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

Welcome, everyone, for today's first session. This would be with ProQR Therapeutics. We're joined by the CEO here, Daniel. Welcome. Maybe to start off, can you just give us a quick overview of where things have been? What were you able to accomplish this year?

Absolutely. Thank you for having us today. I do want to say that there's risk associated with an investment in ProQR and our statements around that can be found on the website of ProQR. ProQR is a biopharmaceutical company. We're based in the Netherlands and Europe. Our shares are traded on NASDAQ in New York. And we're focused on the development of RNA editing medicines. RNA editing is an innovative technology that allows us to treat genetic and common disease by modifying the human messenger RNA. And with that, creates a template to make proteins that enhance health. We can do that by introducing variants that create de novo proteins that have a beneficial effect on the health of people or by targeting mutations that we can restore back to a normal wild-type sequence. This technology we invented at the ProQR Labs about 10 years ago, and we control all the foundational IP around the technology. And over the years following, we've optimized the technology to a point that in 2021, we entered into a collaboration with Eli Lilly. That is a $4 billion partnership in which we received $125 million in upfront payments. And in that collaboration, we are partnering on up to 15 different targets where ProQR does all the discovery work and Lilly takes it into development and commercialization. We can make up to $250 million in milestone payments for each target, and we will receive royalties on the approved product. That partnership is proceeding -- progressing really well. There's a lot of scientific progress being made. And hopefully, soon, there will be more to say about development progress from that collaboration. In parallel to that, we are pursuing this technology for a wholly owned pipeline, where we focus on the use of this technology in liver and CNS indications. We have a pipeline of both rare and more common indications that we are developing in liver and CNS. The lead program in our pipeline is called AX-810 for cholestatic diseases. And this program, we have an open CTA for and are starting a clinical study right now. For this program, we expect to have first human clinical data, PD data in the first half of next year. So that is something we're very much looking forward to. In addition to that, we have a whole range of other programs in our pipeline for cardiovascular disease, for other liver disease. We have a program for Rett syndrome, which is a neurodevelopmental disease. So a wide variety of applications and significant opportunity to advance our pipeline towards the future.

Okay. Perfect. Maybe before starting with the lead program here that you've announced the trial design for, can you just let us know how did you go about prioritizing PSCBA first? Why not something else like AATD, et cetera? And then we'll take it from there.

Yes, absolutely. So the target universe for ADAR editing is very significant. We can apply this technology across hundreds of different targets and potentially generate a deep pipeline of medicines based on this approach. We see there is a number of different ways to utilize the technology. So for correction of mutations, which you would do in the context of AATD or to introduce de novo variants that actually have a health benefit. Given this is a platform technology, we set out to generate a robust initial human translational data set. And for that reason, we picked a target where we can measure target engagement in healthy volunteers. We picked NTCP, which is the main contributor to bile acid concentration in the liver. And that is the underlying causality of cholestatic diseases like PSC and biliary atresia. And between those diseases, there's a very high unmet medical need. There's no approved therapies and both of these diseases are life-threatening. So we think that with this approach, we can both generate a significant data set that validates the technology, helps us to understand the translatability of the science from the lab to the clinic and at the same time, develop a medicine for a really high unmet medical need.

Okay. Perfect. Can you -- okay. So let's start with the PSC and BA program. So you recently announced the trial design. Can you just give us a quick overview of how many cohorts, what doses are you testing? And when can we start expecting some of the results from the trial?

Yes. So the AX-810 program, which we are developing for NTCP, which is a protein that is responsible for the uptake of bile acid from the blood into the liver is being pursued for cholestatic diseases, which do include PSC and BA. The initial trial that we're doing is a trial in healthy volunteers as we can actually measure target engagement in healthy volunteers. So we don't need to include patients. And that gives us a lot of advantages because the recruitment of a trial with healthy volunteers is quicker and easier. There's less background noise in the data, and it allows us to proper sample size the study to get to a robust outcome. The trial is set up to look at bile acid concentration because we're modulating the transport of bile acid and because of that, the bile acid in serum, so in the blood will increase, and that's something we can measure. We will also look at the bile acid ratio between conjugated and unconjugated bile acids. And we will do a specific challenge with synthetic bile acid, that's called the [ TUDCA ] challenge in which we can isolate the function of NTCP specifically and measure that post treatment with oligonucleotide. The trial is set up in Europe, where we're based in the Netherlands, where we will conduct a study close to home. It will enroll 33 subjects across 3 cohorts, 11 in each cohort, which is a randomized, placebo-controlled and double-blinded. So we will treat with 4 doses over the period of 5 weeks. And after we will follow the subjects for another 12 weeks. The study is now about to start. We'll be dosing a patient, first subject in the coming few days. And then we expect an initial look at the safety and the PK data around the end of this year. And all the PD data, so all the target engagement data and the biomarkers will come in the first half of next year.

Okay. Perfect. So one of the things, concerns or rather challenges in liver disease, especially PSCBA is the time line for showing benefit. What is -- is there a path for accelerated approval here? What would that look like? What are you going to measure to see that? And as a continuation to that question, are you measuring liver stiffness or any other biomarkers like circulating C4, et cetera, for this one, so that could kind of give you a leg up or a head start?

Yes, that's a really good question. So the current Phase I study is set up in healthy volunteers. On the back of the healthy volunteer study, we will do a Phase Ib, which is one cohort of PSC subjects that we plan to dose in the second half of next year and then have results before the end of next year. This will be a 1-month treatment period, similar to the healthy volunteer part of the study. And that is likely not sufficient to measure a change in the clinical outcomes like liver stiffness. But we will obviously be looking at all the biomarkers and clinical measures that we can, and that includes indeed liver imaging, combined with certain biomarker measurements that we think combined could provide a path to an accelerated approval. It depends also a bit on the indication because we have not selected yet if we will lead with PSC or BA in the Phase II, and each of them will have a different registration path. But given the high unmet medical needs and the absence of disease-modifying therapeutics for both indications, we think that with a novel therapeutic strategy like targeting NTCP here, there is a potential to develop that in an accelerated manner.

Okay. Got it. And what is the priority in development for BA? How are you going to prioritize that?

So we're currently working through indication selection with key opinion leaders to define if our first study, first inpatient Phase II development study is going to be in BA or PSC. And the factors we're weighing there are developability from a feasibility perspective in recruitment. I think there's the biological rationale for the 2 indications that is slightly different. And obviously, PSC moves a bit slower. It's largely an adult population. And BA is a much more aggressive disease, which is mostly affecting a pediatric population. So they're -- both have a very different proposition and there's pros and cons to both. But in parallel to conducting our Phase I in healthy volunteers, we will also make a decision on indication selection, and we'll announce that in conjunction with the results of the Phase I.

Okay. Perfect. And on the safety side, can you just give us a quick recap of why pruritus won't be an issue? And how should investors have confidence that that's not going to be a continuing issue with the program?

Yes, absolutely. So pruritus is itch, significant itch that is caused by inflammation in the liver. Inflammation markers signal and lead to itch across the body. This is called pruritus and is a significant symptom of the disease in patients. It's often considered that high levels of bile acid and serum leads to pruritus. We believe that's not the case. We think it's coinciding. High levels of bile acid and serum coincides with inflammation, but the inflammation drives the itch, not the bile acid itself. And there's 2 important data points to support that. First of all, the mutation that we are creating with ADAR editing is rooted in human genetics. So there is a natural population that lives with the variant that we're creating. And these are healthy people, healthy people that live with really high bile acid levels in their blood up to 40, 40x higher than a wild-type individual. And these people do not suffer from pruritus. They do not have itch. So although they have 40x higher bile acid, they don't have itch. That's one. The second data point...

Sorry, and there's no variability among patients there. It's all patients with that mutation don't have the pruritus?

So these are healthy individuals. They don't have any disease manifestation whatsoever. The only clinical phenotype they represent -- they present with is high bile acid concentration. The second data point is a clinical trial that Gilead did with Bulevirtide, which is a peptide for hepatitis D that targets NTCP as well. As a result of their study, they concluded that they significantly increased the bile acid concentration in blood, and that was not associated with pruritus in that study. So I think between that, there is a high conviction that this approach will not lead to pruritus.

Okay. Got it. And in terms of outcomes from the healthy volunteer study, just can you just set the stage for what to expect? How are you defining what success looks like? And then as a continuation to that, what is a good percentage of editing that you'd like to achieve? And how is that going to translate into outcomes? Yes.

So we believe on the basis of publications in the field but also work we've done ourselves that if you increase the bile acid level in serum by twofold, you will stop the progression of the disease. So that is the, let's say, the hurdle we've set. We want to increase the bile acids in serum by at least twofold or more. We would like to see that paired up with a shift in the ratio of conjugated versus unconjugated bile acids in favor of the conjugated bile acids. And then we would like to see the change in the clearance rate after [ TUDCA ] challenge. If we are able to establish that those 3 biomarkers move, and we crossed the twofold increase in bile acid and serum, we believe we have a developable product that will hold the progression of cholestasis. In addition to that, we're also looking for safety and a dose regimen that is acceptable. We dose frequently because it's a Phase I, but the TPP for this program is that we would like to dose once every quarter. And generally, with oligonucleotides that is achievable with the PK of these molecules.

Got it. And is the percent of editing directly correlated to the change in the serum bile acid?

Yes. Good question. So we've published data at ASGTC that shows that there is a relatively linear correlation between editing and bile acid concentration in the serum. And we see that with 5% editing, you get a twofold increase in bile acid. With 10% editing, you get a fourfold increase in bile acid in blood. So that's relatively linear. And in this study, we will not be able to measure editing because we cannot take a liver biopsy. But we will be able to correlate it back to the nonclinical data.

Okay. Is there such a thing as too much editing being bad or?

We don't think so. Certainly not for this target, but probably in general for the use case of RNA editing.

Okay. Perfect. And then once you have the data from the healthy volunteer trial, what does the time line look like to starting the next phase of trials? Would it be a pivotal trial? Or can you just lay the path for that?

Yes, potentially, although we can't commit to that yet. It depends on the data and the indication selection. So we are working through those plans right now. We are looking at accelerated development plans to get the drug would it prove to be efficacious, approved as quick as possible. But the plans for that, we will unveil once we have the clinical data in hand.

Okay. Perfect. Anything else you want to highlight on the program? Or should we move on to the Rett program?

Let's move on to the next program.

Okay. Got it. So to start off with, what is the level of priority for Rett?

So Rett is a very high unmet medical need. It's affecting people that are born with normal cognitive function, but then develop this neurodevelopmental disease due to the absence of the MECP2 protein. We can, for certain genetic variants, reverse that by restoring normal function of the protein through RNA editing and with that potentially take away the underlying defect of the disease that would allow for people to gain normal developmental function even later in life. So it's not a neurodegenerative disease. It's a neurodevelopmental disease. So animal data suggests that if you reintroduce the protein later on in life, normal function can be restored. This program is really important. We developed this in a partnership with the Rett Syndrome Research Trust that is cofinancing the development thereof. And if all goes to plan, we will select a clinical candidate in the very short term and then rapidly advance that into clinical studies.

Okay. Got it. And do you have a DC for this yet or?

We have not announced a clinical data.

Okay. Got it. Okay. Perfect. Quickly, how do you -- how does this program differentiate from gene therapy? What is the value proposition there?

Yes. I think it's great for the Rett field that there's so much activity. We learn a lot collectively. Hopefully, there's therapeutics that will reach these patients because it's such a severe disease. Rett syndrome is a very unique indication because you cannot overexpress the MECP2 protein. If you overexpress it, you actually get into what's called duplication syndrome. So it needs to be very tightly regulated. And I think value proposition of RNA editing here is that you restore the present messenger RNA and with that can never overexpress the MECP2 protein. So that gives a lot of comfort that you stay within the range of where the protein needs to be expressed. We can target this on a mutation-by-mutation basis. So the most severe form of Rett is caused by stop codon mutations. And there's 4 of those stop codon mutations that each have about 5,000 patients that we can target with individual editing oligonucleotides. So we're bringing the first one into the clinic. And then if that succeeds, I think there's a strong case to go into the other stop codons as well.

Okay. Perfect. A lot more to discuss. We have run out of time. So let's leave it there. Thank you so much for coming.

Thank you.