Viridian Therapeutics, Inc. (NASDAQ:VRDN) Q1 2024 Earnings Call Transcript

Viridian Therapeutics, Inc. (NASDAQ:VRDN) Q1 2024 Earnings Call Transcript May 8, 2024

Viridian Therapeutics, Inc. beats earnings expectations. Reported EPS is $-0.00079, expectations were $-1.07. VRDN isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Welcome to the Viridian Therapeutics First Quarter 2024 Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to hand the call over to Ms. Louisa Stone, Manager of Investor Relations at Viridian. Please go ahead.

Louisa Stone: Thank you, and welcome, everyone, to our first quarter 2024 earnings conference call. The press release reporting our financial results and corporate updates is available on the Investors page of our corporate website at www.viridiantherapeutics.com. Joining me on the call this morning are Steve Mahoney, our President and CEO; Tom Ciulla, our Chief Medical Officer; and Shan Wu, our Chief Business Officer. Before we begin, I would like to remind everyone that this conference call and webcast will contain forward-looking statements regarding our financial outlook in addition to regulatory, product development and commercialization plans and research activities. These statements are subject to risks and uncertainties that could cause actual results to materially differ from those forecasted.

A description of these risks can be found in our most recent Form 10-Q and 10-K on file with the SEC. I’d now like to turn the call over to Steve Mahoney, our President and CEO.

Steve Mahoney: Thank you, Louisa, and welcome, everyone to our first quarter earnings call. I’ll start by giving a brief overview of Viridian, and then we’ll get into more detail about our programs and recent progress. For those of you who are new to the Viridian story, our strategy is to identify market opportunities where there’s a clear unmet need and where there is potential for us to develop differentiated products. We then aim to engineer the best possible therapeutics and then move rapidly to advance our programs to patients. Turning to Slide 4, Slide 4 shows our pipeline, which includes both a thyroid eye disease or TED portfolio, as well as an FcRn targeting autoimmune portfolio. We have several exciting updates to provide across our pipeline today, which we’ll get into next.

We’re really excited to highlight for you today the significant progress that we’ve made across the business so far this year. Beginning with our 001 IV program, we are pleased to announce that THRIVE, our Phase 3 trial evaluating 001 in patients with active TED, completed enrollment in March. In fact, not only did THRIVE reach the target enrollment of 90 patients in mid-March, but we exceeded enrollment for a total of 113 patients due to strong patient demand at our clinical trial sites. We expect to share top line results for THRIVE in September 2024. THRIVE-2, our Phase 3 trial initiating 001 IV in patients with chronic TED continues enrolling and is on track for top line data at the end of this year. Lastly, for 001, we are announcing that we anticipate filing a BLA for the 001 program in the second half of 2025.

For our subcutaneous 003 program, which we believe has the potential to be best-in-class. We recently completed a positive Type C meeting with the FDA and we are moving forward with our preparations for our pivotal program in line with our previous guidance. We will provide additional updates for the 003 program before we start that pivotal program, which remains on track for mid-year. We are also progressing our FcRn portfolio as planned. We are aiming to file an IND for 006 by the end of this year and we plan to share 008 non-human primate data in the second half of 2024. Lastly, we ended the quarter with $613 million in cash, cash equivalents and short-term investments, and we maintain our cash runway into the second half of 2026 also as previously guided.

Now, I’d like to turn to our TED portfolio and talk more about the programs and our progress in a bit more detail. As a reminder, TED is an autoimmune condition characterized by inflammation and damage to the tissues around and behind the eyes. This leads to symptoms including proptosis or bulging of the eyes, redness, swelling, double vision and retraction to the eyelids. In severe cases, TED can be sight threatening. With those symptoms as a backdrop, there is already a large market opportunity in TED that comes with global growth potential and an expansion that can come with better options for patients. There is an estimated 190,000 people in the U.S. alone who are living with moderate to severe TED. These patients are only served by one marketed IGF-1R IV therapy currently, which generated approximately $1.8 billion in sales in just the U.S. alone in 2023.

This approved therapy requires eight infusion every three weeks, which can be a significant burden for patients. We see opportunity for us to provide differentiated options for TED patients with both our IV and subcu programs. Because TED is an autoimmune disease characterized by flaring symptoms, patients with moderate to severe symptoms struggle with quality of life issues that make it hard for them to drive, work and even sleep. Because it is a flared-baseddisease, it is considered a new start market, which means that it doesn’t matter when a patient was diagnosed because you need to treat the flare or the onset of those symptoms. This new start market also means that all patients experiencing symptoms will have the opportunity to choose from available treatment options with no chronic treatment to displace.

Once a flare is treated, patients do not remain on an anti-IGF-1R therapy. So when a subsequent flare arises, physicians will have the opportunity to choose from available treatment options, including potential new options to manage these flares in their patients. This is a great position for our IV and subcu programs in TED because we believe that we are developing potential best-in-class therapies in a drug class that is shown to be highly effective in inhibiting IGF-1R and in treating TED. Turning to the specifics of our product candidates. Viridian is developing two anti-IGF-1R antibodies for TED. 001, which is delivered intravenously, and 003, which is delivered subcutaneously with the potential for self administration. As you can see here, 003 and 001 have the same binding domain and we expect them to bind IGF-1R similarly.

They differ because 003 is engineered to have an extended half-life, which we have shown to be 40 to 50 days in healthy volunteers, which is 4 to 5 times that of 001 its parent molecule. With 001, we hope to have a fast to market differentiated IV therapy for patients with fewer doses and a shorter infusion time than the current standard of care. With 003, we hope to have – we hope to develop a convenient, less frequent, low volume therapy that patients can self administer at home. Let’s review the 001 program, our progress and what makes us excited about the Phase 3 readout that we expect in September. On Slide 11, this is a reminder that we’ve already shown robust clinical activity with 001 after just two infusions in a Phase 2 clinical trial in active TED.

This robust activity is across all key areas of the disease, proptosis or the bulging of the eyes, clinical activity score and diplopia or double vision. We have added data from TEPEZZA clinical trials after two doses on this slide to show the data side by side. While cross trial comparisons are difficult, we are encouraged by the clinical responses observed after just two doses of 001. On Slide 12, you can see that 001 was well tolerated in active TED patients with no serious adverse events, no infusion reactions, and no discontinuations. Similarly to active TED in patients with chronic TED, just – after just two infusions, 001 meaningfully reduced disease burden across each disease point as well. On Slide 14, VRDN-001 was also well tolerated in chronic TED patients.

Based on this Phase 2 data, we believe that the clinical regimen of VRDN-001 with fewer infusions, shorter infusion time and lower cumulative drug exposure has the potential to be a better choice for moderate to severe patients with TED. Now turning to our Phase 3 trial for VRDN-001. I would like to take a moment to thank all the patients and clinical trial site teams who have participated in our THRIVE trial. We’re not done yet, and our achievements so far would not be possible without them. As we announced today, we completed enrollment for THRIVE in March with 113 patients, which exceeded our enrollment target of 90 patients due to strong demand and interest at our clinical sites. About half of THRIVE patients were from the U.S. and the other half came from Europe.

We expect to provide top line results for this study in September of this year. THRIVE-2, our second pivotal study in TED is ongoing and on track for top line readout at the end of this year. In addition to THRIVE and THRIVE-2, we recently initiated STRIVE, which is a planned safety study. STRIVE is a study of VRDN-001 in TED patients to complete the sufficient safety database for BLA submission alongside the patient numbers from THRIVE and THRIVE-2. In conclusion, with VRDN-001, we are developing a potentially differentiated IV therapy for patients with fewer doses and shorter infusion time than the current standard of care, while inhibiting the same IGF-1R target which has been shown clinically and commercially to be effective in treating TED.

We are very excited about bringing forward VRDN-001 as a potential option for patients, which could mean significantly less drug for patients, fewer visits than the infusion center, lower volumes and less infusion share time. Our next program, subcutaneous VRDN-003 will take this differentiation even further with the possibility of lower frequency subcutaneous administrations and potential for at home self administration using auto injectors. We know from market examples that a later entrance subcu therapy can convert meaningful portions of an existing IV market. We’ve included two of those examples here. In each of the cases on this slide, subcu offerings grew the overall market size of the class, in addition to quickly commanding a significant share of the IV markets.

And keep in mind that these subcu examples have the same or more frequent dosing than their IV counterparts. This would not be the case with VRDN-003, which is designed to have potentially a best-in-class dosing profile. Also, it is important to point out in both examples that neither of these are in new start markets. Again, the TED market is a new start market where we need to treat flaring disease or onset of symptoms as opposed to trying to convert patients from a long-term chronic therapy. With VRDN-003, we hope to provide patients with an anti-IGF-1R therapy that is a better option with respect to less overall drug exposure and more convenience. On Slide 19, we show the complete data set from our Phase 1 healthy volunteer study of VRDN-003 to assess PK and PD.

The update here is the inclusion of the last cohort, cohort 5, where participants receive two doses of 003 28 days apart. The data confirms the differentiated PK and PD for VRDN-003 seen in the first four cohorts with an extended half life of 40 to 50 days and sustained increased levels of the PD biomarker IGF-1. On Slide 20, you can see that the subcutaneous VRDN-003 was well tolerated in the Phase 1 study, including in the latest cohort 5 with no serious adverse events or discontinuations related to treatment, and observed adverse events were generally grade 1 and mild. As we shared previously, our pharmacokinetic modeling for VRDN-003 that showed that or predicts that three potential dosing regimens are available to us. VRDN-003 every eight weeks, every four weeks and every two weeks could achieve or exceed the exposure levels of VRDN-001 that we saw in the active and chronic studies that were correlated to robust clinical activity for our Phase 2 clinical trials in TED.

This gives us a lot of optionality as we move towards our pivotal studies for VRDN-003 and importantly, gives us the potential to develop for patients a best in class, low volume subcu delivery option. We are pleased to announce today that we have completed our Type C meeting with the FDA and we are on track to initiate pivotal clinical trials for the VRDN-003 program. We will share more details on the pivotal trial design before we start those studies. Now, turning to our FcRn portfolio. On Slide 24, in addition to TED and consistent with our development strategy, we are developing an exciting portfolio of potential best-in-class FcRn inhibitors to address the unmet needs of patients living with autoantibody mediated autoimmune diseases. FcRn inhibitors represent a large market opportunity.

The first FcRn inhibitor, efgart or Vyvgart is approved for myasthenia gravis and is in registration for CIPD, and it’s already annualizing to over $1 billion in annual sales. Myasthenia gravis alone is a large market with projected sales of over $4 billion annually by 2028. In addition to myasthenia gravis, as you can see from the slide, there are additional sizable autoimmune indications that would meaningfully add to the FcRn opportunity. Our FcRn franchise includes two assets, VRDN-006 and VRDN-008. With VRDN-006, we are excited to have the only other FcRn targeting Fc fragment in development other than efgartigimod. Argenx has shown that its Fc fragment achieves substantial efficacy while sparing an effect on albumin or LDL and shows better tolerability than the full length antibodies.

We are on track to submit an IND for VRDN-006 by the end of this year and look forward to sharing more about the program in the future. Next on the right is VRDN-008. Our protein engineering efforts identified a molecule derived from Fc fragments that both extended the half life and generated meaningfully deeper IgG reductions in animal models. We believe VRDN-008 is a potential best-in-class extended half life molecule targeting FcRn with the potential to more durably suppress IgG. We are on track to provide VRDN-008 non-human primate data in the second half of this year as guided and we are excited to bring forward this portfolio of next generation FcRns to potentially offer patients a more convenient dosing profile compared to current weekly IV or subcu infusions.

In addition, by aiming to improve the duration and depth of IgG suppression with VRDN-008, we hope to offer a best-in-class option for patients. Our team is executing. We have made excellent progress across the company in the first quarter of the year and we look forward to continuing that momentum through the rest of the year to deliver on our multiple upcoming catalysts. As I mentioned previously, we plan to report THRIVE top line in September and THRIVE-2 top line is on track for the end of the year. The FcRn programs are also proceeding as expected. It has been my pleasure today to provide these exciting updates across our portfolio and in particular for VRDN-001 and VRDN-003, reflecting the work that we’ve completed during this quarter.

This progress and our recent achievements reflect our team’s ability to execute and we are well positioned to continue to work and deliver on our exciting upcoming catalysts. Last but not least, we remain well capitalized, ending the quarter was $613 million and the runway is into the second half of 2026. So with that, I’ll ask the operator to open the call for questions. Operator?

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Q&A Session

Operator: Thank you. We will now begin the question-and-answer session. [Operator Instructions] And the first question comes from the line of Laura Chico with Wedbush. Please go ahead.

Laura Chico: Good morning. Thanks very much for taking that question and congrats on the progress here. I guess I have two questions for you. First, with respect to the THRIVE data that’s coming in September, I’m wondering if you can kind of help us frame what success looks like on the efficacy side, but then also with respect to reduced drug exposure, how would you think this might impact the rate of hearing impairment events that you might see in THRIVE. And then secondarily just related to STRIVE, I’m wondering if you could talk a little bit more about the inclusion of the active control arm. Thanks.

Steve Mahoney: Yes, sure. Thanks, Laura, for the question. In terms of what is good look like for THRIVE efficacy, as we’ve stated previously, we think a profile that looks like TEPEZZA is similar to TEPEZZA would be a really good place for us to land. So with respect to hearing, yes, certainly, I think what we’re looking for in the same vein on efficacy for safety, getting a similar profile on the safety, because the safety profile for TEPEZZA is good, it’s benign, and you referenced hearing in particular. To the extent, the lower exposures improve upon that, that would be great. To the extent, it’s Cmax driven, we obviously have a lower Cmax just by virtue of the volume that we deliver versus TEPEZZA. So that could possibly be helpful.

We’ll have to see. But I think in terms of what good looks like, we’d love to see a similar profile. With respect to your question on STRIVE, yes, I mean, look, the STRIVE is simply to complete the safety database, which is just normal blocking and tackling for a BLA submission. So nothing there unusual on the active control arm. It’s just you got to run a well controlled study. And so we have the option of an active control arm of 3 mg/kg. It randomizes three to one, so the numbers will be heavily weighted towards the 10 mg/kg. Again, it’s all for the safety side of it. So I hope that answers the question.

Laura Chico: That does. Thanks, Steve.

Operator: Your next question comes from the line of Alex Thompson with Stifel. Please go ahead.

Alex Thompson: Great. Thanks for taking our questions. I guess I wanted to drill in a little bit more on safety in particular. I guess, when you look back at the TEPEZZA safety profile from the Phase 3s versus the more recent chronic TED study. Like, do you feel like the chronic TED study might represent a better, if you ran a TEPEZZA study today with more focused hearing, measuring, if that’s more of a par for safety or how are you thinking about, like, what TEPEZZA safety actually looks like today versus when those Phase 3s were started? And then for the top line for VRDN-001 in Phase 3, do you expect to be able to share any data beyond 15 weeks as part of that, either for safety or efficacy? Thanks.

Steve Mahoney: Well, I can take the second one first, Alex. No, top line is top line. So it’ll be a readout at the 15-week end point. With respect to your question on what would – it sounds like you’re asking what is TEPEZZA post the clinical trials and what that real world experience is. Yes, that is all part of it. Like, we’re trying to understand that as well. I mean, I know Amgen is trying to understand that. The physician community, the patient community, they’re all trying to understand that. And maybe, Tom Ciulla, do you want to just explain how we’re approaching our reporting of AEs in the same way that depends a bit.

Tom Ciulla: Sure. So, Alex, as you know, the field is evolving, as you alluded to. There’s updated guidance from the FDA, which led to a label change for tepro, as you know. And in current clinical practice, physicians are assessing patients hearing at baseline, during and after treatment. So we’re recording adverse events using [indiscernible] and as you know, this is just a standard way of recording patient reported changes in their health, including hearing. This is standard for any clinical trial, including TEPEZZA in their pivotal trials. We’re also assessing audiometry as is done in clinical practice at baseline and pre-specified points. So we’re essentially doing what’s done currently in the evolving clinical practice.

Alex Thompson: Great. Thanks.

Operator: Your next question comes from the line of Michael Yee with Jefferies. Please go ahead.

Michael Yee: Hello. Okay, great. I guess, we can hear you. So two questions. First was, on the ongoing THRIVE study, can you talk a little bit about how you can control for the hearing impairment and hearing loss events? I know that if you actually go look back at some of the TEPEZZA post marketing studies, that there’s some commentary and analysis around how patients have some of this hearing loss already, and there’s factors already going on with somebody’s TED patients in the background. And so just trying to think about how you can screen and protect for that. And think about that as you go through your Phase 3. And then on the subcu plans for Phase 3, I think you said that you met with the FDA and you’re planning to start Phase 3.

Can you just talk a little bit about how that meeting went? And I know there were some uncertainties about going directly into Phase 3, so just talk a little bit about your confidence there or anything else that you need to do in order to start the Phase 3 for subcu. Thank you.