Wave Life Sciences Ltd. (WVE) Earnings Call Transcript & Summary

Good morning, and welcome to the Wave Life Sciences WVE-N531 proof-of-concept clinical trial conference call. [Operator Instructions] As a reminder, this call is being recorded and webcast. I'll now turn the call over to Kate Rausch, Investor Relations at Wave Life Sciences. Please go ahead.

Thank you, operator. Good morning, and thank you for joining us today. I will be covering for Kate Rausch, while she's out on maternity leave. This morning, we issued a new release, providing an update on the initial cohort of our Phase Ib/IIa proof-of-concept clinical trial evaluating N531 as a potential treatment for Duchenne muscular dystrophy. A slide presentation to accompany this webcast is available at the Investor Relations section of our website at www.wavelifesciences.com. A replay will also be available on the website following today's call. Before we begin, I would like to remind you that discussions during this conference call will include forward-looking statements. These statements are subject to a number of risks and uncertainties that could cause our actual results to differ materially from those described in these forward-looking statements. The factors that could cause actual results to differ are discussed in the press release issued today and in our SEC filings, including our annual report on Form 10-K for the year ended December 31, 2021 and our quarterly report on Form 10-Q for the quarter ended September 30, 2022. We undertake no obligation to update or revise any forward-looking statements for any reason. Joining me today with prepared remarks are Dr. Paul Bolno, Wave's President and Chief Executive Officer; and Anne-Marie Li-Kwai-Cheung, Wave's Chief Development Officer. Paul will begin the call with a brief introduction, and Ann Marie will then provide more detail on the data. Following the prepared remarks, we will be available to take questions on the call. I'll now turn the call over to Paul.

Thank you, Kia. Good morning, everyone. We are pleased to share with you a positive update on our clinical trial of WVE-N531 which is being evaluated as a potential treatment for boys with Duchenne muscular dystrophy or DMD who are amenable to Exon 53 skipping. As a reminder, the initial cohort of our Phase Ib/IIa trial was intended to evaluate whether our next-generation chemistry with the addition of PN backbone modification had addressed the deficiencies of suvodirsen, our first-generation DMD candidate for Exon 51 skipping. This study was designed to provide rapid proof-of-concept with a focus on demonstrating muscle concentration, localization of N531 and in muscle cells and the observation of skipped transcript. Based on those results, we had planned to expand the cohort or design a new study, either of which would have been done to evaluate dystrophin over an extended dosing period. We are happy to share that based on the factors I just outlined, proof-of-concept was achieved in the trial. The addition of PN chemistry appears to have led significant improvements in pharmacology and target engagement. This includes high mean muscle concentration, detection inside the myocytes and substantial exon skipping. Additionally, N531 appeared to be safe and well tolerated. All adverse events were mild, with the exception of 1 moderate case of COVID-19. What is unprecedented is that we observe these results in just 6 weeks after initiation of multi-dosing with 10 milligrams per kilogram without the requirement of complicated peptide or antibody delivery vehicles. WVE-N531 is now waived third program in 2022 and first splicing compound to achieve meaningful target engagement. Beyond reinforcing the benefit of PN chemistry and the continued improvements in PRISM, these data also show continued translation of our preclinical datasets in humans. DMD is a severe progressive disease that is caused by mutations in the form of deletions or duplications in the DMD gene, leading to nonfunctional or unstable dystrophin and resulting in muscle degeneration and necrosis. Exon skipping technology, a type of splicing has the potential to induce cellular machinery to skip over a targeted exon and restore the reading frame resulting in the production of functional dystrophin protein. Utilizing PRISM, inclusive of PN backbone chemistry modification, we developed N531 to target complementary sequences in the pre-mRNA, engaging with the splicing machinery to exclude the exon from the final transcript. Worldwide DMD affects approximately 1 in 5,000 newborn boys. Boys with Exon 53 amenable mutations represent approximately 8% to 10% of DMD population. The broader promise of the N531 program is that a positive signal opens up the possibility of applying comparable technology to other splicing oligonucleotides including for the other DMD exon, and we continue to explore the possibility. Our path for bringing N531 to the clinic was accelerated after we evaluated data assessing PN modified oligonucleotides and the double knockout or dKO mouse model, which has a mutation in Exon 23 and typically exhibit the severe and rapidly fatal phenotype. Compared with first-generation chemistry, PN modified compounds led to improved exon skipping efficiency. They also demonstrated improved muscle function, respiratory function and led to 100% overall survival at the end of the study. Our preclinical data for N531 sold a similar story with high dystrophin protein restoration up to 71% in vitro in primary human myoblasts and enhance muscle distribution in nonhuman primate. The level of exposure was even higher in the heart and diaphragm than skeletal muscle. These data were highly compelling and supported investigating N531 in the clinic. Given past experience in DMD, we opted for a proof-of-concept study to rapidly assess muscle concentration and exon skipping. I'll now turn the call to Anne-Marie for a more detailed discussion of the outcome of this proof-of-concept study. Anne-Marie?

Thanks, Paul. To remind you on the design, this was a Phase Ib/IIa intra-patient dose escalation clinical trial. We undertook an open-label design and limited both the number of patients exposed and the invasive assessments undertaken in order to minimize impact to patients while still being able to answer important questions on pharmacology. We enrolled 3 boys who received single escalating doses of 1, 3, 6 and 10 mgs per kg. The 10 mg per kg dose was selected for multidosing. Those same boys then received 3 consecutive doses of 10 mg per kg every other week and a muscle biopsy was taken 2 weeks after the final dose. With the muscle biopsies, we look at 4 criteria. The first 3, muscle concentration, localization in the cell and exon skipping were deemed as key for decision-making in this initial study. We also plan to look at dystrophin protein despite the fact that same dystrophin would have been unexpected at this early time point. Importantly, as setting muscle biopsies for these 4 measures after 6 weeks of treatment meant that we were looking for a pharmacokinetic and pharmacodynamic effects earlier than had ever been reported before in a clinical trial of boys with DMD. As you can see from the baseline demographics, the boys in this study range from 8 to 10 years old with the time since diagnosis ranging from 3 to 7 years. All patients have unique deletions, albeit we would expect all to be amenable to our investigational Exon 53 treatment. All the boys were ambulatory. First, the safety data demonstrate that N531 appears to be safe and well-tolerated in the study. All treatment-emergent adverse events were mild, with the exception of 1 COVID-19 infection of moderate intensity that was then related to study drug. The adverse events since that is related to study drug included headaches and a limited pruritic rash during the infusion of 10 mg per kg. All related AEs were mild, transient and resolved without sequelae. There were no SAEs and no events met the stopping criteria. There were also no dose-related trends through the escalation period or with the 3 repeat doses of 10 mg per kg. We also did not observe any oligonucleotide class related risks such as thrombocytopenia, coagulation issues, complement activation or cytokine activation. Liver and kidney function was as expected for this patient population without any treatment-related impact. Slide 13 illustrates plasma concentrations of N531 over a period of 20 days following single IV doses at 4 dose levels. At the 10 mg per kg dose, we saw a pharmacokinetic profile that at similar concentrations in preclinical models resulted in tissue concentrations that delivered functional and survival improvements. This includes a half-life of 25 days and Ctrough concentrations of 53 nanograms per millimeter. Furthermore, these data has the potential to show -- to support a monthly dosing regimen in the future. Considering the meaningful improvement that the less frequent regimen could bring for boys and their families is something we intend to explore further. Here we see in-large images of myofiber cytoplasm and nuclei from a muscle biopsy from one of the boys in the study. The images were taken using RNA scope, a commercially available in situ hybridization assay for the detection of oligonucleotide in tissues. We observed significant amounts of N531 in the intracellular space, shown in the slide of the red stain around the myocytes. The stars show the myofiber cytoplasm and the nuclei shown with red arrows. It's encouraging to see N531 reaching the right compartment in the cell to enable its intended pharmacodynamic effects. When we look to the muscle biopsies, we also saw substantial tissue distribution reaching a mean concentration of 42 micrograms per gram. Perhaps most interesting, all 3 boys exon skipping data are within a similar range of 47.9% to 61.5%, mean exon skipping was 53%. It's remarkable to see how each boy has achieved significant levels of exon skipping only 6 weeks after initiating the multi-dose portion of the study. This is also the earliest time point in which exon skipping has been observed in a study of boys with DMD. Lastly, we assess dystrophin using the Western blot assay and observed a mean of 0.27% of normal which was below the level of quantification of 1%. This is not entirely surprising given that dystrophin protein production can like splicing of the RNA transcript. And we would expect dystrophin protein to increase over longer periods of time. In summary, we're very pleased that we have achieved proof-of-concept of this initial study cohort. The data clearly demonstrate that PN chemistry improved pharmacology in the setting of splicing in muscle. Based on these data, we are initiating plans to continue the cohort to evaluate dystrophin with longer follow-up. Additionally, we will evaluate the best next steps to take with this program given the evolution of the regulatory landscape in the past year. Notably, we do not expect the continuation of the cohort to change our cash runway, which as we announced last week with our GSK collaboration takes us into 2025. Lastly, we'd like to sincerely thank the boys, their families, the sites and the investigators and the DMD community for their participation and support in this study. We're honored to partner with you as we work to advise innovative science that may bring new options to families impacted by this devastating disease. I'll now turn the call back to Paul.

Thanks, Anne-Marie. In summary, we are excited to deliver target engagement in our 3 clinical trials in 2022 with our PN modified oligonucleotide. In 2023, we are looking forward to continuing the initial WVE-N531 cohort advancing our pipeline of PN modified candidates and bringing a whole new modality into the clinic with our continued focus on RNA editing and up regulation. We'll now open up the call for questions. Operator?

[Operator Instructions] Our first question comes from Salim Syed with Mizuho.

Congrats on the data. Paul, I guess a couple from me and [indiscernible] on -- when you're looking at your dystrophin production here, it looks like a pretty tight range and it actually looks pretty close to what EXONDYS 51 had -- I think they had a 0.28% mean change from baseline, but that was at 48 weeks, you guys are obviously much earlier. So I'm just curious how you're thinking about. Do you feel like you're at where you want to be in terms of just from production with this 10 mg per dose or given the safety profile looks pretty clean that there are possibilities that you could potentially go higher? And then also just a second question here, and I mean higher on dose. On the biopsy, just curious around the tissue concentration there, it looked like it was significantly different than the [ deltoids ]. Just any thoughts around that?

Yes. Thank you, Salim. I'll take the first question, and then I'll pass the second to Anne-Marie. But I think to your question on going higher, we do not believe we need to go higher as we saw from the same and the muscle concentrations. We have a substantial amount of drug in the muscle and in the compartment. So we don't believe this is a function of having to go higher. As it relates to exon skipping, this is the highest reported exon skipping than any study that's been done. So even after 48 weeks and even amongst both the peptide conjugate program and then the unconjugated program. So I think to the question of what we achieved in terms of the proof-of-concept is, at the 6-week time point. So we're comparing that high dose at all time points, including 48 weeks. At 6 weeks, we achieved what we needed, which is a substantial amount of drug in the tissue, getting to the right compartment and extraordinarily high levels of exon skipping. What we've seen in looking and to your point on time and duration, and again, this is the next phase of following these patients out longer, is that we do see the kinetics of dystrophin lagging. We've seen that internally recently as we tried to do more work on DMD exon skipping to dystrophin kinetics it seemed when we looked at comparators. So when we looked at NS Pharma data between 12 and 24 weeks. There is a lag between the production -- act of the skip transcript and the translation into protein. So we do think this is not a function of having to go higher. It's more a function of follow-up to see the translation of that transcript. I think we also believe that rather than just benchmarking against the numbers that they stand. If we continue the study out with repeat dosing and continuing to follow that out longer, we clearly expect there to be substantially more dystrophin as well. So I think given the criteria for this initial study, which was proof-of-concept of did we answer the question from suvodirsen, where we did not see skipping. We did not see protein. We did not see a drug in the cell. The first step was to run a prudent study to answer the target engagement question and transcript. Anne-Marie, I'll turn to you for the question on the biopsy, but I will say that it was important that we did see -- we also saw substantial levels of skipping in that patient as well. And it was tight across all 3 boys. Anne-Marie.

Thanks, Salim. Yes, as you mentioned, persistent's of the 3 biopsy was from a biocyte and the concentration is lower in this sample. Importantly, these are all skeletal muscles and other factors could have been involved such as the timing of the biopsy relative to the last dose and importantly, skipping observed in all 3 patients is consistent, and this would imply we have adequate tissue concentrations in all 3 patients.

Yes. No. And I'll just have 1 more thing to because I think it's an interesting point as we talk about concentration and different tissues. One important feature that we did see in our evaluation in NHP concentration was that heart and diaphragm were actually higher levels of concentration than in skeletal muscle. So it's really interesting as we think about long term, treatment of DMD boys. It's critical not just to address skeletal muscle and ambulation, but really to address underlying respiratory and cardiac challenges. So making sure that you get adequate exposure to heart and diaphragm. So we're encouraged by the preclinical data on exposure we've seen now translating to human clinical data.

Our next question comes from Joon Lee with Truist.

Thanks for the update. What are some of the factors that contribute to the delay between RNA splicing event and protein expression? And are there suvodirsen N53 [ anti-time oligo ] sequences identical. And I have a quick follow-up.

So I think some of the factors that could be, and this is work that is ongoing, and I know lots of -- both we're trying to understand it, others in the field are just understanding it. Dystrophin is an incredibly big gene, I think it's both second largest gene in the body. So some of what people are trying to understand is why is there this lag between creation of the skip transcript and ultimately, that translating to the protein. But it is consistently seen across studies with repeat dosing, repeat administration. We've seen an early work looking at early time point versus later time points. So there is a function of kinetics but it's important to remind that this study at the beginning was determined first before we interrogated a much longer study over a much longer period of time, to make sure we answered the question very quickly, are we actually getting to the target in splicing. So with that answer, we can continue to do the follow-up work around the dystrophin kinetics. And so we are excited to continue to do this work. And I think as we said, this was an early look, and I think we've demonstrated that it was probably a too early look, but again, it wasn't designed that way. I would have been more concerned if we saw flat lines, no dystrophin. So we see high levels of transcript expression, and we see that beginning to engage the machine right now we just need to follow out longer.

And are there other sequences between 531 and -- so there is an identical or are there other sequence differences.

So this, as we said before -- no, it's a great question. We designed this off of following it is different than suvodirsen. Remember, suvodirsen was an Exon 51 skipping amenable program and absence of PN chemistry. So remember, N531 is not just a PN chemistry, but it's targeting boys amenable to Exon 53 skipping.

Got it. Got it. And then can you explain what you mean by dystrophin production being 0.27% of normal by Western blot, but below the level of quantitation. It seems like you just did that, and that's 0.27%.

Yes. So that's -- I mean, we're reporting values. We think lots of people have -- any value, the assay, and this is a standard sometimes the question comes up of are these assays standards. Standard assay run by the runs work for DMD companies. The level of quantification is 1%. So you can look at levels below that. But relative to the standard, which is how this is done, that's the reported number. But that's still -- the level of quantification for the assays is set to 1%. So anything else is an extrapolation once you get below 1%.

Our next question comes from Mani Foroohar with SVB Securities.

The nuances, I just want to make sure I have things straight. You were looking to prove there was differentiation versus suvodirsen, new or suspected from competitor data that it would take time for dystrophin levels to grind up. Even if you saw substantial skipping and chose despite knowing those things to the shortest follow-up in any relevant study. Can you tell me what your rationale was for selecting just a short follow-up, if you had any?

Yes. I mean, I think going into the study, given our past experience where we ran an extensively long study to evaluate dystrophin and obviously saw no exon skipping and drug concentrations in the appropriate apartment. The view was to rapidly assess as we laid out the clinical trial design in a short study with a short time frame, do we engage the skipping machinery, at what magnitude do we do that? And then as we've always said, we were going to look as the question came up, are you going to at least explore dystrophin since you have the muscle biopsies, our answer with yes. but the study wasn't designed for dystrophin. And we always said there was an expansion study on the other side where we would expand the number of patients and that study would be both in duration and power and looking for dystrophin. So I think that's been clear when the study initiated. The key for us was make sure we focus our time, important with the community, too, given our past experience that we see translation from preclinical models to the clinic. And so this was, from the very beginning, a study designed to look at answering those kind of 3 important questions. Do we see muscle concentration equivalent to what we saw in preclinical models for translation? Do we see drug in the intracellular compartment in getting to nucleus, which we didn't see before? And do we see exon skipping? And I think what was interesting in the study was once we did get exon skipping as a percent it trend. So we can look at how much skipping we're seeing, I think the astounding piece of 6 weeks is we're already surpassing all of the other exon skipping data by transcript. So now the confidence to see and continue and follow this for the appropriate measurement of dystrophin is clearly the next steps.

Great. That's helpful. So that being the case, I guess it's not surprising that you'd see skipping quite quickly since that's driven by the mechanism of action to the oligo, whereas protein production is determined by the machinery of the cell producing this substantially large protein. It would seem reasonable given your stated logic that we would see longer-term follow-up from these patients on future biopsies to march out that increasing dystrophin curve at 12, 24, et cetera. Is that something we should expect? And what time horizon should we see that data?

Yes. I'll let Anne-Marie comment. But as he said earlier, that is the next step exactly to your point, for us to be able to continue to do follow-up within this expanded cohort where we can look into the kinetics of dystrophin. Anne-Marie, do you want to add anything?

Yes. We're still exploring how we will continue, but we do plan to continue the follow-up of these patients, as Paul has just suggested. I mean just as a reference, you'll remember that NS Pharma's Phase I/II study of [ dystrophin ], they looked at exon skipping at weeks 12 and 24, exon skipping was 35% at week 12. And that resulted in 1% dystrophin, and it was 50% at week 24 and dystrophin at week 24 was 5%. So we would expect to have -- need to have some additional follow-up to follow the kinetics of dystrophin for our patients.

So that's -- I mean, I think, [ money ] to your point, part of the evaluation right now is to look at the kinetics, look at others, look at our early concentrations with repeat administration and pick the exact right time point that we believe would be to capture that dystrophin number so that we get that right in 2023.

We'll share more, obviously, when we have more information in 2023.

Great. That's helpful. So we should expect the 12- and 24-week follow-up in 6 and 18 weeks, respectively. Is that the right way to think about it?

I think the key for us right now, and again, given the short time frame to get that is, we just got the data and are sharing it. I think the analysis we're going to be doing is capturing what that right time point is. And then obviously, providing that update in early 2023 as to what the next -- how people should be thinking about the expectations of follow-up periods. But the key for us is we do know that the next update will definitely be 1 focused on dystrophin to see that, as you pointed out, that translation of impressive skipping translating to hopefully substantial levels of dystrophin.

Great. And you had originally stated this study would enroll up to 15 patients. We have 3 patients of data right now. Is the right interpretation that you're taking the skipping data and not necessarily interpretable, but at least interesting dystrophin data that we have today and just moving forward into a separate extension, are there 12 of the patients are expected to be dosed at this level in this study? I may have missed that, I'm sorry.

Yes. You brought the point that I was saying at the beginning of the design of 2 parts of the study. If you remember, there were 2 kind of pillars. One was an initial cohort that was designed to rapidly assess exactly what we did, which is tissue concentration, muscle localization and exon skipping. And then the plan immediate was on that achieving it, then to go to an expanded cohort in the number of patients. That was what you're referencing would be up to 15. So I think the key now is that given the size and magnitude and recognizing kinetics before we enroll more patients and pick a time point, the goal is to evaluate these patients where we already now have substantial levels of skipping and assess dystrophin and then design the next phase of the study to accommodate what's required as we think forward about the regulatory environment and moving products for. But what you pointed out on that up to 15 was the second part of the study, which was recognizing that this initial cohort was designed to answer that kind of core pharmacologic and expense giving question.

[Operator Instructions] Our next question comes from Paul Matteis with Stifel.

This is James on for Paul. Congrats on the data. Maybe just 1 specifically kind of on the skipping assays here. I guess, how different is RT-PCR versus digital droplet PCR where we've seen that latter assay be used in some other skipping trials. I guess the magnitude of effect be significantly different across the 2? Or is 1 more [ accurate ] in sensitive? Great basically, just to get an understanding of how apples-to-apples can be compared across assays and data sets.

Yes. I mean I think what we've used is the standard assay and regulatory assay in our RT-PCRs beginning, that's been run in the prior approved products that when we think about comparison. There are various techniques that others explore. Anne-Marie, I don't know if you've got anything you want to comment on that?

No, I think you've hit it, Paul. I mean we felt it was important to use the assay that regulators recognize to be appropriate for determining whether a drug is hitting its mechanism of action, anything that's what we've done.

And I'm not showing any further questions at this time. I'd like to turn the call back over to Paul for any call. Sorry, if you have, Paul for any closing remarks.

Thank you. Thanks, everyone, for joining the call this morning to review our update on WVE-N531. I'd also like to thank all the patients and families in the communities we serve as well as the Wave team for your perseverance and dedication. We look forward to connecting with many of you after this call, and we wish you all a happy holiday and happy New Year. Take care. Goodbye.

Well. Ladies and gentlemen, this does conclude today's presentation. You may now disconnect, and have a wonderful day.