately for registration. And depending on strength of data, there could be upside to that. Okay. And just maybe two other things to add. The other things we'll look at, it's not just the radiolabeled copper PET, but we'll look about at an enzyme called ceruloplasmin, which is very low in patients with Wilson's disease. It's something that kind of helps to bind the copper and shuttles it it through the circulation, in the absence of this ATP7B enzyme that's mutated. That's that doesn't occur and that ceruloplasmin degrades very rapidly. So as you treat these patients and you have normalized enzyme function, you should see those levels of ceruloplasmin go up. We'll also be looking at urinary copper, which in disease patients is very high, because the main mode in disease patients of copper excretion is through the urine, not through the feces. And these patients will also test if you see that urinary copper come down. So there's a mix of different endpoints that we can look at, not just the radiolabeled copper PET, and they should all start to point in the right direction if we're having the right impact.

OK, sounds good. And then you guided proof of concept clinical data in 2027. So what kind of initial clinical data do you expect to disclose and like do you know know how many patients that you that you would disclose those data for?

Yes, I mean, I think we'd be looking at, at a minimum we'll be looking at those kind of 3 key endpoints that I talked about, radiolabeled copper PETs, through a plasma and urinary copper, safety obviously as well. You know, this is kind of standard where you do a few patients per cohort. You know, we've talked about, you know, at least three cohorts. So you can kind of do the math on what a potential, you know, first data set could look like. You always have the ability to backfill in certain cohorts if you feel like you're at a good dose level. So we'll wait and see kind of where we are. If things translate well, then you'd expect somewhere between six, nine, 12 patients essentially to get to that first data set.

Great.

Great, thanks. And then with that POC data that you're going to get in 2027, kind of data will be sufficient to give you the confidence to move the program forward?

Yes, I mean, I think what we're going to want to see to gain, so I think at a minimum, are you improving copper metabolism? Like, that's the bare minimum, right? If we're not improving, and if we're making that edit, you should be improving copper metabolism. So, are we able to achieve the level of editing efficiency that we've seen preclinically, or even some level? That's similar to that, which is not that high to see a really strong effect, right? Even at high 20s whole liver editing, we're getting to almost normalization of liver copper metabolism in a mouse model. So as long as we can see vastly improved copper metabolism and these other markers are going the right way, we know we have a drug. And then I think the secondary question to that is, is this something that is effective in every person? Is there any reason why we're not getting kind of widespread efficacy, which is the expectation based off animal models? And so, you know, if you have like one of six people responding, then, you know, you know you can have a response, but there's something wrong there. So you'll want to see pretty consistent responses across the majority of patients. And I think if you have that, that tells you you've got a drug.

Okay, yes, that makes a lot of sense. And for Wilson's disease, your current candidate only covers one mutation. I think it's the H1069Q mutation. There are other mutations for Wilson's disease. So kind of talk about how you're going to broaden that program to cover other mutations in a timeline to do so.

Yes, so the H1069Q mutation covers about, we say, 30 to 50% in the Caucasian population. So we think about predominantly the U.S. and European populations. Other numbers we've looked at, maybe that's closer to 40, 45%, but somewhere within that range. We think ultimately with a handful of additional editors, we can get to about 60% of the population in the U.S. and Europe. And the ability to get those studied is we know, or at least we have alignment that we can do additional mutations under the same IND and we can leverage all the information, the majority of the information that we have from the first mutation for subsequent mutations. So it's a lot faster and it's a lot cheaper to do each additional mutation. And hopefully given genotype to phenotype is pretty similar across Wilson disease, there's not a lot of of, you know, not significant difference. Hopefully it's going to be a small number of patients that need to be studied as well. To ultimately get those to licensure. As we go into Asia, it's a little bit different. The mutational backdrop's a little bit different. The prevalence actually seems to be a little bit higher. And the most prominent mutation there R778L is even potentially 40, 45, or even more percent of those patients. And with a handful of vetters, we might even be able to get to like 70% of that that population. So we think we can pretty quickly get to the next mutations. Our R778L is pretty close to ready to go. There's some additional off-target and other work we'd have to do to get ultimately to the IND, but we've got a pretty good editor right now, you know, and we're trying to determine the right time to kind of layer that in to this current study, even though it's a prominent mutation. There are patients we've identified in the U.S. that do have that mutation. So you could start studying that outside of Asia first before you go into Japan. But that would be the plan for that program.

Got it. A competitor is developing a gene therapy for Wilson's disease.

Yeah, I mean, look, I think first off, you know, I mentioned that we're pretty We're probably going after 60% in these geographies and 70% in Asian geographies. So there's a market beyond what we're doing. So there is a place for other therapies to play. We think a gene therapy and a gene editing approach are very different. You know, a gene therapy, they're using a, you know, you can't fit the full gene in an AAV, so it's a truncated version. Of that gene, which, you know, can or can't have the exact same type of functionality. It's something that's not under endogenous control, so you're under the regulatory controls of the AAV that you're putting in there, when we're making a permanent change at that mutation location at that gene in that genome, so you're under the normal endogenous or the, you know, normal regulation of that gene. So we always say, like, you don't want zero copper, right? It's always going to be some balance that you're trying to get with many of these things. And being under endogenous control is the right answer. The other thing is every daughter cell that has the correction is going to have that correction. So this is something that's durable and gets maintained over time. Some data suggests that you even have a positive selection bias over time. But even without that, this is something that's a durable, fix. For gene therapy, that, you know, hepatocytes, you're not dividing like, you know, epithelial cells, but they do divide over time. And so it is something that will get diluted out over years because every daughter cell, only one of the daughter cells will have that vector. So there's a durability, long-term durability question there, too. So I really feel for this specific disease or most diseases where you're going after the liver, a gene editing approach where available is a better approach than a gene therapy approach. But, yeah, and we'll hopefully that we'll see data to to validate that.

That makes sense.

I would like to talk about AATD now. It's another very important program of yours. Recently, the arbitration panel ruled in favor of you guys, so now you can move ahead with your program. I think Beam said that that decision was somewhat narrow. They still have some rights in developing AATD with prime editing. So just can you help us square away what each party's rights are in this space? Each party's right and your right and their right.

So we've never contested whether Beam has rights to prime editing in Alpha-1. So as part of the collaboration agreement that we did with Beam back in 2019, they have rights to prime editing for doing certain types of edits, which or transition only edits, essentially what you can do with base editing. What I think this decision says is it clearly defines what the Beam field is and what the prime field is, which is, again, back to what we believe the Beam field and the prime field were before. And so as long as we're operating within the prime field, which means we are doing non-transition edits as well, then again, that has a material impact that's within the prime field.

Okay, that makes sense. It's a clear definition across the fields. Okay.

So AATD is a somewhat crowded field for gene editing, and for good reasons, just because there's a really high unmet need and there's a large patient population. So there are two companies that already have some clinical data for AATD. So where do you think your candidate can potentially differentiate from those those two?