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

Good afternoon, everyone. Welcome to Barclays Global Healthcare Conference. My name is Gena Wang. I'm SMID cap biotech analyst. It is my great pleasure to introduce our next presenting company, Solid Biosciences. With us today, we have Bo Cumbo, President and Chief Executive Officer. Bo, maybe before I dive into the questions, do you want to give a very brief overview of the company?

Yes. Thank you, Gena, and thank you, Barclays for the invitation. Solid Biosciences, we are precision genetic medicine company. We're focused on neuromuscular and cardiac diseases. We also have multiple platforms that we work on, both cardiac and skeletal capsid library as well as a manufacturing platform there we developed different plasmids for like dual plasmids for manufacturing expansion. So it's a great company. We work on about 4 or 5 different programs, both in neuromuscular and cardiac diseases. And one of those which are DMD programs moving into clinic right now.

Okay. Great. So maybe before I ask you a specific question, I will ask you about the recent licensing deal with a Armatus Bio. So maybe like how much data do they see? And then what is the -- regarding the upfront payment? And is there any contingency upon certain fee milestones?

Yes. We're very excited about this deal. This is the first one -- sorry, there's first one of many that we're hopeful -- deals that we'll be working on to get our capsids out as well as our plasmid. It's not just going to be capsid, but it's going to be our plasmid -- our dual plasmid, but they got to see our preclinical data. We gave them an MTA first, so they got to play around with the capsid, actually do work with it and see the results that they were going to get [indiscernible] our data showed and they did, and they felt very comfortable moving forward. It's a typical milestone-driven -- it has an upfront. We did not disclose the upfront. And I'll talk about our strategy as well because I think it really does matter. And there were milestones and mid-single-digit royalties along the way. So we're very excited about it. You have to understand what our plan is. Our plan is to get our capsids -- our multiple capsids as well as our plasmid, our dual plasmid out to as many companies as possible. If you understand the life cycle of genetic medicine, it takes a long time. The most important thing in our companies, outside of myself and all the other gene therapy companies, it's time. You do a lot of work upfront, making the capsid, doing the mouse work that you need to do, then the nonhuman primate, that work typically takes 2 to 3 years. You don't want to go backwards in time. And so what we try to do is we try to give our capsid at a moderate upfront. Was this cutting you now? All right, moderate upfront and then try to incorporate into as many platform programs as possible. So this is the first one. We have other companies that are excited about our capsids and we're just going to continue to try to get it out.

So does that also apply -- I do know you have also platform regarding the AAV -- capsid engineering. And does that also apply to say the hard tissue target for capsid...

Yes, it applies to everything. We're going to -- we're focused on getting our capsid and our dual plasmid, which will increase yields 2 to 5 times for gene therapy. We're going to get that out to as many companies as possible. And these smaller companies, they don't have the $10 million, $15 million that they can pay upfront. So it's a limitation. It's a bottleneck for these guys. And so we work with them, make sure that we can get in their hands, get into the trials in that way long term, our goal is to get our capsid as many programs as possible and then get our dual plasmid in as many programs as possible as well. We'll make royalties off that as well. The dual plasmid is very, very interesting. The biggest limitation in gene therapy is COGS. With our dual plasmid, we can increase yields 2 to 5x. So for example, if somebody ran a 200-liter batch on a program -- any program and they get 10 patients out of that 200-liter, huge switching from a triple transfection to our dual plasmid. They're going to get -- go from 10 patients to 20 patients up to 50 patients. COGS are going to dramatically decrease. And that's going to open up also for companies to use our dual plasmid and get it into a lot of populations that are really, really small. A lot of companies don't go into truly orphan drugs, sub-1,000 patients because of the risk and the cost of goods. If I can change that for them and get this program, it's going to open up for a lot of other diseases. We're very excited about our plasmid as well. You'll hear more about that. We just filed all the IP in the last month.

On the other hand, I think it's very a noble way to share your early discovery with other companies. On the other hand is would you limit the indication so that you also get the major -- large indication will be in-house...

Yes. I mean we'll keep it for Duchenne, and we'll keep it for CPVT. I mean that we'll keep it for those 2 indications at least, most likely BAG3 as well, but we'll get it out to everybody else. And if you looked at the license last week, it was also nonexclusive. And I think that, that's something that you should take a look at because I do plan on getting it to out there as many people as possible. I'm not going to try to limit it to one company. The data is really good. I mean like you look at our Duchenne program, for example, you're getting 2 to 5x different biodistribution in the quad, the gastroc, but just as important, diaphragm. The diaphragm is 5 to 10x greater and diaphragms are hard to dose. So when you think about some pulmonary indications that people can go into, it really does open it up.

Good. So now your DMD indication. So I do know you put a earnings release this morning, maybe a little bit of update on the program.

Very excited. Your first biggest hurdle in getting a drug to the clinic is the IND. The second is the IRB approvals. And we're excited to announce that we got both IRB approvals done last week, both Nationwide Children's Hospital as well as UCLA where IRB approved. And that opens up a lot of doors for us. And that was our biggest hurdle. That's what we were waiting on. It took about 60 days longer than we anticipated because the sites, the UCLA and Nationwide. They had some staffing issues to fill the IRBs. If you know about IRBs, they're separated from the PI. It's a separate entity. So you can't -- you have to work with the IRB and you have to -- in our trial, it's going to be obviously in Duchenne, so -- and it's gene therapy. So you need a neurologist, you need an immunologist, and it's hard to schedule these. It took about 45 days, 60 days longer than we anticipated, but we got them done and they approved us this last week. You're not allowed to recruit for patients until you get IRB approvals. So Monday, we started now talking to patient advocacy groups, all the physicians at UCLA and Nationwide are now talking to other physicians because of the IRB approvals. So we have scheduled our site initiation visit in April. That's the next step. So you do IRB approvals, then you go to site initiation visit, that activates the sites, then the sites can -- basically, you're training the site on your drug? And then they start recruiting patients, screening patients, getting them in trial. So this was a huge step for us. We're very excited. And now we can start early moving forward.

So is there any stepping up, say -- sorry, the stacking phase for the first patient, second patient...

Yes, the FDA mandates 30 days. So we have to wait 30 days in between patients. So you dose your patients on day 1 whatever day 1 is, and you're not allowed to dose your patient till 30 days -- second patient till 30 days. Typically, it's not going to always be 30 days. You schedule the patient, you have to work with their schedule to get them into the hospital and dose, but at a minimum, it's 30 days and most likely, it's going to be a little delayed.

Okay. So maybe I think this will be the new capsid into the clinic, right? So maybe talk about -- a little bit about the backbone capsid -- safety profile and now how the preclinical data look like with engineered diversion and how you -- what are the key data points you would be looking for, for the human safety?

Well, you know this capsid is very cool. We took this capsid and it was as -- it was a parental AAV9 and we modified it to where we add peptides for integrin receptors across the capsid. And we noticed -- and when we first made this capsid, we wanted to increase the binding capacity and the speed of transduction for this capsid. And we noticed in early preclinical studies, that we were seeing expression in as little as 4 days. And that's something we typically have never seen before. We work with a lot of other capsids. We work with all of AAV9, rh74, AAV8. You don't see expression typically in 4 days. And we weren't seeing just a little bit of expression we were getting like 50%, 75% in the heart, the diaphragm in 4 days. We repeated that study because there was a little shocking. And we also took a look at 2 days, and you can actually start seeing expression in 2 days and 4 days. We then we took that same capsid, and we went into a study with IVIG. And we were looking at -- we dosed mice with 0.5 mg per kg of IVIg, 1 mg and 1.5 mg per kg IVIG. And then we dosed the microdystrophin on top of that to see if it could -- it could go through the IVIG and it did. We're getting a significant amount of expression even in the face of IVIg. So the capsid acted very different. We also noticed that dose curve was hard to find. We had to go all the way down to 2 each well to get a dose curve. And we've presented that data at 3E13, we're [indiscernible] at 100% microdystrophin expression, then we went up to, I think, 5E13 and then obviously 1E14, 3E14. There is a debate internally, do we start in patients at a lower dose because we were already at 100% microdystrophin expression 3E13. Do you go down to 5E13 and start your dose. But we want to put the best foot forward. We looked at our safety profile in nonhuman primates, we dosed it all the way up to 3E14. The FDA did not have one single question in our IND regarding safety. All the animals did very, very well. There were no mortality events, there were no unscheduled takedowns. No alteration of any kind of immunomodulation. The animals did very well. So with that safety data in hand, with Sarepta and Pfizer and RegeneX and everybody else out there. We're like, let's put our best foot forward and try to help these kids. And so we want 1E14, and we're going to see what happens.

So with 1E14, can you remind me, do you -- do you [ proceed ] Soliris?

No. We just use prednisone, just prednisone. We bump up the dose, I think, 2 days before we dose patients and then we taper down 30 days after.

So any concern there given the AAV9 history?

Based on the animal data, no. I mean I think the -- gene therapy field has changed a lot. It's not just AAV9, you need to think about it. You need to also think about manufacturing. CMC plays a major role in SAEs and potential SAEs. When you have a lower full-to-empty ratio, you're dosing these kids at a vg to kg basis. So for example, Gena, if I had like a 50% full ratio, and I'm dosing you at 2E14. I'm really having to -- if I'm going to get you to the vg/kg, I'm really dosing you at 4E. So this is where full to empty ratios come into play. I think Solid has one of the highest full to empty ratios of any of the groups that I work with. That I've seen, we're on a very consistent basis, 77% to 81% true fulls. And I think it's very important to understand what I mean when I say true fulls. You can lump in, you can look at true fulls, you should look at true fulls, partials and empties. Some people lump partials in with empties. Some people lump them in the fulls. We don't believe that they're active. We lump them as empty. So 77% to 81% on a batch-to-batch basis, pretty consistent on a true full basis. If we lumped in partials, you're talking 98%, 99%. So when we think about it from a safety profile, when you're going up to vg to kg, you're really not having to increase too much and then other companies have had that problem. And I think early days and the reason I'm bringing this up is early days in gene therapy, you did not have a ratio like that. You were probably 50%, 55% at best. So it matters.

So with such a high full capsid -- true full capsid and is that like how scalable that is? like if we wanted to do the commercial scale, would that be easily translatable?

Yes. So we use cesium chloride, right? And a lot of times, cesium chloride is hard to scale because you're having to take that step to titrate out the drug that's full. We automated it. We create equipment on our own, and then we work with a third party to make this machine scalable. We have multiple CDMOs that actually want to buy this machine now, and it's all automated. So we take it out of the controllers hands. Now it goes down. It siphons out the exact same amount every single time with the true fulls. You can do multiple vials at the same time. And it's very exciting because we can now scale up cesium chloride purified drug. I think we're the only company that I know of that does it. And I'm selling the machine to the CDMOs as well. So.

That could be a side business.

Yes. It's innovation. I mean look, we're very focused on delivery. When you think about gene therapy, delivery is critical. And there are 3 flavors of delivery. It's your capsids. It's your CMC and it's your promoters. And we own 2 of the 3 platforms, capsids as well as manufacturing. And we make -- we put a lot of effort behind it.

Actually, since you mentioned promoter, is this -- does this have a muscle-specific promoter?

Yes, CK8. Yes, we use CK8. We haven't disclosed the promoter in BAG3 or CPVT.

Okay. The backbone for the cardio program? Is that the same or different?

You mean the capsid?

Capsid, yes.

For CPVT, it's AAV8. For BAG3, it's rh74. But there's an abstract on the BAG3 program. I didn't have SLB-101 at first. And so we've been dosing multiple sets of nonhuman primates with different constructs to pick our lead candidate. And if SLB-101 looks what -- it looks like in Duchenne, then would might switch.

So now the -- with thinking 3 patients, do you think it's realistic later this year or 2025, you will share the data? And what kind of data will you be sharing? With the initial data.

So everything is still on track. So we knew that the biggest hurdle was first meaning the IRB approvals. We got them last week, ecstatic about that. Now we can start the process and talking to patients. We expect 3 to 4 patients to be dosed. You have to wait 30 days in between dosing. So over late summer, we can announce that we've dosed our 3 to 4 patients announced that we've, hopefully, knock on wood, done this in a safe manner. That puts us on a time line of Q4 to announce our data. What are we going to announce? We're going to have all the data, so we'll have CK8 data, we'll have Titan, NSAA, dystrophin positive fibers, mass spec, the gamut of data that you would expect. And we'll release that in Q4. I mean, we might hold it to a conference that's right after Christmas, but it will be in that time frame.

Good. So you do mention like quite a lot of different measurements. So maybe starting with the protein level, and we did see already a few different programs showing their protein level and what will be your and I'm very happy to hear you also measure using mass spec because that's -- mass spec Western you can get a better understanding of the true protein expression there, right? So what kind of threshold you will be looking for? I know this is the first dose? And what you are looking for, regarding the...

I mean realistically, we're going to be focused on dystrophin-positive fibers to make the choice on how many fibers we're getting to and to move the program forward. The methodology on Western blot really changes from company to company, what antibody you're using? How long are you exposing, what's your standard curve? What's your -- the amount of protein put in vials -- there is greatly -- mass spec will give us as a direction and then dystrophin positive fibers using flagship as a third party will help us understand how many fibers are we actually transducing and expressing. And if we're happy with the number then we're going to move forward with the global trial. We're filing CTAs first half of this year, U.K. as well as Canada and then Italy is coming third. And if we're happy with the data at the end of the year, then we're going to announce that we're going into a global trial. We're already working with to [ key opinion ] leaders [indiscernible] Craig McDonald, all the right people to help us set up these trials and to move forward.

So when you say like global trials, are you thinking about, say accelerated approval paths or you wanted to do traditional like the control study and moving forward?

Yes. It's a great question. And I think you have to think about it both ways. I think you can lean into accelerated approval in the United States and using a surrogate marker microdystrophin. Ex U.S. you need to go -- you need to hit a clinical benefit, which means you need to have a placebo-controlled trial. So what you have to think about is you have to think about it. What are we trying to accomplish? Well, we're going to lean into an accelerated approval process in the United States using surrogate marker. So what does that trial look like? It's going to look very different than what you're going to have to have for the ex U.S. And that's going to be a double on for placebo-controlled trial with a clinical benefit. So if you get reimbursement. Otherwise, you're not going to get reimbursement. That's going to be very challenging. So we're not going to think about it as one size fits all, especially in the world that we're living in today with the regulatory agency that we have, which is I'm grateful for. So we're going to lean into accelerated approval in U.S. and then do the right trial ex U.S. had a clinical benefit get reimbursed.

Okay. That's very good. And that actually, I think, the protein level will become very important, right?

Yes, protein level because that's what Dr. Morris has stated publicly, yes.

Yes. And then what will be the, say, initial like the threshold you will be looking for, that you think it will be competitive enough for you to warrant further development?

So I look at -- as I mentioned before, dystrophin-positive fibers, if we can get to the 40% where you're close to expressing one out of every 2 fibers at roughly 40%. I think that's going to -- that can give you enough expression to hit a clinical benefit for these kids.

Okay. So positive fiber, I felt like kind of low threshold, 40%. I felt like a lots of...

[indiscernible] has mentioned that if you have one positive fiber, it should provide a benefit and structural benefit from this fiber that's decided. So that's why we're looking at that. Of course, we want higher, but we'll see.

And regarding the protein expression?

Like a mass spec?

Yes, like a mass spec, I know you can still draw the linear correlation and then come up with a percentage of protein.

To be determined on that. We have not announced that yet.

Good. I know we are running out of time, but quickly from the initial safety profile you gain from this, how that translates to see your cardio profile because you also have a suite of other the new capsids coming to clinical?

Every program is different, right? I think it will give us a lot of confidence in the capsid, but it will also give us a lot of confidence in the manufacturing platform because I do think the empty/full ratios matter, especially when you're dosing pretty big doses and our platform, our CPVT drug, which is scheduled for IND filing and submission in Q1 of '25. I mean this drug, we're very excited about 20,000 patients in the United States, highly fatal. They get diagnosed 5 to 10 years of age, 40% mortality in 10 years. There's not another company in the space. Our manufacturing material is the highest purity of any drug that we actually make internally. And so we feel very confident about the purity of the drug. And I think it's going to lean into that. That program has the chance to change Solid forever. It's a major, major market high unmet need. The global -- we're doing an adboard in the next couple of weeks. The global KOLs are all over it because this can change the course of the disease. And right now, there's nothing.

Very good. Well, thank you very much.

Thank you.

Thank you, everyone.