Editas Medicine, Inc. (NASDAQ:EDIT) Q4 2022 Earnings Call Transcript

Editas Medicine, Inc. (NASDAQ:EDIT) Q4 2022 Earnings Call Transcript February 22, 2023

Operator: Good morning and welcome to Editas Medicine’s Fourth Quarter and Full-year 2022 Conference Call. All participants are now in a listen-only mode. There will be a question-and-answer session at the end of this call. Please be advised that this call is being recorded at the Company’s request. I would now like to turn the call over to Ron Moldaver, Investor Relations for Editas Medicine.

Ron Moldaver: Thank you, Sherry. Good morning, everyone and welcome to our fourth quarter and full-year 2022 conference call. Earlier this morning, we issued a press release providing our financial results and recent corporate update. A replay of today’s call will be available on the Investors section of our website approximately two hours after its completion. After our prepared remarks, we will open the call for Q&A. As a reminder, various remarks that we make during this call about the Company’s future expectations, plans and prospects constitute Forward-Looking Statements for purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the Risk Factors section of our most recent annual report on Form 10-K, which is on file with the SEC as updated by our subsequent filings.

In addition, any forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. Except as required by law, we specifically disclaim any obligation to update or revise any forward-looking statement, even if our views change. Now, I will turn the call over to our CEO, Gilmore O’Neill.

Gilmore O’Neill: Thank you, Ron and good morning, everyone. I’m joined today by two other members of the Editas’ Executive team, Baisong Mei, our Chief Medical Officer; and Michelle Robertson, our Chief Financial Officer. Last year was a landmark year in Editas Medicine’s history as our team demonstrated two chemical proof-of-concepts in patients using both in-vivo and ex-vivo therapeutic approaches. In November we announced data demonstrating human proof-of-concept for our in-vivo EDIT-101 AV delivered Cas9 therapeutic LCA-10 an inherited retinal disease. However, due to the limited addressable population we made the tough decision to pause patient enrolment in our BRILLIANCE trial. In December we shared very encouraging initial data from the RUBY Phase 1/2 clinical study of our ex-vivo autologous EDIT-301 therapy in severe sickle cell disease.

The readout provided human proof-of-concept demonstrating that EDIT-301 could safely drive expression of fetal hemoglobin to clinically meaningful levels and correct anemia in sickle cell disease patients, and the study continues to progress. As we move into 2023, we will build on these successes as we continue to drive towards our goal of delivering life-saving medicines to patients with previously untreatable or undertreated diseases. As many of you know, last month, we shared our strategy to position Editas as a leader in in-vivo program for gene editing. There are three underlying pillars of our strategy, which I will recap here. First, we have sharpened our discovery focus to in-vivo administered genome editing medicines, while continuing to develop EDIT-301 for severe sickle cell disease and transfusion Dependent Beta Thalassemia or TDT.

We continue to support our partnered cell therapy programs, but are no longer discovering or developing standalone cell therapies, and we have divested our iNK Cell Franchise to Shoreline Biosciences last month. Additionally, we terminated our AAV IRD program or platform and are seeking to divest those assets. Our sharpened discovery focus allowed us to concentrate our talent, which reduced our headcount by approximately 20% and extended our cash runway into 2025. Turning to our second strategic pillar, we are strengthening our discovery engine and technological capabilities. We have split our research division into separate technology and drug discovery groups, enhancing the capabilities of each. Under our new target selection criteria, we will select therapeutic targets that will allow our genome managing approach to differentiate maximally from the current standard of care for serious diseases.

Our goal here is to build a robust pipeline of assets that maximize the probability of technical, regulatory and commercial success. Our new technology group under the Leadership Chief Technology Officer, Bruce Eaton will focus on targeted delivery and enhancing our gene editing toolbox to enable targeted gene repair. Furthering innovation in our technology platform is a key component to achieving our goals via both internal clinical execution and external business development. Bruce is a biotech veteran who, in addition to his new role would continue as Chief Business Officer to spearhead RPD objectives. Within our drug discovery group, we have begun lead discovery work on in-vivo therapeutic targets in hematopoietic stem cells or HSCs and other tissues.

Our search for a new CSO who will head up our drug discovery group continues to progress and I look forward to updating you on this search and our in-vivo work in the future. Finally, our third strategic pillar is an increase in expanded approach to business development. Going forward, we will pursue the right combination of gene editing and targeted delivery tools through internal development and the in-licensing of complementary technologies in order to expedite our drug discovery and clinical execution objectives. In tandem, we will continue to leverage our IP portfolio to drive potential out licensing and partnership discussions. Moving to our development plans under the new strategy, as we shared last month, we are pursuing a leadership position in HSC therapeutics for hemoglobinopathies by taking three actions.

Photo by National Cancer Institute on Unsplash

First, we have reallocated investment resources to accelerate the clinical development of EDIT-301 for the treatment of sickle cell and beta thalassemia. The positive initial data from our RUBY Phase 1/2 clinical study was a key driver of our decision to invest more heavily into EDIT-301. Second and third, by leveraging our unique and differentiated approach of 301, we are investing to develop milder forms of patient preconditioning as well as develop an in-vivo approach for editing hematopoietic stem cell cells or HSC, both of which should reduce the burden and improve the journey for patients who currently live with sickle cell diseases and TDT. Beyond hemoglobinopathies our discovery and development efforts will be focused on in-vivo administered genome editing medicines in other tissues.

Turning to the clinic. Since, we shared our strategy update last month, we have completed review of the safety data from the Sentinel patients of the RUBY trial for sickle cell disease and have begun parallel dosing of additional patients. We remain on track to provide an update on the RUBY clinical data at mid-year and dose 20 total patients by year-end, an ambitious but certainly attainable goal. On EDIT-301 for TDT, we remain on track to dose the first patient in our EDITHAL Phase 1/2 trial this quarter and provide an update from this trial by year-end. Taking a step back, I’m confident in our strategy, and we remained keenly focused on execution. We are building upon the momentum from our clinical redact milestones during the fourth quarter and our recently announced deal with Shoreline.

We look forward to updating you on our progress and execution of our new strategy throughout the year. Now I will turn the call over to Baisong, our Chief Medical Officer.

Baisong Mei: Thank you, Gilmore. Good morning, everyone. As Gilmore mentioned, last December, we presented initial data from the RUBY trial of EDIT-301. For the first two patients with a severe sickle cell disease, that data for the first patient who had a five-months of follow-up showed clinically significant improvement across all hematological parameters. These preliminary data suggests that Editas has a product candidate that can potentially give robust clinical benefit to patients with severe sickle cell disease, and has the potential for clinical differentiation in the long-term. Specifically, that patient has increased fetal hemoglobin infraction of 45.4%, five-months of EBIT-301 infusion. Above the 30% fetal hemoglobin threshold where sickle cell patient may have no symptoms.

We were also pleased to see that the patient’s total hemoglobin increase by more than four gram per deciliter to 16.4 gram per deciliter well into the normal range of male patients. And finally, the distribution of fetal hemoglobin was highly pan cellular with 96% F-cells and the Mean Corpuscular fetal hemoglobin or the fetal hemoglobin concentration per red blood cells increased to 13.8 pg gram per red cells, exceeding 10 pg gram threshold considered clinically meaningful as empirical evidence indicates those level will prevent that red blood cell from sickle. As we have previously highlighted, EDIT-301 utilize a unique mechanism of action that edit the promoted sequence of the gamma-globin genes to disrupt binding of BCL11A suppressor, mimicking the nature mechanism of hereditary persistence of fetal hemoglobin.

The editing is done by a high fidelity, highly specific engineered AsCas12a enzyme. In turn, this provides a high sustained level of fetal hemoglobin in a manner that can be independent of every through periodic stress, residing in reduced, sickle, and the vessel occlusive events in sickle cell patients, and resolving anemia and transfusion dependence in beta thalassemia patients. Since launching the initial data, we have completed our safety review of sentinel patients from the RUBY trial for sickle cell disease. We are pleased to share that we continue to see a favorable safety profile. After completing sequential dosing of the first two patients, we have commenced parallel patient dosing, means that we can now dosing multiple patients simultaneously and we remain on track to dose 22 sickle cell patients by year-end.

Our initial clinical data were very encouraging, consistent with preclinical data. We are confident we will see replication of similar results in subsequent patients. We have said before that sickle cell disease is categorized by more than just vessel occlusive events. It can result in other severe symptoms such as anemia, fatigue, hemolysis, stroke and other organ damage. As we continue to monitor patients over time, we see potential for differentiation via longer term improvement in symptoms and more durable treatment. Since joining Editas last year, I and the rest of management team has been focused on sharpening our clinical execution. We are very pleased with the momentum of EDIT-301 in both the RUBY and EDITHAL studies. Look forward to updating you as those trials progress.

Now I will turn the call over to Michelle, our Chief Financial Officer, to review our financials.

Michelle Robertson: Thank you Baisong, and good morning, everyone. I would like to refer you to our press release issued earlier today for a summary of our financial results for the fourth quarter and full-year 2022. I will take this opportunity to briefly review a few items. Our cash, cash equivalent and marketable securities as of December 31st were $437 million compared to 620 million as of December 31, 2021. We expect our existing cash, cash equivalent and marketable securities to fund our operating expenses and capital investment into 2025. Revenue for 2022 is approximately 20 million compared to 26 million in 2021. This decrease is mostly driven by a decrease in revenue recognized related to our collaboration agreement with BMF.

G&A expenses decreased year-over-year from 76 million in 2021 to 71 million in 2022. The decrease was the net of an increase in strategy and legal expenses offset by a decrease in legal and stock based compensation. R&D expenses increased from 143 million in 2021 to 175 million in 2022. The $32 million increase was principally driven by manufacturing and clinical related costs incurred to advance EDIT-301 as well as a one-time charge incurred in connection with pausing enrollment in the BRILLIANCE trial. Overall Editas remains in a strong financial position. As Gilmore said, our shop and discovery and development strategy extends our cash runway into 2025. This provides ample resources to support our continued trials of EDIT-301 as well as advancing our research ethics and Hemoglobinopathy and other in-vivo discovery.

And with that, I will hand the call back to Gilmore.

Gilmore O’Neill: Thank you, Michelle. In the almost eight-months since I joined Editas, the Company has demonstrated two clinical POCs, one of which has the potential to be a competitive and a deep differentiated product. In addition, we have developed and shared our new strategy, reallocated resources to accelerate the clinical development of EDIT-301. Begun discovery of in-vivo editing of HSCs and other tissues, executed our goal, divest standalone seller for therapy business with our shoreline deal and our building up an already robust gene editing toolbox through the internal development, external business development of new and complementary technologies and this is just the beginning. Looking into 2023, we look forward to executing on our strategy, continuing our transformation, and sharing our progress with you.

As a reminder, our strategic objectives for the year include hiring a new CSO with specific expertise aligned to our vision, refocusing our discovery group, advancing discovery on in-vivo, editing of HSC and other tissues. On the development side, we plan to execute on the following in 2023, providing clinical updates from the EDIT-301 RUBY study in mid-2023 and the end of 2023, which will include longer term data from the initial two patients that were dosed last year, as well as data from additional patients from the ongoing RUBY trial. In addition, dosing 20 total patients in our EDIT-301 RUBY program by year-end, dosing the first patient in the EDIT-301 EDIT trial for TDT this quarter, and finally providing early data in the EDIT-301 EDITHAL trial for TDT by year-end.

Thank you very much for your interest in Editas, and we are happy to answer questions now. Thank you.

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Q&A Session

Operator: Our first question comes from Joon Lee with Truist Securities. Please proceed.

Unidentified Analyst: Hi good morning. This is (Ph) on for Joon. So I have two related questions. Do you expect or already have takers for AsCas12a and slick technology and on AsCas12a, on the nature of communication paper 2021, IDT mentioned that they have a patent on the mutations made for Cas12a Ultra. So, how similar or different is the AsCas12a that you are using from Cas12a Ultra? Thank you.

Gilmore O’Neill: Well, Matthew, I may have to ask you to an pose your first question. I couldn’t actually hear it.

Unidentified Analyst: Sorry. So, do you expect or you already have some other takers for AsCas12a and slick technology?

Gilmore O’Neill: Thank you, Mattie. Well, what I would say is that the most recent agreement or deal that we have done, was with Shoreline, in which we gave them an exclusive license to our sleek knock-in technology for iNK and their oncology derived or driven iMac platform, and an additional non-exclusive license for AsCas12a. That was in addition to obviously selling the EDIT-202 asset. So I think that is where we are on AsCas12a and sleek as an example of licensing. And then with regard to your second question around AIP, we actually have a very comfortable estate that gives us the freedom to operate. And there are no interferences or other disputes around IP for AsCas12a.

Unidentified Analyst: Thank you very much.

Operator: Our next question is from Samantha Semenkow with Citi. Please proceed.

Samantha Semenkow: Good morning, thanks for taking our questions. First question, I’m wondering what experience or expertise you are looking for specifically in your next CSO, and if there is any expectation you could give us for when they could be appointed.

Gilmore O’Neill: Thanks very much, Samantha. We are looking for a number of different qualities and capabilities in our future CSO. We are looking for somebody who has experience in developing and bringing drugs into the clinic. We are looking for expertise, and the ability to work with complex genomics groups. And we are actually also looking for somebody who has significant important collaborative leadership capabilities for working with Baisong, our Chief Medical Officer with Bruce Eaton, our Chief Technology Officer, and the executive team to help us in driving the selection of future therapeutic targets and target tissues in which we will combine a number of elements, including the technology and the probability of technical success, as well as the probabilities of clinical regulatory and commercial success.

And with regard to the timing, I’m happy with the progress we are making. We are talking to very interesting candidates. But the timing will really depend on making sure that we choose the best CSO for the organization. And what I will tell you is that I’m very happy with the leadership that we have in our discovery group which is driving forward on our strategy in the interim. Thank you.

Samantha Semenkow: Okay. Thank you very much.

Operator: Our next question is from Dae Gon Ha with Stifel. Please proceed.