it's still morning-ish.
It is, yeah.
Good morning, everyone. Welcome to, back to the 2024 Global Biopharma Conference, inaugural Miami Conference. So welcome everybody down. I am Mani Foroohar, Senior Analyst of Genetic Medicines, and I'm very fortunate to be hosting the team from Editas Medicine. Guys, how are you doing?
Good, thank you. Good morning to you. Feel a little cool. It seems cooler down here than it does in Boston. I don't know why, but it does.
It might be because the air conditioning is running at a completely climate-irresponsible level, but I think that's an endemic problem.
Yes.
Gilmore, we'll start with you. Obviously there's been a lot of excitement around gene editing, gene editing, gene therapy, base editing, genetic medicines, broadly speaking, as we've entered the commercial arena for, we'll say, therapies of curative intent. The word "cure" itself, I know, has a lot of baggage. Let's talk a little bit about how you see the reimbursement dynamic around one-time therapies for severe diseases, the drive value over many years, but have value that can be a little harder to exactly define.
Yeah.
Because you're having to make sort of assumptions around utilization, reimbursement, future value. Talk to me a little bit about where you see that world and how sophisticated you see your counterparts in payer land, your experience, your con—your early conversations, and the conversations your counterparts are having, about how to value a one-time therapy for something very severe that's still kind of a transplant medicine.
Yeah. I think there are two things. I think you made an important distinction there just at the end. When we talk about gene editing, and we talk about the first commercialized gene editing product, the first commercialized gene editing product is a cell therapy. And our first commercialized, gene-edited therapy was a cell therapy. What we are, as we've disclosed in our strategy, our strategy is to actually develop an in vivo pipeline. That matters because we have to be very careful about what we infer from the cell therapy experience and those payer negotiations, the evolution of that market, as we then think about the in vivo space. I think that's the first thing I'd like to say.
Then, you know, based on the you know experiences but you know long-term experiences in therapeutics development and more recent conversations, you know, in general, payers are actually excited by the possibility and the potential for durable—I'm using the word "durable" rather than "curative"—therapies, although I do share your sentiment. I think they're excited about it. I think what they're going to draw to do is they have to actually find out what happens. They're very much on a learning curve. The experience I think that I've had with payers over the years is that they tend to start thinking about a product, you know, probably in that last year as you're coming up to approval.
But the real conversations, notwithstanding, you know, some of the mechanisms in place in other environments outside the United States, but even in the United States, is they really start thinking about it once the launch happens, once the approval happens, and that's when they actually start leaning in. I think that, the value proposition is actually very strong. You know, where we are dealing with very severe diseases, if you actually look at the lifetime cost of supporting a patient with sickle cell disease in the United States, you're talking of many millions of dollars. And so when you actually then look at where the pricing has come out, from ICER, which is normally quite a conservatively priced organization, you can actually already begin to see kind of the guardrails, you know, of where that conversation's going to be. And I think the payers can actually see, that benefit.
So, I think we're actually very, very positive, positive, positive and optimistic, about what's going to happen over the next couple of years. That next couple of years actually gives us an opportunity as well because we describe our lead product, reni-cel, as a fast follower with the potential for, you know, best in class. You know, it's, it's good sometimes to be that fast follower. We have, I have, with our Chief Commercial Officer, Karen Deardorff, lived the other experience where we were the leader, and the fast followers came in after and actually benefited from a lot of the infrastructural work, the payer negotiation, the center development, you know, that helping centers evolve from being a supportive, palliative therapy center to a therapeutic center, which actually substantially changes the trajectory of disease.
So I think overall, just building on your question, the payer question I think we're optimistic about, we actually have, for the reasons I've said, and we actually have an opportunity to benefit not just from the infrastructural bills that Vertex will do, but actually those payer negotiations. Then a final piece, which gives us a lot of sense of optimism, is that CMS has accelerated their CMMI initiative, with a particular focus on sickle cell disease and essentially a stated intent to actually roll this out in 2025. So they're starting the conversations now. And why does that matter? Well, it's essentially a mechanism that they're investigating whereby the federal government could come together and actually facilitate and enable the initiation of Medicaid pricing discussions, whether it's collective, or they certainly started to enable the beginning of that collective discussion, just to accelerate that process.
That's important because Medicaid is going to represent a substantial number of the patients, that we anticipate treating in the coming years.
So I'm glad that you talked a little about the role of reni-cel and the strategy. You've talked about the fast follower timing, which is not a strategic statement. It's just a factual statement.
Yes.
Because there's an approval out there.
Yes.
A second, although very different technology as well. Let's talk about the path to differentiation and what it takes to not just be a best-in-class product, but to show a best-in-class data set that allows for a best-in-class label, which sometimes can be more important than whether or not the product's actually better is what you can actually claim.
Yes.
Let's walk through how the RUBY trial and the surrounding strategy infrastructure gets you to that label.
Yeah. So, a couple of important points. We actually set out, and the credit has to go to the discovery group in Editas that was there before I joined, but set out to set a built-or-best-in-class molecule or a treatment paradigm by selecting a different target from BCL11A. They decided to edit a sequence or a segment of the promoter of the gamma globin genes, which actually occurs in nature and is associated with very robust elevation of fetal hemoglobin, but actually also is associated with excellent erythroid health. And then the preclinical experiments doing a head-to-head showed that erythroid health, that is red cell output, erythroid or red cell longevity, and markers of red cell health were all better with this editing approach than with a BCL11A targeting strategy.
And then we were very gratified to see that set of hypotheses confirmed in the clinical data set where we've seen that by 3-4 months, or by 4 months anyway, certainly, that all patients that have been followed at that point who had been treated, whether they're men or women, correct, their total hemoglobin into the normal physiological range. And why does that matter? Well, when I went to medical school, which is more than 10 years ago, they used to call it sickle cell anemia. And the anemia is actually a debilitating component of the disease. Severity of anemias will actually impact end organ health, and indeed also has an impact on patient functionality and quality of life.
So from a differentiation point of view, we're collecting physiological parameters, not just the hematologic parameters of fetal hemoglobin and total hemoglobin, but physiological parameters for end organ health, including kidney, heart, lung, as well as quality of life measures and instruments that capture domains, including fatigue, which is a dominant symptom and complaint of patients with sickle cell disease. So those are areas where we can actually look to. It's very dangerous to talk about labels. I've done enough label negotiations in my career, in my previous career, to be careful about claims. But there are areas where certainly the hematologic parameters and some of those PROs and ultimately the physiologic parameters could contribute.
The challenge, if I may, briefly address, is that when you move from developing medicines with relatively modest effects to high-potency medicines, and this is an experience I've had in other therapeutic domains or areas, you cannot predict how those clinical outcomes are going to behave. So we're actually learning that now. When you have a large biological effect versus a modest biological effect where you've characterized the outcomes, you really have to learn what will be the effect size on the clinical outcomes we're measuring in those organ systems, and when would you actually see that effect. So we have a number of levers to pull for the differentiation.
That's helpful. I think we can agree that we don't need to talk. But how long ago we went to medical school? That's a little...
Yeah.
Teasing aside, let's talk a little bit about. We talked about the question around the labeling and how uncertain it can be. And, you know, the error bars around clinical effects can be quite wide when you're making a major change in underlying biology. It's a little bit different than, like, you know, my statin is 10% different than your statin.
Yes.
Let's talk about the timeline to show differentiating data.
Mm-hmm.
To what extent is that an evolving profile from a commercial perspective for reni-cel, additional data sets you'd be submitting, supplementals, updates?
Yes.
To what extent that's something you need—you need to, quote-unquote, or feel you should have at day one of approval? Like, is this a product whose profile will, will change over time with regulatory action? On what time horizon might you provide those additional supplemental data sets?
Yeah. So, I think the first thing is that in many ways, we feel that the response from KOLs and investigators when they actually see the data sets we have with that correction of total hemoglobin, they actually, many believe that that is a differentiated product. Some are still saying, "Okay, maybe let's just see—like to see more data." But many believe that this is an important differentiator. Indeed, a common term is, "Well, it's a no-brainer." And the reason they say it's a no-brainer is that there is a literature, both in the context of general anemia and specifically to sickle cell disease, that degrees of severity of anemia do have an impact on end organ function. So there's kind of that general belief system, I always worry about belief systems, but there is that general sentiment.
In addition, that literature probably supported and helped the agency, the FDA, approve Oxbryta using a 1 gram per deciliter change in total hemoglobin in giving accelerated approval to Oxbryta. And you know, what we're pleased to see, and obviously I'm going to say the usual thing, which is you have to be careful comparing cross-clinical studies, etc., but what we're very happy to see is that the, it's not just we're correcting the hemoglobin, but when we look at the population means, we're seeing about a 1.5-gram difference, at least between our population mean and the population means of others. And I think that that is certainly a very important, it will be an important part of our first package.
I think the timing of supplemental data sets will really be determined by what we learn about the behavior of those clinical outcome measures over the, over this near term.
But actually, you know, this would not be the first time I've worked on products where we do supplemental updates. I think you asked a very important question, though, which is, what is the importance of that? You know, particularly when you're talking about a rare disease and where or how we engage with healthcare providers and systems, it can be a little different than from the sort of the higher volume space. But obviously, within a very compliant system, you know, we're going to be publishing data as we go on, and the regulatory supplementary strategy will evolve as we understand how those outcomes are behaving.
A lot of this conversation has been implicitly U.S.-centric. Some of that is epidemiologically driven for sickle cell in particular. But I don't want to ignore opportunities, broadly speaking, on a global basis, not just for beta hemoglobinopathy, broadly speaking, if you want to zoom out and include beta thalassemia.
Yeah.
How do you guys view the opportunity OUS? And to what extent is that suitable for partnering, suitable for licensing? Are there places where it makes sense for you, for Editas to pursue that independently? And how do you make those decisions?
Yeah. So, I think just around the time I joined, we made a conscious decision owing to the scale of the company and where we were, and really just make sure that we were deploying capital in an effective way, both for maximizing the value for reni-cel and then beyond, to focus on the United States. We were also very clear that we see significant potential upside with a partnering, or a partner with a large global footprint outside the United States that would enable us to reach, you know, the patients, as I say, outside the United States. And you've talked about sickle cell and obviously the thalassemia patient population. Now, I think one of the key issues, of course, is that that certainly has substantial potential, but our ambition is greater.
You know, we—an ex vivo autologous cell therapy really is limited in its usability outside of the, first world or highly developed healthcare systems, which is why, as part of our in vivo ambition, we have actually identified a desire and plans, to edit, hematopoietic stem cells. That's one of the tissues we've outlined, for editing, where we've already identified a target, validated in humans, and validated our AsCas12a enzyme. So obviously, our ambition is to grow bigger. But going back to the specifics for reni-cel, an ex-US partner is certainly an upside we've talked about. And when I say talked about, you know, shared, publicly.
Let's talk about AsCas12a. As investors that we've had conversations with have tried to carve out where the ideal use of the different Cas's is - and this is an open debate, not just for you guys, but for many companies, public and private - where do you see AsCas12a having the clearest competitive advantage and ideal product-market fit that perhaps is not, you know, that is not something you do with just Cas9, etc., etc., the various other entities that exist in the private world? Like, where is - where do you see a clear competitive advantage technologically? And what is the strategy to capitalize on that?
So I think the key areas where you can sort of see a strategic advantage for Cas12a actually sits in two areas. One is the original AsCas12a enzyme before we engineered it was identified as a more promiscuous, if you'll pardon the expression, CRISPR enzyme than a Cas9, in that the PAMs, there's a higher frequency of PAMs distributed through the genome that it can target. So that's great. Now, of course, that came with some downsides. But we have engineered it to maintain that promiscuity while actually increasing its fidelity to a point where it actually is a higher fidelity than Cas9 in our hands and the hands of others. So essentially, you have more opportunity to optimize the genetic target or the targeting of a specific genetic target of interest with Cas12a.
And you actually also have, because of its engineering, a much better off-target profile. Indeed, we can't, with obviously acknowledging the current limitations of the off-target editing assays, we cannot identify off-target edits where we do in our hands see it with Cas9. What that means in the long term is to be determined. But that sort of promiscuity, that ability to really have more choice as you walk around or work around, optimizing the targeting, the specific genetic target, is an important advantage. And then how we're looking or to take it forward, obviously, we use it in our reni-cel, and it's basically our main enzyme. It is our enzyme that we are actually taking into our in vivo pipeline for the reasons that I've said.
Let's talk about the in vivo pipeline more broadly.
Mm-hmm.
As we're touching on that, on what time horizon should we expect to see sort of individual proof points that will allow investors to start giving more clear value? I think it's one thing to say, "Well, that opportunity makes sense. The product-market fit makes sense.
Yes.
You know, reducing it to practice, I think.
Yes.
Is going to be the key differentiator amongst different editing companies. So when, I guess, when are we going to see what? Is that the right question?
Yeah. So what we've actually said and announced as, you know, some of the objectives—one of the objectives for this year is that we would achieve in vivo preclinical proof of concept. We are actually very happy. We're on track for that. What we've also said is that we're going to talk about timelines and forums for what exactly or when, when and where we will present those data, probably in the second half—in the second half of this year. I think the only other thing worth emphasizing is that we have been very clear, both externally and internally, that we will select targets where we are clearly commercially differentiated from the standard of care.
We really want to prioritize, certainly, our own development of targets that are high conviction, which basically means that, they, exploit the differentiated potential of genome editing, that they're not going to compete necessarily with other modalities, but also—and therefore have a high probability of technical as well as medical or clinical regulatory success, but obviously feeding into something that's commercially—truly commercially differentiated. So as I say, I'm looking forward to sharing more about that or talking more about that in the second half of the year.
How do you think about the right venue? Because that's, that's a little bit of a different scale.
Yeah.
A quantum of data to digest than here's 6 patients in a phase 1 study or whatever.
Yes. Yes.
Like some kind of thing we see in genetic medicine. Is that?
Yeah.
Is that something we should expect around an analyst day, something we should expect around a conference? Like, how do you think, I'm not asking for guidance.
Yeah. No.
How do you think about the right venue?
I think the way we're thinking about it, frankly, is that we obviously are very excited by the progress we're making. But we also acknowledge that there are other companies that are a little ahead of us when it comes to the formulation work that's necessary. Say, the power and the strength of CRISPR is that you can plug and play. Once you've actually optimized your formulation for targeting a particular cell type with its formulation, with the message RNA for the enzyme and the guide, then you can just walk around and choose different targets within that cell tissue by essentially replacing 20 nucleotides in the guide that select that actually particular genetic target. So that's a significant consideration that we have to make as we talk about or when we can actually share a lot of specifics about those targets.
So there's our philosophy. There are the targets. And those will obviously impact or are impacting our thinking or our considerations as we think about the optimal venue and how we'll do this. I hope that makes sense.
That makes a lot of sense. I'm going to pivot over, if that's okay.
Sure.
to talk about another piece of the strategy and the value. Obviously, IP and know-how even outside of patent. So broadly speaking.
Yes.
Intellectual.
Yes.
Intellectual property value writ large.
Mm-hmm.
Obviously, as an important part of the debate, has moved back and forth from being center stage amongst public investors and is a little back in front of mind now, in part with your recent transaction and monetization and sort of clarification of where economic rights fall. Maybe this is a better question for you, Erick. To what extent does that drive future strategy? How should we think about that piece of the value proposition for Editas? You know, is this something we should think about? Ongoing BD effort there? And how to think about, I guess, the TAM?
Before handing it over, I just want to say is that you've kind of touched on the third pillar. We talked about reni-cel in vivo and then BD as the three pillars for a strategy.
Almost as if I covered the company.
And when we rolled it out, the key thing was to really drive and explore, how should I say, realize the value that we saw in our IP, in a number of ways. And Erick can tell you all about it. So we're very happy with the progress we're making. And, you know, a big moment was, I think, that Vertex deal where you got a very public acknowledgment of the validity and the value of that IP. But Erick, over to you.
Yeah. Thanks for the question. Well, it's obviously, from my standpoint, it was a major reason why I decided to join the company after the sale of AVEO to LG Chem. When you think about the IP and to your other question, the know-how, when you look at just the IP standpoint, there's a high double-digit number of companies or products in development using Cas9, Cas12a. There's a high single-digit number of companies that have half of those targets. So we very much believe that this is going to be an ongoing part of the story. The Vertex deal, and the VOR deal that we did last year are just going to be, you know, the first of hopefully many deals that we have with respect to licensing our foundational IP to folks to enable this technology to bring more products to market.
Now, the other part of your question with respect to the know-how is very similar and relates to the Bristol-Myers Agreement that we did, where we combine not only the IP but our ability to generate the RNA guides. And we have a multi-product deal that we announced with them many years ago, which is now just starting to bear fruit. Most recently, in their analyst meeting in September, they put, I think, half a dozen programs on their chart where you can start seeing these things come together, which again gets to the know-how piece, our internal ability to generate those guide RNA to create a new molecule, which then has a different royalty structure and a longer IP life. So it's a very foundational part of our strategy.
From my standpoint, as a CFO, it is a major way to generate non-dilutive capital, to fund the in vivo program that we're all excited about. Great. I'm going to go to a slightly more boring modeling question, if that's okay.
Yes.
given the revenue cycle for Vertex and partner CRISPR.
Yes.
It's a little more abstracted than your classic physician writes for a pill, patient picks up a pill, patient gets the. It's a little more complex, which is sort of an endemic issue for transplant medicine. Talk to us about how that revenue recognition works for you guys and how it will flow through your numbers and your financial statements.
Yeah.
So investors sort of want to at least predict and sort of model in a little more thoughtful way.
Mm-hmm. Yeah. I think from my standpoint, having spent 15 years on the buy side before moving to corporate, this is something that they should be acutely aware of and understand. There'll be a patient funnel first. But once you take the cells out and then you do your thing with them, you won't be able to recognize the revenue until you put them back into the body. Then that's when, you know, you've completed all the requirements for the traditional revenue recognition. So if the vein-to-vein time is 6-9 months, that will be your revenue recognition cycle. If it can get shortened, it'll be less than that. If it's longer, it'll be longer, so.
So let's run that back. So that's—that is the revenue recognition treatment has been disclosed by Vertex. How does that flow through to—on what time horizon will that royalty drive to you guys? Would economic rights drive to you? And how would you recognize—is it batch by quarter?
Yeah.
Is there a delay? Well, is it Casgevy treatment versus.
Yeah.
Is GAAP treatment different? Just so that we can think about how to model it.
Yeah. From our.
Or press releases.
Yeah. So from our standpoint in particular, we did sort of a unique structure. We didn't necessarily structure a royalty agreement. We structured a license payment agreement, right? So we'll be getting from $10 million-$40 million a year, depending upon the time and their eventual annual revenues. So we'll recognize that, once a year as a payment. And we won't be affected by the, you know, the varieties of vein-to-vein time and when patients get, you know, into the program versus then get dosed.
Is it reasonable to assume this is going to be a 4Q event every year, given their approval came in 4Q, or is that?
Yeah. I, I think you saw in our fourth quarter not only the recognition of the $50 million upfront revenue, but the $10 million for the first annual license payment. So it should, you know, by logic, follow that same timeline.
Okay. I didn't tell you it was a boring question.
Yeah. It's okay.
We're running out to a little less than a minute. I want to thank you guys for joining us. I know we bounced around a lot of different pieces of the company. But the company's a little more complex than it was a few years ago, which is just a function of moving things forward.
Yeah. Yeah. Yes. Well, we're happy to be there. It's been an enormous effort over the last year and a half or so. And what I'm really glad to see is not just that we had a very—I dare I say—simplified the strategy even as we built a more, how should I say, operationally sophisticated company, but that we've actually also built a leadership team, which has substantial experience in developing, seeking approval, and launching medicines. And finally, also very happy with the evolution of a culture, and the, you know, really strengthening, you know, on an already strong foundation of science, our scientific, and development and execution or, activities. And, you know, finally, really moving the company from being sort of a platform development company to a clinical therapeutics company.
Great. With that, thank you. I'm sure we will continue this conversation again soon. A pleasure to have you guys, as always.
Great. Love you.
Thank you.
Thank you.