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

Great. Thanks, everyone, for joining us. I'm Andrea Newkirk, one of the Biotech Analysts at Goldman Sachs, and I'm really pleased to be joined by Sekar Kathiresan, CEO of Verve. Thanks so much, Sekar.

Our pleasure. Thank you so much.

Well, maybe we'll just jump right into it. Just a couple of months ago, you've announced the Heart-2 data. So maybe walk us through that, what were you so excited about because this does come on the back of Heart-1 a couple of years ago where there had been a little bit of a setback. So maybe just walk us through Heart-2?

Yes. Before I do that, Andrea, just take a step back and say, what do we accomplish and how did this data set really move the ball forward. So Verve is focused on gene editing for cardiovascular disease and the concept is onetime therapy, lifelong lowering of cholesterol and as a way to treat coronary heart disease or atherosclerotic cardiovascular disease. And people often ask us, well, there's lots of options already to lower blood cholesterol, why do we need a new approach. And the unmet need here really has to do with what we term enduring efficacy. So the idea that current approaches basically most individuals, maybe 50% -- up to 50% after initiating a cholesterol lowering therapy, within 1 year are no longer on them. And so they're not getting cholesterol lowering for decades like they're supposed to and what we started with in 2018 was this concept of a onetime therapy, lifelong cholesterol lowering. So really get enduring efficacy for patients. And what that will lead to, if you're able to get LDL lowered by a good amount for a long time is dramatic reduction in coronary heart disease risk. And so that was the idea. And over the last few years, we've been able to get this product concept to work in cells, mice, nonhuman primates. And then we had a first version that we took to patients. That was Heart-1 trial for VERVE-101. We will come back to that in a minute. But then, we have another version VERVE-102, a next-gen compound in the Heart-2 trial that we started last April. And that's the data for that compound is what we disclosed on April 14. And we disclosed data for the first 14 patients across 3 dose levels and we're able to show that we can get LDL lowering up to 69% with a mean of 59 in the highest dose level. And everybody in that high dose group got over 50% lowering. And it was incredibly well tolerated. The acute infusion really had no major issues in terms of infused reactions, only 1 out of the 14 patients had infusion reaction -- infusion-related reaction. And then on the laboratory side, had a very good profile in terms of no elevation in ALT or platelets, no change in platelets and no clinical events. And so really good safety profile, very encouraging efficacy. And then we have durability from that earlier product that we also disclosed. And so this gene editing product durability we saw after to 2 years after the onetime infusion. So about a 60% lowering of LDL. And then 2 years later, the LDL was still down 60%, really all kind of pointing to our original vision of a onetime therapy, a one-dose future for the treatment of atherosclerotic cardiovascular disease could really become a reality. And so this is why we're so excited. It's really the vision we set out with, it looks like it's going to be possible.

Maybe before we dig into the most recent data set, but just to remind us the difference between VERVE-101 and VERVE-102. And what gives you the confidence that, that durability signal that you saw in that first-gen asset will translate to now your second gen?

Yes. So what's -- 101 and 102 have the same cargo. So they basically have the same base editor, same guide RNA. That's really the guts of editing system. And that's really what gives you the efficacy and durability because that's what makes the change, in our case, in the liver and the PCSK9 gene sequence. Now what's different between the two is the delivery system. So there's the RNA molecules, the mRNA for the editor and the guide RNA are packaged in a little fat bubble called the lipid nanoparticle. The 101 has a certain composition, 102 has a different composition. The reason we switched it out between 101 and 102 is that we knew that there was some risk with the delivery, particularly around laboratory safety when we infused, there could be a risk. And so we wanted to really have 2 different options available to derisk that. And what we've learned both from preclinical studies and our now a human experience is that 102 with its different lipid nanoparticle composition has basically a wider therapeutic index. So we're not seeing any of the laboratory abnormalities we saw with 101. And so that's really the key difference. In addition to the composition difference, another component that's different is we added a targeting ligand called GalNAc to VERVE-102 that binds to a receptor that's specific to liver cells only on liver cells called ASGR. So that is another wrinkle innovation really -- proprietary innovation that we added to 102. So we're very excited about 102 because it retains the cargo from 101, but it has this entirely different lipid nanoparticle delivery system.

And when you think about this delivery system, I think we've talked in the past that there are some components of it that parallel what Intellia is using. And obviously, Intellia has been in the news recently with some updates in their program. But just maybe to level set for everyone, is there any risk to VERV-102 based off of the liver elevations that they've seen?

Yes. So Intellia reported, I think, a couple of weeks ago now, a Grade 4 ALT elevation in their Phase III program. We do not believe there's read-through to us, and let me walk you through why. There are basically 2 types of patterns of LFT elevation after infusion of the lipid nanoparticle. Remember, our drug, all these in vivo liver genetic medicines are basically given through a peripheral intravenous dripped in over 2 to 4 hours. When you infuse, then there's a pattern that's early elevation in ALT. By early, I mean, typically within the first week. And that's -- everybody agrees that's basically due to the lipid nanoparticle because that lipid nanoparticle can affect liver cells and you have a transient rise and then fall. We seen that with 101. We didn't see it with 102. We saw it with 101. Beam has seen it with their LNP, Intellia has seen it. That's not the pattern that was described by Intellia a couple of weeks ago. Rather, the Intellia pattern was late. The peak was actually at day-28. So that's not LNP related, at least according to Intellia. And so that's why we do not feel there's read-through to us. So then the question is, what is it, this late rise? And there are a number of hypotheses out there, and I don't want to speculate. But suffice to say, we don't think it's LNP related. So even though we share the same ionizable lipid as Intellia in our -- in VERV-102, we do not believe it will be read through.

Got it. Perfect. That's helpful. Maybe we can go back to the Heart-2 data here. And as you think about VERV-102 and that TPP that you defined before you saw the data, and now you've seen some of the data emerge in the first 14 patients, yet you're still dosing higher, maybe help us understand what you're thinking -- you'd like to see potentially at a force dose? What would be the ideal TPP here?

Yes. So our TPP is basically LDL reduction above 50% for patients with ASCVD, above 40% for patients with HeFH, basically matching inclisiran, the siRNA that has a very similar mechanism of action in terms of reducing protein production from the liver. So that's our TPP. And then of course, we're differentiated in the fact that we have lifelong LDL reduction ideally and there a few months. So that's the key difference. But at least a degree of reduction, we want to match them. Now what we saw at the highest dose level, this is like between 50 milligrams and 60 milligrams of total RNA administered, we had 3 patients in that group. We saw a mean of 59%, a max of 69% and every single participant had above 50%. And this was for both HeFH patients and ASCVD. So we're very encouraged. And so you're asking, all right, then if that's the case, why are you going to a next dose level. The reason is we think there still may be efficacy left on the table. And so you saw in our dose -- well, I should describe the fact that we were able to show individual level data on the x-axis is the milligrams of RNA received, on the y-axis is the percentage LDL reduction, and it was a straight line down right now. It's a linear relationship across 14 participants, the more RNA you got, the greater the LDL reduction. Well, at some point, that straight line down will transition to a plateau from a linear to a sigmoidal relationship. And we need to understand when that is. And this is our only chance to do it in the dose escalation and so that's why we're escalating.

Got it. And you've touched on it a little or you've referenced it a little that the dosing paradigm here. Fixed dose versus the weight-based, weight-based being what you studied here, but you did have an analysis of fixed dose and the effect there. Maybe just taking a step back, what is the rationale behind evaluating it or maybe parsing out the data in this way? And how does that inform your dosing strategy or how you're thinking about next steps?

Yes. This is a really important point for the field. So the field of in vivo gene editing is shifting to fixed doses in milligrams of total RNA delivered rather than weight-based, and we're making that shift. So you'll see that Intellia has fixed doses of 55 milligrams for the TTR product. Beam is basically evaluating fixed doses of 30, 60 milligrams and 75 milligrams for their alpha-1 antitrypsin product. And we started with milligram per kilogram. And we also presented analyses in terms of milligrams of RNA to fixed doses. And the reason the shift is happening is, this kind of product is unique. In the sense that when you infuse into the bloodstream, almost all of it goes right to the liver right away. So you're not -- it's not going to the rest of the body. So milligram per kilogram is useful when there's widespread body distribution. Here, you're essentially just treating the liver. And the principle is that -- let's say, you're 2x heavier than your neighbor, your liver is actually not 2x heavy. So -- and so that's why the mg/kg is not particularly helpful for this kind of product whereas the fixed dose can be. And so what you saw was this beautiful linear relationship between the fixed dose we've given to patients and the degree of LDL reduction, which is the registration end point. And so we're going to move likely to fix doses when we transition from Phase I to Phase II later in the year. We're guiding to a first patient dose by the end of the year in the Phase II and the Phase II will likely involve 2 fixed doses, roughly 30 patients in each of 2 fixes.

Got it. And then just really quickly in terms of, we've talked about LDL, your TPP in terms of LDL reduction, how does it look as you think about PCSK9 reduction? And does that matter how strong is the correlation between LDL and PCSK9? I think we've talked in the past, as we looked at the Heart-1 data that PCSK9, those reductions, those correlations are on a population level, just remind us there?

Yes. I think what we're very -- great situation is that we have 2 biomarkers of PD, LDL-cholesterol and PCSK9. And one of them, the LDL cholesterol is actually the FDA registration endpoint. So it's a very unusual situation, right? And what we're seeing is really very clear relationship between the degree of RNA administered and the LDL reduction. And that's probably what's going to guide us in terms of dose selection. We also see a very nice relationship with dose-dependent relationship with PCSK9. But given ultimately, with the clinically relevant endpoint is LDL, that's what's going to guide dose selection. Yes.

Got it. And then just maybe really quickly here, as of your last earnings call, you have mentioned dosing 2 patients at the fourth dose, just any additional updates you can share on that front?

Only that we'll be presenting -- we plan to present the full dose escalation in the second half of the year at a major medical meeting.

Got it. Maybe speak a little bit more about what the expectations are for that additional or maybe for that fulsome data set that comes? How many patients in total? We've seen 14, what is the end going to look like?

Yes. We haven't guided to that in terms of specifics. But certainly, we want -- again, we want to see that transition from linear to sigmoidal. One of the items that I think you can expect is the durability because that's something we didn't really get into with this data set on April 14. But by the second half of the year, we should have a good amount of durability inflow across the various dose levels. Because if you remember, our first patient dose with VERV-102 was April of last year. So if you're going into the second half of the year this year, you're going to have some patients more than 12 months of follow-up data and then a bunch of patients in the 3- to 6-month range. And so we right now talked mostly about durability from 101 because that's now up to 2 years plus. But then for the second half data disclosure, we'll be able to give a bit more fulsome info on durability for 102. And as you asked earlier, we expect to fully carry through because it's the same editor, the same guide.

Maybe speaking about durability or as you think about this, and you've gone out, you've done your market research, what is the extent of durability that people are looking for to really get comfortable that this is really a onetime product?

Yes. Maybe we can talk a little bit about the biology here because this, I think, surprises people, right? And also people have ideas around viral vector gene therapy, giving something back. There have been challenges there with durability. Why is gene editing going to be different? Well, first of all, this is different. What we're trying to do is change your own -- the DNA in the liver, right, endogenous DNA. So we're not trying to give something foreign, but rather the change is within the DNA sequence, within your own liver cell. And -- but the liver does regenerate in humans and in nonhuman primates, and so if there's regeneration, that typically happens every 6 to 9 months, all the liver cells turn over, how could there be durability. Well, the reason is that we -- when we come in and do the editing initially in the liver cells, we're editing the cells that are responsible for the turnover so that when they divide to give forth new cells, they're carrying forward the edit that we already made. And that's why there is durability. And you can see with the 2-year data that we showed for 101, that's well beyond the standard regeneration time of 6 to 9 months. And so it really gives you a sense, yes, there's editing happening in the cells that are responsible for regeneration. Now in nonhuman primates, there's data now for almost 8 years of durability for in vivo gene editing. Again, really supporting this concept, this is going to be permanent. In humans, Intellia has data for 4 years for TTR for in vivo gene editing and we have data, as you said, as we showed, for 2 years. So we think this is going to be fundamentally different than viral vector gene therapy. And then one other -- 2 other points is that if there are issues with waning durability over time, we don't think there will be, one thing about LNPs, again, contrast to virus is they can be redosed. And so you can kind of give another, not that we -- I don't think we'll need that, but it can be done. And then what do clinicians and payers and so forth? I think 1 example to think about is some of the groups in the U.S., for example, ICER, when they model for cost effectiveness, they'll give you credit for a really long time durability if they see within about 2 years that it's flat, okay? And then after that, they're -- like they'll assume they'll give you credit for 5 or even more. So that's, I think, a pretty good time point to think about, at least for external bodies as to what they're looking for.

Interesting. The other side of -- so durability of efficacy, but many are also looking for what is the long-term safety profile? Do you believe that, that same 2-year implies 5 years translates over to the safety side? If you have a clean profile at 2 years, can you assume that that's going to be the case moving forward?

Yes. I think for any of these kind of therapies, it's always about risk benefit, right? And what you're balancing here is the actual risk that these patients are going to die of a heart attack in the next 1 to 5 years which is an incredibly real risk for these patients, right? Because atherosclerosis in these high-risk patients remains a leading cause of death in the world. And so you're balancing that real risk of fatal heart attack versus a really, really low theoretical risk of an off-target edit in some portion of the genome leading in a single cell to a cancer event. And that's what people worry about in terms of long-term safety. Once you get through the acute safety issue of infusion, then you're like, okay, editing is done, the drug is out of the body, you're left with these edits, you're left with lower cholesterol, and then, is there something untoward that's going to happen over time? And so we think that the way we've derisked by showing that there's basically no detectable off targets really minimizes that low probability that was there to start with. And then again, you have to balance that theoretical risk versus the real risk of a person, again, having a serious cardiac issue. So that's kind of how I think about it. And I think that's the way patients will think about it and physicians will think about it because we've talked about this. There are plenty of procedures that patients go through every day that are irreversible, that have -- that are intended to be permanent and any surgery you can think of, has risks, short-term, long-term risks. And why do patients go through it? Because they think the benefit is going to exceed the risk. And it's going to be the same approach here. This is less of a drug, I would say, more of like a molecular surgery intended to have lifelong benefit. And I think that when we get to registration in a few years, we'll have 4 or 5 years of follow-up in some of these patients that were dosed last year, right? So all the patients in Phase I and Phase II, once you get our drug, you're in the long-term follow-up for 15 years, that's mandated by basically regulators around the world. So they're going to have long-term follow-up in terms of the safety issues. So we'll have that kind of data in probably hundreds of patients in a few years. And that will be the starting point for people's assessment of risk versus benefit.

Maybe as you think about the regulatory environment that we're in, because this has been a topic that is increasingly been top of mind here, the regulatory flexibility, what the agency may or may not be willing to allow here. Have you detected any changes in the nature of your conversations that you're seeing or that you're having right now? Do you think -- how do you think gene editing as a modality is being viewed at the agency right now?

Well, I think there was a fair amount of uncertainty a couple of months ago with the departure of Peter Marks, the announcement of Dr. Vinay Prasad, but I think in the last, I don't know, 4, 5 weeks, there's been a lot of information coming out of FDA that they're actually very supportive of this technology. You saw there was a meeting last week on Thursday, it included the Head of HHS, the head of the NIH, the Head of FDA, Marty Makary and the Head of CBER, Dr. Prasad, and what were they all crawling about. It was actually in vivo base editing. There was this example of the University of Pennsylvania. Actually, I'm proud to say, my first [indiscernible] fellow, Kiran Musunuru, basically, having done this [indiscernible] for a baby that was really sick, developing a custom in vivo base editing -- base editor to correct the gene defect. And the baby just, I think, left the hospital last week. So I think there's a lot of openness to this approach. Now the question we get asked is, okay, well, it's a rare disease, is the same kind of applied to what we're trying to do? I actually think that -- and I think they've actually talked about this, they have -- the language is the administration wants treatments that address the root cause of disease, the root cause of chronic disease, right? So well, what's the root cause of the largest chronic disease in the world, arteriosclerosis, it's LDL. And so the idea that we're going to be able to give a single therapy onetime and address this root cause rather than asking somebody to take a pill daily for 30 years or injections twice a month for 30 years, I think gets at this value proposition that they're looking for. So I'm actually quite optimistic that this administration sees how this approach can transform how we care for patients.

Maybe that's a good segue to the work that you've been doing to understand to that point how physicians, how patients might look at a onetime therapy that's novel, maybe talk to us about the work that you've been doing there and what you've been finding out?

Yes. I think we've surveyed cardiologists in the U.S. We've surveyed -- well, actually, it's a third-party survey of patients who have high cholesterol or who have established heart disease. And both of those give very consistent results, which is, there's a remarkable openness among patients and physicians for this kind of approach and the early adopters, I think, are going to be patients, younger patients probably who have either suffered a heart attack at a young age because they're facing 30, 40 years of care, LDL care with injections or pills, daily pills or patients who have inherited the high cholesterol from their parents. So it's not their lifestyle or diet, but rather they have a genetic condition called heterozygous familial hypercholesterolemia. Both of those groups are pretty sizable. It's about 3 million patients with HeFH. Of the 25 million people in the U.S. and Europe with atherosclerotic cardiovascular disease, about 20% of them, it's has happened at a young age; men less than 55, women less than 65. So these are sizable groups of people who look like they're going to be even more open than the average person. In terms of the actual statistics, we presented to patients a future treatment landscape for cholesterol lowering of a daily pill, twice a month injection, twice a year injection or a onetime gene editing approach and about 1/3 of people preferred the onetime gene editing. When you do the same thing for cardiologists, for HeFH patients, for about 40% of their HeFH patients, cardiologist preferred a onetime gene editing compared to those other options. And then for ASCVD patients, so a huge group, for about 20% of them, they preferred a onetime therapy compared to the other options. So there's a lot of openness. Maybe the last point is, okay, that's patients, that's physicians, what about payers? And there, there's still work to be done. But I think there's some fundamentals in terms of our product that I think will allow us a fair amount of flexibility on pricing and market access. And the reason is our product is very different from what people think about in terms of gene editing, gene therapy. Most people associate a $1 million price tag with any of those -- with these kind of products. That is not going to be us because of a couple of things. One is we have lots of patients, so we don't have to resort to our rare disease pricing. Second is the cost of manufacturing here can be very manageable. This kind of product, about 100 micrograms can be made for about $3. We know that because of the COVID experience, the COVID vaccines are basically mRNA packaged in a lipid nanoparticle. We are RNA packaged in a lipid nanoparticle. We're not going to be giving 100 micrograms, but rather like 60 milligrams or 50 milligrams, so let's say, $1,500 a dose. At that price point in terms of cost of manufacturing, whatever price we set, there's going to be a lot of flexibility, I think, in terms of margin. So we're going to be very different from anything else out there, and this is, I think, part of the excitement why I think we can fundamentally change the conversation on pricing and market access for these kind of medicines with something like VERV-102.

And how do oral PCSK9 play into the picture? Obviously, you saw this morning with Merck having their positive data readout here. But how does that change the calculation or that split of the proportion of patients do you think?

The future treatment landscape that we proposed to cardiologists included an oral PCSK9. So -- and even with that, for 40% of their HeFH patients, cardiologists prefer onetime therapy. That's because, again, we are trying to really, again, fundamentally change from a chronic care model for chronic disease to a one-dose future. And so what does the oral PCSK9 do? Well, it just adds to the chronic care armamentarium. But we already have lots of options in the chronic care armamentarium. We have 3 pills right now that can be taken daily to lower cholesterol. We have 2 injections and other injection coming on the way. So -- but despite the availability of all those chronic care options, very few patients actually are at LDL goal. Less than, I think, 5% of eligible ASCVD patients are actually on a PCSK9. So we don't think that's going to change that much with the availability of an oral additional fourth or fifth pill. So yes.

And then maybe one last question here as it relates to your PCSK9. But later this year, you will also deliver the opt-in package to your partner, Lilly, maybe walk us through the expectations? Or maybe the extent of data -- or not data, but disclosure that you might provide to the Street as this gets underway?

Yes. One of the things we're guiding to this year is the decision from Eli Lilly on the opt-in. And just to walk through that, they have the ability to opt in to this product in the second half of the year. What that -- the mechanics are that we will put together the dose escalation data, we will put together a development budget as well as a clinical development plan, and preclinical data that we've already generated, put all that together, give that to them. They'll review that data and then make a decision. Once they opt in, they would be responsible for 1/3 of worldwide development costs. In return, they would get 50% of U.S. profits. They would also be responsible for 50% of U.S. commercialization expenses. So the 50% of U.S. profits is theirs. The other 50% is us. And then the 100% of ex U.S. is us. So that's the relationship. So we're excited. They've -- they were very pleased to see the product profile that emerged from the April 14 disclosure, and we're excited to partner with them for the -- in the second half of the year.

As -- maybe as it relates to Lilly's approach in cardiovascular, obviously, they have other assets going after different targets. You do as well. Maybe in the last 2.5 minutes that we have here, talk us through the 3 pillars that you have? So we talked to PCSK9, that's largely our discussion here, but ANGPTL3, Lp(a), how do you see the relative?

Yes. So our company was constructed around the 3 main carriers of cholesterol, basically LDL, triglyceride-rich lipoproteins and lipoprotein(a). We have a target that goes after each of those, PCSK9 for LDL, ANGPTL3 for LDL and triglyceride-rich lipoproteins, lipoprotein(a) LPA gene for lipoprotein(a). We talked about our first product. We're very excited about the second and third because they're going to leverage the delivery system that we have, the GalNAc LNP. The second product, ANGPTL3, it's in the clinic now. We'll hopefully have data for that in the second half of this year. We right now got into a program update, but that could be a data update based on enrollment. That product is really nicely derisked because it has the same GalNAc LNP, the same base editor, all that switched out is the guide. And so that's an exciting development. And then LPA, we're partnered with Lilly on that, but a slightly different structure than the PCSK9 relationship. Here, this is much more typical of a standard big pharma biotech, where we're doing all the research now. They're paying for all of it. At the end of Phase 1, the program transfers over to them, and we get royalties milestones. Now their approach to cardiovascular disease, I think we're nicely aligned where we see in the future these very compelling targets like PCSK9, like LPA. For any given target, there basically is a multi-modality pipeline. There could be a pill, there could be twice a month injection, twice a year injection and a onetime option. All of those can coexist in the marketplace because these indications are very large. You see that strategy playing out for Lilly, for example, for LPA. They have a daily pill that's in finished Phase II. They have an siRNA that's in the Phase III right now. They're working with us for gene editing. So this is, I think, the future of cardiovascular care. And we seem to -- both companies seem to have a nice alignment on what are those high-priority targets, PCSK9, ANGPTL3, LPA. For example, they have an siRNA against ANGPTL3, that's in Phase II called zilebesiran. So again, that's, I think, why the relationship between the 2 companies has been so strong.

Awesome. Maybe in the final closing seconds here, just remind us where things stand in terms of your cash runway. And then if Lilly does opt in, how does that impact it?

Yes. So we closed the first quarter with about $500 million in cash. This takes us to the middle of '27 million, and it gets us the Phase I data for 102, the Phase I data for 201, the ANGPTL3 product as well as getting into the Phase II and maybe even completing the Phase II for 102. So really a lot of milestones. And this runway to mid-'27 does not include Lilly opt-in, it's conservative in that sense. Once Lilly opts in, it can extend our runway probably by another quarter or 2.

Got it. Perfect. Well, with that, Sekar, thank you so much. Thanks, everyone, for joining us.