Viridian Therapeutics, Inc. (VRDN) Earnings Call Transcript & Summary

Good morning, and welcome to the miRagen Therapeutics Viridian acquisition webcast and conference call. [Operator Instructions] Please be advised that this audio presentation is being recorded. Now I'd like to turn the call over to Jason Leverone, Chief Financial Officer of miRagen. Please proceed.

Thank you, operator, and good morning, everyone. Earlier today, we issued a press release that outlined our acquisition of Viridian Therapeutics. This release is available at miragen.com under the Investors tab. Before we begin, I would like to remind everyone that statements made during this webcast relating to miRagen's expected future performance, future business prospects or future events or plans may include forward-looking statements, as defined under the Private Securities Litigation Reform Act of 1995. All such forward-looking statements are intended to be subject to the safe harbor protection provided by the Reform Act. Actual outcomes and results could differ materially from those forecast due to the impact of many factors beyond the control of miRagen. miRagen expressly disclaims any duty to provide updates to its forward-looking statements, whether as a result of new information, future events or otherwise. Participants are directed to the risk factors set forth in miRagen's reports filed with the Securities and Exchange Commission. During the call today, our Chief Executive Officer, Lee Rauch, will provide introductory remarks on the acquisition of Viridian Therapeutics by miRagen. Our new President and Chief Operating Officer; Jonathan Violin, PhD, will provide details of our clinical development programs, and I will review details of the acquisition and concurrent private placement financing. It's now my pleasure to pass the call over to Lee Rauch, CEO of miRagen.

Thanks, Jason, and thank you all for joining us today. This morning, we announced the completed acquisition of Viridian Therapeutics, a privately held biotechnology company focused on the advancing of new treatments for patients with diseases that are underserved by today's therapies. I am pleased to be able to share this news with you. We communicated in September that miRagen's Board of Directors had determined it was in the best interest of the company and its shareholders to conduct a comprehensive review of available strategic alternatives with a focus on maximizing shareholder value. We believe the acquisition of Viridian represents the highest potential value-creation opportunity for miRagen's stockholders and creates a promising path forward while we continue to pursue strategic opportunities for our microRNA based programs. We would like to thank our Board members, past and present, alongside our investors in their commitment and support in advancing miRagen's mission. In addition to the acquisition, miRagen also announced this morning that we entered into a definitive agreement for the sale of Series A nonvoting convertible preferred stock in a private placement to a group of institutional accredited investors. The private placement is led by Fairmount Funds and joined by a syndicate of dedicated biotechnology investors, as listed in the press release, as well as additional undisclosed institutional investors and is expected to result in gross proceeds to miRagen of approximately $91 million before deducting placement agent and other offering expenses. The proceeds will provide runway through 2023 and will be used to advance multiple compounds through clinical testing. Our priority emphasis is our lead clinical program, VRDN-001 for the potential treatment of thyroid eye disease. In addition, we plan to advance our rare orphan disease therapeutic pipeline. It is now my pleasure to introduce Jonathan Violin, PhD, who joins miRagen as President and Chief Operating Officer. Jon was previously Founder and CEO of Viridian Therapeutics. He brings deep operational experience with specific expertise, aligning clinical and scientific evidence with strategies to efficiently finance the discovery and development of novel therapeutics. Prior to founding Viridian Therapeutics, he served as Founding CEO of 2 virtual drug discovery companies, Quellis Biosciences and Dianthus Therapeutics. Before that, Jon cofounded and helped lead Trevena from discovery research through clinical development and NDA submission. His efforts included multiple rounds of venture and public financing. Jon has coauthored over 45 peer-reviewed publications and is an inventor on numerous patent applications. He holds a PhD from the Department of Pharmacology at the University of California, San Diego; an MBA with a concentration in Health Sector Management from The Fuqua School of Business; and a B.S. in Chemical Pharmacology from Duke University. With that, it's my pleasure to introduce and to turn the presentation over to Jon Violin.

Thanks, Lee, and thanks to everyone for taking the time to listen in today. I'm excited by the opportunity to join miRagen as we pursue a new direction for the company with a focus on advancing new treatment options for patients with diseases who are underserved by today's therapies. That will begin with miRagen continuing to advance Viridian's lead clinical-stage compound, VRDN-001, which is a monoclonal antibody targeting insulin-like growth factor-1 receptor, or IGF-1R, for the treatment of thyroid eye disease, also called TED, which is a rare and debilitating disease that causes displacement or bulging of the eyes called proptosis and often leads to double vision, pain and potentially blindness. I'd like to start by sharing a bit about our strategy in TED. We have launched multiple development programs simultaneously, consistent with our strategy of moving quickly to fill in gaps left when currently available products do not fully meet patients' needs. In this case, we have 1 program, VRDN-001, which is intended to be our fastest path to clinic and to market with the goal of improving the current treatment paradigm. Our second TED program, VRDN-002, is intended to be a rapid next-generation antibody for TED with the goal of converting the market to a more patient-friendly treatment paradigm. I'd like to discuss each of these programs in a bit more detail, but first, let's consider the current landscape. Historically, treatment options for TED have not worked well, leaving many patients suffering in pain with vision impairment and significant emotional distress and often requiring surgery. Just this January, the first targeted therapy was approved, the monoclonal antibody, teprotumumab, or TEPEZZA, which demonstrated robust efficacy in reducing proptosis and other TED symptoms but is administered through IV infusion once every 3 weeks and is extremely costly at a wholesale acquisition cost over $340,000 per course. We think patients deserve more options. Our lead molecule, VRDN-001, is, like teprotumumab, a monoclonal antibody that binds and blocks the IGF-1 receptor. Published data shows that VRDN-001 binds IGF-1R with sub nanomolar affinity. More than 100 oncology patients were administered VRDN-001, then called AVE-1642, in studies sponsored by Sanofi. So we have some understanding of VRDN-001's clinical pharmacokinetic and pharmacodynamic profile as well as its safety and tolerability. This data underpins our enthusiasm for bringing this program into the clinic to treat thyroid eye disease. Viridian licensed exclusive worldwide rights to develop and commercialize VRDN-001 for all nononcology indications, including the treatment of thyroid eye disease, from ImmunoGen, Inc. And pending feedback from regulatory authorities, we expect to initiate Phase II clinical trial of VRDN-001 in thyroid eye disease in 2021, with a preliminary readout from a pilot cohort available in the first quarter of 2022. If approved, VRDN-001 would initially be protected in the U.S. for the 12-year BLA exclusivity period that begins at the time of approval. And we're actively working to generate additional intellectual property that could provide a longer exclusivity period. In parallel with VRDN-001 development, we've initiated the VRDN-002 program, which will incorporate half-life extension technology into an IGF-1R targeted antibody to reduce the dose required to achieve full efficacy for thyroid eye disease patients, enabling convenient subcutaneous dosing. We're also evaluating developability features, such as solubility, with the goal of achieving the lowest-possible injection volume. We think it's feasible to achieve a truly convenient subcutaneous injection for at-home use with this approach. This program is advancing rapidly, and we expect to file investigational new drug application for VRDN-002 in 2021 and to present Phase I data demonstrating improved pharmacokinetics in 2022. By serving TED patients quickly and continually innovating to create better products, we expect to create best-in-class treatments for thyroid eye disease and other diseases, and we'll take the same approach to other therapeutic indications. We have a discovery program targeting another undisclosed orphan disease. I look forward to sharing more about that program at the appropriate time and to building out Viridian's pipeline to sustain long-term value creation. I'm very pleased to be joining the miRagen leadership team, working with Lee and with Jason, and to continue partnering with Vahe Bedian, who is Chief Scientific Officer at Viridian and now takes that same role at miRagen. Vahe brings deep expertise in antibody discovery and optimization from his time at AstraZeneca and Pfizer, and I have worked with him on several projects prior to our founding of Viridian. Together, we'll work to advance our mission of developing novel best-in-class therapeutics for underserved patients. We have a great opportunity ahead of us, and I look forward to sharing more updates on our progress in the near future. With that, I'd like to turn the presentation back over to Jason Leverone to provide more details on the structure of the acquisition and concurrent financing.

Thanks, Jon. The acquisition of Viridian was structured as a stock-for-stock transaction, whereby all of Viridian's outstanding equity interests were exchanged for a combination of shares of miRagen common stock and shares of a newly designed nonvoting Series A convertible preferred stock. With the acquisition of Viridian Therapeutics, miRagen entered into a definitive agreement for the sale of Series A nonvoting convertible preferred stock in a private placement to a group of institutional accredited investors, led by Fairmount Funds, and joined by a syndicate of dedicated biotechnology investors, as listed in the press release, as well as additional undisclosed institutional investors. The private placement is expected to result in gross proceeds to miRagen of approximately $91 million before deducting placement agent and other operating expenses. Private placement investors will be issued shares of series A preferred stock at a price of $466 per share or $0.47 per share on an as-converted-to-common basis. The PIPE offering is expected to close on October 30, 2020. Subject to stockholder approval, each share of Series A preferred stock will have the option of the holder, converting to 1,000 shares of common stock, subject to certain beneficial ownership limitations set by each holder. On a pro forma basis and based on the number of shares of miRagen common stock and preferred stock issued in the acquisition and the concurrent financing, miRagen equity holders immediately prior to the acquisition will own approximately 12% of miRagen on an as-converted basis immediately after these transactions. The proceeds from the private placement will be used to advance clinical testing of VRDN-001 in thyroid eye disease as well as to advance our pipeline and for general corporate purposes. After completion of the acquisition in private place financing, miRagen will have pro forma cash on hand of approximately $140 million. In connection with the transactions, a nontransferable contingent value right, a CVR, will be distributed to miRagen stockholders of record as of the record date and prior to the issuance of any share Viridian or the PIPE investors. Holders of the CVR will be entitled to receive certain payments from proceeds received by miRagen, if any, related to the disposition of its legacy microRNA assets for a period of 5 years following the closing of the transaction. The CVR is expected to be distributed to eligible stockholders approximately 30 days from closing of the Viridian acquisition. miRagen is actively conducting a broad-based outreach to find a partner or create new enterprises for the miRagen microRNA-based programs. I will now turn the presentation back over to Lee Rauch to provide closing remarks.

Thank you for joining us this morning to learn more about the exciting developments at miRagen, including the acquisition of Viridian Therapeutics and the vision of advancing new treatments for patients with diseases that are underserved by today's therapies. We are excited about the future potential for VRDN-001 to treat thyroid eye disease. We also look forward to providing additional updates later this year as we continue to advance our pipeline. Details on our vision and programs are available in an updated slide presentation that is now online at our webcast. We will not be taking any questions today, but look forward to fielding questions once we've integrated miRagen and Viridian. Thanks again for your interest in miRagen Therapeutics.

This concludes the miRagen Therapeutics webcast today. A recording of today's call will be available for playback, and more details can be found on the miRagen website, miragen.com, later today. Thank you for joining.