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

All right. Good morning. So for our next session, I am excited to be hosting Steve and Shan from Viridian, Steve Mahoney, CEO; and Shan Wu, CBO. And welcome, and great to have you guys here. Well, first of all, congrats on the positive type-C meeting that you guys announced this morning and finalizing Phase III program designed for 003, which is now called reveal the program. So we saw the PR this morning and just a lot of exciting details there that we want to get into. Before diving into our questions, maybe I'll turn the stage to you guys to have and give an opening remark and then discuss the journey so far. And then we'll jump into the questions.

Sure. Thanks, Rich. Yes. Very excited to release this morning, the news about our Phase IIIs, both in active and chronic TED with our subcutaneous program, long-waited and so very happy to be moving forward to have that. That is an exciting part of our overall thyroid-eye disease approach. As you know, we have Phase III readouts this year. We have top line readout for our active study in September. And we have top line readout for our chronic study at the end of this. So a really exciting year for us. We're -- as we indicated in our press release this morning, we'll initiate the Phase IIIs for active and chronic simultaneously in August, and we expect to have top line data in early 2026, first half of 2026 and then followed by a BLA filing at the end of '26. So we're moving rapidly. We're executing and we've got an exciting thyroid-eye disease. We also have a FcRn portfolio, anti-FcRn portfolio, which we have announced back in October. And we have an IND for our first program there, which is 006, which is an Fc fragment approach, which, as you know, from Argenx and VYVGART that, that is a great place to be. We are the only other that we know of in clinical development with an Fc fragment. So exciting for us there. And then we also announced that we have a program that we refer to which is 008, which is a half-life extension approach for anti-FcRns, which would be, in our view, a game changer. So really exciting portfolio as it's advancing. We'll have NHP data for the half-life extension in the second half of this year. So moving ahead.

Sounds good. So before diving into the Phase III program for the subcutaneous agent. Why don't we start with a couple of general questions? So both of you guys joined Viridian in late 2023. How has that journey been for you so far? What was the state of the company when you guys just joined? What was working, what was not working? And what changes do you guys implement in the company? And where is the company now?

Yes. I think operationally, the company was in good shape. I think we were able to come in and reiterate the time lines that the company had already set. We unveiled the FcRn portfolio, which the company had actually been working on for a few years prior to that, and just that was the original disclosure was when we came on board. The team at Viridian is very good. We're adding and building that out with a lot of really, really great people who are working hard. And as you can tell from our track record of execution. We've delivered our subcu data on time in December, even though we had just started essentially in November. That was a great win because we were able to bring the subcu -- the 003 subcu program forward, which was exciting for us. We enrolled the THRIVE study, the active form for the IV study. We enrolled that on time and in fact, exceeded enrollment, so to speaks the execution. And then we just announced this morning, as you mentioned, the subcu program trial design, which was a successful execution with our interactions with FDA. So everything is, from that standpoint, we came in and we have a team that executes. So that's all really positive.

Fantastic. So the stock has been traded down since the beginning of 2024. What has been the biggest pushbacks that you guys have been hearing from investors and what are investors miss?

Well, I think there is a pushback that the investors are watching Amgen sales of TEPEZZA. We think there's a number of factors there. We're very, very confident that they'll course correct that. I think they're in the process of doing that. They did just close the acquisition in October. So work to be done there. I'm sure they have acknowledged on their calls that they're in the single-digit penetration of the market. We agree. As I mentioned, we enrolled our active study, half of which was in the U.S. We exceeded enrollment that speaks to market demand that remains out there. We -- there's opportunities to grow the revenue side of it for all the IGF-1Rs with respect to TEPEZZA and us, when you look at -- they filed in Europe, they filed in Japan, we'll do the same in subcu is a game changer. Subcu comes in. It will increase penetration in the market simply from the standpoint of more convenience for patients and better access. We can mail an auto-injector to your house as opposed to having to go to an infusion center -- and people often forget that not -- everybody lives near an infusion center. So this will be -- this will really broaden out the market. So we think there's plenty of room to grow in both, we think TEPEZZA sales will increase. We also think that when we get there, we'll be able to penetrate even further.

I think, I got it. So just looking at the U.S. market, right? So there is sales was like $1.8 billion in 2023, which was a little down when you look at just the last 2 quarters compared to the year before. How do you think that the U.S. market, forget about the ex-U.S. and expansion there? Just the U.S. market, how do you think that's going to grow? And where do you think it's going to be at a steady state?

Yes. Well, I mean, I think I would remind everybody that's still $1.8 billion, close to $2 billion market in the U.S. is a pretty healthy market. Even if you assume they're never going to grow it. That's still a good, healthy market. And this is a new start market. This is where it's not a situation where a patient gets put on therapy and they stay on therapy forever. And so we're not in a position where we have to convince people to switch. In a new start market, you have -- it's really symptoms driven, whether you're an active form of disease or where you're in a chronic form of the disease, you are -- you present at the physician's office with symptoms. And moderate to severe TED patients or thyroid-eye disease patients have severe proptosis, meaning bulging of the eyes, redness, pain in the eye, and diplopia, which is double vision, which impairs their ability to read, write, drive, work. Quality of life can be really difficult for moderate to severe TED patients. And so we have the ability with our IGF-1R program to address those. And there's plenty of patients out there given the single-digit penetration of the market by TEPEZZA. And as evidenced by our enrollment in our trial, we think there's plenty of demand there to be had. As a reminder, TEPEZZA did not run a chronic study in their registration study. So they didn't generate the data for payers. And they went back and did it later on a post-approval basis. We are doing that in our original study. So we'll generate that data upfront. And so we expect to be able to piggyback off of their efforts there, too. So I think it's actually the markets served very nicely for us to come in and expand it.

Fantastic. So why don't we move into the Phase III design for 003 that you guys announced this morning? Perhaps you guys -- you have 2 studies going on there, and they look similar to 001 in some ways. And why don't you guys go over some of the highlights from the design that you guys have for both trials that you guys announced?

Sure. Maybe, Shan can take that.

Sure, and I can start. Yes, we're really excited to announce the details of the 2 Phase III programs, which will form the clocks of the pivotal programs for our subcutaneous 003 program. in 2 studies, REVEAL 1 and REVEAL 2 in active and chronic TED, very similar to what we have done and are doing for 001, what we have decided to do is take into each of those trials 2 active dose regimens every 4 weeks and every 8 weeks. A reminder that 003 is a half-life extended molecule against IGF-1R, shares the same binding domain as 001, which when we disclosed the data back in December, we showed that with that PK profile, that 003 can -- based on PK modeling, can achieve or even exceed levels of 001 that were shown to be clinically -- really clinically robust and active in a Phase II study. So we feel great about the potential efficacy of both of these arms. And of course, Q4 weekly with an extended half-life antibody that is an at-home auto-injector self-administered would be a transformative profile for patients. and then Q8 weekly will be an even better profile. And so we're really excited about taking those 2 dosing arms forward, top line data expected in the first half of 2026 with a BLA filing by the end of 2026, which we believe puts us ahead of the other subcu. So also very fast development here that we're excited about bringing best-in-class and first market subcu.

Fantastic. So it has only been tested in healthy volunteers, so not in patients so far. So what gave you guys the confidence to go into a pivotal study straight and then using both the Q4W and Q8W?

Yes. Well, I think the healthy volunteer study just helped us identify our doses. We didn't need to go into a Phase II to figure out what our dosing regimen should look like. As Shan just mentioned, 003 and 001 have the same binding domain, CDR. So the only difference being the half-life extension. So we feel really confident about, obviously, the mechanism of action, but also the data from the Phase I healthy volunteer study that PK/PD modeling showed us what our dose line should be. So there's no need to go through a phase -- a traditional Phase II, we can jump right into Phase III.

I see, got it. So when I look into the exposure levels while looking at Q4W, Q8W, it looks equivalent to the 3 mg per kg and 10 mg per kg from the IV. So why choose the 24 weeks primary endpoint? And I think for IV is 15 weeks. Is there -- is it possible to do Q4W, Q8W, say, 15 weeks instead of 24 weeks?

Yes. It's a great question. Firstly, the subcu is just a different molecule. So we're not trying to compare to the IVs anymore. The IVs with our 0015 doses is designed to be maximally differentiated versus TEPEZZA IV, but that's a different game to keep going with that analogy, the 003 subcu with the half-life extension and potential best-in-class profile a game changer for these patients. And so with that backdrop, and just the next example, every 8-week dosing regimen would be 3 total administrations, 1 upfront, 1 at 8 weeks and 1 at 16 weeks and the Q4 weekly would be 6 administrations. That's a really fantastic dosing regimen for patients and why wouldn't we preserve, try to preserve the efficacy of IGF-1R and go out to 24 weeks when it's already maximally convenient and a great profile for patients?

So essentially, we've established the convenience and now we could just match those exposures to bring the efficacy.

Right, right. Okay. Got it. So you guys also announced part of the plan that you guys will have an auto-injector. So, so far, you guys are the only company that actually gave such specific details and commitment to that auto-injector. So where are you now with that auto-injector development with the pairing of the 003 and when should we expect that pairing to go into the study -- into clinic?

Yes. We haven't really gotten into those details in terms of disclosing that. As you know, devices have their own time line that runs in parallel with drug development. So we -- and as you mentioned, we have a -- we have an auto-injector that's already commercially available. It's -- so we have the device that's available and now we just needed to do the testing to get our drug into it. And that runs in parallel until we can merge the 2, and we just -- we haven't -- and we've got plans to do that.

Right, I see it.

But our launch will be in the auto-injector. That's our plan.

Right? So the study will be in the pre-fill syringe and then at some point...

Yes, we'll start via syringe, but then we have a -- we have plans to introduce it in a normal typical fashion, how you introduce a device into these types.

Which are usually at bridging studies but small studies.

Bridging studies, whatever it is, we haven't disclosed exactly what it is, but again, pretty typical in terms of how to introduce a device.

I see. Got it. How do you define a successful 003 in respect to 001 in terms of safety and efficacy? Do you think it has to show similar efficacy in safety tool or TEPEZZA? If there's a drop in efficacy compared to 001? Is there still value in 003?

Yes, that's a hypothetical right. So I don't know what you mean by a drop in efficacy because it could be offset by something else, right? So hard to answer hypotheticals, but I think you nailed it in the sense that a similar efficacy and safety profile would be a great place to start, simply because for moderate to severe patients, they need that IGF-1R treatment effect size. We have -- as Shan mentioned, we have the convenience locked down with the subcu. And now if we can just -- if we can match that efficacy, treatment effect size, that would be fantastic. So that's what we're aiming for.

I'll add to that with the subcu and dosing at lower exposure levels than the IV. But exposure levels that have already been shown to be -- to have clinical activity, we uniquely are in a position to be able to test this hypothesis that lower exposure levels can preserve the IGF-1R efficacy because we know that's really important for moderate to severe patients, but potentially make the profile, the safety profile even better than the IV versions.

I see. got it. So basically, efficacy expectation is to be comparable to the 001, the IV and the safety, perhaps a better, slightly better safety profile.

Well, we'll see. I mean I think that to the exciting Shan's point is right. I think to the extent lower exposures translates to a better safety profile. Fantastic. We're in a great place to see that unfold. And obviously, the difference between subcu and IV would be Cmax, right? Cmax and an IV is a lot higher and subcu, it smoothed out quite a bit. We're not hanging our hat on Cmax as a driver here. But to the extent, it's similar -- to the extent, it plays a role, then we're in a great place to see that, too.

Okay. Sounds good. Okay. So the Clinic study, is that going to be an IGF-1R naive patients similar to 001's pivotal study.

Yes, it's very similar in the approach, yes.

Is there -- do you guys plan to do an IGF-1R experience patient population at some point?

For retreatment.

For retreatment, yes.

Retreatment is a great opportunity commercially, certainly. I think we're [indiscernible] an opportunity.

Okay. Fantastic. So what [indiscernible] 001, there's a lot of -- there's data coming out, there's pivotal studies coming out only a couple of months away. So very exciting time for 001. And there's a lot of hot topics to talk about. So why don't we switch gears? Okay. Can you talk about the Phase II data that you guys generated and how that compares to TEPEZZA's Phase III in your view?

Yes. Maybe I'll start, and then Shan can jump in. But I think as -- I think that's what we've got people really excited about Viridian is when that Phase II data came out. And we showed across the relevant endpoints, which is proptosis, CAS score and diplopia, we are -- after 2 infusions at the week 6 time point, we showed that we were as good, if not, in some cases, significantly better than TEPEZZA at that time point. So that was really encouraging. A good proof-of-concept study, and that allowed us to really gave us the confidence to move forward into these Phase III studies.

That's exactly right.

Right. So in the 2 patient population, the active and chronic, we saw some pretty high placebo effects there. And so besides running a larger pivotal study program, is there anything else that you guys can do to mitigate the potential of these high placebo effects?

Yes. I think the high placebo effects in the Phase II is largely attributed to the small size. And the way that proptosis is measured is by what's known as a Hertel Exophthalmometer, which is a eye-ruler and the trial conductors or measuring millimeters of changes in proptosis. And that those small sizes, especially in the placebo arm, the noise is quite big. So we have certainly powered our Phase IIIs appropriately for that. So I think that's a great place to be, and it's a metric that is across trials, of course, but we'll be comparable back to TEPEZZA.

I see. And have you guys reviewed that the powering assumptions for both of these studies for 001 and 003?

No, we have not.

I see.

Yes. We have not disclosed the powering assumptions, but what we've done is, to Shan's point, we've powered it sufficiently to overcome those small ends that were in the Phase II, which is just a little bit noisy, but they're certainly directional. So again, we feel good.

I see, okay. So looking at the active versus the chronic population, you see a lower response in terms of -- for the chronic group consistently across yours and TEPEZZA's trials. Does it suggest a lower unmet need for IGF-1R biologics in these patients?

Yes. Go ahead.

Yes. No, we don't think so. So there may be something that's a bit more different about the chronic patients from their response. But in terms of the symptoms that they have, they are still moderate to severe with proptosis, redness, inflammation, swelling, which is measured by the clinical activity score and also diplopia. So these are still patients that have an urgency to treat, if not more, because they are the ones who have experience that initial when they were first diagnosed flare-up of symptoms, gotten over and knew how debilitating that was. And what we hear is the patients who are chronic because they've been diagnosed a long time ago when they see those symptoms flare up again, they actually want to treat that even more because they remember how terrible and debilitating the symptoms were. So we think these patients, there's still a very high unmet need in the moderate to severe tech patients.

Okay. Got it. So you guys are differentiating 001 from TEPEZZA based on the shorter treatment course of 5 doses compared to the TEPEZZA's 8 doses. So the -- your treatment course, the duration shifting we've compared to TEPEZZA's 24 weeks. How have you guys decided on that 5 doses versus like 4 or 6?

Well, I think it's worth to look at when we were looking at it, TEPEZZA had its placebo-adjusted Phase III results in proptosis showed pretty clearly that they were maxing out the benefit around the fifth dose. The incremental benefit of doses 6, 7 and 8 with TEPEZZA certainly not clear. And as a reminder here, there was -- TEPEZZA did not do any dose ranging when it introduced the drug. And so to Shan's earlier point, we're really the first ones that are going to be able to explore the therapeutic index here. And we think with our full antagonist in 5 doses, we will match their 8 doses in terms -- on both efficacy and safety and -- or be similar to. And I think that's just a function of looking at TEPEZZA and the gaps in that development. It's a great drug. There's no criticism of the development other than the fact that it presents a real good opportunity for us given the fact that they didn't do any dose ranging. And I think it's pretty clear that if you have unnecessary doses, why would you give them? And so I think we can come in. And again, in the new start market, this is -- the critical piece is that because it's symptom-driven, physicians will -- patients will come in to see their physicians, they'll have a choice to make when our IV is on the market, forget subcu for a second, but if you have IV versus IV and you've got our 5 doses versus their 8 doses, 10 mg per kg versus 20 mg per kg, 30-minute infusion time versus 60 to 90 minutes and all of that plays into, we deliver about 1/3 of the drug, 2/3 less drug for the same outcomes. And if we have a similar profile, I think that's a no-brainer in terms of when you come in and you have choices to make in a new start market. So that's why we feel really good about where we're situated.

I see. Okay. So why don't you expect or want to differentiate in, say, like safety or maybe efficacy? Like, for example, do you see any chance of faster onset of action or something like that or?

Yes, sure. I think there's upside on either side, but I think our base expectations and a great place to be. I mean, TEPEZZA has really -- has great outcomes for patients, both on the efficacy and the safety. And so if we can be a similar profile, like I said, in that new start market dynamic, that's a great place for us to land. So yes.

I see. So how compelling is this competitive advantage of the 5 dose treatment course? Why can TEPEZZA just like mimic that, that 5 dose in a competitive setting in response to when you guys commercialize 001?

Sure. I think that sounds good in theory. I think that's difficult practically from the standpoint that that's their label and that is also how they're priced? So it gets -- that's going to be difficult for them to be able to do. The vast, vast majority of physicians refer to the label. And so I think competitively, we are in a good position to make the argument that we're still in a fewer doses, less drugs for a similar outcome.

I see.

It's also a different molecule. So there are partial antagonist and we're a full antagonist. And so if and when we get to the point, we hope to be where our label is clearly for 5 infusions, the -- outside of the KOL community, the more general prescribers of TEPEZZA will want to go by label, and that's what we understand is happening in the marketplaces right now that the majority of these patients are completing the full 8 doses of TEPEZZA.

And because there are different molecules, there's no clinical evidence that suggests that their 5 doses would -- in terms of -- there's just not enough evidence out there to suggest that they would -- their 5 doses would match our 5 doses.

Okay. Got it. So among the chronic patients estimated that small subset of these patients experience these inflammatory flares. How are you thinking about that overall opportunity for chronic patients?

Well, the chronic patients, again, as TEPEZZA is generating the data -- has generated the data. And we -- in our chronic study, we showed that these are patients that still have these symptoms of proptosis and pain and inflammation and redness as well as diplopia. So there's certainly a market there to address those symptoms. And that's really what it boils down to, can you address the symptoms for people with moderate to severe symptoms.

I see. Okay. So you guys plan to file the BLA not until late 2025. What are all the activities that you need to do to complete before then?

Yes. I mean it really boils down there, and we've said this before. It really boils down to just a follow-up period for THRIVE-2. So the chronic study, we have year-end top line data this year. And then we just need to complete the follow-up period. And we do have a safety study that's ongoing as well. But that fits well within the THRIVE-2 time lines. So it's really driven by THRIVE-2 at this point. And then we'll file as soon as we can after that.

Right. Is there any chance to file ahead of that?

Yes, we're looking at options. We're looking at different options as to how we can do that, and we'll engage. But we have to just work through the regulators on that in terms of whether it could be done on a rolling basis, but we're looking at everything.

Right, I see. Got it. So you guys are using both the MRI and the exo for your -- to measure the proptosis response at week 15. What's the purpose of using these 2 measurements and what happens if these 2 measurements sort of -- if they're different from each other? Does it present any risks to the FDA regarding how the reliability of these results?

Yes. I mean, I think Hertel has been -- Hertel with exo has been traditionally used in this space. I think it's well known that there's some variability in there, which is why you saw our Phase II when we have the Hertel or the exo measurement and -- but the small numbers makes it a little bit noisy. So that's why we powered the studies. MRI certainly is a more objective because the exo is basically an eye-ruler that people -- the physician holds up against your point. So there's a lot of variability that can come with that type of approach in MRI is just a more objective way. So we want to collect both sets of data and just see and see what that looks like. MRI certainly could end up being something that just gives people a better sense of what the true proptosis response rate looks like.

I see. But if those 2 results though are not consistent with that percent of risk, regulatory risk?

We've seen so far that they're consistent with each other that MRI does have better precision, but I would generally say that the 2 methods should be showing directionally the same results. So we wouldn't expect that to be different.

I see, okay. So we have a couple of minutes left. If the audience has any questions, please raise your hand, and we'll come to you with the microphone. So with that said, why don't we keep going? Okay. So what is the long-term aspiration for Viridian? What would the company look like 10 years from now?

I think it's -- the long-term prospects are fantastic. I mean we're building a great team. We're executing. We are -- we have multiple product candidates that we're moving through clinical late stage and early stage. So we've got a whole portfolio in autoimmune, including thyroid-eye disease, but then with the FcRn, the whole host of autoimmune. So we have an opportunity to -- and I would argue a de-risked opportunity because we're going after clinically validated targets that we'll have multiple approved products, commercial products, and we'll keep looking to grow the company in that way. So we're really excited about what we're getting started with.

I see. And how do you see that longer-term sort of commercial strategy or how want to know how these are going to play out in the market? Like how do you see these 2 products sort of like from a market share perspective and how they will roll out and what's your strategy there?

Yes. I mean we certainly recognize that the subcu with the potential best-in-class offering, whether it's Q4 weekly or Q8 weekly. The convenience for patients, again, an auto-injector delivered to your home, you can self-administer. You don't have to go to an infusion there. We certainly understand that, that is the big opportunity for thyroid-eye disease could change the landscape. But we still think there's a spot for IV. I mean other products have shown when they do IV to subcu conversion that IV sticks around and that there are -- there's certainly patients and physicians that still like to do IV. And so we expect that there'll be a split in that market share, heavily skewed towards the subcu, certainly. We've talked about north of 70% on subcu. And so that's a great -- I mean, in our view, it's a great one-two punch to have for TED patients that's differentiated and again, with subcu potentially best-in-class.

Right. So before we conclude, I don't think we can -- we have to touch on the FcRn portfolio a little bit as well. So 006 and 008, so maybe -- plus an overview of where these are? What are the upcoming catalysts for this? When should we expect to see data?

Yes. Great. So 006 is an Fc fragment, very much like efgart. Again, we really like the Fc fragment approach. We feel like we're the -- as far as we know, we're the only other fragment in development, clinical development, we like that differentiation versus what we've seen so far from the full linked antibodies. And so we have an IND for that program at the end of this year, and we're on track with that. We've reiterated that guidance several times. And then we have our 008 program, which is a half-life extended approach, and that could be a game-changer. That could be a game-changer in FcRns given how quickly they clear and how frequently you need to dose. So to the extent we can have IgG suppression, and we showed this in our humanized mice, where we had very good IgG suppression and we're able to sustain that for a period of time that would be -- would allow us to change the dosing regimen. Again, that would be a game-changer for FcRn. So we've seen the humanized mice data, and now we want to see the primate data, and the primate data is coming in the second half of this year. And what's exciting there as a catalyst is that primate data for FcRn has proven to be very translatable into the clinic. So that's a catalyst in it of myself. So we're excited. Yes, the FcRn portfolio is moving right along.

Got it. Last question from me. I don't see any hands raised. So when you look into the -- when you would start preparing for commercial, is that you. People usually start to prepare when the Phase III data -- pivotal data becomes available. And how is the commercial preparation going in because data coming up very soon? Are you guys already sort of -- like where are you guys in terms of the commercial preparation?

Yes, we're ahead of that time line. And we think that's really important. You can't be prepared enough. We have a great commercial team, a highly experienced group that will continue to build out, obviously, as we ramp up. But yes, we're certainly going to ramp up and be ready for that, and I'm pretty excited about our ability to compete.

Right. And are you guys looking for a commercial partner in U.S. and ex-U.S.

Yes. Look, what we do is we keep our options open, and we talk to people. But with this -- these are certainly for thyroid-eye disease, in particular, I mean, just given the nature of how far along it is, that's certainly programs we could commercialize ourselves. So a partner is not particularly necessary. But again, we keep our options open.

I see. Well, Steve and Shan, pleasure to be hosting you. Very exciting time for Viridian that we look forward to seeing the data in September. Final remarks and final conclusion.

No, as we've said, we're really excited about all the things in our portfolio from thyroid-eye disease. We had a great announcement on our press release this morning for 003. Really exciting about the prospects there. We do think that's going to be potentially best-in-class and could really help a lot of patients thyroid-eye disease and then we have our autoimmune portfolio with FcRns. So we're executing across the board, and we've got a long way to go, and we're looking forward to it.

All right. Sounds good. All right. Thanks, everyone.

Thanks.