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

All right. Good morning. Welcome -- so for the next session, we have Steve Mahoney and Shan Wu from Viridian. Welcome to your second Goldman Sachs conference. And before we get started, I'm going to turn it to you guys for any opening remarks.

Okay. Well, great. Rich, thank you for having us here today. We may be making forward-looking statements during the course of the presentation. So please refer to our SEC filings for the risk factors. We are advancing the portfolio on -- across the board, everything is on track, everything is moving well. We -- as you know, we finished our Phase III studies. Well, we had our top line data readouts for our Phase III studies in active and chronic patient populations last year. Data was overwhelmingly positive across all the endpoints, all the time points. So very encouraging Phase III data. We're now marching towards BLA filing in the second half of this year. We're just waiting for the THRIVE-2 chronic study follow-up period data to come in, and then we'll be able to do that. So everything is on track there. We just recently announced our long-term follow-up data for the ACTIVE study, which looked very promising, answered the question as to whether we would be -- see a durability of response. We thought that was pretty clear from that data, which was great. And we also announced recently our Breakthrough Therapy Designation, which obviously was quite validating from the FDA to get that designation, which essentially says that they feel that we have the potential to substantially improve against the standard -- current standard of care. So that would be -- that's obviously great. It also increases our -- potentially our odds for priority review, which pull in the launch timing. So IV program moving along great. And then we're also enrolling our subcu program in our Phase III studies there, REVEAL-1 and REVEAL-2, that is also all on track. It will have first line -- top line readout in the first half of next year. So the TED portfolio is moving right along and doing well. We also have an FcRn portfolio. We've got healthy volunteer data coming out in Q3 this year. That will help us determine IgG suppression, albumin sparing and we'll get an insight into some dosing. And we think that our development of the Fc fragment, the only other company out there developing the Fc fragment besides VYVGART, and we're pretty excited about that. And we also have our half-life extended version of FcRns, which could be a potential game changer, but we're filing an IND on that at the end of this year as well. So we'll get first-in-human data next year. So portfolio is moving well, well capitalized and we're in good shape.

Fantastic. Obviously, this is a very important year, a lot of execution going on. Maybe just a little bit about what we should expect to see? I know you mentioned you guys are looking to file the BLA for veli. Are we going to see -- are you guys going to show any of the 52-week safety data? Or is that something that you would show to investors? And also, how is the REVEAL-1 and 2 study going for 003? Is that on track to have data coming next year?

Yes. So answering the last question first, yes, 003 is on track. Just a reminder, the subcu antibody and the IV antibody are essentially the same antibodies, the only difference being the half-life extension technology in the subcu. So we do expect that the subcu will behave similarly to the IV antibody because it's the same binding domain, same CDRs, so it will block the receptor in the same way. We saw -- in the healthy volunteers, we saw very comparable PK/PD data, which is what we wanted to see, and that gave us confidence to go right into Phase III on the back of that health volunteer data. BLA filing is on track, like I said, second half of this year, and we're waiting for the THRIVE-2 chronic data to finish the follow-up period, and then we'll drop that into the BLA and then we'll be ready to go.

And will you show the 52-week follow-up safety...

So we showed the 52-week follow-up safety data for the ACTIVE study. We had that -- we included that when we did the durability response on proptosis. The safety profile looked great. Vast majority of any AEs reported that were all mild anyway, they all resolved -- the vast majority of them resolved. So the safety profile and the follow-up period look good, again, as expected.

Right. Okay. Fantastic. So obviously, there's a lot of -- you guys are expecting to file the BLA and then -- and right after that, you would have to prepare for the commercial launch? And how is that part of the preparation going?

Yes, we've had a senior commercial team in place for quite a while, as you should, when you expect to launch. So we've got a Chief Commercial Officer and marketing, sales operations, supply chain, market access importantly. So we've got the team in place, and we've built out our launch plans. If we do get priority review because Breakthrough Therapy Designation can often lead to priority review, it's the same review criteria, we'll have to request that once we file the BLA but we think it increases our odds certainly, that breakthrough therapy can increase your odds for priority review. And if we got that, and we were -- so we're planning as if we're getting that. So we're going to be ready no matter what happens to launch. And we've got a very experienced team to be able to do that.

Fantastic. And obviously, you guys have been monitoring TEPEZZA sales. That's a very important metric to investors, to the market and obviously, to you guys as well. And when you look at that sales, it's been declining a little bit in 1Q '25. What do you think is driving that decline? And how do you think of the overall condition of the market in terms of is it going to continue to trend that way? Or is it going to -- you see a more stability of the...

Well, I think, first and foremost, let's acknowledge that we're still talking about a $2 billion market, right, roughly. So we think that with our IV profile, which we just showed in our Phase III, both in active and chronic, and the differentiation, again, cross-trial comparisons, but the Breakthrough Therapy Designation kind of supports this, is our data looks really good. And we think that, particularly with diplopia, complete resolution, diplopia response, rapid onset of treatment effect and the durability of response and the safety profile, don't forget, we had lower hearing impairment rates. That's a key area of interest for folks on the safety side. We have lower rates despite the fact that we were looking for it versus when TEPEZZA ran their trials, they weren't really looking for it because it wasn't known. So that all, in our view, offers a differentiated profile. Again, cross-trial comparisons, but again, breakthrough therapy supports this. We think that profile being introduced into the market with more treatment options available to patients with 5 infusions versus TEPEZZA's 8 infusions, 10 mg per kg versus 20 mg per kg, 70% less drug going in and getting this clinical outcome, we think that's going to open the door for more patients and encourage them to come in and get access to this drug. So we think regardless of what TEPEZZA's performance is, we think the market is certainly healthy. Look at our clinical trial enrollment, we enrolled over 400 patients in trials last year. There are other trials out enrolling for thyroid eye disease patients as well, but that's pretty healthy demand coming from the market side, and over half of those came out of the U.S., by the way. So we think the patients are certainly there and we think a different profile with more treatment options for patients will drive. And then obviously, when subcu comes in, we expect subcu to be available a year after IV, we think that will even drive further penetration because now we can mail an auto-injector to your house and you're not -- you don't have to go to an infusion center. But we do think, just to be clear, IV will stick around. There are physicians [Audio Gap] patients in a controlled setting and there are patients who want to be in a controlled setting of an IV infusion center.

Fantastic. So when you watch TV, you see a lot of DTCs on TED from Amgen. So there's a lot of awareness going on. And then I think Amgen has mentioned that they've been getting good traction with the ocular specialists and they're looking to expand to ophthalmologists and endocrinologists but that seems to be a little more challenging to do. How are you guys thinking about sort of the commercial in terms of what you need to do to build awareness? Do you feel -- are you looking at the three sort of class of physicians that you would want to target? Are these the same type of physicians? And also, how do you think about the awareness that's being created? Do you have to come out and sort of match the same sort of like awareness DTC campaigns?

Yes. First, I think everything that they're doing is, benefits us. They're educating patients, disease awareness, they're educating physicians on IGF-1R inhibition and they're educating payers. So we benefit from all that because, again, we come in with the same mechanism, same target. So our conversations are certainly a lot easier, particularly when you -- when we have the profile that we have. I think we should start there. That's all to our benefit. We actually -- we think that broadening the approach like they've done with respect to more general ophthalmology and endocrinology, those will be -- that's more of a -- in our view, more of a referral network to the neuro ophthalmology and the oculoplastics who are the primary prescribers of -- for TED. Because even in an endocrinology world, you have patients who present initially with presumably with Graves but as soon as the eye manifestation shows up, they want to consult with ophthalmology. And so that's where we think there's 2,000 core prescribers in the U.S., which is a -- certainly a manageable number for a company like us and a company like Horizon originally. The infrastructure we need to build to reach the core prescribers is certainly manageable.

Okay. Great. And then Amgen has also been saying that the U.S. -- that the total addressable market size is about 100,000 patients, of which 80% of those are chronic. However, they continue to say that they only have a low single-digit penetration into that market with TEPEZZA. Why do you think chronic is so difficult? It's been quite some time now since they did their Phase IV study. And how is Viridian better positioned to address the chronic patients?

Yes. First, I think we think the market is actually bigger than 100,000. You can see in our deck, we talk about it more like 190,000, closer to 200,000 patients with moderate to severe. We agree that the large proportion of those are going to be in more chronic. But that means there's still also an incident population of roughly 20,000 new patients coming into that pool every year. And that is based on a number of different research. But if -- with their single-digit penetration that you referred to, we agree with that. We think that, that number is small. Now their ability to penetrate into chronic, it's hard to say, except for the fact that we think that there was more response that you could achieve in the chronic and I think our data is differentiated on that, again, it's cross-trial comparison, so you have to put the caveats on that. But our chronic data is really compelling. I mean if you look at our diplopia response, diplopia is double vision. If you look at our diplopia response and our diplopia complete resolution, so your double vision going away, that our numbers were really impressive. So we think that's going to drive better penetration to the chronic population. Again, our safety profile helps with that analysis as well. The physicians we've talked to have been very excited about our chronic data. So we think that we can drive better penetration on that basis.

I see. And then looking at your data, do you believe that the same treatment regimen is needed for chronic compared to the active patients because their inflammation is less severe? I mean I'm wondering if a shorter or a lower cost sort of treatment regimen is more suitable to help encourage use and help penetrate the market a little bit better and maybe with the payer reimbursement.

Well, in fact, I think if you look at our chronic study, to get into the study, you have to have 3 millimeters of proptosis above normal. So by definition, these are proptotic patients walking in the door. They also -- we also ran, which is different than how TEPEZZA designed its studies, we -- clinical activity score is on a scale of 0 to 7. TEPEZZA studies were limited to patients with 0 or 1. And these are -- clinical activity score is a proxy for pain and inflammation, redness, like gradiness that people feel in their eyes. By limiting it to 0 or 1 like TEPEZZA did, by definition, those are people who are not necessarily complaining about their pain. When we ran our study, we had patients with 0 or 1, but we also had a number of patients with higher CAS scores than that, which indicates -- clear indication that the chronic market has proptosis, has pain, has redness and diplopia. I mean we had a large portion of our patients in the chronic study had diplopia at baseline. So these are people that are certainly symptomatic. And that's why we designed the study that we did to make sure that we got the most representative population for chronic. Now we can have our chronic data in our label -- just as a reminder, TEPEZZA's does not have chronic data in its label. It's got a broad indication statement but not the data. And so we're going to have that on day 1. We are -- the payers are fully aware of what IGF-1R inhibition can do now on the backs of TEPEZZA. And so we just think we're in a better position to drive that penetration into the population.

Great. And then in May, you guys announced that you guys received a breakthrough designation from the FDA. How beneficial do you think this is to maybe -- I mean, there's a big benefit to the regulatory path, obviously, in terms of how the market is going to be perceiving by getting that feedback from your KOLs, clinicians, being more on their radar and how -- maybe tell me a little bit about the awareness of that? And then what is the path for the breakthrough designation for -- to the priority review? Like what do you have to do to get to that priority review?

Yes. Well, I think, first and foremost, breakthrough therapy is a recognition by FDA that this is a serious condition, right? I think that's certainly true. And then what it does for us in terms of the benefits for us is, obviously, there's a more formalized, clear communication channel with FDA, although we were having great alignment in communication with FDA in any event. So that is one component of breakthrough. The other component, which you referred to, is the increasing your odds for priority review. They are distinct designations, but they're based roughly on the same criteria. So you can't ask for priority review until you file. We will -- when we file, we will put that request in, and again, we think it has increased the chances of us getting priority review, which would be fantastic if we could pull in our launch timing. And again, as I've mentioned in the beginning, what breakthrough therapy is, is a mechanism by which FDA actually compares your data to the standard of care. And for them to come out and say, we grant you breakthrough designation, that is essentially indicating based on the definition of breakthrough that we represent a potential substantial improvement over currently available therapies. So a great place for us to land with our alignment with FDA.

Fantastic. And you guys show -- earlier, you mentioned about this, that the positive long-term durability study for data for the Phase III THRIVE study. And I think there, you showed about 70% of patients were able to maintain the proptosis response at week 15 all the way through week 52. How do you -- how does this compare to the long-term data for TEPEZZA? And also, do you believe there's a meaningful differentiation from a longer-term durability perspective compared to TEPEZZA?

Shan?

Yes, I can take that one. So as you mentioned, we showed really strong durability of response for patients at week 15 who had a response, 70% of those maintained their response at week 52, which was really good to see. The number that is in the TEPEZZA label is 53%. And so not making any cross-trial comparisons, but we feel really good and confident about the number that we have reported on at week 52. Ultimately, at the end of the day, the question that was still remaining out there was whether veli with a 70% less drug, 5 infusions or fewer infusions than TEPEZZA, whether the strong responses that we saw at week 15 would continue. And I think we answered that with this data. And I think that's durability numbers that we would expect to be in our label, which again, is a very strong position for us at launch.

Great. And then how do you think about the patients who did not -- were not able to maintain their proptosis response to 52 weeks? Any implication there for potentially a weak treatment?

Yes, it's -- so just a reminder that the vast majority of patients did maintain their response. So we're talking about a minority of patients and this being an autoimmune disease that can have ups and downs and reactivation of the disease as some of our KOLs referred to it. So it's not unexpected to have some patients who don't maintain that response. We think retreatment is absolutely an opportunity and based on real-world data today, we do know of some patients that are getting retreated with the currently available IGF-1R. And the good news is they seem to respond again in KOL support retreatment. So that's something that we will be exploring and looking at as a potential.

Okay. Fantastic. And in terms of veli's durability in the chronic patients for the THRIVE-2, will you be showing that data as well when that becomes available? And also, how are you guys looking at the expectation for that? Are you going to benchmark to that 70% in the active patients? And is there any risk that the durability for chronic may not be as robust compared to the active?

I think if you look at all the data we've put out to date, it's completely consistent across endpoints, time points, durability time points, safety side, again, breakthrough therapy kind of a validation of all of that. So the antibody has answered every question all along the way. So whether we put -- we don't have the THRIVE-2 data follow-up period yet. We don't have all that data yet. But we -- it is the last piece of the BLA. So we will be scrambling to get that into the BLA, so we can file as quickly as possible. So what -- our plans for whether we put that out or not, I don't know if we need to. It will be in the BLA anyway and maybe we'll have it in the medical congress at some point. But I think we've answered the question on durability of response, whether the drug could actually do it or not given the amount of drug that we're putting in. But we'll have the data eventually and we'll get it out at medical congress or it will just be in the BLA.

Fantastic. And then obviously, I think for safety, I think this is important to mention that you guys have a lower -- placebo-adjusted hearing effects are lower compared to TEPEZZA. How important is that? I mean we talked about -- I mean, for the longest time, you guys talked about having 5 dose instead of 8 would be a major differentiation. And having that sort of that slightly better, lower hearing effects. How important do you think is that to the clinicians when they're looking -- deciding between treatment options?

Yes. We do think it will be helpful as a part of the overall package of efficacy and safety that we're delivering. And of course, the fewer infusions and shorter infusions that comes from veli. It's a benefit risk conversation that physicians will have with patients. When we first showed the data to some of our KOL advisers back when we reported on the Phase III data, one of the things that they talked about was it makes the conversation that they have with the patients much easier. Now that the available therapy has been on the market for 5 years, patients know this can be a side effect and they go on Google, they go on online forms and they go in and ask their physician questions about hearing impairment as a potential AE. And so that is a conversation that many physicians are having with the patients. And so the fact that we can give them, the physicians, a chance to have an easier conversation, I think, is definitely helpful for our overall profile. A reminder that the overall hearing impairment, we're not really talking about reductions in hearing function. The vast majority of these are mild events like tinnitus, which is a ringing of the ears or hearing some echoing of one's voice, and almost all of it resolves when the patients come off of therapy as we also corroborated with our week 52 data. So this is a manageable risk profile for physicians. They're very comfortable managing hearing impairment as a umbrella set of potential AEs, but anything that we can do to make it easier for them to have that benefit risk conversation with the patient would be better.

Great. And then I know we talked about the U.S. commercial prep and how that's ongoing. How do you think about Europe? Is the plan to also file the regulatory submission for EU sometime in 2026? Or -- and how are you thinking about commercializing veli in Europe?

Yes. So we're trying to keep all our options open ex U.S. certainly. We think from an epidemiology standpoint, Europe is certainly a viable market. We'll be curious to see how pricing works. Obviously, that's a key component to any European launch or commercial opportunity. But we did guide that we would have our MAA filing in the first half of '26. So we're going to get the BLA in. We designed the Phase III studies in -- with Europe in mind as well. Meaning we have an end point in there that the European regulators want to see, which is the overall response rate, which essentially is just your proptosis response and your clinical activity score combined. So we had that in our study to begin with, knowing that, that's what Europe would look for. So we'll be ready to go. We just need to switch from BLA into MAA once we get in and then -- and of course, we're just watching how Europe develops in the meantime, and we're just keeping our optionality open. We don't have to spend any money from that optionality, which is always great. And then other parts of the world, the normal markets like Japan, we're looking at what we're going to do there as well. So we have all our options open. And just a reminder, TEPEZZA has been on the market now for 5 years, and they're just finally going into Japan and Europe. Horizon was focused on the U.S. So we could skip the waiting period there and get those ex U.S. revenues going as well.

So I know it's maybe still a little too early to talk about pricing, but how are you guys approaching that? Obviously, you have a competitor that already have a price out there. Are you guys looking mostly -- you have a differentiated drug, and that looks better in many dimensions. And how are you guys looking at the pricing? Is it going to be mostly parity? What's your approach to thinking about that?

Yes. Well, first, it is too early to talk about pricing. But yes, we're looking at all of that. Obviously, we spent a lot of time with our market research and are talking to payers. We know what the current price is for TEPEZZA and we are looking -- I think all we could say really at this point is we would probably price on a per course of therapy like they do. But other than that, more to come later.

I see. And also the payer coverage. I think one thing when we look across all the payers is that they all limit TEPEZZA's use to once per lifetime. There are some retreatment possible for that. Maybe comment about how do you see the payers looking at another drug in this market? What's important to them? And do you think they would loosen up at some point at that once per lifetime for veli? And what do you need to do to show there?

Yes. I mean I think they'll do that in response to data, as always. I think in terms of making progress with payers, TEPEZZA is already doing that. They were -- on the chronic setting, they got pushed back from payers because they did not have any chronic data at launch. They ran a chronic study 18 months after approval, generated that data, it was available in 2023. Like I said, they had a limited trial design with respect to particularly clinical activity score 0 or 1 but they've made progress. In their last call, they indicated that they had jumped from 55% commercial insurance coverage up to 85%, which is all good for us. Just as a reminder, this is all good for us. They're clearing the way for us to come in and have a differentiated profile that we think will be more palatable to payers anyway. So this is all good lead work that they're doing for us. And we think based on our market research and based on our talking to payers, we think we're going to be in a good spot.

Okay. So the VRDN-003, the subcutaneous formulation, you have two ongoing Phase III studies, data is coming out next year. How are you thinking about what's the expectation for that in terms of what do you need to achieve? Are you benchmarking to veli -- to veli's Phase III study? Is that sort of the goal for 003?

Yes. So we have both of those two ongoing studies, as you mentioned. We think 003 is a derisked approach given the data that we've generated with veli. Back when we designed the REVEAL-1, REVEAL-2 studies and the decision to take a Q4 weekly and Q8 weekly active dosing arms into that study, that was all based on being able to achieve similar exposures of veli at 10 mg per kg and 3 mg per kg IV, respectively. And that was -- both of those dosing arms show really great efficacy back in the Phase II trial, which of course is now 10 mg per kg IV, we've seen spectacular data from THRIVE and THRIVE-2. So we think the efficacy and safety for 003 is derisked coming out of what we've seen for veli, both from an efficacy standpoint. And then to the extent that lower overall exposures, even Q4 weekly with a subcu smoothing out Cmax but in particular, with Q8 weekly being more at the exposure levels of 3 mg per kg, to the extent these lower exposures can lead to an even better safety profile while preserving the efficacy of IGF-1R is a really exciting place to be for the 003 studies. On exact expectation setting for those two studies, we haven't gone -- come out and set that yet. But we do believe that everything we've generated with veli IV and because the two molecules share CDRs, have the same pharmacology, we would expect to behave similarly, interact with the target in the same way at the same exposure levels, we feel really good about the REVEAL-1 and REVEAL-2 studies.

Got it. So you haven't set expectations, but when -- how should the market look at this? Is it -- does it have to be as good as veli or if it comes slightly below that for efficacy? Is there still value in that?

Yes. I think the way that we look at it is providing more options for patients, a subcu option, whether it's Q4 or Q8, both of those would be best-in-class regimen for subcutaneous. There's nothing out there that we know of that is that infrequent and as auto-injector that will be mailed to a patient's home. And at the end of the day, either one of those two options would be great for patients and we give them a range of options, including IV veligrotug as something that they can choose from.

Great. And then looking at both the Q4W and Q8W dosing regimen. Is the plan to take both to commercial? How are you guys going to decide between both of these going forward?

Yes, we'll definitely need to look at the data before making that decision of how we take things forward. But again, as we said, either one of these would be fantastic regimens for patients and it comes down to what the safety and efficacy data shows from the trials, and we'll make decisions accordingly based on that.

Okay. Great. And then for 003, are you guys still committed to launching it with an auto injector? And then how is that portion of the development going for 003?

Yes, it's going really well. Everything is on track as we guided to a top line data first half of next year with a BLA submission anticipated by the end of the year. That BLA submission would be with an auto-injector. So all of that has been worked into the time lines for BLA.

Fantastic. One last question before I turn it to you guys for closing remarks. Anything in the competitive landscape that you guys are still tracking for in TED? Obviously, I think there's a lot of competitors that released data over the past year and a lot of them have been disappointing. And is there anything else that you guys are tracking, anything else that you think could be worth looking more into?

No, it's a good question. I mean, I think that was one of the big overarching questions last year is what about the competitive landscape. The competitive landscape is really cleaned up really nicely in our favor. As you mentioned, there's been a number of companies that have had data that didn't look all that compelling versus what we've been able to offer. And again, when we look at -- it's a cross-trial comparison. When we look at our different profiles in a new start market, I mean, that's the key here. We're not asking anybody to switch. When it's just us and TEPEZZA, we think we -- we're not asking people to switch off TEPEZZA to try us. These are -- everyone comes in the door and we get -- they'll have options with respect to our drug versus TEPEZZA. And we think we're in a good position there. But the rest of the competitive landscape, I think there's either a recognition that the other attempts at IGF-1R inhibition were not that compelling. And then the other mechanisms are not particularly on target. You have broad anti-inflammatories, you have broad IgG suppression. We just don't think that that's on target for the cell signaling that's taking place for moderate to severe patients with TED. So the competitive landscape is cleaned up quite nicely for us.

Well, Steve, Shan, it's been a pleasure hosting you for a second time at the Goldman Sachs conference. Thanks so much for attending. And I'm going to turn it to you for any final concluding remarks.

Yes, sure. Look, bottom line, we have derisked programs, validated mechanisms, clinically validated, commercially validated mechanisms, which is our approach. We like to try to make things better and easier for patients versus what the first entrant, and so all of that is on track. We're executing across the portfolio, and we just continue to march along and keep derisking these programs even further and everything is on track for -- we're going to be a commercial company next year. I think that's a pretty exciting prospect.

And we're continuing to advance our FcRn portfolio as well, which very much fits into that derisked and exciting development path for a derisked market.

Great. Thank you.

Great. Thanks, Rich.