Verve Therapeutics, Inc. (VERV) Earnings Call Transcript & Summary

Good afternoon, everyone. My name is Gena Wang. I'm a SMID-cap biotech analyst at the Barclays. It is my great pleasure to introduce our next presenting company, Verve Therapeutics. With me, we have Sekar Kathiresan, Chief Executive Officer and a Co-Founder. So, maybe before we dive into the questions, could you give us a very high-level overview of Verve?

Yes. Thank you very much, Gena, and thanks to the Barclays team for the opportunity to be here. The problem we're trying to solve, Gena, is heart attack, the leading cause of death in the world. And heart attack is caused by cholesterol building up in the heart arteries over time. And what we're trying to do is develop a medicine, a one-time treatment that would actually lead to lifelong cholesterol lowering. And our approach is gene editing, in vivo gene editing. So the idea is, a single intravenous infusion that would lead to a cholesterol raising gene being turned off in the liver and then lead to cholesterol lowering for a lifetime. So, that's the concept we started the company with in 2018. And over the last 7 years, have made really nice progress to get this new approach to work in cells and animal models, and now we're testing in patients. And I think the big exciting news for the company is really that we'll have data for our lead product, VERVE-102 in Q2 of this year. And this is a Phase I first-in-human study in a couple of patient populations, heterozygous FH as well as premature coronary artery disease patients.

Okay. So, maybe I will take one step back. When the company started, you have maybe a lot of capability to do the gene editing. So maybe why choose this editing?

Yes. So, we started the company with this idea of a one-time therapy, lifelong cholesterol lowering, we actually had the targets that we wanted to go after already in hand, based on maybe a decade or so of human genetics research. These targets were PCSK9, ANGPTL3 and LPA. These genes have tremendous human genetic validation. And so, they really were the focal point for the company. The question really became, well, how do we actually turn these genes off in the liver? What technology do we use? And we specifically set up the company to be technology flexible, both on the editing side and also on delivery to the liver. So, we got access to a couple of different gene editing technologies. One called standard CRISPR-Cas9, which cuts DNA and the second called base editing, which was kind of new on the scene in 2017, 2018 when we were starting the company. And we tested both. It was really a bake-off between the 2 in model systems for a couple of years -- in the first couple of years of the company before prioritizing base editing. Base editing was chosen because it is inherently a bit safer because it avoids the DNA cuts that could potentially lead to translocations of DNA. And so, what base editing does is it's really a single spelling changes made in the DNA. One letter is swapped out for another. And that's the mechanism we're using to turn off, for example, the PCSK9 gene with the VERVE-102 product.

Okay. Very helpful. I think another part, very important is the lipid nanoparticle, the delivery vehicle. I think there seems a lot of the confusion regarding lipid nanoparticle between VERVE and Beam and first gen and a second gen. So maybe the -- give us a little bit background regarding the first-gen lipid nanoparticle and second-gen lipid nanoparticle. And even yesterday, data update being there was some read-through regarding the lipid nanoparticle. Like, if you can [ lay out ] regarding the lipid nanoparticle, the history of a lipid nanoparticle.

Yes. So, the drug product that we're working with is the editing system, and that's 2 pieces of RNA; an mRNA for the editor, a guide RNA that tells the editor where to go in the genome to make the spelling change. Those 2 pieces of RNA need to be delivered to the liver, and we're delivering it through the bloodstream. So, in order to get these 2 pieces of RNA to the liver, they need to be packaged in something, and the packaging here is a little fat bubble that's basically the lipid nanoparticle. And this lipid nanoparticles have several components that go into them, and one of them is called an ionizable lipid, which is probably the key component, chemical component of the lipid nanoparticles. So, when we started at the company, we were figuring out which editor to use, but we were also flexible on what delivery option. And so we evaluated a range of lipid nanoparticles, and we ended up settling on 2 different delivery systems to pursue near simultaneously in the preclinical work and then into the clinic. That's why we have 2 products, VERVE-101 and VERVE-102. They both have the same inner contents, so same guide RNA and the same mRNA, but they differ in the composition of the lipid nanoparticle. We tested VERVE-101 first in patients, and we actually were able to provide strong human proof-of-concept for in vivo based editing. We basically got it to work. We were able to lower cholesterol by 55% to 60%, and we were able to do it durably, meaning that in a patient, the LDL came down 55%. And then 18 months later, after the one-time intravenous infusion, the LDL was still down 55%. So, that's 101 in terms of efficacy and durability, but we had a challenge with the lipid nanoparticle, and the lipid nanoparticle led to transient rises in liver function tests as well as in 1 patient, a drop in the platelet count. And therefore, we paused the 101-study last year, and we transitioned to 102. 102, again, is the same cargo that we already showed worked, but has a different lipid nanoparticle. And what we're looking to show in Q2 is that this new product, VERVE-102, the next-gen product, will retain the LDL reduction that we saw as well as the durability that we saw with 101, but avoid the transient laboratory abnormalities. And that's really what we're hoping to show in Q2. Now, every lipid nanoparticle is its own beast. There's no such thing as just an LNP. And so, we have a certain LNP in 101. We have a different one in 102. Beam has yet a different one. And so, they did put out some data on Monday, but it's really with a different delivery system than what we're using.

So, has your -- the 101, 102 lipid nanoparticles has anything similar or different compared to, say, whether Beam or Intellia, the lipid nanoparticle that also has shown quite safe in a lots of patients already. Any similarity or difference there?

That's a great question. So, 102, the current version being tested in patients, the ionizable lipid, that's part of 102, it's the same ionizable lipid that Intellia is using in all of its programs in its 2 programs in the clinic. So that Ionizable lipids has been tested now in a couple of hundred patients and has, as you mentioned, a good safety profile. So that gives us confidence that 102 is going to have the same kind of profile. In addition, we have preclinical data that supports that 102 will avoid those laboratory abnormalities. And of course, we've dosed patients now across 3 dose levels in the Phase I with VERVE-102. And again, we're going to show that data coming up and hope to show that it will avoid the laboratory abnormalities.

And then, your -- the 101 versus 102 lipid nanoparticle was never the same as Beam lipid nanoparticle?

I'm actually not sure what ionizable lipid Beam is using.

Okay. Okay. And -- so regarding your first-gen lipid nanoparticle that had a safety issue. So, did you see that safety issue in the non-human primates' data compared to animal data?

We saw in non-human primates that the transient rise in liver function tests, yes. We also saw, in some animals, a drop in platelets, but at doses higher than the no observed adverse event limit.

Okay. And then, what makes you confident it's not because of PCSK9 target, and given that's also LDL receptor mutation, right?

Yes. So, we're very confident that the laboratory changes are not due to the cargo or the editing of the PCSK9 gene. The reason we can say that is because we've done experiments where we actually deliver a lipid nanoparticle with an inactive guide in the middle so that it's not capable of editing. And so you're just testing the lipid nanoparticle component itself. And when you do that, you actually see the transient rise in ALT as well, really suggesting that it's not the cargo or the editing apparatus, but rather the actual lipid nanoparticle itself that is leading to these changes.

I see. Have you tested the first-gen lipid nanoparticles in healthy volunteers or in-- not the disease model? And then did you also see similar safety issue?

Well, we did test the VERVE-101 in a Phase I study in 13 patients, and that's where we saw the abnormalities. Yes.

Right. So, my question is, could that be because of PCSK9, the -- Oh, I see, so you're saying that you're not going after PCSK. But my question on that, could that be the patient population itself?

No. I think it's really inherent to the ionizable lipid. That's really what it looks like, yes. And again, the best proof of that is going to be the data we're going to show in a couple -- in Q2, where we are testing essentially the PCSK9 editor wrapped in a different lipid nanoparticle. And what we hope to show is that, again, the editing is there, the LDL comes down. It's durable, but there are no laboratory abnormalities. There is a good safety profile because we've switched out the lipid nanoparticle.

So, maybe comments on your second-gen lipid nanoparticle because you do add a GalNAc there, right? You're adding additional uptake mechanisms for the lipid nanoparticle. Maybe if you can highlight that.

That's right. So, we -- the lipid nanoparticle that we're using now, again, one of the components, the ionizable lipid is different. But then we've also -- there's a second difference between 101 and 102, and that is we've added a targeting ligand to 102, a GalNAc carbohydrate. It's a proprietary GalNAc that we developed internally. We have a U.S. patent for it. And this GalNAc allows the lipid nanoparticle to get into liver cells through the receptor for GalNAc, which is ASGPR. And so, it can get in through a mechanism, port of entry -- portal of entry that is independent of the typical mechanism, which is LDL receptor.

Okay. And you did mention, in the first gen, you did see non-human primates, the sign of just safety, toxicity profile. And what kind of safety profile you see in the non-human primates and how much higher dose you used in the non-human primates?

For 102?

102, yes.

Yes. For 102, we actually have a tolerability profile and a safety profile that's quite distinct from 101 in non-human primates. And again, really giving us confidence in terms of the human data that we're going to show coming up that basically it's going to be much better tolerated without any of the ALT or platelet changes that we saw with 101.

What was the highest dose you tested in the non-human primates?

I don't think we have provided public guidance on that.

Okay. Okay. And now regarding your HER 2 data update, you will have 3 cohorts, 0.3, 0.45, 0.6 milligram per kg. So maybe, for the 2Q data, first is, do you see these data real time?

Yes, it's an open-label trial, so we're seeing the data in real time.

Okay. Okay. So, you should see all those safety and all the measurement you are collecting now, right?

That's right.

Okay. And then do you think, given -- you just comment on the same cargo, do you expect similar level of say, LDL and the PCSK9 knocking down or reduction level with this dose range?

Yes. So, just to set expectations for the data release, we're guiding to 3 dose levels: 0.3 mg per kg, 0.45 mg per kg, 0.6 mg per kg. We're guiding to a minimum of 10 to 12 patients across those 3 dose levels. Each patient will have at least 28 days of follow-up. And it will be safety; endpoints will be safety, the blood LDL level and blood PCSK9 level. The reason we chose the 28-day endpoint is that by 28 days, there's a nadir that's reached for both the LDL and the PCSK9. And so, that's really the data set. In terms of benchmarks, of LDL reduction and PCSK9 reduction, we come back to our Therapeutic Product Profile that we're hoping to accomplish. Our TPP is really going to be inclisiran like. Inclisiran is an siRNA targeting PCSK9 that's on the market now. And what degree of LDL reduction does that product achieve in patients? Well, it depends on the type of patients. In patients with HeFH, heterozygous familial hypercholesterolemia, a severe genetic disease that we're targeting initially with this product, it lowers LDL. Inclisiran lowers LDL by about 40%. In atherosclerotic cardiovascular disease patients, Inclisiran lowers LDL by about 50%. So, 40% and 50% are the LDL benchmarks for HeFH and ASCVD. And then there are PCSK9 reduction benchmarks as well. And those are 60% reduction for HeFH and 70% reduction for ASCVD. So, that's really what we're hoping to show and accomplish with this trial. And recall or you should know that we have 2 types of patients in this trial. One is HeFH and the other is ASCVD patients who've had basically suffered ASCVD at a young age, men less than 55, women less than 65 who might have suffered a heart attack. These are the 2 patient populations being studied in the Heart-2 trial.

So, the [ first week ] cohorts, you already -- you're hoping you can reach what you just set the benchmark. And then, regarding the safety, usually how soon -- if there is a safety issue, how soon you will see the safety issue happen?

Yes, the laboratory abnormalities that people usually see with lipid nanoparticle infusion are all acute. So, within the first couple of days, within the first week for sure, are when you might see any of these safety issues.

And so far, I don't know if you can comment on how many patients already enrolled, and -- but so far, you haven't seen any safety issues?

We characterized safety in the 10-K just a few couple of weeks ago. And as of the mid-February data cutoff date, we -- there were no treatment-related serious adverse events and no clinically significant laboratory abnormalities. So the profile looked quite reassuring.

So then, what's the purpose of fourth dose? Is that because you want to test better efficacy or you were thinking -- wanted to see how high you can go for drug to be still be safe?

I think there are 2 reasons. This is the dose escalation. This is the only chance we'll really be able to explore the full dose range. And for a new product, typically, you do the dose escalation to understand not only where you're getting maximal therapeutic effect, but also the safety margin from that point. So, those are the safety margin you might have from that point on. So, those are the 2 reasons to kind of continue on to a fourth dose level.

What kind of -- because I see like [ 0.3 ], 0.45 and 0.6. Is it fair to think like a fourth dose will be 0.75?

We haven't provided public guidance on that fourth dose level just yet.

Okay. And then when we see others, including Beam and Intellia. Intellia started with weight-base and then translated to fixed dose, and I think Beam is using fixed dose. Are you also planning to use fixed dose in the future?

Yes.

Okay. And any specific dose you do not want to go beyond?

I think we -- the dose range that, for example, Intellia explored, 0.1 mg per kg to 1 mg per kg is roughly the range, I think, that our constraints are as well because we are, again, using the same ionizable lipid, which is a primary driver of efficacy and safety for LNPs.

I see. So this addition of GalNAc, do you think it will help with drug delivery or safety?

The main help we expect -- the main reason we developed the GalNAc is it should equalize any potential efficacy differences between patients who are wild-type versus mutations in the LDL receptor. The most common mutation leading to heterozygous FH, so a very high cholesterol in the blood early in life and premature heart attacks, this genetic disease are mutations in the LDL receptor. And if you recall, I said that the main way that the LNP gets into the hepatocytes is through the LDL receptor. So, you can imagine, in this patient population, a standard lipid nanoparticle might have trouble getting in. And the idea behind the GalNAc is to essentially allow for LNP to get in through a receptor other than LDL receptors. So it should equalize any potential efficacy differences.

Okay. Good. So maybe I think the very common pushback, and I cover tons of gene editing companies and a lot of investor pushback is, if a disease is well served, nobody will use gene editing drug. So maybe what is your counter argument?

Yes. I think that's probably the biggest misconception about our company and what we're trying to do in the sense that this disease is not well served by current cholesterol-lowering medications because people equate efficacy with a certain degree of cholesterol reduction at onetime point. So for example, a 50% reduction at day 28. But efficacy, true efficacy here is not only how low at a single time point, but for how long. So, it's really area under the curve over time. And that's where all of the current approaches fall short. They actually leave efficacy on the table because the average patient who gets started on a cholesterol-lowering medication, 50% of them are no longer on them at just 1 year. So that means from year 2 to year 50, when you're supposed to be on it for a long time, they're getting 0 LDL reduction. And so, that's the unmet need that we're trying to serve. And it's pretty clear that if you could lower LDL, let's say 40, 50 milligram deciliter for 30, 40 years, you would actually probably wipe out this disease. Like you would not have coronary heart disease. And so, that's really the fundamental promise of what we're trying to do, really change the way this disease is cared for and have a transformative impact because we're addressing true efficacy.

Okay, good. Maybe more of the partnership question. I think the Vertex and Verve collaboration regarding a serious liver disease. Maybe any more color you can share on your end? Why did it terminate and what is your plan for that asset?

Yes, that asset -- we started a collaboration with them a couple of years ago. They funded this whole effort. We developed a bespoke editor for this asset Now it's wholly owned. And so, we're planning to progress it independently right now. The reason they moved on from this asset is for portfolio prioritization reasons, and that's the Vertex's rationale. And so, it gives us an opportunity to progress this product ourselves and make a decision in the near term as to whether we're going to continue it ourselves or we attempt to partner again. But our most important collaboration is really with Eli Lilly for our first 2 programs; the PCSK9 program as well as the second asset, the ANGPTL3 asset. And Lilly has the ability to opt in at the end of Phase I and step in and basically share in development costs, a 1/3 of -- pay for 1/3 of worldwide development costs. In return, they would get 50% of U.S. profits. We get the other 50%. We have 100% ex-U.S. and we control development, book revenues. And so we're really excited about them as a potential partner as we develop this product forward later this year.

So for the mid-year update, when you -- I think second quarter, right, when you update data, will you also have some feedback from Lilly or you will share the data first and then you go to Lilly [indiscernible].

Yes. So, there is 3 major milestones this year for our lead asset. One is the initial data release across the 3 cohorts in Q2. Then second, in the second half of the year, we should have the full dose escalation data release. And then the third event this year is really the Lilly opt-in. So, it's really 3 distinct events separated in time. First, the Q2 data release for 3 cohorts. Second, the full dose escalation in the second half. And then third is the Lilly opt-in decision.

Okay. Good. I know we are running over time, but this is a very productive discussion, and thank you very much, and we look forward to the data update later this year.

Thank you, Gena.

Thank you.