Editas Medicine, Inc. Q1 FY2023 Earnings Call

Good morning, and welcome to Editas Medicine’s First Quarter 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 Cristi Barnett, Corporate Communications and Investor Relations at Editas Medicine.

Thank you, Camilla. Good morning, everyone, and welcome to our first quarter 2023 conference call. Earlier this morning, we issued a press release providing our financial results and recent corporate updates. A replay of today’s call will be available in 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 statements, even if our views change. Now, I will turn the call over to our CEO, Gilmore O’Neill.

Thank you, Cristi, and good morning, everyone. Thank you for joining us today on Editas' first quarter earnings call. 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. As many of you know, in early January, we shared our strategy to position Editas as a leader in vivo programmable gene editing and hemoglobinopathies. During the first quarter, we successfully executed this strategy driving to our goal of delivering life-changing medicines to patients with previously untreatable or undertreated diseases. We are increasing our momentum in driving our ex vivo EDIT-301 program as we pursue a leadership position in hematopoietic stem cell medicines for hemoglobinopathy. As a quick recap, there are three underlying pillars to our new strategy. First, while continuing to develop EDIT-301 for severe sickle cell disease and transfusion-dependent beta thalassemia, or TDT, we have sharpened our discovery focus to in vivo administered genome editing medicines. As part of that refocusing effort, we previously announced that we had divested our iNK cell franchise to Shoreline Biosciences in January. Second, we are strengthening our discovery engine and technological capabilities. We have divided our research division into separate technology and drug discovery groups, enhancing the capabilities of each and implementing our new target selection criteria. Finally, our third strategic pillar is an increased and expanded approach to business development. In tandem, we will continue to deleverage our IP portfolio to drive out-licensing and partnership discussions. So, how have we executed against our new strategy in the first quarter? We have increased our investment in our EDIT-301 program after reviewing promising initial RUBY Phase 1/2 study data that indicated that we have a competitive and potentially differentiated program to treat sickle cell anemia and TDT. Additionally, we are investing to develop an in vivo approach for editing hematopoietic stem cells for the treatment of sickle cell disease and TDT, leveraging the unique and differentiated approach of EDIT-301 that we have already seen proof of concept for in humans. We continue to ramp up enrollment and dosing of patients in the RUBY trial for sickle cell disease and are on track to have dosed 20 total patients by the end of 2023. We are also excited to share that the FDA recently granted orphan drug designation to EDIT-301 for the treatment of sickle cell disease, and we are pleased to announce that in June we will provide a RUBY clinical data update in an oral presentation at the European Hematology Association, or EHA Congress, and in our company-sponsored webinar. Baisong will share further details regarding our June data readout and our enrollment progress in his remarks. On EDIT-301 for TDT, we are pleased to share that we dosed the first patient in our EDITHAL Phase 1/2 trial in the first quarter and that the patient has successfully engrafted neutrophils and platelets. Enrollment continues to progress and we remain on track to provide initial clinical data from the EDITHAL trial by year-end. Moving to in vivo. Earlier this year, our drug discovery group began lead discovery work on in vivo therapeutic targets at HSCs or hematopoietic stem cells and other tissues. As a reminder, under our new target selection criteria, we will select therapeutic targets that will allow our genome editing approach to differentiate maximally from the current standard of care for serious diseases. The target selection criteria will work to ensure targets are selected that maximize the probability of technical, regulatory, and commercial success. Our search for a new CSO to lead this drug discovery group continues to progress, and I look forward to updating you on this search and our in vivo work in the future. Turning to our intellectual property position. Since the founding of Editas, we have placed substantial importance in securing robust intellectual property protection, covering our cutting-edge scientific discoveries and gene editing advancements to enable the development of novel transformative medicines for patients in need. It is important to note that we have a large portfolio of foundational U.S. and international patents covering CRISPR/Cas9 in human therapeutics, only some of which are subject to interference proceedings. And we are confident that our IP portfolio will provide meaningful value in the future. We are the exclusive licensee of Harvard University’s and Broad Institute’s Cas9 patent estates, and Editas is uniquely positioned to issue exclusive and nonexclusive licenses for Cas9 to any company seeking to use these enzymes to make human medicines, including in vivo and ex vivo therapeutic applications. Our unique position as the exclusive licensee of this patent estate ensures that we are the party responsible for any licensing discussions as CRISPR/Cas9 products enter the market, which, given the size of the U.S. patient market, and the number of companies vying to develop CRISPR/Cas9 medicines, is a substantial position. With our sharpened strategic focus, our world-class scientists and employees, and our keen attention to execution, we continue to build upon the momentum from our clinical readout milestones during the fourth quarter of 2022. We look forward to updating you on our progress and on the execution of our new strategy throughout the year. Now, I will turn the call over to Baisong, our Chief Medical Officer.

Thank you, Gilmore. Good morning, everyone. Let’s start with the EDIT-301 RUBY study for severe sickle cell disease. As Gilmore mentioned, we continue to enroll and dose patients in the RUBY study. We have activated 20 study sites and enrolled 19 patients, almost double the number of patients enrolled from three months ago. As we previously shared, we began parallel dosing of patients earlier this year. We are on track to provide an update on the RUBY clinical data both next month and year-end as well as to dose 22 total patients by year-end. Turning to clinical data. I’m excited that we will present RUBY clinical data as an oral presentation at the European Hematology Association, or EHA Congress, and at our company-sponsored webinar in June. The data set will include safety and efficacy data for multiple patients, including 10 months' data from the first patient treated and 6 months' data from the second patient treated, including total hemoglobin and fetal hemoglobin. We will also share data on safety, neutrophil and platelet engraftment, and vaso-occlusive events or VOE, from the first four patients. As a reminder, last December, we presented initial data from the first two patients treated in the RUBY trial. The first patient who had five months of follow-up after treatment with EDIT-301 showed clinically significant improvements across all hematological parameters and no VOEs. Specifically, that patient had an increase of fetal hemoglobin fraction to 45.4%, five months after EDIT-301 infusion. And the correction of anemia with total hemoglobin level well into the normal range at 16.4 grams per deciliter. These initial clinical data indicated that EDIT-301 provides patients with high and sustained levels of fetal hemoglobin and normal levels of total hemoglobin. This clinical observation is consistent with preclinical data, which has demonstrated that targeting of the gamma globin promoter enables increases of fetal hemoglobin independent of erythropoietic stress. Given the unique gene-editing approach and mechanism of action by EDIT-301, supported by preclinical data and initial clinical data, we continue to believe that EDIT-301 can potentially provide robust clinical benefits to patients with severe sickle cell disease and potentially provide clinical differentiation in the long term. As a reminder, a sustained normal total hemoglobin level is an important clinical outcome for patients, as the correction of anemia can significantly improve quality of life and ameliorate organ damage. We believe a sustained normal level of total hemoglobin could be a potential point of differentiation for EDIT-301. Turning to EDIT-301 EDITHAL Phase 1/2 trial for transfusion-dependent beta thalassemia. As Gilmore mentioned earlier, we dosed our first patient in Q1 and the patient has experienced successful neutrophil and platelet engraftment. We remain on track to provide initial clinical data from the EDITHAL trial by year-end. As we have done for the RUBY study, we are also taking multiple measures to accelerate the development of EDIT-301 for TDT and have strong positive momentum. We have enrolled multiple patients who have completed pheresis and have had their CD34 positive cells edited or are in the process of pheresis. Recently, I have been traveling around the country visiting our RUBY and EDITHAL clinical trial sites. I very much appreciated the enthusiasm and the support from the investigators and study sites. I’m pleased with the momentum of EDIT-301 in patient recruitment, pheresis, editing, and dosing in both studies. I’m excited to hear from investigators that patients dosed with EDIT-301 have already seen positive changes in their lives. We look forward to sharing additional updates as the year progresses, including RUBY study data next month and at year-end, and sharing initial clinical data from the EDITHAL study by year-end. Now, I will turn the call over to Michelle, our Chief Financial Officer, to review our financials.

Thank you, Baisong, and good morning, everyone. I’d like to refer you to our press release issued earlier today for a summary of our financial results for the first quarter of 2023. I’ll take this opportunity to briefly review a few items. Our cash, cash equivalents, and marketable securities as of March 31st were $402 million compared to $437 million as of December 31, 2022. We expect our existing cash, cash equivalents, and marketable securities to fund our operating expenses and capital expenditures into 2025. Revenue for the first quarter of 2023 was $9.9 million compared to $6.8 million in the same period last year. The increase is related to the previously announced sale of our oncology assets to Shoreline Biosciences and related licenses, which was completed in January 2023. G&A expenses for the quarter were $23 million compared with $19.5 million for the first quarter of 2022. The $3.5 million increase is primarily attributable to increased professional services expenses to support business development activity, partially offset by a decrease in stock compensation expense. R&D expenses this quarter were $38 million, which was flat compared to the first quarter of 2022. This reflects a decrease in expenses following the strategic reprioritization of our portfolio, offset by increased investments to accelerate the development of EDIT-301. This reallocation of capital is in line with our strategic priorities. Overall, Editas remains in a strong financial position, and our sharpened discovery focus allowed us to concentrate our talent and extend our cash runway into 2025, which provides ample resources for our continued progress in both of our EDIT-301 trials as well as advancing our research efforts in hemoglobinopathy and other in vivo discoveries. With that, I will hand the call back to Gilmore.

Thank you, Michelle. It has been almost one year since I joined Editas. In this time, the Company has demonstrated two clinical proof of concepts, including a proof of concept for EDIT-301, which has the potential to be a competitive and differentiated product for the treatment of sickle cell disease and transfusion-dependent beta thalassemia. In addition, as I stated in my opening remarks, we’ve taken a number of tangible steps to reshape the Company around our new strategy, which we shared in early January and have begun executing on that strategy. And this is just the beginning. We look forward to continuing our transformation and sharing our progress with you. As a reminder, our strategic objectives for the year include providing clinical updates from the EDIT-301 RUBY study in June and at the end of 2023, providing clinical data from EDIT-301 EDITHAL trial for TDT by the end of 2023, dosing 20 total patients in our EDIT-301 RUBY study by year-end, hiring a new CSO with specific expertise aligned to our vision, advancing discovery of in vivo editing of hematopoietic stem cells and other tissues, and finally, leveraging our robust IP portfolio and business development activities to drive value and complement our gene editing technology capabilities. I thank all the patients, investigators, and our employees who are helping to drive our strategy forward. Thank you very much for your interest in Editas, and we’re happy to answer questions. Thank you.

And our first question comes from Joon Lee with Truist Securities.

Hi. Thanks for taking our questions. Novartis recently terminated their sickle cell disease program after treating a couple of patients to see no benefit. Given your editing strategy is similar to what Novartis stated, could you point to some differences why your promoter editing strategy should continue to work when Novartis failed? And I have a follow-up. Thank you.

Thanks very much, Joon. Yes, we did actually see that event some weeks or months ago. I think there are some elements that are critical. The first thing to point out is that in our initial proof of concept readout at the end of last year, we actually saw very robust data with an increase in total hemoglobin as well as a robust fetal hemoglobin expression, completely consistent with the preclinical data that were generated. In testing our preclinical and our clinical hypotheses that our unique approach of combining an AsCas12a effector CRISPR enzyme with the targeting of a different region of the HBG1/2 promoter, which was much closer, in fact, actually encompasses the area where we see deletions or mutations associated with hereditary persistence of fetal hemoglobin. We believe that all those factors point towards a key difference and differentiation, and indeed, our preclinical data and our clinical data have actually supported that hypothesis.

So, can you remind me if you have any preclinical data comparing the editing of the same region in Cas9 versus AsCas12 that you’re using, and what the difference is maybe?

Sorry, Joon... Can you… Yes. So I mean, comparing Cas9, which is what I think Novartis used and AsCas12a, which is what you’re using, you can have different outcomes if you were to target the same region in terms of getting deletions or…?

Joon, I think you are breaking up a little, but let me try. This is Baisong. Let me try and see whether I understand correctly. There is background noise. So I think your question is to say compared to Novartis do you have a comparison between Cas9 and Cas12a and also the region just Gilmore mentioned. Is that your question?

Yes. No, actually, if you target the same region, either with Cas9 or Cas12a, what differences in outcome do you get?

Yes. We conducted a comparison from a clinical perspective by scanning a large area of the promoter region to determine which specifics to edit. We covered a significant part of the promoter in HBG1 and HBG2 and discovered that the region we chose aligns with clinical observations for HPFH. Additionally, we compared Cas9 with Cas12 and identified the differences between the two. Does that address your question?

Yes. No, absolutely. Your impaired data is very good, but just was just curious what was driving that difference. Thank you so much. I’ll hop back in the queue.

Thank you.

Our next question is from Samantha Semenkow with Citi.

Just a couple for me. For the presentation at EHA, is that a late-breaking presentation? I just wanted to clarify.

Thanks, Samantha. I’ll just have Baisong update you or give you detail there.

It is a normal oral presentation that is expected.

I wanted to clarify something. I heard you mention that we will have updated data for the first and second patients. I also heard you say four patients. So will we have data on a total of six patients regarding VOE, or is it four patients total?

Total will be four patients at the EHA presentation.

And then when you’re making that cutoff for those incremental additional two patients, what level of follow-up was the cut-off there? So I’m just curious, is it a couple of months, is it one month? Any information you can provide would be helpful.

Yes. For these next two patients, we’ll have two months or more.

Just a follow-up, one other thing, I think it’s important to understand that, obviously, we will, because the abstract, which will be published later, was based on a data cut earlier, we will actually be presenting more data than in the abstract at the EHA Congress.

Yes. Thanks, Gilmore. And just kind of also follow-up on that, the abstract will be available on May 11th.

Next question is from Dae Gon Ha with Stifel.

Hey, great. Thanks so much for taking the question. And I look forward to the data update next month. So, I guess, I was just kind of wondering about your strategy going forward. So, maybe if you can kind of walk us through how you’re thinking about next programs or priorities beyond EDIT-301? I think, Gilmore, you mentioned in vivo HSC editing. But curious, is delivery tech or less burdensome conditioning a stronger emphasis in your lineup, or is it advancing new programs? And if it’s the latter, I guess, would you continue to do other ex vivo HSC, or is it more of an in vivo? And in that case, would you also think about other organs? Then I’ve got a follow-up.

Yes. Thanks very much, Dae Gon. A large part of our discovery focus is actually on in vivo. I think that was a very important part and pivot of our strategy because we believe that it maximizes our ability to exploit the powerful technology that we have available to us. From a point of HSCs, if you reduce the problem of in vivo to sort of three elements, selecting a robust effector molecule or enzyme, CRISPR enzyme, selecting a good target, and then delivery, we believe that we have solved two of those problems, with very robust human data in the use of our Cas12a, CRISPR enzyme and the target of that specific HBG1/2 promoter. And so that reduces it to an in vivo delivery problem. As I said in my earlier remarks, our discovery group is actually working on that, and we look forward to updating more at an appropriate time in the future. I will say that we are looking actually also beyond HSCs to other tissues. And again, we’ll give further updates in the future.

I would like to follow up on Baisong’s comments from the prepared remarks. As you were engaging with physicians regarding their opinions on EDIT-301, you noted their high enthusiasm. Could you share what percentage of the doctors you visited are also interested in administering CTX001? Have you been able to gauge their motivations for choosing CTX001? Are they currently preparing to line up patients for it? What is the overall sentiment? Are there any concerns about this approach? Any insights you can provide would be appreciated. Thank you.

Yes. Thanks for the question. Yes, I visited quite a few study sites. Actually, many of them are participating in the previous gene editing trials. So, they are very enthusiastic about the approach we are taking, including the different targeting region for editing and the different enzymes to do. And so, actually, the benefit for us is those investigators have a lot of experience in this field.

Yes. I think just building on Baisong’s remarks, as you’re obviously looking out towards the evolution of the market against the background of enthusiasm for our investigators and indeed the patients with the increase in our acceleration enrollment. We anticipate that in the future that the vast majority of patients will be awaiting dosing at the time of our launch, and I can go into more details on that. But I think a very important point, something that has really resonated with the investigators is that our initial clinical data were very encouraging as presented in December, consistent with our preclinical data, and we’re actually very confident that we will see replication in subsequent patients as we continue to monitor them through the execution of the 301 studies.

Our next question comes from Steve Seedhouse with Raymond James.

My question actually requires a bit of a prelude, so I hope everyone can bear with me for a moment. You mentioned that globin locus editing increases fetal hemoglobin independent of erythropoietic stress. As you know, the recent ICER report on exa-cel highlighted an ongoing need for phlebotomy, at least in sickle cell, and earlier data from the thalassemia program indicated phlebotomy use as well, though that information ceased to be reported at some point. Thus, it’s unclear how widespread phlebotomy use is for exa-cel. This is significant because there was data presented at ASH years ago showing that BCL11A editing works in conjunction with phlebotomy in primates to enhance F cells and ultimately HBF levels, likely due to the stress caused by erythropoiesis. Given all that, I wonder if you agree that phlebotomy might be complicating the fetal hemoglobin data for BCL11A strategies. Additionally, could you share the impact of your editing approach at the HBG1/2 locus, how phlebotomy use has been in your study, and whether you believe this situation could offer you a competitive advantage? Thank you.

Steve, thank you very much for your question. So, from our own clinical data, preclinical data and also published clinical data, you’re probably referring to for the BCL11A targeting approach. It did require some stimulation for the erythropoietic stress to increase the fetal hemoglobin, sufficient fetal hemoglobin expression. And so, that’s actually the reason we’re treating the target we are treating now, and we actually did take a longer time to get all the targets from a preclinical study perspective, and that’s been validated by other publications. And regarding specific clinical data for the BCL11A approach, I have not seen formal publication. So, I would be waiting for them to publish their data and so we’d have a better understanding. So I will not comment on their data unless published.

However, it is worth pointing out that in our early disclosure, we actually noticed the combination of a very robust normalization or correction of anemia in our first patient in December. And that was associated with a robust fetal hemoglobin expression, suggesting that indeed stress erythropoiesis as we hypothesized based on known biology and our nonclinical data, indicates that our approach is not dependent on erythropoiesis.

Our next question is from Yanan Zhu with Wells Fargo.

To continue the discussion from the previous question, Gilmore, you mentioned that the total hemoglobin for the first patient is quite robust and within the normal range. The percentage of fetal hemoglobin seems to align well with competitor gene editing products. I am curious if the higher total hemoglobin for that patient is a result of the total number of red blood cells or if it could be connected to the baseline level of hemoglobin in that patient. Additionally, could you remind us of the baseline hemoglobin for patient number two, who is a female, and what the normal range is for her? Thank you.

Thank you for your question, Yanan. I will first address your initial query about fetal hemoglobin compared to the number of red blood cells. Our observations indicate robust erythropoiesis in these patients. Their hemoglobin levels are influenced by both the amount of hemoglobin per cell and the total number of red blood cells, and we have seen increases in both areas. Additionally, even though approximately 45% of the hemoglobin is fetal hemoglobin, the overall hemoglobin level and total fetal hemoglobin amount are also elevated. Regarding the second patient, we plan to present that data soon, so I won't get into the specifics right now. However, I can mention that normal hemoglobin levels differ between males and females. Typically, males have levels ranging from about 13.5% to 18 grams per deciliter, while for females, it's around 12 to 14, depending on the reference lab, which accounts for some variance.

Okay. I think one other thing, Yanan, you asked a question about what was the baseline hemoglobin of the patient one. And I think what we can say is that the hemoglobin or the total hemoglobin increase that we saw occur very rapidly just within the first few months of dosing comprised a 3.5 gram per deciliter increase.

Yes. I would like to add some nuance regarding the baseline for sickle cell patients, particularly in gene-editing trials. When patients prepare for pheresis and conditioning, they typically undergo blood transfusions. Therefore, the baseline we have is not the lowest level recorded but rather set during visit 2. This means there could be various reasons affecting the baseline. Specifically, it is around a little over 10 grams per deciliter based on our records for this patient. This serves as an example regarding the baseline, which might not be entirely clear.

Very nice. Thank you for all the explanation. Maybe a quick follow-up. Do you expect this to be also a differentiator for TDT and perhaps maybe at a greater level of significance because anemia is a major manifestation of that disease? Thank you.

We organized our discovery team and scientists to create and select the combination of Cas12a with a specific focus on the HBG1/2 promoter. This was accomplished through a series of empirical experiments aimed at identifying the best method for enhancing fetal hemoglobin expression and achieving strong erythroid output, independent of erythropoiesis or anemia. These experiments confirmed that directly targeting the HBG1/2 promoter was the superior approach, which aligned with our original design hypothesis. The preclinical data supported our findings, showing significant erythroid output compared to other methods, along with pronounced fetal hemoglobin expression. This was evident in our initial data release from the RUBY study. While we have not yet collected enough data from our EDITHAL patients, RUBY has clearly produced results consistent with the preclinical data that affirmed our initial biological and therapeutic hypotheses.

Our next question comes from Phil Nadeau with TD Cowen.

This is Ernie Rodriguez for Phil. Thanks for taking my question. On the sickle cell program, have you met with the FDA to gain better visibility on the regulatory path? And then, a second question on the TDT program. For the year-end update, would that include only the sentinel patients that you initially dosed, or will you disclose additional patients? And if you will be disclosing additional patients, are you planning on reporting when you switch from sentinel dosing to parallel dosing?

So I think I’ll ask Baisong to respond to the question regarding the FDA and the regulatory interactions.

Yes. Thanks for your question. So, we certainly have a lot of engagement with the FDA. As you see that recently, we have the orphan drug designation. And from the registration perspective, we previously announced that we actually have the alignment on the potency assay with the FDA, which FDA will consider this efficacy data can be supporting registration. And we will have further engagement with the agency to align on the total registration package for the BLA submission, which is also planned. And your second part of the question is about the beta-thal data. So, we are moving really along with the EDITHAL study, and we expect that we will have data by year-end, more than just the sentinel patients. And so, we’re looking forward to sharing that data by the year-end.

Are you planning to disclose when you will approve to continue parallel dosing before then?

We are planning to obtain the data for initial readout by the end of the year. While we haven't decided whether we will share that information, it's important to note that we are on track to reveal promising initial data by that time.

Our next question comes from Rick Bienkowski with Cantor Fitzgerald.

I guess, I’ll expand a bit on the last question on the path towards registration for EDIT-301. 20 patients is a pretty substantial cohort size in sickle cell disease. So, do you have any sense of how many patients’ worth of data you will need for a registrational filing?

Yes. Thank you for the question. So, we certainly think that with the gene-editing approach that we have, we will be able to generate a substantial amount of data. And the specifics on the number of patients needed to be able to use for registration, we need to align with the regulatory agencies. So, we are planning to discuss with the FDA.

And I just have another quick one. I was hoping for a little bit more granularity on the collaborative revenues for the quarter. Were all of the $9.9 million in revenue attributable to the Shoreline transaction, or are there some other revenues attributable to other partnerships in there?

It’s a combination of both the Shoreline and then some other small sublicense revenues.

Our next question is from Rich Law with Credit Suisse.

I have a couple of questions for you guys. So, with the appeal litigation pending, what does it mean for a company such as CRISPR Vertex that already filed a BLA for exa-cel that utilized CRISPR/Cas9 from your IP perspective? They don’t have a license from you or the Broad and could potentially launch the product before we know the outcome of the appeal. So any insight here would be helpful. And then, I have a follow-up question.

We anticipate the judgment in early to mid-2024 and are confident in our ability to prevail, as we have done previously. The matters being discussed focus on the application of existing law rather than new facts, specifically the application of the law by the PTAB. Setting aside that interference, it is important to note that we own a portfolio of intellectual property that is not affected by any interference and covers products in development utilizing Cas9 for human therapeutics. Looking ahead, we are open to granting licenses to facilitate the delivery of this technology to patients and believe we should acknowledge significant value related to that.

So, in terms of granting a license, we’re not going to know the appeal decision likely before the BLA and also potentially the launch? Like, how do you sort of think about that?

Well, I think there are a number of important points to make. The first, again, is just to remind that the appeal applies to some of our Cas9 in human therapeutics IP estate, but not all. I think it’s important to emphasize that we have Cas9 or IP around Cas9 use in human therapeutics that is not subject to any interference, and therefore, is not subject to that appeals case. And we actually believe that it actually covers products in development. And so, what I think I want people to really understand is that that appeals case is around interference on some of our IP estate, but not all.

And then, just one more question for me. So you’re seeing some next-gen FCB therapies already in development with new conditioning agents. So, if those succeed, it doesn’t seem like the shelf life for these first-gen therapies will last too long. Any thoughts about this?

To clarify, you’re asking if the introduction of new conditioning methods could impact the approval of products. It largely depends on the specifics of the conditioning itself. We have closely examined toxification, which is crucial. It's important to strike a balance between reducing toxicities and maintaining engraftment efficacy. We recognize that enhancing eligibility for patients is vital, as more individuals will be able to handle a non-genotoxic, less toxic conditioning approach. Some strategies are not reliant on editing. Therefore, we believe that the development of gentler conditioning methods could potentially broaden the pool of eligible patients for all treatments. Additionally, we are looking beyond just conditioning; we are also incorporating in vivo editing as part of our strategy, because we believe this will further enhance the eligibility of patients for treatment.

Our next question is from Debjit Chattopadhyay with Guggenheim.

This is Ray Forseth on for Debjit. I just want to build off of the conditioning discussion and sort of get an outline of your strategy. Is it sort of bifurcated kind of exploring both in vivo editing and the opportunity to in-license assets that would be alternative to busulfan? Can you sort of map that out for us? And just wanted to get your thoughts, too, on the ASGCT abstracts and sort of what you see in the competitive landscape around conditioning, especially given that competitor is kind of moving forward with the CD117 approach?

Thank you, Debjit. I’ll begin, and then Baisong will add his thoughts. Strategically, we are implementing a two-pronged approach. We are making significant internal investments to discover in vivo editing for hematopoietic stem cells. As I mentioned earlier, we believe we can address this challenge, specifically focusing on delivery. We feel confident that we have overcome two of the three obstacles related to selecting a CRISPR enzyme and identifying a target. Simultaneously, we are continuing our evaluations of milder conditioning methods. You also inquired about CD117, and I will hand it over to Baisong to discuss that further.

Thanks for your question. I can say that we have looked into this milder conditioning in very deep, looking at the space as well as internal efforts-wise. And there were generally probably two approaches: One is that CD117 antibody in that direction, and the other one is actually doing cell modification together with gene editing. So, the latter approach is still in infancy, if I may say, and the previous approach with antibody have many different exercises on that. So I think we are very closely monitoring the space and understand these. And I also want to mention that the milder conditioning, if successful, is not going to be only successful for sickle cell transplants; it’s going to be successful for leukemia and many different gene therapeutic areas. So, we are actually very much looking into this space.

Our next question is from Madhu Kumar with Goldman Sachs.

This is Rob speaking on behalf of Madhu. We were curious about how to approach our future operating expenses, specifically in R&D, considering the strong recruitment efforts for RUBY. Additionally, we would like to know the duration of spending on cell editing and transplants compared to follow-up activities.

I’m sorry, Rob, I actually had great difficulty hearing your question. Could you just repeat it, please?

Sure. We are just wondering how we should be thinking about forward OpEx, particularly spending in regard to transfusions versus follow-up?

Okay. So, I think you’re asking about forward-looking operating expenses related to the execution of the RUBY study. Is that correct? Okay. Michelle?

Yes. We do not disclose our annual or quarterly operating expenses, but I can tell you that approximately half of our spending is on the RUBY trial and the TDT trial. Therefore, we do not anticipate a significant increase from quarter to quarter. However, as we treat more patients, our research and development expenditure will increase, though not substantially. Additionally, our current cash runway is sufficient to support our RUBY trials.

Our next question is from Greg Harrison with Bank of America.

This is Mary Keith on for Greg. Thanks for taking our questions. So, with 19 patients enrolled and plans for 20 to be dosed by year-end. Maybe how many sickle cell patients have been currently treated with EDIT-301, and maybe how could we expect to see this represented in the efficacy readout by the year-end update? Thank you.

We have 19 patients enrolled. Among them, 4 have been dosed, and more patients have completed pheresis, with their CD34 cells edited and ready for dosing scheduling. Additionally, there are other patients currently undergoing pheresis. We are very confident that we will be able to dose 20 patients by the end of the year.

Our next question is from Luca Issi with RBC Capital Markets.

Maybe on beta thalassemia, obviously most patients are in Southern Europe, so wondering if you could comment on what’s the plan to capture that market. And maybe how you’re thinking about some of the key lessons learned from the unsuccessful launch of bluebird bio there? And then, maybe on sickle cell disease, wondering if you can comment on pricing. Obviously, report suggests $1.9 million. So, wondering if that is actually aligned with your thinking. And then, maybe lastly on LCA10, any update on partner discussions there?

Thank you, Luca. Beta thalassemia is a significant health issue in various regions, especially in Europe, Southeast Asia, and South Asia. Currently, our efforts are concentrated in North America. We’ve mentioned before that we are looking to partner with a large global organization to assist with development and commercialization beyond the U.S. We are pleased with the progress we are making within the United States and North America. Regarding pricing, it's still too early for us to discuss specifics; this will be addressed closer to the time of approval and launch. We anticipate future discussions around this topic as the market evolves. Lastly, concerning LCA10, we refrain from providing details until a deal is finalized.

I just want to add one more point about pricing. We are still in the early stages, and it’s encouraging to see that the community recognizes the value of this gene editing therapy and acknowledges the importance of the medicine in this field.

Our next question is from Jay Olson with Oppenheimer.

Good morning. This is Chang on the line for Jay. Maybe two from us. So, I’m just wondering if there’s a chance where you have the capacity to dose more than 20 patients for the sickle cell disease program this year. And second question is on your ex-U.S. strategy. What you’re kind of thinking? And if you are planning to partner that program, what is the best timing to do that? Thank you.

Thanks very much. So, do we have capacity to dose more than 20 patients? Yes. One of the important points when we rolled out our strategy was to again sharpen our focus on developing and accelerating 301. And indeed, we have deployed capital to enable not just the acceleration on the clinical side but also to ensure that we have capacity to edit or other CMC capacity to edit and support that clinical acceleration. So indeed, we do have that capacity to dose more than 20 patients. And then, I think your second question was around ex-U.S. and the timing of partnership. I think as I said before, we are interested in partnering. We’re looking to a partner with a global footprint that would support ex-U.S., particularly on development and commercialization. And with regard to timing, we wouldn’t really discuss the timing until we actually have a deal signed and executed.

Our next question comes from Joel Beatty with Baird.

Hello. This is Benjamin on for Joel. Thanks for taking our questions. Looking across other late-stage products in sickle cell and TDT, it appears that data sets of 30 patients could support approval. So, with Editas being on track to dose 20 patients by year-end, how quickly do you think you’ll be able to secure the necessary data to support regulatory approvals? Thank you.

Yes. Thanks very much, Ben. Baisong?

As I mentioned earlier, in terms of total number of patients required to support registration and then need to have required alignment with the regulatory agency. And in terms of the progression of the study, we are very positive about the momentum. So, we are very optimistic we will be able to dose patients as we planned.

So, I think the key thing, Ben, is that you’ve actually identified sort of a benchmark. But obviously, what we need to do is, as planned, sit with the regulators and come to an agreement on what the data set they would like to see for our programs.

Our next question comes from Joon Lee with Truist Securities.

So, I had the same question as Steve, but maybe a different way of asking. What percentage of sickle cell patients with hereditary persistence of fetal hemoglobin have mutations along the globin locus versus the BCL11A locus?

So, we do not have all the specifics on your question on that, but what we know is the mutation, the promoter region directly impacted the fetal globin expression. But BCLA is a transcription factor, which impacts multiple different cells in it. And the mutation of the BCL11A will have a much different impact from the fetal globin expression only, and will have other impacts, too. So, the gene optimization is a much more complicated issue than the HPFH with the promoter region and mutation for the gamma globin promoters.

I think another way to characterize this is by considering the strength of the signal. The hereditary persistence of fetal hemoglobin and its ability to significantly reduce the effects of sickle cell disease and thalassemia were established quite some time ago because the correlation between this phenotypic change and genotype was identified quite robustly a few decades ago, while the BCL11A was discovered through a genome-wide association study.

Thank you. We have reached the end of the Q&A session. And with that, ladies and gentlemen, this concludes today’s call. Thank you once again for your participation. You may now disconnect your lines.