CRISPR Therapeutics AG (CRSP) Cowen 43rd Annual Healthcare Conference (Transcript)

CRISPR Therapeutics AG (NASDAQ:CRSP) Cowen 43rd Annual Healthcare Conference Call March 6, 2023 10:30 AM ET

Company Participants

Sam Kulkarni - Chief Executive Officer

Conference Call Participants

Tyler Van Buren - Cowen

Tyler Van Buren

Good morning, everyone. Tyler Van Buren here senior biotech analyst at TD Cowen. Thank you very much for joining TD Cowen’s 43rd Annual Healthcare Conference. For next session, it’s a privilege to have CRISPR here and in particular, Sam Kulkarni, the CEO. Sam, thank you very much for joining me.

Sam Kulkarni

Thank you for having us.

Question-and-Answer Session

Q - Tyler Van Buren

So, before I get started, if you have a question in the audience, feel free to raise your hand. We will try to get it in. But let’s go ahead and kick things off with exa-cel. So the EU filings were completed and validated. You guys are going to complete the rolling BLA submission by the end of the quarter. So, what’s left to do to submit that rolling BLA? Obviously, we are getting here towards the end of the month. And I guess, what’s the FDA feedback been like during the process?

Sam Kulkarni

Well, we are – first of all, this is a very important year for genetic medicines. And exa-cel is sort of at the vanguard of that in cell and gene therapies, exa-cel will be the first CRISPR-based therapy to be approved in globally and we are very excited about the progress. We completed our European filings in end of last year and they were validated by both the MHRA and the EMA, which is great news. We have got – we began our rolling submission in the U.S. in November last year. In fact, one of the first modules went in at the end of last year and we are – will do the remaining part of the BLA in the process of doing this quarter. So we are sticking to our guidance around completing the BLA filing this quarter. Beyond that, obviously, we will see what the response would be in terms of PDUFA dates etcetera or whether it’s an AdCom. But so far, I think we are all focused on just getting the BLA done.

Tyler Van Buren

Okay. And in terms of launch preparations, is it a coordinated effort between you and Vertex or is Vertex taking the lead and how are those expected to progress through at the end of the year?

Sam Kulkarni

Yes, it’s going to be a very important launch, because also different kind of launch relative to most other pharma launches, right. I mean, we have obviously seen some AV launches or some cell therapy launches in the past. But this is a very important one in the sense that it’s a disease that has a high unmet need. There is no other options for these patients with sickle cell disease or transfusion dependent thalassemia. And I think it does require different kind of launch than a lot of the other medicines. It requires coordination at the site level. It requires sort of a global planning around supply, because we have a redundant manufacturing – set of manufacturing facilities, but we do need to coordinate that across different sites. It does require lot of coordination with the payers. So it’s a more involved, more nuanced launch. Vertex has tremendous capabilities on commercialization, especially in rare diseases. And while we are helping them, I think they are taking the lead in doing the commercial launch and launch preparations. But so far, I think we are very encouraged by the feedback we are getting and encouraged by the level of energy there is behind this across the ecosystem.

Tyler Van Buren

Okay. And how many sites do you guys plan on having up and running by the time you launch and how can that expand over time?

Sam Kulkarni

There is something that Vertex, we had caller on the last earnings calls while they have 75 sites identify 15, the U.S. 25 and Europe which are qualified to administer a therapy like this. The sites need to be relatively experienced with transplant procedures that are relatively seasoned when it comes to managing the patients post-transplant. Now, all 75 won’t be active at launch. I think we will bring them on board gradually, but a fair number of these sites will be ready to go, especially in the U.S. where you want to capture the big populations that sickle cell disease, especially in the south, states in the south where you want to have these ATCs ready to go and fully ready from Day 1.

Tyler Van Buren

Okay. And so I imagine you guys will get a priority review. Obviously, the advantage of a rolling BLA submission is the FDA can look at these modules in advance which you kind of alluded to. So, all signs are pointing to an approval in the second half of the year. When we think about how the launch will proceed with respect to treating patients what’s that time from patient identification to treatment look like and how should we expect the early innings of the launch to go?

Sam Kulkarni

Yes. I think, the first step would be as soon as we launch is to get patients who are – who raise their hands to come into the process, I think there is a scheduling aspect to all this, you have to collect their cells, send it to our manufacturing facility, manufacture it, send it back to the site. It resembles a lot, it looks a lot like some of these elective medical device launches, let’s say you are going to go to a hip transplant – hip procedure or something like that you go get the measurements, pick out the implant, you are going to get, it’s going to get manufactured, it’s going to be ready. And then you pick a date for the procedure. So there is a bit of a time lag between patients coming into the hopper, if you will, to the time they actually get dosed. But it just builds on itself, right, over time, I think you get momentum that accelerates the launch quite a bit beyond the early months.

Tyler Van Buren

Okay. And is there a patient registry that perhaps you guys can start or to what extent can you identify these patients prior to the launch?

Sam Kulkarni

Yes, I think we haven’t commented on a patient registry. But I think what I’ll say is just based on the level of interest and inquiry around our clinical trials, there is a lot more demand than people anticipate. And there are a lot of patients who are saying, kind of lot done living with this disease. It’s a terrible disease. I don’t know what’s going to happen to me 2 weeks from now let alone 20 years from now. And I think there is a set of very educated thalassemia patients as well that are saying, every year that I wait, I am undergoing more organ damage. And I want to be part of these – part – I want to take a chance on a medicine that could be potentially curative. And so I think there will be a significant demand upfront. And we don’t have to do too much around that pre-launch.

Tyler Van Buren

So I won’t give away the results of our non-malignant hematology panel. But last October, when we asked about exa-cel relative to [indiscernible], there seems to be a somewhat of a preference for exa-cel. So why might that be? What sort of – what are the KOLs or the physicians latching on to that they could potentially find attractive over [indiscernible]?

Sam Kulkarni

Yes, Vertex has done a lot of work around physician preferences and patient preferences in the places that we have been involved in quite closely as CRISPR. And personally, I’ve been – I have seen as part of panels or discussions that I’ve been attending or being part of, I would say, with the patients themselves or the parents of patients, there is a significant preference for a CRISPR based approach, whatever the reasons are they – whether it’s potential safety, potential elegance of the approach relative to lentivirus, there is a strong preference both are available, I’ll probably go with the CRISPR approach. With physicians, it’s more nuanced. I think there is different physicians and treating centers that have different experience levels with one or the other. They will say, I want to look at the full data that at the time when the – of approval, I want to compare based on these aspects or say, we will see how the support level is around using a therapy from your company versus something else. So there will be more to – more in that mix. I am less worried about us versus Bluebird at this point versus the category buildup. I think that’s really the key is, how do we build a category that’s completely novel in industry? In fact, we get a lot of questions like these from pharma companies, they are trying to watch and say, what’s going to happen with some of these launches? Because, there is a point of reckoning that pharma companies are going to have, they either have to – they are going to have to build these capabilities, which many pharma companies have said, let’s see what the telltale signs are before we jump in into the – into these categories. And so really, I think it will be a combined effort in a way to build a category and we appreciate everything that Bluebird is doing in educating patients, educating physicians, educating parents.

Tyler Van Buren

So how big of a category do you think this could be?

Sam Kulkarni

Well, that’s – I do think there is going to be a significant drug in terms of given the level of unmet need, given the support there is in system for a solution for sickle cell, hard to believe it’s over 100 years since we identified sickle cell as a disease. And with the recent surprising data from the full Phase 3 pembrolizumab, we are back to square one there is literally no drug available for sickle cell patients and then transfusion dependent thalassemia. Again, there is very little options. People think, yes, you can solve it with monthly transfusions. That’s a pretty big burden. If you ever talk to patients that go through monthly transfusions, you have all sorts of happen, you have patients that have inflammation from these transfusions, you have patients that have the ebbs and flows of their RBC levels that causes other effects, visual acuity losses, things like that, that people don’t –unless you live with it, it’s very hard to imagine what they go through. And a solution like this can have a transformative impact on these patients. And so I do think this exa-cel will give meaningful drug in the industry.

Tyler Van Buren

Okay. So you spoke about more experience with the data nuance, the full dataset, obviously, the last update we got was at EHA last year, great results in all the patients, but still not everyone past 12 months. So when should we expect a more robust dataset this year and what can that look like?

Sam Kulkarni

Yes, absolutely. I think Vertex and us are actively discussing this. We do want to put more data out there. But I think at this point, we have our hands full. That’s one of the reasons we didn’t have another dataset at ASH last year. We are just heads down right now just doing everything we need to do to complete the BLA filing. And beyond that, we will have a little bit of breathing room to say when do we want to put the rest of the data out there, we also want to make sure the data cuts and everything else coincide with what we are doing for the regulatory process as opposed to a completely different process that adds to the amount of work that teams need to do. But we hope to get more data out there this year.

Tyler Van Buren

Okay. And you guys have ongoing efforts to identify a more mild conditioning regimen. So can you give us the latest there and when that might potentially make it to market or at least when we will see Phase 2/3 data that could derisk the approach?

Sam Kulkarni

Yes, this is a very high priority for both Vertex and us. And in fact, I would say between the efforts that Vertex is doing and what we are doing a probably more than many other companies out there, that we are claiming to do conditioning agents. It’s not a very straightforward thing. You do need to identify an agent that hits a certain pharmacodynamic window. You need to be potent enough to go kill the existing stem cells in the marrow, but then disappear as an agent before you have any impairment of the drug product. So you need that short half life, but you need that quick hit as well without any toxicity. And so it takes a lot of expertise around just the target biology and the know-how of creating ADCs that can fit the profile that you are looking for. So we do – we will have more updates on the progress we are making there. There is some obvious targets, like [indiscernible] and some other non-obvious targets, but we are making good progress. I don’t think it’s going to be something that comes into play in the market in the next couple of years. It will take longer than that. But that’s actually in some ways helps us because we established the notion of how the supply chain works, how the support for the treatment centers work over the first 2 to 3 years before something else could conceivably come into play.

Tyler Van Buren

Okay. And the final question on manufacturing capacity, will there be any constraints early on or how many patients could you conceivably treat based upon the current setup?

Sam Kulkarni

No, I think we have done everything we can to make sure that we don’t – we are not in a constrained world in terms of capacity. I mean, that said, we may always get surprised with the amount of demand there is. But what we have done is created a multiple manufacturing facilities that are redundant and where we can route the samples to or the harvested CD34 cells. And we have enough capacity that can be easily scaled up if you need to. Now, as we go towards here, three or four of launch, we will have to obviously increase our capacity, but for now, I think we are in a good place as far as capacity is concerned.

Tyler Van Buren

Okay, great. Any exa-cel questions before we move on? Alright. Let’s move to the in in vivo pipeline, so for 210 Phase 1 is finished dosing, should we expect an update by the end of the year?

Sam Kulkarni

So in our – so we are quite committed to regen med as a franchise and the ultimate thesis behind this is the last 20 years have been lot of work around iPS cells and embryonic stem cells to create different organ systems. And there is a huge unmet need. I was looking the other day at the waitlist for kidney transplant, it’s 95,000 long. And you just won’t get – most of these patients just won’t get another kidney. And so there is a way to differentiate iPS cells into different organ systems. But they can only be mass produced if they are stealth. Otherwise, if you are doing a bespoke patient-by-patient, it’s never going to be a real commercial success or it’s never feasible from an economic standpoint. So, if you are going to do this with CRISPR, our gene editing, there is a certain set of edits that become very important. We have filed a lot of IP on a combination of edits, though, and we started with the type 1 diabetes setting because one, there is a strong unmet need there. But with for pancreas, there is proof-of-concept in the fact that the Edmonton Protocol, which uses categoric islet cells as a transplant modality does actually work. There is patients who are insulin independent 20 years out after categoric islet cell transplant. And you can actually differentiate iPS cells or embryonic stem cells into islet cells. With our edits and we have filed extensive IP on β2M, PDL1 knock-in, HLAE knock-in, C2TA etcetera. I think we were building a core set of capabilities on regen med, that along with the manufacturing capabilities will allow us ultimately to do many different organ systems. And we are just scratching the surface here. With diabetes, what we did is we did VCTX210 and then VCTX211 with our partners ViaCyte. The notion being we wanted to do a safety sort of running with 210 with a smaller number of cells. It wasn’t targeted to delivering insulin independence or significant reduction in insulin. It was, can we put islet cells in a device and implant that device as a credit card size device, under your skin in the patients and do it safely and demonstrate that we can do that with a handful of patients. And we have enough confidence that we have done that safely. Now, that allowed us to move into 211. And 211 is optimized for cell dose, to actually produce enough insulin to potentially render these patients insulin dependent. But also, it’s optimized from a clone perspective. It’s optimized from how many devices you may need to put in, etcetera. And has additional edits to make them more robust cells. This is particularly edits that relate to endoplasmic reticulum stress. And so we will have data as a combined dataset probably between 210 and 211. At some point, we are discussing actually with Vertex on when and how we dispose them.

Tyler Van Buren

Okay. And I guess specifically to 211, which is the optimized product. As we think about previewing that data, what biomarkers will be important in terms of gauging efficacy early on?

Sam Kulkarni

The most important biomarker for cells is C-peptide. So, insulin is produced as pro-insulin by these cells, and then it gets cleaved into insulin, and the byproduct is C-peptide. Most of these patients are actually injecting themselves the insulin, so you have to differentiate between the insulin is injected versus the insulin is produced by these cells. And so C-peptide measures are the key biomarker for these patients. And obviously, there is other biomarkers we look at as well. But if C-peptide level is above, a certain metric, around 500 nanograms per milliliter is actually a very good sign that you are producing enough insulin to render them insulin independent. If nothing else, you are going to reduce the hypoglycemic events quite a bit.

Tyler Van Buren

Okay. I guess as we look to other products in the in vivo pipeline, and a general with gene editing, cardiology applications are obviously potentially exciting in terms of magnitude of the opportunity, but it seems like something that’s very far away, right, and in terms of people actually wanting to edit themselves for those indications. So, I guess the ANGPTL3 program is kind of where you guys are starting, why is that important and how can the progression of that program in the cardiology pipeline play up?

Sam Kulkarni

Well, my take is actually not that far away. There is, people are going to be raising their hands to do this. In 2015, when we started doing the sickle cell program, it was like, this is so far away, who is going to want to edit their bone marrow cells in this indication. And now there is like people coming out, left and right saying they want to do that, in cardiac cardiovascular disease, going to be the same way. I met with someone on Friday, who was taking three drugs to keep their LDL below 15. And the reason is, they have very high genetic LPA. And in their family, they have had a number of cardiovascular events and early death because of that over the last three generations. And so, this person is saying, Gosh, there is an LPA solution, I am definitely going to take that because it’s just based on my family history, this could mean 10 years to 20 years of life. And so what do you see is an increasing acceptance around editing to prevent disease. And obviously, the greatest body of evidence we have is around PCSK9, but it’s also the most crowded in terms of number of options there are. ANGPTL3 is something where there is only one other approved drug. And there are populations of patients that have very, very high triglycerides. So, even if you knock down their LDL, they still have very high cardiovascular risk as these have been shown in natural history studies, with over 10,000 patients that had some naturally occurring snip. And so we are excited to move into in vivo with these indications this year. So, it’s not that far away and started with ANGPTL3 and LPA. Then subsequently, we will do other risk factors as well. And what you can see is, increasing acceptance of – by physicians and patients to do the clinical trial, but eventually in the marketplace as well.

Tyler Van Buren

Alright. Let’s move to oncology and the cell therapy pipeline. So, CTX110, is a potentially registrational file starting. So, what ultimately do you think you need to show in this trial for approval, but also to be competitive and see used in the clinic?

Sam Kulkarni

Yes. I think I think with CD19, generally with our allogeneic cell therapy portfolio, we are pretty excited about what everything we are seeing. We have now dosed over 150 patients with our CAR-Ts. So, we probably outside of Gilead have the biggest dataset, patient dataset for a number of patients dosed to understand what’s going on these patients across different settings with both solid tumors, T-cell lymphomas, as well as CD19 positive malignancies. And that’s we have learned a lot from that, from our experience. And what we have here is CTX110, which is the first generation CD19, which showed that about 40% CR rate with a single dose and about a 20% CR rate, it has the durable CR rate. If you look at six months or nine months CR rates, right. So, half the CRs are maintained durably, which indicates that if you hit the tumors hard early on, you could get high durability. Now, in the real world, you have auto CAR-Ts at about 30% six-month durable CR rates, okay. I think whatever the published numbers on the clinical trials, in the real world you are about 30% and bispecific somewhere in between. So, if we can get to a two-dose regimen with our CTX110 and improve that even by a couple of percentage points, I think it’s going to be a very competitive drug. I think you captured 10% to 15% of the relapsed refractory market. You are talking about a close to a $1 billion drug. And this is – has several advantages over bispecifics. It’s not a nine-course treatment. It’s guys with single course of treatment with two doses. It’s very safe. We had a patient recently come to us and say, they visited us at CRISPR, and they said, when I was ready, when I think of cancer treatments, I am ready to lose my hair. I am like looking at wigs. And I am looking at all sorts of pain, nausea, none of that I felt feverish for a couple of days. And then that’s it, right. And so it’s a very different way to think about safety. And we do think that this will have an important place in the treatment landscape. And by the way, we also are pursuing CTX112, which has the opportunity to up end autologous all together, if it performs as well to autologous.

Tyler Van Buren

Since you mentioned 112, can you just review the improvements with the next gen CAR-Ts and the impact that they might have?

Sam Kulkarni

Yes. So, we made two new edits to CTX112 compared to CTX110. And that’s the tandem combo. We said we don’t know what we are going to do, what I was working on. The obvious edits, people were thinking about where PD1 knock-out and etcetera, etcetera. And what we said is, let’s just do a massive empirical experiment with pair-wise knock-outs and see what pair-wise knock-out look the best. And it turned out that TGFβr2, TGF beta receptor two and Regnase-1 are the two edits that we have picked is the most powerful combination of that lot for T-cells. It was then confirmed independently as we did one partnership with another company that we got the license from them as well around Regnase-1. Regnase-1 is going to be a very important target, I think in the immunooncology. I think it’s been very difficult to drug with traditional modalities like small molecules antibody because it’s intracellular, and it’s a RNA-binding protein that’s very hard. It’s fleeting in the cell, so it’s hard to target. But if you can target at the genetic level, it can be a very important target. It’s basically a regulator of all – of a pro-inflammatory environment around the CAR-Ts. And that’s going to make these CAR-Ts that much more robust and potent. But interestingly, these cells also retain a greater proportion of central memory phenotype, which means they can go longer. So again, these are all data that we will have this year. We haven’t decided when we are going to disclose the data. But this year, we will have data on CTX112, 131 across both hemoglobinopathies and solid tumors.

Tyler Van Buren

Okay. Great. And look forward to that data. And I guess, CTX130, CD70. As you mentioned, there is 131, the next generation candidate, which may make sense to move into renal cell, but the T-cell lymphoma data looked pretty good, so do you move forward in T-cell lymphoma as aggressively as possible to get to markets?

Sam Kulkarni

Yes. At this point, our strategy is to move CTX130 T-cell lymphomas as fast as we can, because again, there is no competition there. Patients with T-cell lymphoma, they are still relying on drugs like romidepsin that were – that didn’t do much at very low ORRs. The ORR benchmark was less than 30% for some of these drugs, ORR benchmark, right. So, there is really nothing there for these patients. And what we are seeing is we are getting these patients into – some of these patients in durable response. Our last dataset, obviously, was at EHA last year. But I think we are continuing to have discussions with regulators. We know on the basis of the data we showed at EHA we got the RMAT designation, and we have meetings coming up with the regulators to discuss what a path to registration might be. So, we don’t have that agreement yet with the regulators. But we hope to do that in the next two months to three months.

Tyler Van Buren

Okay. Well, it sounds like it’s possible that maybe you guys could just enroll more patients in the existing study, essentially file if you get that feedback, right.

Sam Kulkarni

Yes. The key question is, can we count all the patients enrolled so far to just start the new count around that? So, that’s really one of the questions that we want to resolve, and also want to get confirmation that a single-arm trial is sufficient in this setting to get approval.

Tyler Van Buren

Got it. Okay. You guys have had plenty of cash for quite some time. So, what’s your cash runway look like? And what kind of major milestones will that take you through?

Sam Kulkarni

Yes. I mean I think we announced that we had $1.87 billion in the bank at the end of last year. We have the cash runway into 2027. We may never need to raise cash again if things go well. But that said, I think there is an opportunity to invest. We will always raise more money and invested, because at this point, if I look across the industry, we are at a pretty interesting time in the biotech markets. Lots of failures are all around us, but if you think about gene editing, it’s much higher percentage of success across the trials we have seen so far. And so no better place to invest capital than in gene editing plays, as long as you pick the indications carefully, and you pick the type of editing you are doing to ensure safety. So, we will continue to invest aggressively. Right now, we are investing heavily in two parts. One is our in vivo portfolio. And the second is what we call as CRISPR-X. So, we are doing advanced gene editing well beyond things like base editing. That allow us to do precise correction at very specific low sigh in the genome. Allows us to regulatory elements. Allows us to regulate genes up and down based on average genetic editing, things that are going to push us to further preeminence in the gene editing field. I don’t like these terms, when people call a CRISPR 2.03 or whatever. It’s just, we are going to have is a set of different tools for different – that are best suited for different indications. You are going to have indications like A1AT, where a particular type of gene editing modality may be best. Indications like haemophilia, where it’s going to be something different. So, I think we are going to pick what’s best for each indication, based on the indications we are going to go after. And what you are going to see throughout the course of this year is that we unveil more and more the in vivo pillar and additional indications we are going after.

Tyler Van Buren

Okay. Great. So, in the last few seconds, maybe we could close with asking you what aspect of the CRISPR story you believe is most underappreciated by investors?

Sam Kulkarni

Well, I think I was talking to someone this morning. We have seven catalysts this year and people said what, how do you how do you have seven catalysts, we have said we had how many clinical programs in play right now. A lot of cards to turn over. We have data for the next gen CAR-Ts, we have data for diabetes, we have data in vivo programs. Not to mention what’s going to happen to exa-cel and our existing trials with 110 or 130. So, a lot to look forward to. This could be a defining year for our company, which may raise a lot of questions about our strategy going forward in the future. But I am more excited than I have ever been over the last 8 years of our company’s journey for us to make the turn or pivot I would say into the next phase of our growth.

Tyler Van Buren

Wonderful. Sam, thank you very much.

Sam Kulkarni

My pleasure. Thank you.