Hello, everyone. I'm Max Skor, biotech analyst with Morgan Stanley. Before we get started, for important disclosures, please see the Morgan Stanley Research Disclosure website at www.morganstanley.com/researchdisclosures. With that, I'd like to welcome Sam Kulkarni, CEO of CRISPR Therapeutics. Thank you very much for joining us today.
Thank you for having us.
Maybe just to start off, Sam, you can kind of set the stage for us, walk us through CRISPR Therapeutics' key priorities, milestones through year-end, and where the portfolio stands overall.
Yeah, happy to. 2026 has been a great year for us so far as we move to the next phase of the company. What we have are several layers of value. One is CASGEVY, which is our commercial product for sickle cell and thalassemia, which we are partnered with Vertex on, and that's showing a very nice trajectory from a revenue standpoint, and we expect that to be a multibillion-dollar opportunity. The second is three assets that could potentially be ready for phase III next year or pivotals next year, and these are namely CTX310, which targets ANGPTL3. This is for a one-shot reduction of cardiovascular risk by using CRISPR-Cas9 to reduce the ANGPTL3. We have zugo-cel, which is an allogeneic CAR T, which is off-the-shelf, very convenient, and it could do a one-time immune reset for various B cell-driven autoimmune diseases.
The third being CTX611, which is our siRNA, which we are partnered with a company called Sirius on for Factor XI, which has the promise of anticoagulation without the risk of bleeding. That can be applicable in many different settings and indications, such as stroke prevention. So those three assets represent the next layer of value for us. Then we have two early assets in the clinic now. One is for A1AT, which is our first advanced editor, which has leapfrogged Gen 2 editors to be something very efficient and potent and very precise. We call it SyNTase editing, and that is going to dose patients soon. CTX340, which is for refractory hypertension, where we actually target angiotensinogen, and that can result in a pretty meaningful reduction in blood pressure in patients very soon after being edited. Those two will have data in the not-too-distant future.
So we have other programs beyond that. One of them is CTX321 for LPA, which kind of hangs in balance based on Horizon data, and also Type 1 diabetes. The last layer of value for us is our very prolific and productive research arm. We have a best-in-class in vivo CAR T now, both in the form of a transient CAR T based on mRNA, but also permanent CAR Ts based on editing, where we insert the CAR into cells, and that is permanent. We have in vivo HSC editing, where we directly edit hematopoietic stem cells, which can be durable, and many other things that we are working on. So all in all, a very rich portfolio, but we have the strong balance sheet to move all these programs forward ourselves and really change the face of medicine along many different dimensions.
Great. So maybe we will start with CASGEVY, move on to some of the more mature assets, and then we can talk about the future from there, if that sounds good. The FDA recently expanded the CASGEVY label to children two years of age and older, adding approximately 5,500 potentially eligible patients with sickle cell or transfusion-dependent beta thal. How should we think about the pace at which pediatric expansion could translate into patient referrals, treatment center readiness, initiations, and ultimately revenue?
Yeah, it is a great tailwind for us on CASGEVY. Vertex, in their last disclosure, announced revenues of about $76 million for the quarter, and also, more importantly, said that they are initiating over 100 patients per quarter. That puts you, if you just do the math in terms of future revenues, at around a $2 million price tag, that you are already looking at future revenues well north of half a billion dollars and getting closer to the billion-dollar mark, which makes it a blockbuster. I think that tailwind of pediatric expansion is only going to add to the number of patients that are being initiated per quarter because with kids, you have more children's hospitals at play, and they are used to these kinds of procedures, so they are going to be more productive as well as there is a more bigger addressable population.
Not to mention the fact that I think with these diseases, you want to treat these kids earlier and earlier. The sooner you treat them, the better because you don't have any organ damage or any permanent damage that will be caused by these diseases. All in all, I think a very favorable dynamic for CASGEVY over the coming quarters.
Okay. So more broadly, what are you seeing in regards to the movement of patients through the CASGEVY treatment journey? Where is the greatest remaining friction between referral, initiation, cell collection, conditioning, et cetera? What are you seeing as potential bottlenecks, and what's the team working on to remediate that?
Yeah, at this point, most of the bottlenecks have been worked out by our partner, Vertex. I think initially when we started the launch, there was a lot of work required to get the reimbursement set up fully to be well-oiled in terms of prior authorizations, getting all the approvals, and mind you, we had to do this not just in the U.S., but several jurisdictions around the world. But good news is we're very strong payer coverage. Second thing was to get each of the hospitals contracted and you have individual requirements per hospital, potentially based on their own IT systems and what they needed to get these patients into flow. So that's all been done. Then the last thing is manufacturing capacity, and we're steadily increasing the capacity as we see more and more demand coming to be able to serve the needs of all these patients.
I would say at this point, most of those elements of friction have been dealt with and we're just now awaiting the patients to come into the funnel, move through the funnel, and ultimately get treated. It still does take over six months, potentially nine months plus to get a patient from initiation to treatment, but at some point, it's going to stop mattering because it's just a matter of getting into the funnel and then getting through the funnel and getting treated. All in all, I think that's looking very good and could be the basis for steady growth for a long period of time from here on out.
Is there anything you would look at potentially to decrease that time, or will six months always be the low end?
Yeah, I think we'll do everything we can, but it's not the manufacturing that's the major contributor to the time. I think the actual manufacturing itself happens pretty quickly. But a lot of patients opt to do exchange transfusions, for instance, so you have two to three months where someone's doing exchange transfusion before they even collected. Then after the drug is manufactured, sometimes people wait because they have to get their life in order, or they have to take a break, or they need vacation from work, et cetera. And so you do see some wait time there anyway. So it's never going to be one month. But at the same time, it doesn't matter at this point.
What matters for the patients is the guarantee that they're going to get the drug product if they go through the journey, and that's what our main goal is, to have that assurance for the patient. The last thing also I'll say is the other tailwind that we should think about as we look at the next few years is gentler conditioning. I think Vertex will disclose more on gentler conditioning over the coming months. But I think that a gentler conditioning agent that allows a patient to just do a three day hospital stay or less instead of a two week or three week, that's going to be a big tailwind as well, and it's going to expand the addressable market where some of the more moderate patients will also potentially opt for CASGEVY.
I think that's another factor that we're preparing for as we think about capacity expansion, not just in the U.S., but globally.
Yes, I was going to ask that question on gentler conditioning, but also in vivo hematopoietic stem cell editing. Any updates around that?
Yeah, it's a major focus for us to do direct hematopoietic stem cell editing, and it requires a lot of different things to come together, the LNP platform, the targets, and the type of editing you're doing. We're making very good progress. In our corporate presentation, we showed durable editing of hematopoietic stem cells over a six-month period. We didn't say which edit that was, but you can see that being applicable to a number of different indications and diseases. You could modulate several factors, whether it's porphyrias, whether it's autoimmune conditions, et cetera, that you could do if you can actually establish a platform for HSC editing, not to mention the fact that sickle cell and thalassemia will be the huge beneficiary of that. So the life cycle of the franchise for us and Vertex is that we have CASGEVY in its current form.
We have CASGEVY with gentler conditioning agents. Then in the '32, '33 timeframe, you're going to have in vivo HSC editing that's going to come to patients that will allow us to treat many more patients than what the current affordability indicates, right? We go beyond Western Europe and U.S., and potentially even treat patients in Asia and Africa to get rid of this bad disease.
Okay. That's helpful. Maybe we can pivot to CTX310. You recently presented data at ESC. Maybe just put the data update into context. I have a few follow-up questions, but maybe introduce the audience to what was presented.
Yeah. This is a fascinating target that was elucidated about 15 years ago. It is called ANGPTL3, angiopoietin-like receptor 3. The basis is natural history data as well as some work that was done in the Boston area. There is a village called Campodimele in Italy where people have a naturally occurring mutation in their ANGPTL3s, which it is a loss of function variant, and these people just have lower levels of ANGPTL3. It turns out that the cardiovascular risk in this village is a lot lower. While it is not statistically significant, they all tend to live longer. A naturally occurring mutation in ANGPTL3 resulting in a greater lifespan, lower cardiovascular risk. We are just following the genetics, following natural history data.
If we can recapitulate the same knockout, it does not have to be the same mutation, but we can knock down ANGPTL3. It basically is a protein that acts on lipoprotein lipase and endothelial lipase. These lipases are enzymes that chew up the cholesterol. You are unhinging those lipases of the enzymes to reduce your cholesterol levels. When you knock down ANGPTL3, no surprise, your triglyceride levels, your LDL levels all come down. In the phase I-A data that we presented, we presented some early data last year at AHA, then continuing data at ESC, which shows that we get dramatic reductions at the higher dose levels of ANGPTL3, up to 80%. It is not 100% because there is some ANGPTL3 produced outside the liver. We are pretty much maxing out the liver editing of ANGPTL3.
When we knock down ANGPTL3, you get near 50% reduction of LDL cholesterol, near 50% reduction of triglycerides. It is a little variable because different patients in the phase I-A, it is a mixed population. Some people have high LDL, some people have high triglycerides. That is really encouraging. Then we presented data at ESC that shows that that edit is durable. If you knock it down 80%, it remains knocked down 80% a year later. That is a very good sign because it means that it is durable for life, essentially. So it lays the groundwork for a one-and-done gene edit that is going to reduce your bad cholesterol for life. We will have more data coming soon in our phase I-B, where we have segmented the patients into severe hypertriglyceridemia, mixed dyslipidemias, refractory hypercholesterolemia, et cetera.
The first one that we are moving forward, obviously, is severe hypertriglyceridemia. We will get a greater sense of the data for that population later this year in terms of what is the triglyceride reduction that you get there and what else are you seeing in terms of LDL reduction, hepatic fat fraction, et cetera.
From the ESC data, if I could just ask, what did these data teach you about dose selection, patient level variability, durability you've commented on, but just the therapeutic window as you advance into the phase I-B?
Yeah. It's basically proved that at the highest dose levels that we did in the phase I-A, which is about as high as we need to go, it's very safe and it's durable, essentially laying the groundwork for our phase I-B, where we pick the fixed dose based on that highest level dose. There is some variability between patients because they're all different types of patients. Some have both high LDL and high triglycerides, some have low LDL but high triglycerides, and vice versa. That obviously leads to, if you have normal LDL or triglycerides, you're not going to see much reduction because you're already normal.
But essentially, it's a very clear indicator that ANGPTL3 was dose responsive reduction, and if it's reduced to a certain level, it remains reduced for a long period of time, and it's durable, and it gives us a good window into what the dose is that's safe, that we can go forward into phase I-B and potentially pivotal. I think, the phase I-B data we get later this year is the last piece of information we need before we can go to the regulators and say, how do we start a pivotal trial for ANGPTL3 in population A or population B?
That's a great segue into the phase I-B data. Could you just set expectations? What clinical and biomarker evidence would support advancing into this indication? How will you determine which population offers the most practical first registrational opportunity?
Yeah. Each of these populations will have different level of information or evidence, right? You have in severe hypertriglyceridemia, I think what we're trying to get a handle on is what is the level of triglyceride reduction you see in patients with very elevated triglycerides. If you look at the siRNA trials, they usually had a cutoff of about 500 mg per deciliter as their lowest triglycerides, so 500 and above. We're trying patients that are well above that, and we're trying to get a handle on how much triglyceride reduction there is, and then all the other biomarkers, such as what happens with LDL, what happens with their A1C, what happens with hepatic fat fraction. I think we'll get a handle on that, and that'll allow us to say, are we getting the same reduction that you see with siRNA for triglycerides?
What is the population we want to go after? What's the cutoff of triglycerides that we want to go after in a phase III trial? So that's for triglyceridemia. For refractory hypercholesterolemia, what's very interesting is ANGPTL3 is synergistic with PCSK9. We had patients in our phase I-A that were on PCSK9 therapies, had reduced their LDL, but it's still high, uncontrolled LDL, even after PCSK9 therapies. And they had 50% reduction on top of PCSK9s, right? Indicating that ANGPTL3 is very synergistic with PCSK9 therapies. So there's that population of refractory hypercholesterolemia, which we'll get to next. I think we want to do this in a phased approach, but our immediate focus right now is severe hypertriglyceridemia.
Okay. As you commented on, there are siRNA approaches out there. Could you just talk to the value of a one-off treatment? I'm not asking you for a price or committing to a price, but just help us think through what the value proposition looks like.
The value proposition is for everyone. For patients, today we're saying, okay, if there's a once every three month siRNA, why would you do a one-time treatment? But that question's going to flip. If you have a one-time treatment that's safe, why would you just not do that? Because people still have compliance issues. People leak into. Sometimes they miss a dose at three month, they may go into the fourth month or whatever, and you get this saw-toothing effect with siRNA. So not every patient is compliant, so why would you just not reduce the bad actors that lead to cardiovascular risk once and for all, right? So that's sort of the primary argument for why you would do that.
Second thing is, I think ANGPTL3 is probably a better target than APOC3 for these patients. That is because you are also getting LDL reduction in addition to triglyceride reduction. You get better glycemic control with ANGPTL3, it seems like, than some of the siRNA or ASO data. You could actually potentially have better liver fat reduction with ANGPTL3 relative to APOC3. I think all those point towards ANGPTL3 being a better target as well, and I think as we look at the data will tell us, but eventually feel very good about the prospects, because if you have that as a solution to patients, and by the way, the pharmacoeconomic benefit.
If we price something at about 5x siRNA pricing, that is a big value to the system, essentially, to employers, to the government, because you are eventually over a lifetime going to spend a lot less on these patients.
Mm-hmm. Okay, that is helpful. Let us move on to CTX611 and zugo-cel. Maybe if you could just briefly introduce CTX611, and then we can move on to the phase II, what looks like a successful readout, and benchmark expectations there.
Yeah. Factor XI is going to be a very interesting target. Some people are saying now it is going to be a $20 billion category in the pharmaceutical space, and a lot of big pharma are very interested in Factor XI. The reason for that is because there has always been this holy grail with anticoagulation. We had these DOACs that came onto the scene almost two decades ago now, that had a major anticoagulant effect, but they caused a lot of bleeding risk. So many patients are not able to take DOACs because of the bleeding risk. What if there was this holy grail that says you get anticoagulation, but you do not get the bleeding risk? That is what Factor XI represents, because our bodies have two pathways.
One is an intrinsic pathway and one is an extrinsic pathway, that is tissue factor pathway, that both come together at Factor Xa. Factor Xa is where the DOACs act. Both pathways converge into the clotting cascade. We are only turning off one versus both. Because DOACs act on X-A, they turn off both. The promise is for indications like stroke risk. If you have stroke risk, a lot of patients who have strokes, whether it is a transient ischemic stroke or if it is a major stroke, many of them go on baby aspirin or something like that, because they cannot take DOACs. Some people try low-dose DOACs, et cetera, but it is not very effective. You could have a once every six month injection of Factor XI that dramatically reduces your stroke risk. Same with AFib patients who have similar risks.
Then there is a number of indications like the total knee arthroplasty. You get the knee surgery, and then you have major risk of DVTs or even pulmonary embolisms. You can take all that away because you do not have thrombus formation. That is where CTX611 comes into play. This is our first in class and potentially best in class siRNA that has deep, durable reduction of Factor XI up to 95% in our phase I studies. Now we are doing a phase II study in a total knee arthroplasty setting, and we will read out the top line from the phase II study at the end of the year. If that is positive, and some of the other phase IIIs are turning out to be positive, then you have a big category here that we are very well-positioned versus small molecules and again, even biologics.
We are doing this together with. This came through our BD efforts with NA. The molecule was developed by our partners, Sirius Therapeutics, but we are developing it together, and we are actually responsible for all the phase IIIs and ultimately commercialization of this asset.
Yeah. If you could just briefly walk us through the potential registrational path, and also just thinking about the competitive landscape, where you sit amongst your peers.
Yeah, absolutely. I think to get to registration, I think we need to have information from this phase II study that shows that it has a therapeutic effect in patients. Also, some more information on our MAD dosing to understand how multiple doses work in terms of both Factor XI knockdown, but also aPTT levels, et cetera. Once we have that, we can put a package together to say, here's a phase III. The different indications where we could go, the obvious one is secondary stroke prevention. There is also the DOAC-ineligible AFib patients, where there is a major trial called LILAC that is being conducted right now. For secondary stroke prevention, you had a positive trial for asundexian in phase III. You have a milvexian trial reading out soon. Potentially some other indications like cancer-associated thrombosis.
There are drugs like RYBREVANT from J&J where it is an ADC, and you take the ADC and 30% of patients get thrombus formation. They get VTEs events, et cetera. So lots of cancer patients suffer through that, and you can do for any of these cancer patients before they take their chemo or their ADCs, you could prevent any of that happening by dosing them with the Factor XI beforehand. So there are multiple places you can take this, but that is something we will disclose as we get past towards the phase II study as to where we want to take it forward. But I think we are very well-positioned relative to small molecules and antibodies, because small molecules right now are twice-a-day dosing, essentially. Because you get these peaks and valleys in aPTT even through a course of a day.
It is inconvenient from a compliance standpoint, whereas once every six month injection sub-Q is much easier for patients. With antibodies, you may get these, again, very high peak reductions, but it is every month, and by the way, it is not very reversible in case you hit your nose and have an emergency or something like that, because the antibody still circulates. Whereas with siRNA, you can simply replace the factor through plasma, and you reversed it in case of an emergency. So several things that nuances why an siRNA is much better in this setting than an antibody or a small molecule.
Okay. That is helpful. Thank you. Then maybe let us just touch on zugo-cel, and then we can talk about the future, but how are you weighing the relative opportunities in autoimmune disease, oncology, plans going forward?
Yeah. Our major focus with zugo-cel right now is autoimmune diseases, and the logic is as follows. I think what you are seeing in autoimmune disease is a real opportunity to cure these autoimmune diseases with a one-time reset of the immune system for B-cell driven diseases. These are numerous. There is rheumatology indications like lupus, myositis, scleroderma. There is heme indications like ITP. There is neuroimmune indications. Everyone is excited about TCEs, but T-cell engagers may not always be durable because the issue is they do not have deep penetration into the tissues, nor do they help the CAR T's traffic or the T cells traffic to the site of disease. Whereas CAR Ts do traffic to the site of disease are very deep penetration.
The dynamic we have right now is that allogeneic CAR T can move very fast relative to autologous CAR Ts, which take time from enrollment perspective. There is safety overhang with autologous CAR Ts. Even if it is one in 50 patients, you have that issue. Allogeneic CAR T off the shelf is available and I think could be very important. In vivo CAR T is still early phases. I think we have a lot more to see in terms of data before it becomes something real. At this point, we see a major opportunity for zugo-cel to be the leader within the allogeneic CAR T space, especially because we have these edits that make them much more potent and autologous-like relative to other allogeneic CAR Ts or allogeneic NK cells.
We are advancing this in a basket trial across indications, but by the end of this year, we will certainly have a greater N in terms of patients, but also a greater follow-up across some of the subsets. So we will have systemic sclerosis, for instance. We will have a reasonable number of patients myositis. We will have a reasonable number of patients that would indicate in these indications, can we get to a phase III and pivotal start soon. Meanwhile, we will continue the basket expansion with neuroimmune trials. The other fact of this thing is in neuroimmune indications, I do not think a TCE is really going to make a big dent because TCEs do not penetrate the blood-brain barrier and go into the CNS system. Whereas we know with our allogeneic CAR T zugo-cel, that it does go into the CNS system and there is activity there.
We have seen that with an oncology setting where people had CNS manifestations, and the CAR Ts did go into the CNS, and there was a response for mets in the brain.
Mm-hmm. Okay. That's very helpful. Maybe briefly before we dive into maybe the broader questions in the last six minutes, could you just lay out the clinical catalyst path ahead, things we should really be focused on, maybe through year-end early 2027?
Yeah. I think CASGEVY will be a steady cadence of updates every quarter, obviously next year, I'm sure Vertex will guide to what the year will look like because we have a lot of forward visibility. Among our clinical assets, I think you'll look for key data on each of these three assets that may move into phase III. For CTX310, I would point to our phase I-B data that's for severe hypertriglyceridemia, that's the data set you'll see by the end of the year. For zugo-cel, you'll see data from the basket trial, but I think we'll have more data for one of the subsets, one of the indications that tell us how we're going to move forward into phase III there. With durability, we'll have reasonable follow-up, but not all the follow-up we need, but reasonable follow-up.
For CTX611, we'll have the top-line data just at a very high level in terms of the control arm enoxaparin versus the drug arm, which is CTX611, what the differences look like in terms of VTE rates. We'll have more information on bleeding risk, et cetera, at a later time point, but at least we'll get the top-line data on these three assets. So that's key. The data for A1AT refractory hypertension will most likely be next year, but not too far into the future because with A1AT, we're already starting at a reasonable dose that's efficacious versus dose escalating from beginning because we have a platform designation for our LNP platform. So we'll have data from A1AT for refractory hypertension as well, you don't have to wait a long time to see what happens to the patients.
Within days of getting gene edited, their blood pressure is going to likely drop you're going to see what that looks like. I think we'll have more catalysts early next year for those two assets as well.
Okay. That's very helpful. I guess one other question that just interests me, gene editing was in its infancy. We're coming to a new age almost. It's expanding. You're even moving beyond the liver. There's competitors in the space that are advancing, moving to the clinic, and closer to commercialization. As you look out across the landscape, what excites you? What frontiers are you really focused on, and maybe a couple concerns or things that have popped up recently?
Yeah, I think there's broadly the platform is advancing, right? The editing platform's improving and improving, and with our SyNTase platform, we can do precise editing with very high potency. The delivery solutions are improving. But for us, broadly as a company, we look at two axes for improvement. One is delivery. We want to get beyond liver into the hematopoietic system, into the immune system, into other organs like kidneys, CNS, et cetera, muscle. That's one axis for improvement is more and more expansion across disease organ systems. The other axis is on editing, is going beyond correction to full whole gene insertion as well. I think at this point, even whole gene insertion into the liver is probably solved. We have to get it there in terms of clinical candidates, but that's a whole set of rare diseases that we can tackle that way.
I feel pretty excited about this next phase of gene editing, and I think you're seeing that. If you saw what happened with Moderna and the excitement around these advanced therapies, I think you're past the sort of the bottom on cell and gene therapies, and we're now into this phase where, like a Genentech, by the way, Genentech was in a bottom in 1988 or something like that, right? There was a big second wave of growth. I think you're going to see a similar second wave of growth, and hopefully we're at the vanguard of that growth as we take cell and gene therapy into the future and change the face of medicine.
Okay. Then maybe one or two more questions if we have time, but in regards to the rise of China innovation, how is it changing your, I guess, competitive positioning, your thoughts on R&D and BD strategy?
Yeah, I think you're seeing tremendous innovation coming out of China, but largely in sort of the antibody space and ADCs, now sRNAs. Fortunately, they haven't done as much in gene editing, and I think that still gives us an opportunity to be ahead of a lot of the Chinese companies in gene editing. What that means for us, in a lot of IP is that we're going to keep it know-how, we're not going to file all the IP right away because we want to take it longer. Also, I think from a BD standpoint, we are looking at assets in China continuously, and we did one deal with Sirius, we may do more. But I think we definitely have a very close look at what's happening out there. It is a threat for the entire American biotech ecosystem, but it could also be an opportunity.
Then one last question, AI implementation. How is AI being leveraged within CRISPR Therapeutics, your thoughts on it, any takeaways?
Yeah. I was sort of an AI skeptic not too long ago, but now I'm complete convert because we're seeing productivity gains everywhere with AI. Take for instance our FDA filings, our medical writing, all those operational elements, AI is helping us move that much faster. So that's just allowing us to, with the platform designations we're getting from the FDA plus AI improvements, we're able to move very quickly in terms of execution of assets into the clinic. We leverage the Australia-New Zealand phenomenon and do trials out there, and also China. The second part of it is product design.
I think this was. I expected, I didn't think this was going to be as helpful, but as we do various things around editing, or even looking at different mutations and how that might play out, there was a paper that just came out last week that took 6,000 mutations that have been observed in humans and said, what is the likely outcome of those mutations or knocking gene X, Y, or Z? You can do these massive simulations around mutations. We can do massive simulations around product design that we're not able to do before to come up with better answers, whether it's codon optimization or whether it's picking the right locus to edit.
All in all, I think we're probably just at the beginning of AI making a difference what we do, but we're heavy adopters in AI, and I think it's particularly useful with CRISPR-based gene editing.
Great. Well, thank you very much, Sam. Really appreciate you attending.
Thank you very much.