Earnings Call Transcript - NTLA Q1 2021

Operator, Operator

Good morning. My name is Izzy and I will be your conference operator today. Welcome to the Intellia Therapeutics First Quarter 2021 Financial Results Conference Call. All participants are currently in a listen-only mode. Following formal remarks, we will open the call up for questions. This conference is being recorded at the company's request and will be available on the company's website following the end of the call. I will now turn the conference to Lina Li, Director of Investor Relations at Intellia. Please proceed.

Lina Li, Director of Investor Relations

Thank you, operator. And good morning, everyone. Welcome to Intellia's first quarter 2021 earnings call. Earlier today, the company issued a press release outlining the company's progress this quarter as well as topics for discussion on today's call. This release can be found on the Investors and Media section of Intellia's website at intelliatx.com. This call is being broadcast live and a replay will also be archived on the company's website. At this time, I would like to take a minute to remind listeners that, during this call, Intellia management may make certain forward-looking statements and ask that you refer to our SEC filings available at sec.gov for a discussion of potential risks and uncertainties. All information presented on this call is current as of today, and Intellia undertakes no duty to update this information unless required by law. Joining me on the call today are Dr. John Leonard, Chief Executive Officer; Dr. David Lebwohl, Chief Medical Officer; Dr. Laura Sepp-Lorenzino, Chief Scientific Officer; and Glenn Goddard, Chief Financial Officer. For today's call, John will start with the company's first quarter and recently business highlights, followed by David who will provide an update on our NTLA-2001 clinical efforts, Laura will recap the company's R&D progress, followed by Glenn's review of Intellia's financial results for the quarter. John will then make some closing remarks and we will open the call for Q&A. With that, let me turn the call over to our CEO.

John Leonard, CEO

Thank you, Lina. Good morning, everyone. We're happy to provide an update on recent progress against our core priorities for this year and a view forward to our key upcoming catalysts. At Intellia, we're committed to developing curative genome editing treatments to transform the lives of individuals with severe diseases, and we're proud to be at the forefront of genomic medicine. Our deep scientific, technical, and clinical development expertise and robust intellectual property portfolio position us to transform the broad therapeutic potential of CRISPR/Cas9 into new classes of revolutionary medicines. Our leading platform supports a full spectrum strategy which deploys differentiated modular solutions across in vivo and ex vivo therapeutic applications. For genetic disease, we utilize our in vivo approach, leveraging a lipid nanoparticle-based delivery system to selectively knock out disease-causing genes or precisely insert genes to produce normal proteins, or ex vivo T cell receptor, or TCR-based approach, is designed to produce a homogeneous robust cell product that epitomizes a patient's own natural immune system to eliminate cancer cells. Across these efforts, we have generated a broad pipeline, including emerging clinical candidates and an expansive research stage portfolio, following a rapid and reproducible development path. The first quarter was a productive one for Intellia as we continue to make headway across these efforts. We were pleased to receive the European Union's orphan drug designation for NTLA-2001, demonstrating regulators' appreciation of the potential significant benefit of NTLA-2001 in the treatment of ATTR patients for whom there is no cure. Additionally, we presented key preclinical data expanding our modular capabilities and new directions. In March, we introduced our proprietary base editing technology for enhanced cell engineering. In a separate presentation, we showed proof of concept for systemic in vivo editing in bone marrow. Platform innovations such as these lay an important foundation for Intellia's continued pipeline growth and the advancement of the next wave of genomic medicines. Finally, we were pleased to welcome Dr. Georgia Keresty, who joins our board with more than 35 years of pharmaceutical industry experience, including as a scientific and operational leader across stages of clinical development and commercial manufacturing. Our progress on these first quarter and upcoming milestones provides us the opportunity to advance not only our core priorities for 2021, but our long-term vision for Intellia. We continued the evaluation of the clinical profile of NTLA-2001, both as a potentially curative treatment option for ATTR patients and as validation of our nonviral in vivo delivery platform. In the middle of this year, we anticipate reporting our first clinical data with an interim look at our Phase I study of NTLA-2001, the first systemically delivered CRISPR-based therapy dosed in patients. In addition, we plan to submit two first-in-human regulatory filings to advance our lead engineered TCR T cell therapy, NTLA-5001, for AML, and our second in vivo knockout candidate NTLA-2002 for HAE. And we remain on track to nominate at least one new development candidate from our research efforts by the end of the year. With key catalysts upcoming and a strong financial foundation, we're positioned to invest the resources and energy necessary to advance our pipeline, expand our platform capabilities, and deliver on our mission for patients. With that introduction, I'll hand the call over to our Chief Medical Officer, David Lebwohl, who will provide an update on our progress in the clinic with NTLA-2001.

David Lebwohl, Chief Medical Officer

Thanks, John. And good morning, everyone. I'll start with a bit of background on ATTR and on NTLA-2001. Transthyretin amyloidosis, or ATTR, is a rare, progressive and fatal disease caused by the buildup of TTR protein in multiple organs. People living with the disease can have either the hereditary or wild type form of ATTR, which results in a diverse range of disease manifestations, the most frequent being polyneuropathy and cardiomyopathy. Globally, there are an estimated 50,000 people with hereditary ATTR and between 200,000 and 500,000 with wild type ATTR. Intellia's candidate, NTLA-2001, applies our in vivo lipid nanoparticle delivery technology to knock out the TTR gene in the liver, which is the source of circulating wild type and mutant TTR protein, therefore reducing amyloid deposition. Based on our robust preclinical data, which shows long-lasting TTR reduction of greater than 95% in non-human primates after a single dose, we believe NTLA-2001 offers the possibility of halting and reversing all forms of the disease with potent lifelong reduction of serum TTR following a single dose. In March, the European Commission granted orphan drug designation to NTLA-2001. As a reminder, this designation provides regulatory, financial, and commercial incentives to develop therapies for rare diseases, defined as having a prevalence of less than 5 in 10,000 people in the European Union. This is meaningful as it not only reflects NTLA-2001's potential to deliver significant benefits over existing treatments for ATTR, but also the unmet need that remains in this population. We view this as an important acknowledgment that regulators recognize the benefits of a potential single-dose treatment in indications like ATTR, even when product therapies exist in the market. Importantly, this is in line with our conviction in this program, as well as feedback from leading investigators who are enthusiastic about the value NTLA-2001 would offer patients and our healthcare system. As you may recall, our first-in-human trial is an open label, multicenter, two-part study evaluating NTLA-2001 in adults with a hereditary form of ATTR and peripheral nerve damage. The study will enroll up to 38 patients and consists of a single ascending dose phase in part one and, following the identification of an optimal dose, a single dose expansion cohort in part two. The trial's primary objectives are to assess the safety, pharmacokinetics, and pharmacodynamics for NTLA-2001, which will include the measurement of serum TTR levels following a single intravenous infusion. The secondary objectives are to evaluate the efficacy of NTLA-2001 on clinical measures of neurologic function in hATTR-PN patients. Once we have established the safety and the optimal dose, our goal is to expand this study and rapidly move to pivotal studies, in which we aim to enroll both polyneuropathy and cardiomyopathy patients. By way of clinical update, we continue to enroll patients across global sites and expect to share interim results from the ongoing single ascending dose portion of this study at a scientific or medical meeting in mid-2021. These results will offer a preliminary view of the safety and activity profile of NTLA-2001 as we progress towards identifying the optimal biological dose. We believe our interim results will establish clinical proof of concept for a modular LNP delivery platform, an important milestone for Intellia, while demonstrating to the field at large the potential for systemic in vivo genome editing in treating life-threatening diseases. We're excited to learn how our ability to edit in vivo translates from our observations preclinically into humans and look forward to sharing interim results mid this year. And with that, I'll turn it over to our Chief Scientific Officer, Laura Sepp-Lorenzino, for updates on our two additional development candidates, NTLA-2002 and NTLA-5001, and across our R&D efforts.

Laura Sepp-Lorenzino, Chief Scientific Officer

Thanks, David. I'll begin with our second in vivo knockout candidate, NTLA-2002, in development for the treatment of hereditary angioedema or HAE. HAE patients experience recurrent, unpredictable and painful attacks of swelling across multiple tissues. Where there are approved acute and prophylactic therapies for HAE, the treatment burden on patients remains significant. We believe there is additional opportunity for a therapy that not only further reduces frequency and intensity of attacks, but which may prevent and eliminate them altogether. To that end, we're applying our modular LNP delivery system to NTLA-2002 to knock out the KLKB1 gene in the liver to permanently reduce plasma kallikrein protein and activity. This approach is expected to provide continuous suppression of kallikrein activity and eliminate the significant treatment burden associated with currently available therapies for HAE patients. In March, we presented preclinical results at the American Academy of Allergy, Asthma and Immunology Annual Meeting, demonstrating NTLA-2002 achieved greater reductions in serum kallikrein protein levels and activity as compared to published results of the current standard of care for HAE. These reductions of up to approximately 90% were sustained for over 17 months following a single dose in an ongoing non-human primate study of our cyno-specific LNP formulation for NTLA-2002. In addition, we presented data from the humanized KLKB1 mouse model of bradykinin-mediated vascular permeability, establishing that a single administration of NTLA-2002 prevented captopril-induced vascular leakage and, therefore, is expected to prevent HAE attacks. We continue to make steady progress with IND enabling activities and we expect to submit an IND or equivalent application for NTLA-2002 in the second half of this year. We're leveraging insights from NTLA-2001 and, therefore, anticipate being able to start NTLA-2002 at the higher dose for our first-in-human study, which will evaluate safety, tolerability, and measures of activity, including levels of kallikrein knockdown. I will now turn to our ex vivo efforts. Here we're using CRISPR/Cas9 as a tool to create engineered cell therapies. Similar to our efforts in vivo, our proprietary approach to cell engineering underpins a modular platform with versatility to mix and match cell types, targeting modalities, and the ability to introduce the edits necessary for eliciting the desired pharmacology. Regardless of the solution, we're achieving highly efficient sequential editing with high yields, optimal cell performance, and scalable manufacturing. Our lead program NTLA-5001 is a potential best-in-class engineered T cell therapy designed to treat all genetic subtypes of AML. Each investigational candidate is an autologous T cell receptor, or TCR T cell therapy, targeting the Wilms' Tumor 1 antigen. NTLA-5001 utilizes our proprietary cell engineering process, which is able to precisely edit and replace patients' T cell receptors with a tumor-targeting TCR. This process reduces safety risks and should translate to improved potency and function versus other technologies for multiplex editing. Despite recent therapeutic advances delivering improved response rates in subsets of AML, long-term outcomes continue to report with overall five-year survival below 30%. WT1 is overexpressed in over 90% of AML patients regardless of subtype, and so between our proprietary cell engineering process and the prevalence of histones, we believe NTLA-5001 will be a well-tolerated solution capable of improving long-term outcomes for patients across all mutational subtypes and forms of AML. We remain on track to submit an IND or equivalent regulatory application for NTLA-5001 mid-year. Our first-in-human trials will evaluate the safety and activity of NTLA-5001 in patients with persistent or recurrent AML, who have previously received first-line therapy. Moving on now to our research programs and platform advancements. We continue to make strides in developing new therapeutic candidates for genetic diseases and next-generation engineered cell therapies for cancer. The versatility of our approach allows us to move quickly with pipeline expansion and we remain on track to nominate at least one new development candidate this year. During the first quarter, we had oral presentations at two different scientific conferences, broadening the applications of our modular toolbox. In March, we presented preclinical data, introducing our proprietary cytosine deaminase base editing technology at the Cold Spring Harbor Laboratory Scientific Meeting on Nucleic Acid Therapies. The data highlights our expansive cell engineering capabilities that enable us to introduce multiple edits via CRISPR as required by next-generation allogeneic cell therapies. Additionally, at the recent histone genome editing meeting, we presented preclinical data extending the modularity of our in vivo delivery strategy. Through our extensive LNP discovery and development efforts, we identified a class of LNPs that achieved dose-dependent therapeutically meaningful editing of bone marrow and hematopoietic stem cells in a preclinical mouse model lasting one year following a single dose. For inherited blood disorders such as sickle cell disease, this approach could greatly reduce the barriers to treatment associated with bone marrow transplantation. More broadly, these results demonstrate the ability to deliver to and edit tissues outside the liver. We will continue to expand upon this work with financial support provided by the Bill & Melinda Gates Foundation. Although still in the research stage, the technology's share in these presentations are important demonstrations of our emerging capabilities, which together reflect our commitment to drive our pipeline forward through continued platform innovation to create potentially curative therapies for patients. Looking ahead, we plan to share preclinical data at the ASGCT annual meeting taking place next week. This will include an update on our research in alpha-1 antitrypsin deficiency, which is the second disease indication for which we have demonstrated robust proof of concept of our targeted in vivo insertion technology to restore normal levels of proteins in non-human primates. Further, we will be sharing data on our research screening platform, utilized to derisk and identify guide RNAs that are both potent and highly specific, with no detectable off-target edits. This foundational work has provided us and regulators with key insights and the confidence to move our program, including NTLA-2001, forward into human clinical trials. We look forward to these presentations next week at ASGCT. With that, I would like to hand over the call to our CFO, Glenn Goddard, who will provide an overview of our first quarter financial results.

Glenn Goddard, CFO

Thank you, Laura. And good morning, everyone. Intellia remains in a strong financial position as we advance our pipeline. Our cash, cash equivalents, and marketable securities were $600.8 million as of March 31, 2021, compared to $597.4 million as of December 31, 2020. The increase was mainly driven by $45.3 million of proceeds from the company's at-the-market agreement, $13.3 million in proceeds from employee base stock plans, and $2.4 million from the Regeneron collaboration. These increases were offset in part by cash used to fund operations of approximately $57.6 million. Our collaboration revenue decreased by $6.5 million to $6.4 million during the first quarter of 2021 compared to $12.9 million during the first quarter of 2020. The decrease was driven by a $5 million milestone payment earned from Novartis for the IND submission of OTQ923 in 2020. R&D expenses increased by $4.6 million to $39.3 million during the first quarter of 2021 compared to $34.7 million during the first quarter of 2020. This increase was mainly driven by the advancement of our lead programs, research personnel to support these programs, and the expansion of our development organization. G&A expenses increased by $2.3 million to $13.6 million during the first quarter of 2021 compared to $11.3 million during the first quarter of 2020. This increase was related to employee-related expenses, including stock-based compensation of $0.9 million. Finally, we expect our current cash balance to fund operating plans for at least the next 24 months. And now, I will turn the call back over to John for closing remarks.

John Leonard, CEO

Thank you, Glenn. As you can see, there are many reasons for excitement for what the remainder of the year holds for our company and the field of genomic medicines. Our Phase I study of NTLA-2001 is progressing well, and we look forward to sharing interim results mid this year for clinical validation of our platform. We continue to progress our pipeline and expect to file a first-in-human regulatory submission mid-year for NTLA-5001. In addition, we expect to submit an IND or IND-equivalent application for NTLA-2002 in the second half of this year. We're advancing our research stage portfolio as we expect to nominate at least one new development candidate this year, and we continue to expand our toolbox to enable the next wave of genomic medicines. With all this progress, and as we close in on key milestones, we remain focused on our core priorities and wholly committed to making genome editing promise a reality for patients. We'll now open the line to any questions.

Operator, Operator

Our first question today comes from Salveen Richter at Goldman Sachs.

Sonya Bhatia, Analyst

This is Sonya on for Salveen. We have a few questions on NTLA-2001. So, as far as the data should we expect from the read in mid-2021? How many cohorts should we expect data from? And then the second question is what is the status of the IND for NTLA-2001 in the US? Thank you.

John Leonard, CEO

First, I want to just remind you NTLA-2001 is a study that we're currently studying outside the United States. So, for the first in human study, there's no plan to have an IND as part of this particular study. The expectation is that for subsequent work, we would come back to the US and have an IND for work that would involve cardiomyopathy in subsequent studies. With respect to the ongoing study and the data we anticipate presenting, we're not talking about the number of cohorts other than to say that we progressed well with the study as it was laid out. And we're adhering to the principles that we'll have substantive data that's readily interpretable and we look forward to sharing that.

Maury Raycroft, Analyst

Congrats on the progress. Just had a question on the 201 clinical study. Just wondering if there's anything additional you can say on safety so far in the clinical study. I guess one concern in the past was on immunogenicity. And is there anything you can say about that at this point? And will that be part of the mid-year update?

John Leonard, CEO

With respect to safety, I think it's best to look forward to the information that we anticipate sharing here mid this year. A study is progressing, and we're excited with the progress that we've made. And I think we'll address many of your questions at that point in time.

Maury Raycroft, Analyst

We've been getting questions too on LNP design and I guess some of the characteristics that go into your LNPs. And I'm wondering if we could learn more about that in the mid-year update and how your LNPs, the functionalization translates to an improvement in immunogenicity and also the tunable tropism as well?

John Leonard, CEO

As the year unfolds, I'm sure there's going to be opportunities to talk more about the platform and the work that we're doing. I think with respect to the clinical data that we're talking about, I would anticipate that most of the discussion at that time would be about the study and the results that we have. But as you know, Maury, as our science progresses, there's points in time where we'd like to share some of the advantages that we have. And there may be opportunities later this year to do that.

Xiaozhou Fan, Analyst

This is Sheldon on for Gena. So, I think you mentioned in the past that the target knockdown level is about this 80% for the NTLA-2001 trial. So, right now, you have almost set out the timing of the presentation. Does it mean you already reached the target level in the initial at those levels?

John Leonard, CEO

The way we've approached this, as we've said from the outset, is that we would share interim data from the studies in progress. Remember that there's two phases to it, the ascending dose phase and then the expansion phase, where we would take what we think will be the optimal biological dose and study that more fully in a larger set of patients. The principle that we've applied for this first phase of the study is that we'll have meaningful results that are readily interpretable. We haven't tied that to a specific target, or this particular data release. It's true that we set as a benchmark 80% and beyond. Our objective is to surpass 80%. Because we think the further one reduces the circulating TTR levels, the more beneficial it will be for patients. And I think there are places we can look for data that seems to indicate that. So, that is our ultimate objective. But the particular data that we share here is not necessarily triggered by any specific number.

Rick Bienkowski, Analyst

This is Rick on the line for Mani. I actually have a follow-up on Maury's question on safety. And specifically, there are a few novel components being evaluated here for the first time in the clinic. That's the LNP formulation or the transient expression of Cas9 and guide RNA in the liver and then the actual edits being made to the genome. So, I was hoping to just get your thoughts on – if there is any sort of safety signal observed in the trial, what ability is there to parse out which of those components may be contributing to the signal and potentially read-throughs for the rest of the in vivo platform?

John Leonard, CEO

So, we're talking in general how we think about safety. And the way we approach it is, there's the LNP itself and its administration and then there's the long-term effects of that particular intervention which we expect to be largely beneficial based on the expected TTR knockouts that we've achieved in animals. LNPs as a class, you may remember, Rick, generally have a characteristic pattern of safety findings that when one gives sufficient quantities of material, you can trigger. All that, we've worked on very carefully in our preclinical work to develop a therapeutic index. So, the clinical exposures that we're doing in the human trial here are designed to balance the desired and expected TTR effects within the therapeutic index that does not trigger those particular LNP class effects. And the Phase I study is to test exactly that, those preclinical findings. And as we've said, we'll share some of the early results here mid this year.

Joon Lee, Analyst

You just set your bar as 80%, which is what I guess sRNAs and antisense oligos hover around that knockdown level. But as a genome editing tool that is constantly working, do you really need to hit similar knockdown as those antisense oligos and sRNAs achieve similar clinical advocacy? Or could you envision a situation where you could get less knockdown but still get equivalent or better clinical effect? And could we get clinical data mid-year as well as some of the knockdown levels? And I have a follow-up question.

John Leonard, CEO

So, it's a very important question you're asking, which is when we talk about these numbers of knockdown, what does it actually mean? Right? And so, the numbers are typically presented by some of the other modalities that I'm familiar with, at least are typically portrayed as maximal effects. And what you're asking is essentially an area under the curve question, which is, well, if you have a maximal effect at a particular number, call it 80%, what is the average effect over time? One of the advantages of the approach that we're taking here is that the maximum effect is the effect because there's no pharmacokinetic variability that occurs over time. So, our approach to this is we look at 80% as the benchmark. The goal is to surpass it, not just from maximal effect, but from a sustained effect. And if you go back to some of the preclinical data that we presented, you'll see that when it comes to the animal models, that's exactly what we achieved. So, our thesis is that reducing TTR to the lowest possible levels in the blood is going to lead to more clinical benefit. And that's exactly what we're setting out to achieve here. So that's how we think about it.

Joon Lee, Analyst

So, we'll get clinical data along with the knockdown mid-year?

John Leonard, CEO

So, in the early phase of the study, remember, it's a three plus three design for a cohort. So, the extensive clinical data I think is going to be very modest here early on. What I would look to is primarily a safety characterization and primarily a TTR effect. There's descriptive clinical data, but the bulk of that information, I would look to the second phase of the study.

Jack Allen, Analyst

It's Jack Allen here. We want to touch briefly on NTLA-2002 and we were wondering if you could talk a bit about your expectations for the trial as you move it towards the clinic. It's our understanding that there are a number of therapies already approved for HAE. How do you expect the magnitude of clinical benefit here as you move it into the clinic? And then I know someone touched on this earlier, but you briefly mentioned that you may file an IND or IND equivalent for this program by the end of the year. Could you speak to the factors that are going to dictate the decision to go with an IND or an IND equivalent? Is the NTLA-2001 data one of the factors that you're weighing in that decision? Thank you so much.

John Leonard, CEO

Just a couple of words about where we think NTLA-2002 can sit in the pharmacopoeia. We think that the modality that we have is ideally suited to hereditary angioedema. It's certainly the case that advances have been made with respect to treating that condition. Either patients are treated as an attack occurs, patients don't like that, or they're prophylaxed with ongoing therapy. Remember, these patients are typically identified at the time of puberty or shortly thereafter. So essentially, what you're talking about is lifelong therapy. That is a very, very significant treatment burden, and one that in some cases has become quite effective, and others far less so. So, therapeutic opportunity clearly remains. Don't forget also that most effective therapies are extremely expensive, starting at over $0.5 million a year with many patients spending over $1 million a year for those same therapies. So, whether it's the meeting or exceeding the effect that others have achieved, or whether it's dealing with the burden of treatment, or dealing with the significant pharmacoeconomic costs to the healthcare system, we think that we have something to offer on every single front. With respect to the clinical trial, and where we do it, we certainly look across all the work that we do, wherever it is, and whatever the drug is and factor in how we think about what we're doing, how we're doing it, and where we're going to do it. And we would expect that to be a very central factor in our ultimate decision on where we carry this out.

Operator, Operator

Thank you. There is no time for further questions. I will now hand back to Lina for closing remarks.

Lina Li, Director of Investor Relations

Great, thank you all for joining us today and for your continued interest and support. We look forward to updating you on our progress. Have a wonderful day.

Operator, Operator

That does conclude our conference for today. Thank you for participating. You may now disconnect your lines.