uniQure N.V. (QURE) Earnings Call Transcript & Summary

Good afternoon, and thank you for joining us. After market closed today, we issued a press release announcing a major licensing agreement with CSL Behring for rights to our hemophilia B gene therapy program. This press release is available on the Investor page of our corporate website, uniqure.com, along with an accompanying slide deck. Joining me to discuss the significant business update are Matt Kapusta, Chief Executive Officer of uniQure; and Jon Garen, Chief Business Officer. After our formal remarks, we will open the call to our research analysts for Q&A. During this call, please note that we will be making forward-looking statements. These statements will be subject to factors, risks and uncertainties, including those that are detailed in our Form 10-Q for the period ended March 31, 2020, as well as subsequent SEC filings that may cause actual results to differ materially from those that are expressed or implied by such statements. Now it's my pleasure to hand over the call to Matt for opening remarks.

Thank you, Maria. Good afternoon, everyone, and thank you for joining the call. Earlier today, we announced that uniQure has entered into a license agreement providing CSL Behring exclusive global rights to commercialize EtranaDez, our promising and innovative gene therapy candidate for patients with hemophilia B. This transaction, which is one of the largest gene therapy deals announced to date with a total potential value in excess of $2 billion, it's not only a major milestone for uniQure and its development of EtranaDez, but more importantly, for the estimated 70,000 patients around the world living with hemophilia B. The combination of EtranaDez, CSL's strong commercial infrastructure and global reach, along with our shared commitment to transform the care of patients with hemophilia B, establishes the foundation for a prosperous and strategically compelling partnership. We are extremely excited to have CSL as our commercial partner and look forward to working with them to advance EtranaDez to hemophilia B patients around the world. Upon the closing of the transaction, uniQure will receive an upfront payment of $450 million in cash, providing us a pro forma cash balance of approximately $720 million. uniQure will also be eligible to receive up to $1.6 billion in regulatory and commercial milestone payments and significant tiered royalties up to low 20s percentage of net sales. Excluding any future milestones and royalties, our pro forma cash is expected to extend our cash runway into the second half of 2024. We believe the magnitude of this transaction reflects the true potential of EtranaDez as well as the inherent value of uniQure's manufacturing and technology platform. But perhaps more importantly, this transaction is a testament to the courage and ingenuity of our employees, qualities that have defined uniQure's 22-year history in gene therapy. Recall that in October 2017, we announced the bold strategy to transition from our first-generation hemophilia B gene therapy to a new Padua-based construct that we believe have the potential to provide added benefit for patients. In just 2.5 years, we have secured regulatory support for our strategy, initiated 2 clinical studies, successfully demonstrated clinical proof of concept, completed patient dosing in our pivotal study and are now poised to be the first market entrant with potentially best-in-class gene therapy for hemophilia B. Today's announced transaction is an excellent example of how this ingenuity, which is imprinted in the DNA of our nearly 300 employees at uniQure, can translate into value for our shareholders. At uniQure, we feel a deep responsibility in sense of urgency to ensure the promise of our gene therapies can be delivered to as many patients as possible. And that's why we spent the last 18 months rigorously evaluating various go-to-market strategies for EtranaDez, including direct commercialization approaches and partnerships. We believe our commercial partnership with CSL is an ideal path forward for the following 3 reasons. First, teaming up with CSL enables us to reach more hemophilia patients faster and more efficiently. Unlike many rare diseases with few or no treatment options, hemophilia is a crowded market dominated by large entrenched players. Over decades, these companies have built strong trust and brand confidence in their products. CSL Behring is a global pharmaceutical leader in bleeding and coagulation disorders that has been at the forefront of innovative medicines in hemophilia for more than 30 years. With commercial sales in more than 100 countries worldwide, we believe CSL is exceptionally well positioned to seamlessly incorporate EtranaDez into its portfolio and maximize global sales. Second, we believe the economic terms of the transaction provide uniQure full value for EtranaDez. The transaction is one of the largest single-product licensing deals and gene therapy licensing deals. With compelling economics and the efficiencies created by partnering with CSL, we believe this deal delivers the greatest value to our shareholders. And third, the transaction positions uniQure to invest significantly in the development and ultimately commercialization of our programs in CNS disorders and other areas, anchored by AMT-130 in Huntington's disease, and provides us the resources to greatly expand our pipeline of gene therapy candidates, aided by investments in new technology innovation, further scaling of our manufacturing capabilities and increasing business development activities. More on our strategy later in the call. It's important to note that with respect to the hemophilia B, HOPE-B pivotal study, all 54 patients in the trial have achieved at least 12 weeks of follow-up with our first treated patient now out beyond 52 weeks. We continue to expect to present top line 26-week fixed data on all patients before the end of the year. Before I hand the call over, I would like to express my gratitude to the teams at uniQure for their tireless commitment and hard work to bring EtranaDez to this point and their help in the execution of this historic transaction. I'd also like to recognize Jon Garen, our Chief Business Officer, as well as his Business Development team, whose leadership and focus, particularly in the context of recently very challenging times due to COVID-19, were instrumental in helping uniQure with this important partnership. With that, I will hand the call over to Jon to walk through some additional details related to the transaction.

Thanks, Matt, and good afternoon, everyone. As Matt stated, our decision to enter into a global license with CSL was based on extensive analysis of various commercialization strategies with a focus on maximizing long-term value for hemophilia B patients globally and shareholders at uniQure. As part of this evaluation, we developed a comprehensive commercialization plan for the U.S. in close collaboration with leading consulting firms highly experienced in commercial planning for gene therapy, hemophilia and other rare diseases. This significant work provided us with a strong understanding of the revenue potential of EtranaDez and commercial investments required to maximize the opportunity. In parallel, with these internal commercial planning efforts, we conducted a highly competitive process that engaged multiple parties, all expressing a high level of interest in licensing the commercial rights of EtranaDez, both on a regional and on a global basis. We set a very high bar for our licensing transaction and held firmly to the principle that economic terms had to provide full value for a potential first and best-in-class gene therapy with the ability to transform patient care in hemophilia B. Ultimately, CSL provided the ideal combination of both strong global commercial capabilities and attractive economic terms that have the potential to generate more value for patients and our shareholders compared to a go-it-alone model or a regional partnership. Importantly, both CSL and uniQure share the same vision for hemophilia B patients, which is to transform hemophilia treatment standards to help patients realize a life full of potential. Together, we believe EtranaDez aligns extremely well with CSL's core capabilities and commercial strengths, and that CSL is well placed to maximize the potential of EtranaDez by establishing a new standard of care for patients living with hemophilia B around the world. For more than 100 years, CSL has been a global leader in innovative medicines for serious and rare diseases with more than $7 billion in sales worldwide. In hematology, they are the leading manufacturer of plasma-derived proteins as well as a leader in production of bioengineered recombinant clotting factors in North America, Europe, Asia and Australia. CSL has a deep, long-standing relationship with the hemophilia community worldwide and arguably the broadest offering of products within the field of hematology and thrombosis with more than $1 billion in related sales. CSL has conducted 5 major product launches in the last 3 years, including some of the most successful launches in the industry. These commercial capabilities and experiences demonstrate CSL is exceptionally well positioned to seamlessly incorporate EtranaDez into its portfolio and maximize global sales. As Matt mentioned, under the terms of the transaction, uniQure will be eligible to receive more than $2 billion in total value, of which $450 million will be payable upfront, making this one of the largest gene therapy deals to-date. UniQure also is eligible to receive an additional $1.6 billion in milestone payments, of which more than $300 million is based on regulatory and first commercial sales milestones that are nearer-term events, and the remainder of the milestones are based on achieving annual net sales thresholds. In addition, uniQure will retain meaningful upside in commercial success of EtranaDez through substantial tiered royalties on net sales, starting in the mid-teens and increasing up to the low 20s. Under the agreement, uniQure will be responsible for the completion of the HOPE-B pivotal study, manufacturing process validation for approval and the supply of EtranaDez until such time that the manufacturing capabilities are transferred to CSL and relevant approvals are achieved. A transfer of commercial manufacturing to CSL would have the benefit of freeing up capacity to support other uniQure programs, CSL will fully reimburse all clinical and regulatory activities performed by uniQure under the agreement, and will be responsible for all regulatory submissions, further development and commercialization of EtranaDez. This transaction is subject to review under antitrust laws in the United States, Australia and the United Kingdom. Now let me turn the call back over to Matt.

Thanks, Jon. As I mentioned earlier on the call, one of the most compelling aspects of the transaction is that it provides uniQure substantial near-term non-dilutive capital, which affords us the opportunity to go big in accelerating and expanding our gene therapy pipeline, anchored by AMT-130 in Huntington's disease as well as to invest further in building out our manufacturing and technology platform. This transaction creates greater focus on complementary clinical indications aligned around CNS disorders and rare liver-targeted diseases, such as our programs in spinocerebellar ataxia and Fabry disease. With regard to Huntington's disease, we announced last week an important milestone, the successful completion of our first 2-patient procedures in our Phase I/II study of AMT-130. For the remainder of this year, we remain highly focused on further driving patient enrollment in the study with the goal of providing early biomarker data on initial patients in 2021. We also plan to make additional investments in this important program with the goal of accelerating the development of AMT-130 and it's time to market as well as exploring next-generation approaches involving less invasive administration. We look forward to discussing these strategies in more detail later in the year. We're also very excited about the potential to accelerate AMT-150, our gene therapy product candidate for Spinocerebellar Ataxia Type 3 into the clinic. To date, in preclinical studies, we have demonstrated the ability to suppress the pathological gene ataxin-3 by up to 65%, which has led to motor function improvement in diseased animal models. And recently at ASGCT, we presented nonhuman primate data demonstrating strong biodistribution in the brain using a less invasive, interest external administration procedure. We expect AMT-150, which utilizes the same miQURE gene silencing technology as in our Huntington's approach, to begin IND-enabling GLP tox studies in the third quarter of this year, setting up for an IND filing plan next year. In addition to SCA3, we've initiated research programs in other SCA, subtype SCA1 and SCA2. While these other forms of SCA involve different gene mutations, we can leverage much of the work with SCA3, including the design of the construct and administration modality. This is an exciting new opportunity as SCA represents a high clinical unmet need with a combined prevalence similar to that of Huntington's disease. We also plan to further expand our pipeline, focused on CNS and rare liver-directed disorders through both enhanced research efforts and intensify, yet disciplined business development activities. These new efforts will leverage our leading gene therapy platform as well as allow us to pursue new enabling technologies to enhance targeting, expression and biodistribution. I have talked frequently about the latent value of AAV5, which we believe is a differentiated capsid that represents a truly modular platform to generating multiple best-in-class gene therapies that can be manufactured at high scale and rapidly moved into the clinic. Recall, there are several key differentiators for AAV5 compared to other serotypes. First, AAV5 has strong tolerability profile. Specifically, AAV5 gene therapies have been tested in multiple clinical trials for liver-directed and CNS disorders, including 5 studies conducted by uniQure in nearly 80 patients with up to 8 years of follow-up data. Second, AAV5 may have a more favorable immunogenicity profile compared to other AAV vectors, potentially minimizing the use of immunosuppression therapy and loss of expression due to immune reactions to the capsid. None of the patients receiving systemic administration of our investigational AAV5 gene therapies have had any confirmed cellular review responses or required prophylactic administration of immunosuppression therapy. And lastly, we believe that AAV5-based gene therapies may provide clinical benefit to more patients and have the potential to be readministered to the same patient. We've presented and published data from numerous preclinical and clinical studies that have demonstrated the potential for AAV5-based gene therapies to be efficacious even in the presence of preexisting neutralizing antibodies. Note that uniQure is the first to conduct a large-scale clinical study to investigate an AAV gene therapy in patients, irrespective of preexisting neutralizing antibody status. Our HOPE-B pivotal study of EtranaDez, which includes 54 hemophilia B patients, did not screen out patients with preexisting neutralizing antibodies. To the extent this landmark study demonstrates clinical benefit in antibody-positive patients, we believe it will be a major industry milestone and provide uniQure an opportunity to develop truly differentiated gene therapies that are applicable to a significantly greater number of patients with rare disease. To support the acceleration and expansion of our pipeline, we will also further invest in and strengthen our gene therapy platform, including our manufacturing capabilities and enabling technology portfolio. Today, we believe uniQure is the leader in manufacturing of AAV gene therapies, and our goal is to maintain this competitive advantage over the long-term. Comprehensive planning and work are already underway to significantly expand our in-house commercial manufacturing capacity and invest further in next-generation production technologies, such as producer cell lines. We believe our proprietary insect cell manufacturing platform is ideal for scale up, and we view this as critically important to support a meaningfully broader pipeline, including product candidates for diseases with larger prevalence. We have already successfully scaled manufacturing into 500-liter stirred tank bioreactors, and early planning is underway to further increase scale into 1,000-liter vessels. As part of our efforts to focus on those gene therapy programs that have the greatest potential to improve patients' lives and generate long-term value for shareholders, we also announced today our plans to deprioritize development of AMT-180 for hemophilia A. This decision was based on a rigorous strategic evaluation of the program, including preclinical and nonclinical data, feedback from regulatory agencies, clinical feasibility assessments, the evolving competitive landscape and the potential for partnering. While we are obviously disappointed, we believe this is the right decision, and I applaud our R&D team for having the courage to make this difficult decision. With this, operator, please open the line for analyst questions.

[Operator Instructions] Our first question is from Debjit Chattopadhyay from H.C. Wainwright.

Congrats. So just a clarification and a follow-up after that. What percent of the $1.5 billion in future regulatory and commercial milestones are regulatory versus commercial?

So what we've disclosed, Debjit, is that more than $300 million of that $1.6 billion relates to regulatory milestones and first commercial sales.

Okay. And then could you kind of outline how the commercial milestones are structured? Is it based on gross annual revenue? Or is it a cumulative sales, say, for example, every $250 million?

Annual net sales.

But any metrics in there that we should be incorporating into the models?

There are various tiers. We haven't disclosed the specific tiers, but they are tiered based on certain annual net sales thresholds.

Our next question is from Paul Matteis from Stifel.

I wanted to ask 1 strategic question and 1 follow-up on Huntington's. On the strategic side, I guess, when you think about it thematically, what ties together the indications that you're keeping as wholly owned? And do you plan on now for any of these if they hit, be it Huntington's, SCA3, would you take those to market independently? And then I just have 1 follow-up.

Yes. I mean, what I think ties this together thematically is, in our view, they have the potential to be best or first-in-class. Obviously, Huntington's disease, SCA3 and now SCA1 and SCA2 also leverage the same enabling technology platform, right? So that includes AAV5. It includes our miQURE gene silencing platform, and they're all CAG repeat disorders. We are going to be focused not only on CNS, but also liver direct -- rare liver-directed therapy because we feel we have also a very strong pipeline related to the liver that includes AAV5 liver-specific promoters and other technologies. We -- it's important for me to mention, we still aspire to be a commercial -- fully vertically integrated commercial entity, and we do plan to take Huntington's disease and other gene therapies to the market. This decision was based specifically on analyzing the competitive dynamics associated with the hemophilia market. And our view was that partnering this globally was the best way to get EtranaDez to as many patients globally as efficiently as possible and as fast as possible within this specific market.

I would just also add to that, that these also tied together because they are fairly high unmet medical need and unserved and relatively large prevalence for rare diseases.

Makes sense. And then on the cash burn guidance you guys gave through -- funding through second half of 2024, what is baked in there in terms of scope of a potential Huntington's pivotal program there? I think there's been different expectations on the part of Roche as to what the path to market could be. And now they're doing this over 600-patient Phase III study. Is that how you think the power to be for 130? And how have you kind of contemplated that when you did your long-term financial planning?

Yes. We have not -- we have obviously not disclosed what the parameters of a pivotal study would be because we obviously just dosed our first patient in the Phase I/II, but I will tell you that we have fairly robust assumptions in terms of the clinical development pathway and increasing our investments in Huntington's disease as well as in other gene therapies beyond those disclosed programs. And we feel that the cash on hand would be sufficient to fund operations into the second half of 2024. And again, that's excluding any further milestones or royalties associated with the transaction.

Our next question is from Joseph Schwartz from SVB Leerink.

Congratulations on the deal. I was wondering if you could talk about the work that CSL did to establish that Phase III as likely to be successful. And do they have any recourse if it's less so? And to what extent did they see data that's beyond what's been publicly reported to folks like us?

Yes. So I mean, what I would tell you is that this is an open-label study. I mean, everybody should be aware of that. And so there's no requirement for us to keep the data blinded. So CSL was -- has the ability to evaluate the clinical data. They do not have any recourse to get out of the transaction based on the clinical data. And as I've said, the -- that all of our patients have achieved at least 3 months of follow-up all 54 patients with up to 52 weeks of follow-up.

Great. That's helpful. And then does this deal need to pass FTC review, do you think? And if so, what is your assessment of that likelihood?

Yes, this deal will be reviewed by the regulators in the United States, U.K. and Australia.

And have you evaluated whether there's likely to be a significant challenge just based on what's been seen in gene therapy, hemophilia space to-date? It seems like they have some extra scrutiny in this area.

Well, there's a range of experience in the area. And so it can be any -- of course, we can't predict exactly what the potential decision-making process will be related to the review. We've seen things go quickly or relatively quickly in the case of Alexion Achillion and then take longer in the case of Roche Spark. So there's -- there are different -- there's a range of things, and our particular belief is that this should pass, and it should be closer to and Achillion Alexion. However, that's just speculation at this point.

Yes. I mean, what I will add is that, obviously, this was extensively looked at by both companies. Both companies have highly experienced antitrust counsel that have looked very closely at fact pattern. There is a collective high degree of confidence that this deal will get done. And it's just a matter of time and it's hard to always speculate on what the FTC is going to do. And of course, the precedence that Jon mentioned all got cleared and ultimately closed.

Our next question is from Joseph Thome from Cowen.

Congrats on the deal. In terms of transferring the supply and manufacturing over to CSL, what sort of the time line that you're looking at there? And is there any read-through to that with the sort of regulatory process? Is that necessary to happen before you move forward there? And then one on Huntington's, you mentioned looking at potentially less invasive modes for delivery. I guess, what does that mean for sort of the first-generation product and that study? How would you slot a new mode of delivery?

For the first question, there's no specific time line for technology transfer at this point. uniQure is responsible for bringing forward the validation of the manufacturing process. And then there will be a decision at some point in the future to make the technology transfer when the time is right.

Yes. And with respect to your second question, we have every intention to take AMT-130 to the market. And in our view, this is such a high clinical unmet need that we believe that this is going to provide substantial value and a onetime administered gene therapy for these patients. These patients don't -- it's not hemophilia, right? These patients don't have the luxury of waiting. Having said that, we do believe that there is potential with technologies that we've been looking at to develop a next-generation product that could follow this in a less invasive manner. And so we haven't disclosed any specific details of that, and that's something that we can talk about later on as appropriate.

Our next question is from Salveen Richter from Goldman Sachs.

So 2 here. One is when you talk about becoming or being a neurology and rare liver-focused disease company, I guess, what ties in the liver aspect, that you have Fabry is going to be? Are you just really going to be focused on LSDs? And then secondly, on Huntington's, when we get the early biomarker data next year, how much insight do you think we can get into efficacy here and on the less invasive administration? I mean, just given that you've just started the first-generation study, can you bring this in in parallel?

Yes. No. I mean, the less invasive technology is early and would be perceived as a next -- real next-generation program. I mean, keep in mind that our Huntington's disease program is an amalgamation of 6 years' worth of research. So we are highly focused on AMT-130 and driving that through the clinic and to the market. But we do see value potentially in a follow-on next-generation product, which could come down the pipe with a less invasive administration modality. In terms of your first question, the reality is that uniQure, if you really look at our history, uniQure has spent an enormous amount of time developing a suite of technologies for direct administration to the liver. And we have talked a lot about liver direct gene therapy and systemic administration and the value that AAV5 can provide. And as I mentioned in my prepared remarks, in our view, we feel that if there is the potential in our pivotal study, 54 patients, to demonstrate that irrespective of neutralizing antibodies that AAV5 gene therapy can provide the potential for an efficacious onetime administration that in and of itself, this becomes a modular platform for multiple liver-directed gene therapies insomuch that it can provide the potential for a superior immunogenicity profile and the ability to treat all or nearly all patients. And so in many respects, we feel that we can go after a lot of low-hanging fruit in liver-directed gene therapy with AAV5 and provide a better mousetrap for those patients.

Our next question for today is from Gbolahan Amusa from Chardan.

I think my questions were asked, but I'll improvise and ask you to quantify how much you're currently spending each quarter on EtranaDez clinical and regulatory activities, just roughly speaking. And then I have a follow-up to that.

Yes, Gbola, we have this -- we haven't disclosed what that is on a quarterly basis. And it's important to note that those expenditures, the clinical regulatory expenditures, would be reimbursed by CSL post-closing of the transaction.

Indeed, I was trying to get a sense of how much of the number is. So let's talk about your partner then. What can you say about your partner in terms of their commercial infrastructure? How many countries do they operate in? Or are there any other levers that you can elaborate upon that could optimize the value of EtranaDez for you?

Yes. CSL is one of the leading companies in the hematology area in the world. They're in many, many countries. And they also have one of the -- several of the leading products, very successful launches and are extremely well deployed globally in both hemophilia and other hematological areas as well. So they're a very strong and successful commercialization partner. They also deal very regularly with complicated biological products and understand manufacturing and distribution challenges as well. So -- and that's been demonstrated by the success that they've had in the area.

Yes. Gbola, I mean what we saw in the CSL, I mean, this is a company that arguably has one of the broadest portfolios in hematology and thrombosis. They've spent 3 decades developing very close relationships with the hemophilia community. And they've launched more than 5 products in recent years that have been some of the most successful product launches in their spaces. They have commercial -- they sell their products in over 100 countries worldwide. And so we really do think that they're a very strong commercial partner that, I think, can seamlessly integrate EtranaDez into their portfolio.

[Operator Instructions] The next question is from Robyn Karnauskas from SunTrust.

Congratulations on this landmark deal. I guess, my question for you is, you said that this was a competitive process. And what are the strategic -- what is the biggest controversy? And how do they view the market in the competitive landscape? Obviously, the huge upfront payment is a vote of confidence in CSL, and it's a huge player in the field, but what was their main controversy? How do they view the market landscape versus, say, how the Street is debating the market for the hemophilia program?

Yes. I don't know if I would say there's any controversies. But what I would say is, it's not terribly different than how we view it. I think the biggest thing about hemophilia is that it is a relatively well-served market, and thereby definition, a relatively low clinical unmet need when you think about rare diseases. And, I think, our view is that there's a very compelling convenience targeted to a onetime administration. There's also a very compelling health care economic argument. But in the end, it comes down to that this market is pretty specialized. There are 5 to 10 major players in this space and how strategically compelling is hemophilia within their therapeutic focus areas. So I mean, that's generally speaking, how I think -- I mean it's not rocket science, right? But I think that's generally speaking how every player is going to evaluate it. What I would say is that there was a high degree of interest in the asset, the hemophilia B asset. But in terms of how people value it, right, or look at it, I think they -- those are the kinds of factors that they're going to be evaluating as well as their existing market share and the relevance of hemophilia within their business.

I guess my follow-up question is, do you think in the gene therapy space, they'll be more deals like this or even with your other programs potentially, I know you're not commenting on those, but you're going to become a company that's more neuro focused. But do you think there'll be more licensing deals versus outright acquisitions? Like how are strategics viewing that, that will help us inform us of how they might view your other products in development?

Yes. I mean, look, I think there's no cookie-cutter answer to that. I think that we don't view our -- I mean, we view ourselves as a platform company, but we don't view ourselves as being beholden to the platform in terms of we still aspire to be a vertically integrated commercial entity. It's just that in our view, the best way to approach the hemophilia B space was to partner with a really strong market player in this particular space. I think that when you think about M&A, I mean, M&A for pharma companies is about the lead program. It's about the pipeline than it's about the platform. And I think that for an acquisition to make sense, you've got to be able to value all of that. And that's what all the deals in our space have been, in my view, about. The reality is that when you look at hemophilia B and you look at Huntington's or CNS assets, in order to value all of that requires a specific therapeutic focus area of an acquirer. And so I think it really depends for a big pharma company, how they're going to view it. I will tell you that, in my view, I think that this further validates our platform, our manufacturing capabilities, what we've been able to accomplish. And I think in many respects, it actually could make us potentially more attractive acquirer -- a target for an acquirer.

Our next question is from the line of Jim Birchenough from Wells Fargo.

A couple for me. I guess first on CSL Behring. Can you remind us in heme B specifically what they have and what their market share is? Just trying to get a sense of their competitive positioning in heme B specifically?

They have a couple of products, but the lead product, the one that is their more recent launch, is called IDELVION. It is launched in the United States. It's launched in certain countries outside the United States as well. And the current market share is in the range of 20% to 30% and growing.

And then just at the highest level, in making the decision to go with a global partner like CSL Behring and relying on them to do what sounds like it's going to be some heavy lifting, should we all assume that the trajectory of the uptake is going to be a little slower than what we might have previously thought? It just sounds like you're describing some heavy lifting here. So how should we think about that as we make estimates around launch trajectory, that sort of thing?

So we've done a great deal of work in this area as we prepared the analysis that we described, and I would certainly agree that there's a lot of heavy lifting. I don't think that actually translates into slow adoption. We've seen through market research and our own clinical trials that there is a high degree of interest, it depends. There are different patients and some are less inclined initially and -- but there's a significant portion that are very interested and positively inclined. So we would think with the benefit of heavy lifting and strong reputation, because reputation is very, very critical in this particular market because it's got a lot of mature market dynamics and a certain history that has made reputation very, very important. With a strong reputation and the appropriate heavy lifting, we think that the adoption could be very, very good.

Yes. And I would just add that, I think that this is part of the rationale for partnering with somebody that has this infrastructure, right? So yes, I mean, it doesn't mean that CSL is going to be on cruise control, but it does mean that there's going to be heavy lifting, but it does mean that they start from a point of strength with the foundation of commercial infrastructure and foundation that we think really benefits getting EtranaDez to more patients globally, faster and more efficiently.

Our next question for today is from the line of Ellie Merle from Cantor Fitzgerald.

Congrats on the deal. Just in terms of Huntington's, I guess just -- I know you've done a lot of detailed work on the biology of F1+1. Just curious, I guess, based on this work, how are you thinking about what this would suggest for the trajectory of NFL and MRI volume after sort of initial dosing? I mean, in terms of these biomarkers, I know it's sort of hard to say, but I guess, how are you thinking about what you would view as encouraging in terms of biomarker changes on sort of MRI volume or NFL markers? And then second, as sort of the literature, I guess, revolves around exon 1 fragments and their importance in the disease. Can you -- just curious on your thought on the potential clinical effects of knocking down mutant huntingtin protein and not specifically the exon 1 fragments and the clinical implications of that.

Yes. So yes, just in terms of the biomarkers, I mean, obviously, that's the $60,000 question. And what is fantastic is -- yes, and what we're excited about is that we're on our way to entering that now that we've begun dosing patients. I can tell you -- I think I've heard -- I think there was one of your colleagues have done a survey with leading neurologists. And I think they felt that it would be really exciting that if you would look at a natural history, whether it's NFL or a deterioration of motor symptoms or neurocognitive deficits that you were even able to reduce the progression of the disease by 20%, forget about retarding it, but just reduce the progression of the disease by 20% that, that would be really compelling from a clinical point of view, but that's just a perspective of certain KOLs. In terms of -- the short answer is, we will find out, and we're looking forward to providing some early indications of that next year. In terms of exon 1, I mean, I think it really comes down to this, what is the -- what leads to the pathology of the disease, right? And I think the overwhelming view is that the mutant protein -- the aggregation of the mutant protein is a leading driver. But over the course of the last 5 to 10 years, there's now been a growing thesis that it's supported by independent research that the short fragment exon 1 is highly toxic, potentially -- could potentially be more toxic than even the mutant protein itself. So that doesn't suggest that if you can successfully knock down the mutant protein, it definitely suggests that won't be efficacious. But to the extent that, that theory is correct and that the alternative splicing of exon 1 does lead to the pathology, our view is that silencing or knocking down both the mutant protein and the exon 1 short fragment would potentially lead to improved efficacy. And so the fact that we are the only gene therapy company that we're aware of that, that is targeting exon 1, I think, is quite exciting.

Yes. And just a follow-up on the miQURE platform. I know you've done a lot of sort of work with a novel scaffold and pathogenic strand toxicities and sort of ways to avoid that. I know it's a very recent first dosing, but I guess, are there any sort of indications or particular things that you can look at to get sort of early signs that all the extensive scientific works that you have done sort of preclinically is translating with the initial dosing with the miQURE platform?

Yes. I don't -- yes. I mean, I do think that we're going to have to -- I mean, the overarching primary objective of the Phase I/II study is really to look at safety. And of course, we have a lot of exploratory efficacy-related biomarkers. But I think we're going to need to get further on the study and with some more follow-up than what we have now to really be able to opine on the construct, the microRNA scaffold and how this relates to the safety of our particular transgene. So we obviously look forward to that. But we've obviously presented and published significant preclinical and nonclinical data that really does suggest in vivo, the benefits, both on efficacy and safety associated with our proprietary approach.

Our next question is from the line of Whitney Ijem from Guggenheim Security.

It is Evan Wang on for Whitney. Congrats on the deal and all the progress. A question on potential uses of cash. I guess, what are you guys thinking of, I guess, in terms of programs and potential technologies in-license? Are you looking at maybe earlier-stage or later-stage programs there?

Are you specifically asking about business development?

Yes.

Yes. I mean, what I would say is that I wouldn't box ourselves out of anything. All I will say is that we will be highly disciplined. And our goal is really to build out a gene therapy pipeline with best or first-in-class programs. And to the extent that we do business development, we want rights, commercial rights to these programs or share of the profits. I mean that's really our goal now is to build ownership in a highly compelling pipeline, and that's how we would look -- we look through that lens as anything that is business development-related. But we do think that the platform really does provide -- I mean, we've done an extraordinary amount of work looking at the landscape. There's 150 different gene therapy companies, most of which are just floating academic programs, right, without any really vertically integrated platform. And I do think that uniQure really provides a significant value as a partner of some kind for many of these programs, and we look forward to exploring the potential.

Got it. I had 1 follow-up. You described kind of work towards larger prevalence indications. Any more color you can provide there? What kind of prevalence range should we be thinking about? And what kind of disease areas? Is that mainly CNS?

Yes. I would just say to you that we really do -- we're taking a very long view with this transaction. And we really do see that the future of gene therapy is going to be moving into larger genetically defined indications. And I do believe that it's going to be very challenging for most gene therapy companies to successfully commercialize in that regard. And so our mission is to ensure that we have the capabilities, both from a technological point of view and a manufacturing point of view, to support those initiatives. So beyond that, I won't provide any detail in terms of our road map, but we do see that as a part of the future of gene therapy and the promise of gene therapy, and we want to lead this field into that area.

[Operator Instructions] Our next question is from Madhu Kumar from Baird.

So I guess my question really is around the timing of this transaction. So can you walk through the rationale of doing this licensing now versus, say, after the HOPE-B data comes out at year-end?

Yes. So Madhu, the HOPE-B data, we guided to before the end of the year. And as I mentioned in my remarks and earlier in the Q&A, this is an open-label study, right? It's a little bit unusual to have a pivotal study that's open-label, but it's an open-label study, and all 54 patients have at least 3 months' of follow-up and beyond now 52 weeks. So particularly given the dynamics around hemophilia B, and the Factor IX as a surrogate biomarker and how validated it is, I could just say that I think we have a fairly good sense of the data. And in reality, what we're focused on is making sure whether this is us or a partner that we secure that in time, so that we can prepare and have the strongest launch possible. So that's really the nature of the timing. And then lastly, there has been significant interest over the transaction. So you kind of put all that together, and in our view, this was the appropriate timing of the transaction.

Okay. And then on hemophilia A, so can you kind of parse out how much of the desire to deprioritize hemophilia A is internal considerations about the Super9 transgene, external considerations of the heme A gene therapy landscape and whether CSL, how do you input on the decision to deprioritize heme A?

Yes. I mean -- well, I don't know what you mean by CSL having input, but it's -- I mean, I think it's all of the above, right? I think that there's no doubt that when you are bringing the gene therapy into a relatively well-served market that the risk-benefit card is much higher, right, than it would be for Huntington's or SMA or DMD. And so the fact that we have an engineered transgene, it was really incumbent on us to really demonstrate that we can drive phenotypic correction for our hemophilia A program. On top of that, the other aspect is the competitive landscape. And the competitive landscape is not just about all the beta-domain deleted factor VIII gene therapies, but there -- if you really think about it, since we've initiated this effort, there's just been a dramatic change in the landscape of hemophilia A, largely due to Hemlibra, and I think they've had a great deal of success. And as we evaluated the clinical feasibility of this, that also factored in. But to make -- perhaps the last part of what you had mentioned in your question about CSL, we did, through this process, evaluate interest in partners in hemophilia A. Obviously that would have been strategic, but that interest didn't materialize. So I mean, for all of those reasons, we felt that this was a sensible decision for us.

Okay. And then kind of finally, stepping back, thinking about 18 months from now, what do you expect will be the clinical programs that uniQure has ongoing?

Well, I mean, it's going to be at least what's in our pipeline, right? So I would expect 18 months from now, you'll have hemophilia B, which we still, in our view, maintain meaningful upside, should be rounding the corner on the regulatory review. You'll have Huntington's disease with -- that will have our first cohort completed. We'll be well into our second cohort, and we'll have presumably early indications of efficacy. We have SCA3, which, as I mentioned in my prepared remarks, that is going to be moving into IND-enabling studies in the next quarter, the third quarter. And so there's potential that, that could be in a situation where we're either close to submitting an IND or potentially have a cleared IND and are ready to begin a Phase I/II study. We have our Fabry disease program, which we would expect in the second half of this year to identify a lead program and that would be in IND-enabling studies. And I would also suspect that you'll hear a lot more from us about how we're going to be utilizing our cash to expand and accelerate the existing pipeline and getting into new areas. I think you'll hear a lot more about that as well as investing and expanding and strengthening our platform, including our manufacturing capabilities.

The are no further questions at this time. I want to hand the call back to Matt for closing comments. Thank you.

Okay. So in summary, we are very excited to enter into this licensing agreement with CSL Behring. The transaction unites uniQure with a world-class commercial partner that is extremely well positioned to maximize global sales of EtranaDez, provides full value for the opportunity and furnishes the necessary capital to aggressively advance and expand our pipeline, invest in technology innovation and further scale manufacturing capabilities. Each of these elements, pipeline, technology and manufacturing capabilities, are critical success factors within the field of gene therapy as well as areas in which we believe uniQure excels. But perhaps the most important success factor is something I mentioned earlier, ingenuity. Ingenuity, is what led uniQure to get the first gene therapy product approved in the western world. Ingenuity is what enabled uniQure to initiate the first human clinical study of a onetime administered gene therapy for Huntington's disease, and it is ingenuity that drove uniQure to leapfrog the competition in hemophilia B by successfully transitioning to a potential best-in-class gene therapy. This ingenuity, which is in the heart of getting uniQure's success, will also power our mission going forward, which is to be the world's leading gene therapy company. So before I end the conference call, I'd like to provide an outline of our 5-year vision for uniQure and what we expect ingenuity will look like for us. As we plan to move forward from this important moment today, we aspire to grow our pipeline, enhance our technology and expand our manufacturing capacity to develop cutting-edge product candidates at a quick and steady pace. We aspire to build a company that in 5 years, one, is a commercial-stage gene therapy company with a potentially best-in-class pipeline, including 3 to 5 commercial or pivotal stage programs as well as 5 to 10 Phase I/II programs. We expect to have the ambition to directly commercialize Huntington's disease and other gene therapies, and we expect to have an industry-leading commercial manufacturing capabilities, capable of supporting a broad pipeline in larger genetically defined diseases. These capabilities are expected to include large-scale bioreactors and next-generation producer cell line technology. Our vision is ambitious, but with the ingenuity of our great team, we believe we can get there, and we look forward to updating you on our progress as we move through 2020. Thank you for participating on our call, and have a good evening.