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

Is this live? Sure enough. There we go. Great. Good afternoon. Thanks, everyone, for joining us. So to everyone here for the presentation today, we're thrilled to have the Viridian team with us. We've got Jon Violin and we really appreciate having everyone here at the conference. I'll go ahead and pass it over to him to make the most of the time. But thanks so much, and welcome again.

Thank you, James, and pleasure to be here to share an overview of Viridian. Before I begin, of course, I'll be making some forward-looking statements. Please see our SEC filings for important disclosures. So Viridian is developing best-in-class medicines for patients suffering from serious and rare diseases. We were founded in 2020. We're based in Waltham, Massachusetts, just outside Boston, with about 90 employees. And our market cap after some exciting news yesterday morning that I'll discuss more details now approaching $2 billion with an initial focus on thyroid eye disease or TED. We're well-funded with cash at year-end of approximately $425 million, that funds us into the second half of 2025. And our core focus is to leverage our expertise in antibody discovery and engineering we look for first entrants that validate a novel mechanism of action where we see a significant market opportunity and a serious disease with limited competition. Then if that first entrant leaves room for improvement we'll identify and engineer what we think will be potential best-in-class antibodies and move them forward to patients as quickly as possible. Our pipeline is led by both an intravenous effort in thyroid eye disease, VRDN-001, where I'll share some exciting data today, and then a subcutaneous effort. We have two different molecules, VRDN-002, and VRDN-003, both including half-life extension technology that we think can deliver a durable best-in-class entrant in thyroid eye disease. We do intend to grow beyond thyroid eye disease beyond ophthalmology. We have preclinical programs in autoimmune and rare diseases, the RDN 004, 005, 006. We'll be excited to share more about these -- at least one of these programs this year. So thyroid eye disease, for those of you who are unfamiliar with this rare disease is a debilitating autoimmune disease, in which auto antibodies attack the insulin-like growth factor-1 receptor, IGF-1R pathway, and that leads to an expansion and inflammation of the tissue surrounding the eye that illustrated on the right-hand side of the slide here. And it's a progressive disease with an acute or active stage, followed by a secondary chronic phase where the inflammation is less obvious. The signs include the proptosis or bulging of the eyes, redness, swelling, double vision and retraction of the lens. These are all characteristics of disease. And in severe cases, it can be sight-threatening with optic nerve compression. It impacts more women than men at about a 5:1 ratio, and is treated by several specialists, oculoplastic surgeons, neuro-ophthalmologists, comprehensive ophthalmologists or endocrinologists. The symptoms of thyroid eye disease are quite distressing to patients. They include dry eye, double vision or diplopia, light sensitivity with photophobia, decreased visual acuity, defects in the visual field, diminution of color vision, and again, in severe cases, optic neuropathy from compression of the optic nerve. And while this is a rare disease, there are a large number of patients suffering from both the active and chronic form of the disease, over 20,000 active TED patients diagnosed each year in the U.S. So this is an incidence market. And then more than 75,000 patients with chronic thyroid eye disease in the U.S., and even larger patient populations in Europe and the U.K. This means there's a large commercial opportunity, the first and only approved therapeutic is TEPEZZA, which is an intravenous course of therapy, given over 8 infusions over about 6 months, that within 2 years after launch, achieved an annualizing rate of $2 billion in revenue, almost entirely driven by active disease patients because that's where the only existing randomized controlled trial data exists. And so the $2 billion market today, we see growing to $4 billion or more based on potential penetration into the chronic disease segment as well as ex-U.S. And it's important to us that this is an incidence market, that means all patients are new starts. We don't need to convince patients to switch from TEPEZZA. We need to offer a compelling alternative when patients first become eligible for biologic therapy. We're advancing three different antibodies in thyroid eye disease. I'll first focus on our intravenous efforts, VRDN-001. Later on in the presentation, I'll discuss VRDN-002 and 003, which we're developing as subcutaneous entrants. So VRDN-001, like Teprotumumab or TEPEZZA is an IgG1 targeting the IGF-1R receptor where it differs as in how it binds and activates the receptor. Teprotumumab is a partial antagonist that leaves residual activity. 001 is a full antagonist at more completely inactivates the receptor and leads to more robust biomarker responses. And as you'll see, we think the potential for better efficacy. Other than that, it performs like Teprotumumab, very similar PK, half-life 10 to 11 days, and we're dosing it every 3 weeks intravenously, same as Teprotumumab. I'll review data from our proof-of-concept study in active TED patients. We had reported 2 cohorts worth of data, studying 10 and 20 mgs per kg in August and November last year. And then just yesterday morning reported data for a low dose 3 mgs per kg. Now active TED in this case means a clinical activity score, which is a composite assessment of redness, pain and swelling of for higher out of a 7-point scale and symptoms onset within the last year. The primary endpoint in TED development is proptosis, the bulging of eyes. We're measuring that both by The Hertel exophthalmometer. This is the most commonly used modality. It's been successfully used previously as a primary endpoint, and it's what we'll be using in our Phase III program, the THRIVE program. We're also measuring proptosis with MRI imaging. So this is a more precise measurement that relies on central reading by two blinded reviewers. And it is both confirmatory and our smaller proof-of-concept cohorts, but also in our Phase III study will provide potentially differentiating findings to support our commercial launch. To give you an overview of how well VRDN-001 has performed. Here, we're presenting data on the top row, looking at all 21 patients together that have been dosed with VRDN-001 across the 3, 10 and 20 mg per kg dose. We do that because the evidence suggests that all three doses are saturating the response. Of course, we show the individual cohort data of the individual doses in the middle row and the bottom, we look at the TEPEZZA data at the same time point, the 6-week end point after two infusions of drug. So what we see in terms of overall response, this is at least a 2-millimeter improvement in proptosis and a 2-point improvement in clinical activity score, 2/3 of VRDN-001 patients achieved this measure, less than half of TEPEZZA. Proptosis responder rate, which was the TEPEZZA Phase III primary endpoint as well as ours. 71% reached the hurdle of at least a 2 millimeter improvement from baseline proptosis compared to just over half in the TEPEZZA Phase III. The mean change in proptosis, underpinning that response rate 2.3 millimeters compared to less than 2 millimeters for TEPEZZA. And then turning to clinical activity score. Again, this composite assessment of inflammation, redness, pain, swelling. 62% of VRDN-001 treated patients achieved a CAS of 0 or 1. So a complete or near complete therapeutic response, nearly triple what's observed with TEPEZZA at this time point. And a doubling of the mean CAS change, one at a 4-point reduction compared to a 2-point reduction in the TEPEZZA studies. And then finally, diplopia, double vision, where here, we report resolution, the complete freedom of double vision, which, as you can imagine, is incredibly meaningful to patients. Over half of patients achieved this closer to third within the TEPEZZA Phase III study. So across the board, every single measurement, we're seeing favorable results that we think give us a great opportunity to launch a meaningful product. This is underscored I think, when we look at a patient. So here is a case report from the 3 mg per kg cohort. This patient had proptosis of 29 millimeters of baseline, CAS was 7 out of 7. You can see the swelling, the redness, which reported a lot of pain. And then 6 weeks later, proptosis was reduced by 5 millimeters, both by The Hertel exophthalmometer and by MRI, CAS was reduced by 6 points. But honestly, the picture tells you all you need to know, you can see just how dramatically two infusions and just weeks of therapy have transformed this patient. So we're incredibly excited about the molecule we have on our plans -- on our hands and our plans moving forward. So just to review what we've learned about VRDN-001. We see significant rapid improvements in the signs and symptoms of TED. And again, this is just two infusions at all 3 doses. Safety has been encouraging, no infusion reactions, no serious adverse events. We're seeing safety in-line with TEPEZZA. And we've selected the 10 mg per kg dose, the middle dose as our Phase III dose going forward. We've now got 21 patients who've been treated with VRDN-001. So we now have an increasing number of patients. And we keep seeing the same finding that we have a drug that's at least as good as TEPEZZA and the more we see this outperformance on multiple endpoints, the more we feel we may actually be able to deliver better efficacy. The activity we observed at 3 mg per kg supports differentiation of the molecule where at a sixth dose of TEPEZZA. And it also supports our efforts to develop a once-monthly convenient, self-administered subcutaneous injection, which we think could be a game changer in this indication. We now have ongoing a proof-of-concept study in chronic thyroid eye disease, same design as the active cohorts that we've reported. The only difference is that we're looking at patients with symptoms for more than a year and CAS of any scale, so 0 to 7. And we'll have data from two cohorts later this half. Then our Phase III program has already commenced. We reported first patient in, in the THRIVE study. This is a Phase III study in active thyroid eye disease just last month, and we'll plan a second pivotal study in chronic thyroid eye disease to commence later this half. Both studies have 3 arms looking at placebo compared to the standard 8 infusion course of treatment. That's the TEPEZZA regimen as well as an accelerated 5 infusion course, which could allow patients to proceed to the completion of therapy within 3 months. So the potential improvements that we have then are not just the shorter course of treatment, it's a lower dose. That enables shorter infusion times 30 minutes compared to 60 to 90 minutes. And of course, based on the clinical data we've seen, we think we can deliver faster onset of symptom relief and improved efficacy. So let's turn then to VRDN-002 and VRDN-003. These are our half-life extended antibodies that we are developing as a low-volume patient-friendly subcutaneous injection. VRDN-002 is a different molecule than VRDN-001. In fact, it more closely mimics the effect of Teprotumumab it binds to a similar epitope like Teprotumumab, it is a partial antagonist. And the key difference here is the incorporation of a validated half-life extension technology, FC modification, which we've seen in healthy volunteers to quadruple the half-life, a halfway up to 43 days. And the key benefit of that improved half life is that we can reduce the dose, hence reduce the volume, hence, get to in every other week or every 4-week low-volume subcutaneous injections. Now I've told you VRDN-001 is a standout in terms of its pharmacology, VRDN-002 in terms of its pharmacokinetics. So of course, we'd like to marry those benefits. We've done that in VRDN-003. This is identically the VRDN-001 molecule except it includes the same Fc modifications of VRDN-002, so we have the full antagonist features of VRDN-001 and we expect the PK to match or exceed what we observed with the VRDN-002. And our plan is to advance both of these molecules, we'll have clinical data later this year from both programs, and we'll select one to advance into Phase III commencing early 2024. And I won't go over the PK modeling any detail on the slides. The red curves are the 3 mg per kg PK from IV VRDN-001. The blue on the left is VRDN-002, on the right, it's VRDN-003. What this shows us is that a 2-milliliter injection of 300 milligrams given every 4 weeks, but with a loading dose of 2 injections in the first setting. The 2 injections on day 1, followed by a monthly single injection exceeds the exposures of the 3 mg/kg 001. That means a monthly dose of 002 or 003 can give adequate exposure to deliver robust, meaningful efficacy to patients. And it is the half-life extension that we've incorporated in these molecules to the only IGF-1R antibodies in development with afflict extension that really sets these apart and puts us on a path to what we think could be a durable best-in-class entrant. So the path forward for our subcutaneous efforts are to move 002 into a proof-of-concept study. We'll have data in the second half of this year from TED patients via the subcu route. VRDN-003, we've accelerated from backup status to now a contender to be our subcutaneous entrant. We'll file an IND in the second quarter and have healthy volunteer data and PK/PD that can leverage the VRDN-001 experience so that by the end of the year, we can select whether VRDN-002 or 003 is our choice to move into Phase III and initiate Phase III development for a subcutaneous program early 2024. And we're working on a pen device akin to the DUPIXENT profile shown here. Convenient self-administered device that maximizes settings of care and hence both can be the favorite choice for most patients, but also can help grow the market by expanding those settings of care. So our corporate priorities then moving through the rest of this year and beyond. I talked about VRDN-001, we have next up proof-of-concept data in chronic thyroid eye disease later this half. We've already started the THRIVE study, the active TED Phase III program. We'll have top line data in the middle of next year. And then the THRIVE 2 study in chronic thyroid eye disease will initiate later this half and have data by the end of 2024. In our subcu programs, we just reviewed this. We're moving both 002 and 003 forward. It's essentially a bake-off to see with clinical data in hand for both molecules, which is our choice to move into Phase III development early in 2024. So thinking ahead then, what does this mean for our long-term strategy. We aspire to build a fully integrated biopharma company. We will launch what we think can be a best-in-class intravenous therapy in the U.S. and beyond. And we will follow that with what we believe could be a durable best-in-class product with a self-administered subcutaneous injection that pen device that I showed. And then we will replicate the excellence that we will develop in development and launch of these TED therapies in other autoimmune and rare diseases. And so we see a bright future for the company. And it's been a pleasure to share an overview with you today. And now we'll be happy to answer any questions.

Thank you so much, John. For the question-and-answer portion, we're also going to have Kristian Humer here, who's the Chief Financial and Business Officer as well as Todd James, Senior Vice President, Corporate Affairs and Investor Relations. So while we're giving it a minute for questions to queue up, we've also got folks on the webcast watching as well. I'll go ahead and kick off with one. You talked a lot about the potential for the subcutaneous administered dose and how that could expand the market. Could you give a little bit more on what the vision for that is and what the strategy is for that post kind of deciding in the beginning of '24?

Sure. So we believe the market will segment. There are always going to be some prescribers in some patients who prefer the intravenous route. And that's in part why we think our best path is to develop VRDN-001 as quickly as we can. The advantage of a subcutaneous product, especially in a convenient, self-administered pen device as we're working on is not just that it's easier for patients. It's a lot easier for prescribers as well. And for payers, payers don't -- would rather not pay for a trip to fusion center and prescribers, while the most intensive prescribers very quickly realized what this mechanism of action can deliver for patients and really transform their standard of care. That was really true in the neuro-ophthalmologist and some of the oculoplastic surgeons who see most of these patients. When you think further out on the patient journey, as patients first encounter disease, they're often diagnosed by endocrinologists and comprehensive ophthalmologists who don't see as many of these cases. And for them, trying to figure out how to work with the patient to get access to drug to send them to an infusion center is well outside the norm in ophthalmology and endocrinology. And so being able to have a simple convenient subcutaneous device that can be self-administered at home, we think cannot just be a preferred choice for many patients and prescribers, but could help give more patients access to drug and thereby grow market.

Excellent. Another one following up on the subcutaneous Obviously, you've spoken about the opportunity with an active dire disease there. Do you think there's any potential to explore the subcutaneous further on in the future potentially for a chronic thyroid eye disease indication?

Yes, it's interesting. So when TEPEZZA was approved, there was a single pivotal study in a single Phase II, both in active thyroid eye disease. Disease where symptoms have presented less than 9 months ago and CAS at 4 or higher, the same CAS cutoff we're using in our active trials. Nonetheless, the label just is for thyroid eye disease because the FDA, at least does not recognize between active and chronic, it's a spectrum of disease. And so what's happened is that while the label is for Ted, full stop, payers are really giving access to patients who match not the label, but the trial. So we don't have any randomized controlled trial data yet. We're generating our own. There will be other data coming out later this year from TEPEZZA. We have seen numerous case reports, 50 or 60 case reports of patients with long-standing disease who have received TEPEZZA and have reported changes that very much mimic what's seen in active thyroid eye disease patients, robust improvements in proptosis that don't seem to correlate with CAS or any other criteria. So there's a very large set of data suggesting this mechanism works as well in chronic thyroididiseases that does an active thyroid eye disease. We think we'll be able to show that with VRDN-001 via the intravenous route. And because that's an untapped part of the market, it represents a lot of the upside beyond the current $2 billion market, it will be a key part of our subcutaneous development plans as well.

Excellent. And I know you spent a lot of time in the presentation covering off on VRDN-001, 002 and 003. Is there anything further down in the pipeline? I know you guys have a 004 through 006 as well.