ProQR Therapeutics N.V. (PRQR) Earnings Call Transcript & Summary

Thank you, operator, and good day, everyone. I'm Sarah Kiely, Vice President of Investor Relations and Corporate Communications at ProQR. Today, we issued a press release summarizing the top line results from the Phase II/III Illuminate trial sepofarsen and CEP290 mediated LCA10. The press release can be found on our website at www.proqr.com. With me today are Daniel de Boer, our Founder and CEO; and Dr. Aniz Girach, our Chief Medical Officer. Following their prepared remarks, Smital Shah, our Chief Business and Financial Officer, will join Daniel and Aniz for a Q&A session. In order to include your question on today's call, we request that you dial into the telephone numbers provided in the press release. During the call today, we will make forward-looking statements. There are risks and uncertainties associated with an investment in ProQR, which are described in detail in our SEC filings. I will now hand the call over to Daniel.

Thank you, Sarah, and hello, everyone. Today is a sad day for everyone with an interest in our sepofarsen program and especially for all members of the LCA10 community. Earlier today, we announced top line results from the Phase II/III Illuminate trial of sepofarsen. Unfortunately, in the top line analysis, the study did not show a difference between the treated and the control arms on the primary endpoint of BCVA or the secondary end pots. We are shocked by this unexpected outcome, especially given the remarkable vision improvements that were observed in multiple patients in the earlier trials. To help us understand the root cause, we will conduct further analysis on the Illuminate data in the period to come, and we plan to share these learnings with you later in an appropriate form. The results that we will be sharing are hot off the press as we wanted to share these results with you immediately. So it will take some time before we will be able to address all the questions that we have on this outcome. Before Aniz will provide his perspective on the top line results, I first want to thank the individuals who participated in this trial, their families, and supporters, and the wider inherited retinal disease community. I also want to thank the physicians, research coordinators, and the procurions who work tirelessly on the conduct of this trial. And lastly, I want to thank our shareholders who have supported us throughout. While today's results are disappointing, we are committed to continuing our work to develop potentially life-changing medicines for the high unmet need in genetic eye diseases. I will now hand over the call to Aniz to provide his perspective on the top line results.

Thanks, Daniel. Before we get to the data, I will briefly review the study design to provide some context. The Phase II/III pivotal trial for sepofarsen or the Illuminate trial is a multicenter, randomized, double-masked controlled study. The key inclusion criteria were LCA10 due to the c.2991+1655A>G mutation in the CEP290 gene. Participants were at least 8 years old and had the best corrected visual acuity or BCVA, between 0.4 to 3.0 LogMAR which is equivalent to 20/50 vision up to hand motion on visual acuity testing. The trial randomized 36 patients across 3 arms equity, a target registration dose, a lower dose, and a sham harm. The primary endpoint of this trial was mean change from baseline in BCVA at month 12, comparing the active treated arm against the sham procedure. The top line results of the Phase II/III Illuminate study on BCVA reveals no difference between either of the sepofarsen-treated arm and the sham arm at month 12. Neither was there any difference observed between the 2 doses and the sham group at month 12. In these top line results at month 12, the mean change from baseline in BCVA in the e 160/80 microgram dose group was minus 0.11 LogMAR. In the 80/40 microgram group, minus 0.13 LogMAR Global, and in the sham group, minus 0.12 LogMAR. All p values are nonsignificant between treated group versus sham with an ANCOVA analysis. So essentially, every group had a one-line improvement. Also in the notable secondary endpoints of full-field stimulus test or FST, and the mobility course, we did not see a difference between the sepofarsen and sham-treated group here either. Of note, sepofarsen was observed to be generally well tolerated in the study, just as it was in the Phase I/II clinical trial with cataracts, CME and retinal thinning observed. All in all, no surprises on the safety here, but the big disappointment was the lack of efficacy. Given the limited time for analysis, there are still multiple additional analysis to be conducted, including subgroup analysis. We plan to present the results of this study at a future medical meeting. Before I turn the call back to Daniel for some initial remarks, I wanted to echo my sincere thanks to all that have taken part in the study. Daniel?

Thank you, Aniz. While we are disappointed with the results from the Illuminate trial that we shared today, we have confidence in our platform that generated robust data across multiple molecules, mechanisms of action and indications. We look forward to continue to advance our pipeline of RNA therapies for genetic eye diseases with 2 pivotal trials of ultevursen which was formerly known as QR421a or Usher syndrome. And behind that, QR1123 for autosomal dominant retinitis pigmentosa and QR504a for our first front-of-the-eye disease program for Fuchs endothelial corneal dystrophy. In the coming year, we anticipate sharing data from our Helia extension study of ultevursen as well as the first data from our QR-504a Biomarker study. We are also excited about the potential of our Axiomer RNA editing technology in the eye for our in-house pipeline. And in addition, we will selectively partner the technology out in areas outside of the eye, like we did in our recent partnership with Lilly that we announced last fall. ProQR is in a strong financial position and based on our current spending plan, this provides a cash runway into mid- to late 2024, which provides us with the opportunity to continue to create value across our pipeline and have clinical data readouts in all of our ongoing programs within that runway. Going forward, I see 3 priorities for ProQR. First, we will figure out what happens with the sepofarsen Illuminate trial, where we will leave no stone unturned. Second, we will further our commitment to the ophthalmology community with the development of our programs in Usher, retinitis pigmentosa and Fuchs Endothelial corneal dystrophy. And lastly, we will continue to invest our proprietary RNA editing platform technology, Axiomer. Before I hand the call over to the operator for questions, I want to thank everyone for joining our call today. I wish we would have better news to share. Operator, we'll now take questions.

[Operator Instructions] Your first question today comes from the line of Yigal Nochomovitz from Citi.

Sorry about the tough news. That's a real pity. I know you still have a lot to analyze, but I just wonder, did you see any differences in the distribution of LogMAR data at the patient level across the 3 arms. For instance, perhaps more super responders in the drug arm but offset by those that didn't respond? Or were all pre-distributions of the LogMAR data also fairly similar.

I'm going to let Aniz answer your question.

At this stage, with only less than 48 hours gone, we're just looking at the top line results. And therefore, at a mean level, which is the primary end point we can see that actually all 3 arms behavior very similar me. We know that there are responders there. They're likely to be across the board with all 3 arms. And I think that that's really the bulk of the work as we move into the next few days and weeks as we dive into the individual patient data and also the secondary endpoints, you really learn much, much more about exactly what happened here.

Okay. And then what's the strategy as far as taking forward development in LCA10? Are you leaving open the door for potentially running another study, and perhaps a larger study once you fully understood what happened in Illuminate, or, are you planning to leave LCA10 alone and move on to your other programs?

Yes. Yigal. So this data is really hot off the press. We obviously wanted to share it immediately given the outcome. We are going to keep taking to understand why this disconnect in the data between the Phase I/II and the Phase II/III occurs, to understand what the root causes of this. That will help us to inform the decision on the next steps in sepofarsen, where everything is on the table. So we can come back to you later once we've done that analysis.

Your next question comes from the line of Dae Gon Ha from Stifel.

Sorry to hear about the data. Maybe just recognizing, again, limited information you guys also have with this data. Can you comment on anything to the extent of the inclusion and the baseline BCVA of the participants that came in recognizing, I guess, the understanding right now is baseline visual acuity has more of a meaningful, I guess, prognosticator factor. But anything of the sort that maybe you might have dosed or enrolled more of the, I guess, better BCVA patients at baseline such that you kind of suppress the effect size, if you will. And then just kind of going into what Yigal was just asking, Daniel, you just mentioned everything is still on the table. So I just want to be clear about this. When you say cash runway as mid- to late 2024, does that scenario also include running another sepofarsen trial? Or is that without another sepofarsen trial?

Thanks, Dae Gon Ha. I'll take the second question first. So there's obviously some spend in that runway on sepofarsen. This is a 2-year study. We are now at the 12-month interim analysis so the study will continue. That does not factor in a completely new trial, would that be where we land. But there's a lot of [indiscernible] between now and then and we first are going back to where it has taken and understand what happened here. On your first question, I'm going to refer to Aniz.

Yes. Thanks, Daniel. Indeed, the LogMAR criteria for inclusion into the study was LogMAR 0.4, which is equivalent to about 20/50 on the external acuity chart and went up to LogMAR 3, which is roughly equivalent to hand motion. Now we know that the majority of the patients that were enrolled in the study were on chart, and therefore, they have a LogMAR 1 or better. But importantly, they're evenly distributed across all the 3 groups. And so I think this is going to be really the crux of the next few hours and days as we go through the data, analyzing this in order to make sure that we get a better sense of the [indiscernible] distribution and how each patient fared over a very good time.

So if I may just ask one more question. Does this data in any way, I guess, raise question marks around maybe approaching the splice factor approach. I guess I'm just asking broadly on the biological question of, is this more of an antisense oligo approach? Or do you think the genetic target itself may be somewhat in question now given the results? Or is this more of an operational thing? I know we're kind of at a high level now, but I me, what are your thoughts on that?

Yes. Let me comment on that first, Dae Gon. I think we have seen really robust data in the Phase I/II sepofarsen in Phase I/II in Usher. We've seen consistent data across those studies that was consistent with the nonclinical data as well. So far, we will investigate why the Phase II/III trial is so inconsistent with the findings before. And that will guide further insights in that. Obviously, the science behind this is we understood it has likely to approved therapy. So we don't think it has anything to do with the underlying technology and platform. But we really need to invest the time to understand what happened here before we can draw any conclusions.

Your next question comes from the line of Jon Wolleben from JMP Securities.

Unfortunate news this morning. I wonder if you could comment on how the sham group performed compared to your expectations coming in?

Yes, Jon, if you look at the sham group, it increased by 0.1 LogMAR at the 12-month time point, which is equivalent to 1 line on the ETDRS chart, which is actually equivalent to what you would expect with the test retest variability for the ETDRS chart. So really, from our point of view, something like 0.1 of a 1 line improvement is very much in keeping with what you'd expect. And so a sham group behaved as it did. I think for us, the most disappointing thing is the efficacy on the efficacy group themselves. So -- and that's what we need to dig into in more detail over the next few hours and days.

Got it. And is there any stratification in the statistical analysis plan?

So we didn't stratify at entry into the trial because of the small numbers involved here. But indeed, of course, our statistical analysis plan goes into an extreme amount of detail of stratification by subgroups. We have to look at that data. And so we will be analyzing all of these subgroups as time goes on.

And one more, if I may, on the cash position. I know you had access to 2 more $30 million tranches over the next 18 months, I believe. Were those tied to any sepofarsen progress? Or do you still have access to that capital.

Yes. Good question. So those are tied to by design to sepofarsen because we were making sure that planning for a success and how sepofarsen which we fully believe in with the Phase I/II results that we would have access to that capital as we look at a commercial launch. So it was really to fund that. So of course, we won't access those tranches in absence of that. That's why it doesn't affect runway really because the commercial spend also goes away if we are not approved.

Your next question comes from the line of Brian Cheng, Cantor Fitzgerald.

Sorry to hear about the result. So we have now about the variability can be a huge factor going into the Illuminate trial we sell. It seems that there were 3 sweet spots for efficacy when we look at your earlier study. So I just want to drill on the baseline characteristics a little bit what's the proportion of patients who were about 2.0 LogMAR and out of the 36 patients, how many of them were on enrolled in the U.S. and Western European sites?

Yes. Thanks, Brian. And some of that information, we still have nothing. But essentially, what we had was a reasonably equal distribution across the different sites, the majority of the sites were European compared to the U.S. And in terms of the number of patients that were enrolled per site, again, a fairly even distribution there. With regards to the baseline characteristics from VA point of view, the majority of the patients were on chart. And just to clarify, the on-chart patients are those who have LogMAR 1.6 or better, and that was evenly distributed across the different groups as well. So I don't know whether that answers your question, Brian.

Okay. I got it. So -- and then -- yes, so I guess one of the top questions that we have in mind is how does this data potentially change your thinking about the rest of the pipeline? You do have multiple programs are ongoing. Is there a potential chance that you can put more resources to advance some of those other earlier-stage programs? And can you remind us what the upcoming data, tell us that are lined up for the remaining of the year? And I have one question remaining from the modeling side for middle.

So I think the data is on the Phase I/II trail sepofarsen [ circular ] system. And we saw a similar picture in our trial of ultevursen for Usher syndrome. This year, we are expecting a readout in the Helia open-label extension study in ultevursen program for Usher syndrome. And we also have 2 pivotal studies ongoing, which we will update you on as well. This year, we also expect the first data from our trial in Fuchs endothelial corneal dystrophy with a QR-504 program, and that's also on track. We furthermore have a program for QR-1123 that is entering a repeated dosing study this year. And also, over the course of this year, we plan to advance target space of Axiomer forward into our pipeline. As you know, -- we have a really broad and deep pipeline of molecules for other genetic eye diseases. And we indeed plan to advance later in the year, one or more of those molecules for it into development. And we will inform people about what those targets are. So yes, we will progress the pipeline over the course of this year.

Okay. Smital, on the modeling side. I know that you've provided guidance on your cash runway. But can you give us a sense on how we should model out your R&D and G&A expenses for the near-term quarter?

Yes. So we don't provide guidance on R&D and G&A expenses or the annual bond. We generally provide guidance on where our run rate takes us because there is -- depending on what stage the trial is in that does fluctuate or some. I think the update, as we think about going forward, is that any revenue that we had taken for now taking that as we were planning commercial launch and all of the costs associated with that. But we plan to advance everything else that Daniel just mentioned. And even with all of that, our runway takes us mid to late '24, and even in that, we probably have some more flexibility but we are not ready to guide to that yet. So in that run rate, we will basically have data from all of these programs.

Your next question comes from the line of Steve Seedhouse, Raymond James.

First, I just want to ask, in retrospect, what's your best guess of what happened with the super responders in Phase I/II?

Steve. Yes, that's a good question. So we found the Phase I/II that data was consistent in terms of the onset of the effect and the durability throughout different patients. We saw similar responses in the all 2 open-label extension study, the inside open-label extension study. And we see good consistency there in the data. We -- as we previously discussed, there were different response sizes in the Phase I/II. And we think they were mostly driven by where patients were in the baseline official acuity. So we saw that more progress than were towards hand motion, the larger [indiscernible] response was, obviously because they would have less of a ceiling effect. That insight didn't change.

Okay. I'm also curious just about the pharmacodynamics here. Do you think you have sufficient CEP290 correction? Or do you think maybe all along, you just haven't been achieving that? And then I'm also -- a related question. Do you -- just given the dosing differences between Phase I/II and Phase II/III, do you see any differences in vision at earlier time points in Illuminate that sort of go away? Or is there just no separation from sham at any point?

Yes. So there is no suppression from sham at any point, not noticeable. We do -- we did at the same dose in the Phase I/II trial, 160-microgram dose and 80 microgram maintenance dose. The majority of the patients in the Phase I/II and also an inside we're on this dosing regimen. And we have continued this in inside and then also started treating the second eye on this dosing regimen. So -- but from a pharmacodynamic perspective, we're really comfortable that this is right dosing regimen as we have clinical data to support that.

[Operator Instructions] Your next question comes from Keay Nakae from Chardan.

Daniel, just trying to get your opinion about what you think the read-through is on the platform for your other indications. Obviously, the drugs and the design choices are such because the drugs are designed to work in different ways. For Usher, you're looking at exon skipping; for RP, it's more of a traditional gap mirror [indiscernible] as you mentioned, at the front of the eye. So they do work differently. How should we view a read-through from LCA10 to -- or sepofarsen to your other programs?

So we expect limited read-through for some of the reasons you mentioned, but also because we saw really consistent results from the nonclinical data into the Phase I/II trials across multiple molecules, across multiple patients, and then into extension studies. For -- in our view, the outlier here is the Illuminate result as we are presenting today. And therefore, we remain confident in the platform as such. We are advancing these programs that you just mentioned, they are in the run. And within that cash runway, all of us will have readout, including 2 of those who have readout this year. So we look forward to reading out those trials.

There are currently no further questions. I will hand the call back to you.

Thanks, everyone, for participating in today's call. As I mentioned earlier, I wish we had better news to share. But unfortunately, that's not the case. Thank you all for participating. Bye.