Solid Biosciences Inc. (SLDB) Earnings Call Transcript & Summary

Welcome, everyone, to the 39th Annual JPMorgan Healthcare Conference. My name is Anupam Rama. I'm one of the senior biotech analysts here at JPMorgan. I'm joined by Tessa Romero and Matt Bannon from the team. Our next presenting company is Solid Biosciences. And speaking on behalf of the company, we have CEO, Ilan Ganot. Before I turn it over to Ilan, I just wanted to highlight that for the listeners on the webcast, if you'd like me to ask a question on your behalf, please use Ask a Question feature in the portal, and I'd be happy to do that. With that, I'll turn it over to you, Ilan.

Thank you, Anupam, and thanks so much, JPMorgan, for hosting this conference. Clearly, a very peculiar one indeed. It's a pleasure to present the progress we made at Solid over the last few years, especially in 2020, in the face of the pandemic. And I will try to highlight the slides I'm referring to as I go through the deck. Slide #2 is our forward-looking statements. I will be making some. It's a fascinating grid, and I do recommend for everybody to read it just before bed tonight. Slide #3 highlights our priorities for 2021 and the anticipated milestones. We will resume dosing patients in IGNITE DMD this quarter. And we will also present 12 months of data from all 6 patients that have already been treated in our study, including functional outcomes this quarter. And we look forward to reconvening those opportunities to share that data as we're aggregating it now and putting it forward. We will continue later in the year to present additional biopsy data from patients that we will start dosing immediately. That will happen in the second half of the year and continue working towards commercial readiness as well as our registration study and further pipeline expansion as we did in 2020. Slide 4 is really the structure of today's talk. I'll try to make it short. We'll touch a little bit about the past of Solid: where we come from, why we are who we are; talk about the present, the unmet need; and then dive a little bit into the future, what 2021 and beyond would be for us. Many of you know I started this company with Annie and others after our son Eytani was diagnosed with DMD, Duchenne muscular dystrophy, in 2012. And in many ways, despite us leveraging decades of biology and work and efforts that have been done by many scientists and patient families and experts all over the world, we remain connected to this disease and are constantly reminded of the need as well as the opportunity to help patients who are still suffering from Duchenne. Slide 6 is one that we unfortunately added late because on New Year's Eve, we lost Michael Counterman, a friend for so many of us. He was at Solid for over 4 years, working across various aspects of the organization, making a lot of friends. Michael was 28 years old with DMD. He was brave, he was incredible, he was such a nice guy to have around to work with, to learn from, to help appreciate what it is like to navigate through this world with such a disease. When COVID met him, it was just a little too much, and we lost him. And we will remember him and the impact he made on us forever. Slide 7 shows a little bit what Duchenne muscular dystrophy is all about. It's a terrible disease that's caused by a genetic mutation in the dystrophin gene. It affects between 10,000 to 15,000 patients in the U.S. alone, hundreds of thousands in the world. It is progressive, irreversible and fatal. And as of now, despite a lot of good energy and good investment and great science, we do not have in place good treatment options for patients. Solid was founded after Eytani was diagnosed, with a deep personal connection and focus on this disease. We are always looking to add talent, whether it's employees or partners or people in our network that can bring value to fight against this disease. And we're very proud of a core technology portfolio that allows us to develop differentiated approaches to dealing with Duchenne. Slide 8 discusses our differentiated microdystrophin biology. And I'll start with a very quick biology overview. In the top half of the slide, you really see that long line, which is the micro -- the dystrophin protein, the full-length dystrophin protein that is present in the membrane of everybody that doesn't have Duchenne. And it is used to stabilize the membrane, to be a shock absorber to the muscle and prevent muscle tissue damage and death. Unfortunately, in DMD, because of the genetic mutation, that protein does not function correctly and isn't fulfilling the role it was designed to fulfill. We, therefore, are using a microdystrophin in SGT-001, our lead molecule, which is a smaller truncated version of the full-length gene. We cannot use the full-length gene. It is too big to fit inside the AAV that we use to deliver the gene therapy. And decades of biology and work have gone into deciding which parts of the dystrophin gene we should preserve and recombine to our microdystrophin. Specifically, at Solid, we are uniquely using the nNOS binding domain. On the bottom right-hand side, you can see it represented by the repeats 16 and 17, which is a small part of the dystrophin gene that is important to prevent activity-induced ischemia as well as associated muscle injury. And based on both animal work and a lot of natural history data from Becker muscular dystrophy patients, that's a lesser form of dystrophy, it provides better function and benefits to patients that are able to produce it. The microdystrophin is a surrogate for the full-length dystrophin. And as you know, we are very hopeful that would provide patients with a lot of benefits. Slide 9 is a short overview of IGNITE DMD, the study we started in 2018. We have, to date, dosed 6 patients: 3 at the dose of 5x10^13 vector genomes per kilogram and 3 at 2x10^14 vector genomes per kilogram. The study went on clinical hold at the end of 2019 because of an SAE in patient 6, the last patient that we treated. That hold had since been lifted, and we are getting ready to dose the next patient in IGNITE early this year, this quarter. All the SAEs are fully resolved. There have been no additional drug-related adverse events, and we really look forward to seeing the next generation of patients treated in this study. Slide 10 relates to the fact that 2020 was a transformative year at Solid. It was a tough year. We started it on clinical hold, with concerns around runway and around the path forward in the clinic. And we spent the year digging deep, preserving resources and engaging with every expert in the world that we could find to really identify and get to the bottom of the best path forward, to protect this program and continue developing it for patients. We got off clinical hold towards the end of the year. And the next couple of slides, I'm going to go into the details on how we did it and how that influences our path going forward. Slide 11 demonstrates the clinical protocol amendments that we made to IGNITE DMD in consultation with great experts and the FDA. Specifically, we were looking to experts in immunology and complement biology. We designed ways to inhibit complement activation; we identified a path to dampen the immune response, specifically by improving or increasing transient levels of steroids; and we are reducing the total viral load that we deliver to patients in 2 ways. The first is by selecting smaller patients. The first 2 would be 18 kilograms and lower. The other method to reduce total viral load had to do with our manufacturing process, which has a little bit of a historical highlight on Slide 12. This is a process we've been working in for years now, we took in partnership with the University of Florida. We took an early academic work and really brought it to bear and are still in the process of enabling advancements in that process to deliver the quantities that are required to dose patients with DMD and other diseases that have a high viral need. In 2020 specifically, we implemented a process improvement. We call it the second-generation AAV GMP production, together with the analytics that were required to demonstrate comparability between the old process that we used and the new one we are planning to start using imminently in the clinic. The main difference is demonstrated on Slide 13, and it is how we reduce the total viral load by removing most of the empty capsids from the mix. When you make AAV, you shoot for full capsids that have the gene of interest packaged inside the AAV, but you also get capsids that are empty and that get delivered to the patients together with the fulls. We identified a path to remove most of those empties and are currently planning to start treating patients with a 90% full-to-empty ratio. You can see that when you look into the total viral load on the right-hand side, that results in a nearly 50% reduction of the amount of virus that gets delivered to the patient without the dose of full capsids being altered. The reason we like the dose of full capsids is because the other thing we did in 2020 was finally identify and demonstrate the activity of our microdystrophin at the 2E14 vector genome load in patients in the 3 months muscle biopsies. We looked at 3 90-day biopsies and we were able to observe muscle-wide distribution, localization and stabilization to the membrane of the dystrophin glycoprotein complex and microdystrophin expressions at level which we expect would provide benefits to patients. Slide 15 happens to be my favorite slide in this book. Shows something that was really a dream when my son was diagnosed, to introduce this distribution of positive fibers to patients with Duchenne using gene therapy was a dream only 5 years ago. We really hope that this kind of distributions of fibers and these many muscle fibers -- and for those that are not sure what we're looking at, it's a slice of muscle and those little circle red areas are expressions of microdystrophin in the membrane of the muscle and are very likely to lead to functional benefit across the muscle bed. Slide 16 demonstrates some very unique aspect of our microdystrophin for SGT-001. Not only are we expressing the microdystrophin at day 90 compared to baseline, where it did not exist, but we can also show the beta-sarcoglycan as well as the localization and activity of the nNOS binding domain in the muscles of these kids. Lastly, on Slide 17, we're showing the western blot of our biopsies. This is another way to quantify the amount of microdystrophin present in the muscle. We're using a qualified assay here, and we are demonstrating an average of 10% across the 3 patients that were treated. And we really look forward to dosing additional patients at this level and demonstrating additional levels of expression later in 2021. In 2020, we were very proud to announce a collaboration with Ultragenyx on the West Coast, a great company which I personally have been following for many years and admiring from afar. We spent a few years discussing ways of working together, the 2 companies. Emil, their CEO, has always wanted to help patients with Duchenne. And over the year, we've come up with a plan to combine some of the best capabilities that both companies have into a single program. Solid is contributing our nNOS binding form of microdystrophin, which Emil called best-in-class as well as everything we learned in Duchenne, in muscle biology and in the development of SGT-001. Ultragenyx are bringing their HeLa PCL manufacturing platform, a 2,000-liter scale, which based on what they are telling us, could be a very impressive manufacturing method indeed, together with an AAV8 variant which they have worked with previously and have favorable immune profile. We at Solid retained the rights for other microdystrophin applications in SGT-001 and outside of AAV8 and have received a meaningful contribution from Ultragenyx for the partnership and have the potential to either collect royalties or milestones and milestones or opt in following proof-of-concept in humans. We're very excited. We kicked off the program already and really look forward to next steps together with Ultragenyx. Slide 19 is a quick highlight of some of the other work that we do at Solid. We feel it's a duty to continue to push forward the science for muscular dystrophy. We are fortunate to have the resources, the people and the knowledge to really push the envelope here and try to see not just what comes next, but what comes around the corner and what else can we do for boys with Duchenne muscular dystrophy. This is an example of a vector we've grown in-house, SLB-101. We've looked at thousands of vectors, trying to identify better ways of expressing protein in muscle, as you know, our main target. SLB-101 on the left-hand side, is showing in a chart with a number of other candidates, levels of expression in the neighborhood of 9 to 10x better than AAV9. And on the right-hand side, you can see the expression of microdystrophin itself in vitro, in muscle cells, using SLB-101. Indeed, a more impressive level than previously been possible by other vectors. This is not something that's ready now. It's in animal currently, and we are excited to continue to innovate across vector biology, across microdystrophin biology, promoter and other forms of delivery to muscle. This is the disease that we have the passion for, and we continue to push as hard as we can R&D outfit in our labs. We were also fortunate to have a strong finish for the year with access to over $100 million of new capital. This came through a combination of approaches: the Ultragenyx deal, which involves stock at a premium; we used the ATM; and we also used the PIPE just before the holidays to bring in a total of $150 million, which really sets us up great for 2021, gives us a runway to do everything we want to do this year and go into the future, able to deliver on the mission we set forth. Slide 21 just highlights the fact that we are passionate and we're excited about the future. Certainly, on Slide 22, I go back to the structure. We were shaped by the past. It's not been easy. We've learned a lot. We fell down and we got up again. And we are constantly engaging with the community around us. Obviously, I got to work at home, but we try very hard to stay connected, to continue to relate and to show the compassion that we see in our employees and in all of our partners to try to find a way to deliver a better future for patients with DMD. I want to finish with Slide 23, which is the slide in which I repeat the priorities for the year. We are imminently going to dose patients this quarter and report that we will share the 12 months update for all 6 patients that have already been treated also this quarter, continue presenting future biopsy data from the new patients that will be dosed, advance towards commercial readiness, prepare for registration study and further expand the pipeline. I want to thank everybody for taking the time, but more than anything, and thank you, Carl, for reminding me last night, I want to thank our employees who've been through a very tough year and saw the other side and are excited that we're going to have a great 2021. So with that, thank you very much, Anupam, and everybody, for hosting, and I look forward to taking your questions.

Yes. Ilan, if you want to introduce the broader team on the line, we can get started.

Absolutely. So we have Cathryn Clary, she's our acting Chief Medical Officer; and we have Joel Schneider, our Chief Technology Officer and Solid's first employee.

Okay. Great. Maybe I'll kick off the discussion here with, Ilan, you said resume dosing in IGNITE DMD this quarter. Remind us what are some of the gating factors to actually getting the patients enrolled.

Sure. Maybe Cathryn wants to take this.

Sure. Hi, everybody. Yes, so we got -- the clinical [indiscernible] lifted last fall, the first thing we did after that was amend the protocol and consult with our DSMB, who also gave us approval to begin dosing at the 2E14 vector genomes per kilogram dose. We've been working closely with our 4 sites to get IRB approval at the sites with the new protocol, and that is going well. And so we're -- and then the next step really is to screen -- begin screening patients in the dose, and we're on track for dosing in the first quarter.

Got it. And then I guess maybe help us understand kind of what we'll be looking for in the one -- in the first quarter data update, which is from the 6 patients that we already kind of know a little bit about. Like what would you point us there to look to kind of add some confidence into the profile of the gene therapy?

Maybe I'll start and hand over to Cathryn if she wants to add anything. So obviously, we've been treating patients since February 2018. The first was a nonambulatory adolescent and then 5 after him were kids. We've been monitoring all of their functions all the way through. We have the baselines and recurring visits at the clinic since treatment. And we are aggregating all that information, putting it together and preparing it for presentation later this quarter. Just to remind you, our sixth patient was dosed late in 2019, and it was just in the -- and towards the end of last year that we had -- that, that patient had actually completed the 12 months' visit, and that is why we're now in a position to share the data from all 6 patients. The focus will be on those at the high dose. We have the 3 patients there. And that is the dose where we feel comfortable based on the microdystrophin expression and the different aspects of the biopsy that I previously shared, that we hopefully are really helping the kids and providing them a meaningful therapy. And so you should expect to see some of the obvious outcomes, whether it's North Star or 6-Minute Walk, CK and the like. Cathryn?

Yes. No, I would just add to that, that we are actually exploring a range of exploratory outcomes in IGNITE DMD, and we've actually taken the time to really look at all of that. So we'll be sharing what Ilan said and potentially some other data. But we're exploring that right now.

And it sounds like in the second half of the year, we'll get some 90-day biopsy data for the newly enrolled patients. If I remember correctly, so has the protocol changed that all the biopsies will now be at 90 days? Because I thought previously, you could take it at day 45 and I think 90. Or if you wanted to do 6 months, you could do like that was supposed to give you more of a longitudinal work. But is it now everyone's got to be at 90 days?

Cathryn?

Sure. I'll take that. Yes. Yes, you've got a good memory. The protocol still allows us to be flexible in terms of when we take that first biopsy. And while we've been taking them all at 90 days, we certainly will look at potentially doing it sooner if we feel we're going to need the data to get into one of our goals for the second half of the year, which is to begin planning a registration trial.

Got it. And that's -- that 90-day update, biopsy update in the second half, should we be thinking about some functional data, too, maybe or no?

So I mean, so far we have not included functional updates in the 90-day biopsy update. We want to make sure that we are serious when we disclose this kind of information. In the early days of all these gene therapy studies, you have the confounder of the steroid increase. This is also an open-label study, so patients know that they have been treated and we don't want to let that interfere with the outcomes. And also, it's not really clear how long microdystrophin needs to work in order to provide such measurable benefits. So we feel more comfortable sticking to the 1 year on function. But the 3 months biopsy for expression so far has been the period we've selected to use.

Maybe a couple of questions here. Just on how do we interpret expression now, right, based on what we know in the field, right? We've got a company that has shown us almost 30% expression and had mixed outcomes in certain populations, right, in older kids. That correlation between expression and functional benefit, I think, is one that is still a little bit unclear, right, in the field. How do we think about that as we kind of look to your second half update biopsy results? If we look to some of the data that we're going to get later this quarter, like how do we interpret what we see based on what we know about the field, right?

Joel?

Sure. Now Anupam, I think you've highlighted a number of [ imploring ] confounders. We have 3 companies that are all doing the best job that they can to develop methodologies and qualify and validate assays that allow us to interpret the output from our dosing to our patients. And I think some of the confounders and some of the general questions around being able to prepare between studies are because we all have different types of loading controls, we all have different methodologies in how we quantify as a percentage of normal. There's a lot of data out there that a healthy person expressing dystrophin to be very different from one to another. My levels of dystrophin will be half of yours, Anupam, or yours could be half of mine. And so when we talk about comparing to normal, it becomes challenging when 3 companies or multiple companies are all developing their own methods. This is why some of our immunofluorescence data, as an example, is a great way to begin to cross-compare. It's not based on normalizing to anything, but the number of myofibers expressed in dystrophin. I think what we've seen in terms of the second part of your question around the correlation to expression function, there's a lot of interesting data recently published that even levels of 1% or higher can lead to meaningful changes in progression between the patients. And so I think ultimately, the question about the exact levels that we need to produce to demonstrate meaningful outcomes in terms of motor function end points is still largely undetermined. That's due to overall the heterogeneity of the DMD population, the heterogeneity in how patients progress from the early stages of the disease through the overall progression itself. So a lot of unanswered questions there. I think what we're all highlighting, all the companies that have shared data so far is that there are meaningful levels of microdystrophin expression being expressed. And what we're seeing are overall, clear signs of motor function improvement and efficacy. So as we learn more, we certainly will share more information about our thoughts about the natural history, heterogeneity with DMD population and how do we begin to think about levels of expression in terms of motor function output. And that will start this quarter [ as a lot high level ].

How do we get comfortable with the heterogeneity of this population? I mean we're not talking about one trial that has had setbacks, different modalities in this disease. Ataluren and others have had to deal with heterogeneity in these populations. And I was looking at that [indiscernible] at all paper. And they've got a nice little line there, but then you look at the error bars, and they're so high. Like how do you control -- like you talked about moving into a later-stage trial, but we're just on the back of some results recently that suggest heterogeneity in populations. Like how do we think about -- how do you think about controlling that in later-stage trials? And then in particular, like how do we put that into context of single-arm, open-label data when we get your functional data, right?

That's a good question. I think I would answer in 2 ways and then maybe Joel and Cathryn have more to add. I would say, first of all, you got to acknowledge and respect that variability. You cannot expect homogeneous outcomes in DMD. It doesn't work like that. There's way too many factors, whether it's other genetics or nutrition or even mood that are really getting in the way of collection of homogeneous data. And you got to respect that and anticipate that and not be too fazed when that happens. Second point is natural history. We are now in a place where there is significant natural history data on Duchenne. A number of studies had placebo arms and had other clinics all over the world collecting data from patients untreated for years. And that data exists, is available and should be used. We intend to use natural history quite heavily when we share the functional data. And I think until people run very large blinded studies, which we may need to do, hopefully there's other ways. But until that happens, I think that is -- natural history is the best tool we have to try to anticipate and then identify what could very well be drug effect. Cathryn? Joel?

Yes. I mean I think just to add to that, it is definitely a complex enterprise to do clinical trials in Duchenne because of heterogeneity of the disease, which is real, and also because of the variability in some of the outcome measures. So the North Star, which is an excellent tool that measures the multiple outcomes in Duchenne is still a difficult -- it's somewhat difficult to administer in a very standardized way even with blinded radars because of the subjectivity of the young kids doing this. So I think what we're really thinking about, and I'm sure the whole field is, is how do you design trials that's appropriate, covariance, the appropriate populations? What are the best outcomes to use? Is it a single outcome? Is it a composite? So that's really kind of what we're sort of taking the time to think about as I'm sure the entire field is this year.

I'm going to turn it over to Tessa from the team to ask a couple of questions.

Yes. This is Tessa. Yes, just so a quick question. I guess on the manufacturing side, I guess, is the clinical supply for IGNITE DMD, is it all the same lot? Or is it separate lots? And then the second question that I had is just on how the technique for the western blot for. Is it supercoil or linear? I know some others have talked about differences there and how the expression is analyzed. Could you just walk me through your technique on the western blot side?

That's for Joel.

Yes. So I'll start with the second question and work backwards towards manufacturing. Tessa, I think you're referring to the PCR methodology that we use to titer our materials. And what I -- is that correct?

Yes. That's correct. Yes.

Yes. What I could tell you is that we've developed a qualified PCR method that we continue to use as we move forward. We continue to innovate as we lock down our process methodology and our analytical development strategy towards a registrational and commercial effort. And I can tell you that, overall, we've seen broad similarity in our PCR methods from our earliest days of development and continue to design and develop and iterate based on keeping that consistency. So qualified PCR methodologies, along 30 or 40 other release assays that we use with every lot of material that we produce, to ensure to the best of our ability, homogeneity from lot to lot. Certainly doesn't mean that the field is not dealing with heterogeneity and variability, those are all issues we have to deal with. I think we've tried to be remarkably insightful and thoughtful about how we iterate on our process to ensure that we see consistency, which means sometimes going back into cells, going back into animals. One of the things that we announced late last year was the development of an in vitro expression assay, which is a qualified characterization method that we use. And that was requested by the FDA because the field, in general, is maturing. What was earlier more nascent is now becoming much more refined. And the FDA is asking for more quantitative demonstrations of equivalents as you move forward. And so long story short, have been remarkably comprehensive in our PCR method is to try and ensure homogeneity as we've gone through manufacturing improvements. Then your second question is related to whether or not each patient is -- or whether or not all patients are dosed from a single lot. And the guidance we've given previously is that every patient is dosed from a single lot of material. What that means for us, we define a single lot as a single bioreactor reaction, so 1 AAV production scheme. So while patients may be dosed from multiple lots, each patient is only dosed from a single lot of material. And as we move forward this year and along kind of highlight, especially for the second half of the year, we plan to talk more about our path towards a lockdown commercial-like process for our confirmatory development efforts. And we'll talk more about scale, yield, all the things that are -- we try to be forward-looking on and share a lot of information on. You can expect to hear more of that as we move forward.

And I guess is vector genome copy number is something that we could see this year from the IGNITE patients? I don't -- is that something that you might share?

We've collected vector genome copies over the years. Similar to our thoughts on other methods, we find that the most useful information that we generate is our protein expression. As you know, we're using 3 different methods. We use immunofluorescence, mass spectrometry and western blot. And those to us are the most meaningful outputs that really tell us what levels of expression we're seeing. And then for the first time this quarter, we'll talk about how that's translating into observations of function and biochemical activity. So I think we're going to continue to focus on protein expression and how that translates to motor function outcomes.

Okay. We're coming up on sort of 40 minutes here. So I want to thank the Solid team for this really super productive session this morning.

Thank you, Anupam.

Thanks, Anupam. Thank you, guys, and Happy New Year.

Thank you.