I'll get started, if that's okay with you.
Of course.
All right. Good morning, everyone. Welcome again to TD Cowen's 45th Annual Healthcare Conference, the first day. For this next session, actually, before I say that, I'll go ahead and say my name, Tyler Van Buren, Senior Biotech Analyst here at TD Cowen. But for our next session, we have a fireside chat with CRISPR Therapeutics. Very excited to have this discussion, and it's my privilege to introduce Sam Kulkarni, CEO of CRISPR. Sam, thank you very much for being here.
Thank you for having us.
So also, as we go through the discussion, if you guys have questions, feel free to raise your hand, and we'll do our best to get them asked. But I wanted to start with a few general questions. Sam, you've been at CRISPR now for roughly a decade, if I'm not mistaken, which is somewhat unique in our industry. And at CRISPR, you guys are really pioneering a new technology and have pioneered a new technology. So I'm curious just to hear you compare and contrast where CRISPR was 10 years ago versus where you are now and where you think it might be 10 years from now.
Yeah. No, great question. It's hard to believe that it's been 10 years, more than 10 years, since the start of the company and 10 years for me at CRISPR. It's been an absolutely amazing ride. If you think back to those times, those were heady days for biotech. I think there was platforms were in vogue. Yet, the platform for CRISPR was in its infancy. We didn't know what you could do with it. The indication choices early days was a coin toss at best. If you look at the various decks from the different companies that started at the time, Editas, Intellia, and CRISPR, you weren't sure if immunogenicity was going to be a problem. One company went into the eye. Another company said, "You know what? Ex vivo is probably the place to go. It's de-risked." There were other challenges with ex vivo.
There were companies even trying to go into the brain as their first indication. But if you take a 20,000-foot view, the technology has moved faster than most other platforms in the biomedical industry. If you look at antibodies and recombinant proteins, it was a 15-year journey to maturity. RNAi and siRNA have been almost a 20-year journey to maturity. And I think CRISPR and gene editing have been faster and also benefited from all the work done with other platforms and modalities before. So here we are. And the word I use is, it's real now. We have amazing data clinically. There's medicines that are now commercially available, and there'll be more in the future. And we're seeing a plethora of data and clinical data sets emerging that show the power and showcase the immense ability to address diseases at their root cause.
That's where the world is moving towards, and the world of cures. I think CRISPR is at the forefront of that.
That's great, and there's been some thought pieces published by the media lately and on the gene editing space, so I want to get your thoughts on these and what they might be overlooking as they think about the future of gene editing relative to other modalities. I mean, you kind of addressed a lot of that, but curious if you have anything to add.
Yeah, absolutely. I think what Tyler, you're alluding to, and for those who haven't read these thought pieces, there have been questions about where is CRISPR headed? Has it achieved the promise that people once saw? What are some of the, how does it compare with other modalities? And a lot of the cycle that we see right now and the investor excitement and subsequent skepticism is very similar to what we saw with the antibodies in the '80s. In 1983, when Genentech went public, their market cap at the time was $3 billion, which in today's world is $30 billion, the IPO. And then they had their first approved drug three years later. But by 1989, I think there was, people said antibodies are dead. We're just going to go back to small molecules. And I think you're seeing that similar cycle with gene editing right now.
Some of the thought pieces. But the two big questions that people are asking about gene editing, one is, how commercially viable is it, especially as it compares to other modalities? And I'll answer that question. The second is, it is relatively more expensive to develop than other modalities like antibodies or bispecifics, for example. And so what's the return equation? And the third issue that's also plaguing us right now is, after the initial success that CRISPR and Intellia had, there were a number of other companies that started, 20 other companies that started in gene editing. And I think we have this issue right now of too many companies in the space trying to do the same thing. And that's adding to the investor anxiety as companies shut down here and there. So what do I think? And by the way, these are valid points.
I'm not going to say that none of this matters and these questions is all going to sort itself out. I think what I am confident, though, if you pick the right indications and we've done a lot of surveys, for instance, with some of our indications like Lp(a), physicians see that one-time gene editing for someone in their 30s or 40s for the rest of their life is way better than giving them injections every three months for the rest of their life. Similarly, with ex vivo therapies, I think after the initial learning period, you're going to see a phase where people are going to learn how to commercialize these profitably. So on the commercial side, the world will change.
I mean, I still remember in 2006, there were surveys about BlackBerry versus iPhone, and everyone said, "Oh, why would you ever do an iPhone?" I think the world changes faster than we all think. And I think the question's going to flip in five, six years where people are going to say, "Why not gene editing? Why would you do siRNA?" So that's one. The second part is a trickier equation, which is it is expensive to develop these medicines, but it's getting better. And part of the reason it's expensive is because the regulatory framework is maturing. So the early regulatory framework made it more expensive because you didn't have the harmonization between different jurisdictions. You had all these requirements because the regulatory agencies were trying to learn. And you didn't have all the CDMOs and the support CROs that generally make things more efficient.
But that is getting better. I think things are getting better, but there's still a scale advantage. So if you're a new gene editing company doing one indication and starting out now, it's impossible for you to scale and build the threshold capabilities you need to develop a medicine. But for us, now that we're at scale, for us to do every new in vivo indication, for instance, for the liver, it's only an incremental $15 million, whereas the initial indication will cost you $100 million plus to get there. So I think there's going to be efficiencies in the system, and you're going to see that overall, the industry is going to learn how to make these medicines for lesser investment upfront, which changes the return equation. So overall, I'm very bullish about how this is going to turn around from an investor sentiment perspective.
The last thing I'll say is pharma sentiment is definitely turning upward because we're seeing a lot more interest from pharma now that this is becoming, as I said earlier, real, even in their words.
Okay. That's very helpful. You touched on a lot of important points there regarding commercial viability. Patient choice is pretty straightforward. Obviously, if you can get it one time for the rest of your life versus quarterly injections, that's a big advantage. But I guess on the topic of safety, do you think getting people comfortable with gene editing, especially broader populations, do you think those are going to be some of the more important data sets over the next five to 10 years as you guys start to read out that data? And what do you need to show on that front?
Yeah. I think people are getting more comfortable with safety. I mean, in fact, we had regulators say to us that, "Look, it looks like gene editing can be safer than everything else we're doing because with small molecules, it's not predictable what effects you're seeing outside of the intended organs you're trying to affect." There is emerging data on siRNA. If you treat for very long periods of time, you do get some off-target effects, and some of those safety data sets we've not seen fully, and gene editing is one-time targeted, and we've shown that there's no off-target effect with our medicine. So it could be that gene editing is a lot safer than other modalities, but only time is going to give people comfort as more patients are treated and you see more safety data.
Now, with siRNA, is there a safety data set that's thousands and thousands of patients? No. But people are more comfortable with it. And I think that's the same phenomenon you might see with gene editing.
Okay. Let's get into some of the programs. So the ongoing Casgevy launch. So patient cell collections started to pick up in the second half of last year, over 50 now. How many of these patients do you believe will be treated in 2025? And how do you expect patient cell collections to evolve over the course of the year?
Yeah. One of the discussions I've been having with you and others as well right in the space, which is modeling Casgevy is very different from modeling most pharma launches because typically, the way we all think about drug launches in biotech or pharma is to say, "Well, here's the addressable market patient population, and what are we seeing early on as uptake within that patient population?" The addressable patient population for sickle cell and thalassemia is huge. But we are driven with Casgevy on the launch by two other factors. One is how many authorized treatment centers are there, the ATCs that are activated. And within the authorized treatment centers, how much can they do per month or per quarter? What is the velocity coming out of these authorized treatment centers?
It's more akin to modeling a med device launch or perhaps a sequencer that Illumina launched in 2008, perhaps, if you go back in time. That's more the model for this. So I think you're going to see a double—you're going to see an acceleration based on these two factors. There are going to be more ATCs activated, and each of the ATCs are going to learn how to do more per month. And so what I'll say is, yes, you will see an increase in the number of patients who will have their cells collected. We haven't guided to that number, or Vertex hasn't guided to that number. But you will see that increase. And I think in our clinical trials, we didn't see much drop-off at all between getting your cells collected and manufactured to getting dosed.
I see no reason why someone would drop off after going through all that. So our expectation is that a majority, almost all the patients that get their cells collected and manufactured would be dosed. And so that's something that's just. We'll have to see how that plays out in the real world.
From cells collected to being dosed, what's that approximate time frame right now, and how do you expect that to evolve?
In our clinical trials, the time frame for thalassemia between having a patient's cells collected and to the point where they were dosed was about six months, and for sickle cell, that time was slightly higher. It was probably in the clinical trials more in the eight to nine months time frame, and various reasons for it. Sometimes sickle cell patients may need more than one collection, or some patients will elect to do exchange transfusions before collection, etc. So I think that may, we haven't disclosed the numbers in the real world, and Vertex will update at some point around that, perhaps. But I think it won't be dissimilar in the real world, is my expectation. So I think that's what you're seeing play out is on the collections to the revenue sort of handicap.
You're seeing perhaps more thal patients getting dosed earlier, but you're also seeing sickle patients being dosed. And over time, you're just going to see that build up.
Okay. So when it comes to drug launches, we're very familiar with looking at the U.S. and Europe. But with the Casgevy launch, there's been a lot of discussion of the Middle East. And historically, it doesn't contribute a ton of sales for drug products. But why might that be different in this scenario?
Yeah, two reasons. One is typically, if you look at just a population ratio, like the Kingdom of Saudi Arabia is about 30 million people. So it's a tenth of the U.S. in terms of incidence or prevalence for diseases. But in the case of sickle cell disease, it's 2x that of the U.S. There's almost 60,000 patients that have sickle cell disease, and there are patients who have thalassemia in KSA. And we haven't fully gotten the epidemiology, but Bahrain, for instance, had about 9,000 patients. The UAE and Qatar are equally prevalent for various reasons around why there's so much more sickle cell. So that gives you a much bigger addressable population. And it's a real burden for that society to have patients with sickle cell disease. And for that reason, those countries have decided that they will pay and cover all these expenses.
So we've been saying this for a while. In fact, we've been visiting these countries since 2017 because we recognize this opportunity. You'll see from some of the recent disclosures that the ability to pay for the Middle East is equal to the U.S. It almost more than doubles the expected or addressable population that people had perceived for this drug, especially in the early going.
Okay. And with the greater than 50 cell collections, have you guys talked about how that split between the geographies between the U.S., Europe, and Middle East?
We have not discussed the split in terms of cell collections. But if you look at the ATCs, we have said that we had more than 50 ATCs activated. There are treatment centers that are specialized that have learned how to administer Casgevy, collect cells, etc. From the Casgevy website, you'll see that there's 40 plus that are U.S., which presumably tells you that the remaining are in Europe and in the Middle East. So the ATCs may be smaller there, but I think the momentum is also very strong in these countries. And getting reimbursement coverage, for instance, in the U.K., etc., are all tailwinds that help us globally as we launch Casgevy.
Okay. That's helpful. So as we think about fixed and variable costs for Casgevy as they evolve over the course of this year and the coming years, how would you frame them? And how are they going to be impacting CRISPR's P&L and cash runway moving forward?
Yeah. Yeah, I think this is a hot topic of debate as there's several companies now that have cell therapies in the market, whether it's for rare sarcomas or for lung cancer or melanoma or for other indications, and then Casgevy. And what I'll tell you is when you look at the cost bucket, there are three different pieces to the cost bucket. And two of those are either variable or go away, and only one is sort of the true threshold cost of commercializing a drug. And the two other costs are. One is expanding your label. So as you do more trials to get to pediatric population, for instance, or to get to more jurisdictions, there's a huge burden of regulatory filing in all these different countries, and you want to get the approval. Those are temporary costs that go away.
But it's an investment we're making right now because we want to expand Casgevy everywhere else because there's no other competition, and we want to establish ourselves as the option in these Authorized Treatment Centers. And the second piece of this is our own bullishness. While the market may not be very bullish, or some analysts may not be bullish on what the launch may look like, we are investing in capacity expansion. So we're saying we want to be able to treat not just hundreds, but more than that in terms of patient numbers per year. And so what is the capacity expansion that allows us to do that? And that has to happen a couple of years before you get to that volume because you have to get the regulatory comparability for the expansion before you actually activate it and use it in the real world.
So I think those are the two buckets of cost that are beyond that that make it look like it's a significant investment. And we are investing. And this year will continue to be a year of investment for us for Casgevy. But that'll turn around very quickly once some of the costs go away and the sales go up.
Great. Let's move to the pipeline. So the in vivo pipeline. I remember at your R&D day two, maybe three years ago, you guys unveiled the big in vivo pipeline with a lot of programs, which was exciting. And now by the end of the first half, we're going to get initial clinical data. So what should we expect from the ANGPTL3 and Lp( a) programs by the end of the first half?
Yeah. I think it's been an incredible journey to build the in vivo part of our company. I'll admit that when we were in maybe 2020, 2021, we were behind. I think Intellia was ahead with their in vivo pipeline because our focus was a lot on ex vivo at the time. We were doing Casgevy. And then we saw the incredible opportunity there is. But also, there was a de-risking of LNPs. And from that point onward to having data that we'll have in the first half of this year is incredibly rapid. So that's one thing about the DNA of CRISPR and the company is we're very good at execution, and we move very fast once we decide we're going to do something.
I think it was okay for us to be a fast follower on the in vivo side because I think we may have some of the most valuable programs with in vivo gene editing in the liver compared to others, and two of these programs. One is Lp(a). One is ANGPTL3, CTX320, and CTX310, respectively. Lp(a), I'm sure in this audience right here, 90% of you have measured your LDL cholesterol, right? How many of you have measured Lp(a) cholesterol or Lp(a)? I see like one or two hands, right? It's just not part of the cardiology practice, but it turns out that Lp(a) is six times more atherogenic than LDL, so if you're worried about high LDL, if you have high Lp(a), the risk is sixfold higher, and it's becoming now a part of medicine everywhere.
You see posters on Lp(a) when you go to conferences because people recognize this risk. And the only way to reduce Lp(a) right now, you don't have any commercial products approved, would be perhaps to use siRNAs or gene editing. And I think we're at the forefront of that wave. And we'll obviously see some big readouts from the siRNA world around the outcomes difference based on Lp(a) reduction. But so that's, I think, a really important target for pharma in general. I mean, we've had half the top 10 pharma companies reach out to us about this target because they're all excited about it. ANGPTL3 is a target that's been around, which is an enzyme that acts on lipoprotein lipase and other proteins, which effectively reduce the ability if you have lower ANGPTL3, you have more lipase that will cleave the lipids and reduce the lipid levels.
So it has a tremendous effect on triglycerides in addition to LDL. And so the reason we picked ANGPTL3 as well is because the biomarkers are so validated that we can actually develop this drug all the way to the finish line without the need for an outcomes trial, without a tremendous amount of spend. When you think about a typical cardiovascular drug, you're talking about $1 billion of spend to develop something. And with ANGPTL3, it's probably a third of that all the way to the finish. And so I think we like this tandem of one that's a giant market, multi-billion-dollar opportunity, Lp(a), one that may be $1 billion-$2 billion, but it's very efficient to develop with ANGPTL3. And I think we'll have our dose escalation data first half of this year. And it's a typical dose escalation, three patients per dose level.
So we just want to show that using our LNP platform is safe and that you're getting the knockdowns that we saw in non-human primates. So that's the expectation.
Yeah. The knockdowns in primates were tremendous. So maybe you could just recap briefly what you saw in primates.
Yeah. In our primate studies, we saw a 90% knockdown for both Lp(a) and ANGPTL3 in a durable fashion. Those monkeys, we kept they're still living, by the way. We keep looking at their data. We presented the data with six months, then there was 12 months. And now they're two years out more. And they're still having the same durable knockdowns. You don't have any of the effects where there's some reason why it would come back up. And so we're very confident on the durability. Now we'll have more data preclinically with preclinical ANGPTL3 studies where you can do repeat dosing and titrate up exactly where you want to be on the editing. There's lots of reasons to think that this is a very scalable, titratable platform with our LNPs.
All right. We've got two minutes. So I'm going to try to ask a question on cell therapy and regenerative medicine. But with cell therapy, CTX112, the data at ASH were much improved over the first generation programs. We're going to get an update in the middle of this year in B- cell malignancies and lymphoma. So I guess just briefly, what should we expect from that update? And how do you expect to position that product in the existing CAR T treatment paradigm?
Yeah. I mean, I think we're very pleased with how CTX112 has played out. All the first generation programs in all of CAR T didn't meet the efficacy bar of autologous, right? But at the same time, you now have data that go three, four years out, which show that for a smaller tumor burden, you were able to get durable effects. Allogene was published recently. We've shown data with patients that are out four or five years, right? And they're cancer-free. So with 112, it's that much more potent. It's autologous-like potency with all the advantages of allogeneic and a very low cost of goods. And I think we're going to develop this in a big way in both indolent and aggressive lymphomas. And we'll have a mid-year update that tells you what our strategy is.
And we got the RMAT designation from the FDA that tells you how excited they are about it. And we'll discuss the regulatory path forward. And I think while most companies have said they're done with oncology with allogeneic CAR Ts, we're going to double down. I think that's our opportunity to establish leadership in this space.
Yeah. We'll have our lymphoma panel Wednesday morning. And your program consistently gets a lot of votes from the KOLs. On autoimmune, we're going to get an update later in the year. Is that just going to be early kind of B-cell depletion and safety as well?
Yes. Mid-year. We said mid-year update on both oncology and autoimmune. So it will be early on autoimmune. But there's a lot of key markers you can look at that would tell you how this is working in autoimmune. And so that'll be the update on that front.
Okay. And regenerative medicine, diabetes, that program has been in the clinic for a while. And we haven't gotten an update. So what should we expect from the update later this year?
Yeah. We'll have an update. I think what's very interesting, there was another company that showed some data. When you differentiate these iPS or embryonic stem cells to islet cells, they're generally hypoimmune already. And then you do one or two edits on top of it, and they can be very stealth. And so that is very encouraging. And I think the progress that Vertex have made with islet cells, progress some other companies have made. And at this point, for iPS-derived cells that are edited, we're probably the farthest along out of all the companies. And so I think you'll see updates not only on how these cells did in a device and the immune evasion that you might see with that, but also what that means for naked cells or cells without device that ultimately should be the product that can reach millions of people.
Wonderful. We're over time. But to wrap up the conversation, Sam, what do you believe is the most underappreciated aspect of the CRISPR story by investors?
I think the biggest thing that people are not putting together is, one, Casgevy will do well, which gives us the platform and the ability to take these risks with indications like Lp(a) , perhaps even indications like Alzheimer's that can really make us into a $100 billion biotech that we aspire to become. I think our continuing data readouts would support that vision in a practical but realistic way. We're not trying to do that tomorrow. I think it'll be a steady growth from here on out as we establish Casgevy and show more clinical readouts.
$100 billion sounds pretty darn good. Thanks for your time, Sam.
All right. Thank you, Tyler.