Voyager Therapeutics, Inc. (VYGR) Earnings Call Transcript & Summary

Welcome to the Morgan Stanley Global Healthcare Conference. I'm Jeff Hung, one of the biotech analysts. For important disclosures, please see the Morgan Stanley research disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. For this session, we have from Voyager Therapeutics, CEO, Michael Higgins; and CSO, Glenn Pierce. Welcome.

Thanks, Jeff.

Thanks for the opportunity.

So for those who may not be familiar with Voyager, can you provide a brief introduction?

Sure. Why don't I -- Glenn, why don't I just say a few words, and then you can comment further as well as, I guess, the best way to think about Voyager these days is we're -- we believe we're a leader in AAV Gene Therapy. We are focused on the CNS, but we're not limited to CNS. And I'd say the -- if there's something to remember, it's kind of our platform right now. Our key platform areas are we've -- are having ability to generate novel capsids that allow for specific targeting of tissues in the body. We have a vectorized antibody platform that allows us to deliver to various targets, and we have a Sf9 manufacturing platform that we think enables our programs. We had half a dozen programs that we're pursuing ourselves, and we have a number of opportunities, we believe, to enable others in the gene therapy space with their programs, based on the capsid work that we've recently released some data on -- back at the ASGCT meeting. So Glenn, would you like to add a couple of additional words and just as by way of introduction of the company.

Is Glenn there?

Don't know if he had...

Yes. So I've had the opportunity to work in Gene Therapy for more than 25 years; and with AAV Gene Therapy, off and on for nearly 20 years. And so have seen a lot of changes in the field. And one of the constants has been the short therapeutic window that we've got as we go in search of a number of treatments for different diseases, especially monogenic diseases. And so what attracted me to work with the team at Voyager really was development of a novel capsid platform that could dial in Tropism or dial out Tropism for given tissues and then allow for systemic administration of vector, allow for penetration through the blood-brain barrier, allow for widespread distribution within the brain as well as Tropism for non-CNS tissues, such as the heart. And so by developing this technology, this platform over the past 5, 6 years, the company is in a position now to have screened through hundreds of thousands of variants and identify variants that are capable of showing 10, 50, 100, or even 1,000 fold increase over parental vectors, parental capsids, of RNA protein generation. So it's opening up the door. And I think the next generation of these gene therapy vectors really resides in getting more specific Tropism to minimize some of the toxicities that we're encountering with a number of the different serotypes today.

Great. Thanks, Glenn. But before we dig into the various aspects of your technologies, a few months ago, 2 of you became Interim CEO and Interim CSO. So maybe for those who do not know you two, can you provide a brief introduction on yourselves and what you envision for the future of Voyager?

Sure. Mike do you want to start? All right. I can -- well, I can start. So Glenn Pierce, I have -- I'm a physician scientist by training. Got my start at Amgen, where I developed -- started the Department of Experimental Pathology and the Neurobiology Departments. I went on to do gene therapy as a start-up for -- in San Diego for tissue regeneration, nonviral vectors, adenoviral vectors. And then I moved on to AAV at a first-generation company called Avigen, where we took Parkinson's disease and hemophilia B into the clinic. We made a number of seminal discoveries with hemophilia B, including the cytotoxic T-cell response to AAV capsid that unfortunately shut that program down, but also opened the door for mitigation of that response that many others are utilizing now in the form of immunosuppression. I went back into some protein engineering work, largely in the hemophilia space, running U.S. research for Bayer Healthcare in Berkeley. And then moved on to Biogen, where I led the development of the first extended half-life products using Fc fusions for Factor VIII and Factor IX. We got those approved in 2014, and I became a consultant at that time, got embedded with a number of different companies in the gene therapy space, in the hemophilia space as well as non-hemophilia space. And then joined the Voyager Board about 4, 4.5 years ago now and stepped in as the Interim CSO to lead the company into this next phase. Michael?

Thanks, Glenn. So my name is Michael Higgins, I'm the Interim CEO at Voyager. I stepped into the role back in May with -- alongside of Glenn, when we made the transition. I've been in the biotech space for the past 30 years in a variety of functions and a variety of companies. I've spent the past 6 years in -- essentially helping to launch companies in a few different forms, helped launch about half a dozen companies over the past 6 years and have spent most of my career really in kind of the early to mid-stage launch and development of companies. Prior to the past 6 years, I was Chief Operating Officer at Ironwood Pharmaceuticals for a dozen years. I joined when the company was just getting launched, a couple of dozen employees. And I stayed with the company through the launch of our first product, and we were at about $500 million in top line sales when I left. So we got to see the entire kind of discovery, development process and the launch of a product. So have a good understanding of what it takes to kind of build value over time in these companies. Prior to that time, I was at Genzyme Corporation for a number of years. Again, in my -- most of my experience there was in one of the smaller business units. I was in the cell therapy and gene therapy space. And prior to that, I helped get an immunology-based company off the ground, took them public back in the early 90s. Have pharma experience prior to that. But mostly spent my career in operations, biz dev, financial-related functions, but as I said, my focus has been on kind of helping early to mid-stage companies build and grow and feel like we're in that exact -- that place right here with Voyager. So it feels like a great spot that I've been familiar with.

You recently refocused the company on new and second-generation programs. What aspects did you see room for improvement with the new programs?

Glenn, why don't you take that one?

Yes. So one of my concerns as I stepped into the company was the work that we had done over a number of years with intraparenchymal delivery. And as you probably know, we stopped our Parkinson's program with our partner, Neurocrine, in advanced Phase II testing because of some MRI imaging abnormalities. And when we stopped to think about intraparenchymal delivery, we have a number of potential issues that have been discovered in primates along the way, but we haven't had much of the choice, because we haven't had vectors that could get through the blood-brain barrier. And so those issues include distribution, high concentrations at the site of the catheter, the need for disposition of high amounts of the capsid in very small concentrated spaces and so on. And so one of the attractive things about the novel capsid program that I mentioned a few minutes ago, that's been ongoing now for a number of years is, the ability to get through the blood-brain barrier. And so that obviates the concern about intraparenchymal delivery, the need for neurosurgery, which comes with attendant risks and potential complications as well. So if we could crack the blood-brain barrier and get into the CNS, then that makes for a number of possibilities for a variety of different neurological diseases, both degenerative diseases as well as monogenic diseases, and it also extends the peripheral tissues, because if we can get through the blood-brain barrier, we can screen for peripheral tissues and cell types within those tissues as well using the same engine.

Great. And then I guess as a result of the pipeline reevaluation, can you remind us how much cash you have and how far that takes you?

Sure. We finished last quarter with $143 million, and the guidance -- we provided that that capital gets us into 2023. I'll add that we have alluded to, I've said it in comments earlier, we continue to look at multiple ways of moving forward. But that's just our cash on hand. We believe that we have potential for partnerships and a whole host of other things that will allow us to move beyond that 2023 time frame. But with our current cash, that's where we get to.

And you mentioned the partnership with Neurocrine. Any update on the program in Friedreich's Ataxia?

So current program is underway. We haven't disclosed a great deal of detail behind that. But we continue to move forward on that program with our partners at Neurocrine as well as 2 other programs that are part of that, that are, at this point, still unnamed. So we continue to maintain a good relationship with Neurocrine and continue to move forward on the research.

Okay. Sounds good. Maybe moving on to the TRACER AAV discovery platform. How does your proprietary AAV capsids compare to AAV9, for instance? And what kind of opportunities does that afford Voyager?

Well, we've done a number of screenings. A number of our screenings have been based off the AAV9 parental capsid and then the other set of screenings we've done so far has been based off the AAV5 parental capsid. Very different Tropism relative to AAV9. And so in the screening process, a number of mutations are made at key places in the AAV capsid. And then it's done in a fashion so that one can screen thousands of variants at the same time and then identify those that are actually doing a better job than AAV9 or AAV5 in making messenger RNA. So that's the key thing. And when one does screening, there's a few things to keep in mind. First of all, screening really needs to be done in nonhuman primates, because the mice will give either false positives or false negatives. And so we need to be close to our own species in order to have some predictability about the viral tropism that we discover being applicable to human beings. That's the first point. The second point is that the screening process that we've developed really involves looking for RNA and rather than just binding of the capsid to the surface of the cell or even internalization into the cell. And that's important because, when the virus gets to the surface of the cell, it binds to a receptor and then it goes through a whole series of steps before it gets into the nucleus, uncoats the viral capsid, forms double-strand in our DNA and then is able to make RNA. If one is looking at the end product, RNA, then all of those steps have to have occurred beforehand. And therefore, if we find a large increase between our new capsid and the parental capsid at the RNA level, it means we've got something that can go through the entire process and give us a substantial increase in tropism. So it's a terrific system and one that is very robust and reliable to be able to make a number of improvements off the parental capsid and get to specific tropisms that not only allow crossing the blood-brain barrier, but allow demonstrating RNA generation within specific cells and specific tissues in the CNS and outside of the CNS.

And what kind of initial data have you generated with the TRACER capsids? And how does that compare to AAV9 delivery?

So we've demonstrated an increase over AAV9 and for some of our capsids, the increases are ten-fold, forty-fold, sixty-fold, hundred-fold, thousand-fold over AAV9, looking at both RNA as well as looking at protein. And so I think the evidence is pretty substantial. We've presented some of the initial evidence at meetings, and we'll continue to generate additional evidence, publish it and present it at more meetings. We have a number of capsids now that we are evaluating in vivo. And we also have the ability to improve the tropism in the capsid. So once we identify a tropic capsid, for instance, is a hundred-fold better than AAV9, we can push that in a couple of different directions. We can push for an increase relative to AAV9 in RNA generation. We also can push for more specificity. So either increasing specificity for a given cell within a tissue or decreasing specificity for a given cell, such as liver de-targeting. And so the whole system is a very powerful one that can allow us to select capsids based on whatever criteria we program in.

And how does the novel capsid deliver significantly higher transgene expression in the brain than AAV9?

Well, a lot more gets through the blood-brain barrier. AAV9, as you probably know, a little bit gets through the blood-brain barrier, but not much at all. And unfortunately, much of the AAV9 goes to the liver where it does cause toxicity. So we have a considerable amount more, multiple-fold, as I mentioned, 50 to 1,000-fold more getting in through the blood-brain barrier. And then at the level of the cells, once it's inside the brain, we are demonstrating a large increase in the amount of RNA that each cell makes substantially above the AAV9, again, 50 to 1,000-fold above AAV9. So in that sense, compared to AAV9, these capsids offer tremendous opportunity to really exploit a therapeutic window that simply cannot be done with AAV9 or for that matter, any of the other natural capsids.

And how does your second-gen Huntington's disease program compare to your first-gen candidate? And what kind of benefits do you think the improvements will translate to for patients?

I think the key thing about the second-gen Huntington's program is the ability, we think, to give systemic delivery. And so with these blood-brain barrier crossing capsids, all of it is systemic intravenous delivery. And so that means no neurosurgery, no risk of neurosurgery for the patients and the more uniform distribution to the areas of the mutant Huntington protein that we are interested in targeting. So we know from animal models, the kind of distribution we get relative to systemic injection of one of these capsids -- these novel capsids versus the kind of distribution we get with intraperitoneal delivery, and it just doesn't compare.

And your TRACER AAV capsid programs are currently in discoveries. So what are the next steps for these programs? And what are the next data that we should expect to see in terms of when we might see the first program with the TRACER AAV capsid enter the clinic?

Well, Michael and I have just come in a few months ago, and so we've reorganized the pipeline, we have refocused much of our efforts on the TRACER derived capsids. And so we're still early in the prosecution. I think I'll defer to Michael to maybe give a little bit more of the time line for us as we continue to push these programs forward.

Yes. Just 2 additional comments I'll make. First, with regard to the specific time lines around the programs, we -- as Glenn said, we're still in the early days of kind of mapping that out. We have a plan in place and identifying the specific capsids for each of the specific programs is kind of early in the docket. But we'll be laying out a more detailed plan for each of the programs coming up early next year. For the moment now, we're just getting the teams lined up to get the plans moving forward. With regard to -- just a general comment about milestones and upcoming events. I do think that the kind of near term, it's -- as Glenn said, we've come in a few months ago now and have started to make the transitions start to happen. I think the near-term items you should expect to see from us in the coming months, relate to our ability to kind of take some of these novel capsids and complete some transactions. We expect to be able to do that over the coming months and beyond. I mean it does take some time, but we're having some good conversations, and we expect that that will probably be the first signal. And we recognize that we need to kind of reestablish some credibility in this space, and we think that those types of transactions will be a good first step to help people see the value of what we're doing here at Voyager.

Great. Maybe moving on to the anti-tau antibody platform. Can you talk about this platform? And what kinds of advantages it provides?

We can. And so this is a platform that got started with funding from AbbVie several years ago now. And it has been ongoing now in -- within Voyager over this period of time. And so we've identified antibodies to tau, high affinity specific for particular regions of the tau protein and are basing some of our decisions on the work of others, both what looks like it's been effective, what looks like it's been ineffective as we move this forward. So we have some passively generated antibodies that have proved to be very effective in animal models, enrolment models of tauopathies and are moving those toward vectorization. Antibody vectorization is a technology we acquired over these last few years through the support of the initial collaboration with AbbVie. And so we now have a group that is quite experienced at whole antibody, whole IgG antibodies as well as antibody fragments. Vectorizing those and then utilizing AAV to deliver those to specific targets. It provides an approach toward getting tau to -- we hope, the right place for the right period of time with more constant levels of the antibody to have its effect on eliminating the tau -- excess tau protein that is found in the tauopathies. So that's the approach that we're taking. A different kind of an approach necessarily than some of the passive generated antibodies, although we could use these antibodies for their utility as protein therapeutics as well.

And you kind of touched upon this, Glenn, but what kind of initial data have you generated that gives you confidence in this approach?

We've used specific tauopathy mouse models that are well-established in the field that others working in the tauopathy arena have utilized and have seen substantial reductions in the 50%, 60% range of protein over a fairly short period of time, reductions of the tau protein. So it's a model that is consistent with some of the best effects that others have seen within -- with other experimental therapeutics and gives us reason to think that this is something that we can continue to advance.

And what kind of tauopathies are potential candidates for this new strategy?

Well, the big one, of course, is Alzheimer's. There are other tauopathies where we have identified increases in tau. I don't think we've made a decision on which particular disease and whether it would make more sense to look at a smaller footprint than Alzheimer's or perhaps somewhat less complicated disease than Alzheimer's. And that's something that I think that we would be very interested in talking with a partner about. As you know, going after a tauopathy is a substantial effort. And so while we have a number of tools that have been generated over the last few years, we likely will need some help to continue to prosecute this towards clinical development.

Can you walk us through your approach on modular antibody vectorization cassettes and the benefits of that strategy?

By modular, you mean antibody fragments.

Yes.

Yes. Well, so we can put a full-length IgG in. And that's very useful, if we're looking for antibodies to be around for a long period of time. They have long half-lives, on the order of 28 days or so. And that gives -- that long half-life gives good constant levels of the antibody without having to generate a lot of protein in the process. On the other hand, if we want an antibody to be able to be smaller, to get into smaller spaces, for instance, we can make a variety of different antibody fragments. Single chain antibodies, fab antibodies, antibody fragments that really just have the binding site. And while those will have much shorter half-lives, they also may have -- may confer some advantages on penetration, including penetration possibly into the cell. That would include bispecific antibodies as well. And as you know, a number of groups have developed bispecific antibodies. Some are marketed, and that offers the ability to bring 2 entities together. And so by being able to develop those as a vector vectorizing it, it opens up other avenues. These are areas, I'd have to say we're not doing a lot of active exploration on other than the proof of principle that we can generate this with the vectorization approach, the cassettes that we built, but it does offer a number of other opportunities that could be pursued with the platform of vectorized antibodies.

And what are the next steps for your tau vectorized monoclonal antibodies? What are the next data that we should expect to see? And when might they enter the clinic?

We're doing some additional, more sophisticated studies in the animal models. And so I expect that we will be able to show those data at an upcoming meeting in the next number of months, whenever the appropriate meeting occurs, probably early next year. And that includes the passively administered antibodies as well as vectorizing at least one of those and demonstrating its activity as well.

Great. Well, maybe in the last couple of minutes, one last question is a little bit more general. Are there any aspects of the Voyager story that you think that investors either underappreciate or that you think that investors should focus more attention on?

Well, probably, it'd be good for Michael and I to both answer that. I can start by saying that in my experience, I'm limited to my experiences in working with AAV, I'd have a series of disappointments along the way with a lack of therapeutic window. And what I do find attractive about this next generation of AAVs, whether it's our screening approach to come up with increased tropism or get through the blood-brain barrier and potentially others in the field as well, is that they really represent the future for gene therapy, utilizing the AAV. And so as we continue to generate more data, demonstrating the risk benefit ratio, the increased therapeutic window, the lack of toxicity, given the therapeutic effect that we're shooting for because of the increased tropism, because we can manipulate that capsid to such an exquisite degree, I think that that's where the future lies. And that's what makes me excited about getting up for work every morning. Michael?

Yes. I'll just add 2 things. First, I would say that in terms of our transition, I think we have been, for a number of years, people have valued us on the basis of clinical programs. And I think we're, in some respects, still suffering from that as we've made the transition away from clinical programs to some -- what we believe are really very exciting, early stage programs. I think the pendulum has swung quite far in terms of our value at this stage, and people aren't recognizing our leading position in gene therapy as a whole and specifically our leading position with these novel capsids. We recognize why, and we totally respect that. And we expect really to build back that credibility broadly in the gene therapy space over the coming months and beyond. But I think as a general matter, I think people have -- because of the setbacks we had in our clinical program, have lost sight of some of the work that we've been doing for some time. I mean this capsid work has been going on for a couple of years now, and you're just starting to see the fruits of that labor. So I think that's my big comment. The other thing I would just point to is, we've touched on a few times very tangentially, but the -- our ability, we've been known as a neuro-focused company, and we still remain that. But we do have the ability to move beyond, and we've started talking more about moving beyond just neuro. We certainly are going to continue our neuro programs, as you've seen and heard in the pipeline. But we will do things beyond neuro, because we believe that the technology we've developed allows us to do so. Not only ourselves, but we think we'll be able to enable others. So we think we're -- there is a new generation of gene therapies coming forward. We think we're in a leading position, and we look forward to keeping the investors up to date, and we really appreciate the opportunity to speak with you today, Jeff.

Great. Looks like we'll have to leave it there. Thank you so much for your time.

All right. Thank you Jeff.

Thank you.

Thank you.