Okay, good afternoon, everyone. Excuse me. My name is Eric Schmidt, and I'm one of the biotechnology analysts at Cantor Fitzgerald. So welcome to the afternoon of day one of our annual healthcare conference. With me today for this session is Editas. We're delighted to have with us the company's Chief Executive Officer, Gilmore O'Neill. Gilmore, welcome.
Thank you very much, Eric. It's great to be here.
So we're gonna have a nice little fireside chat about hopefully all things that matter to this company as they try to bring innovative new medicines to patients in need. Feel free to make this interactive. We've got a relatively modest-sized group here, so we can engage with you all. But maybe, Gilmore, just start with the high-level view for those a little less familiar with the company. Where are you these days? What are your priorities?
Thanks very much, Eric. Actually, one thing is you used the word innovative, and I want to say that we are interested in innovation, but not for the sake of being innovative. We're interested in innovation for the sake of having a high impact on patient outcomes, and that's a very important part as we drive towards being a leader in the long term of in vivo curative therapeutics.
So where the company is today is we're executing against the three pillars of our strategy: one, to drive Rene-cel to approval. Very importantly, to build an in vivo discovery pipeline, which is differentiated and focusing on developing therapeutics that'll be first-in-class or best-in-class. And then the third pillar is to use non-dilutive levers or financing with a proactive approach to out-licensing or monetizing the foundational IP that we've exclusively licensed from Broad Harvard MIT.
So in terms of foundational IP, I think everyone thinks of gene editing when they think of Editas, and-
Yes.
Maybe just talk today in this world of 2024, you know, what's still differentiated about your gene editing? What's still special? What's still attractive about this technology, maybe in terms of differentiation?
I think what's very... And thanks for highlighting the editing, 'cause I left that unspoken. Sorry. There's in the name. But you know, from a point of view of the differentiation and what's special about our technology, we are leveraging our unique AsCas12a enzyme. And very importantly, it's differentiated by both being a highly efficient editor, as well as a very high fidelity.
You know, it's actually hard or not possible to detect off-target editing as compared to Cas12. So that's an important differentiation. Very importantly, it has been validated in the clinic. So AsCas12a is the CRISPR enzyme that we're using to edit our Rene-cel therapy, and has actually done that very effectively.
I think other things with regard to capabilities, it's worth highlighting, is that we have substantial know-how when it comes to guide RNA chemistry, enzymology. You know, our computational biology is second to none. Indeed, many of the tools that we've developed and made publicly available are used by both academic and commercial researchers, so overall, a substantial set of capabilities. I'm also very proud, over the last two years, of the development organization we've created and the CMC organization that we have created.
Okay, so when you take those assets and think about how they drive forward into your vision, what are your kind of immediate priorities?
So our immediate priorities, as I said, are to really build in vivo medicines that'll be first-in-class and best-in-class. And so how would you approach that? Well, or rather, why would you do that approach? Well, first of all, you want to be differentiated and have a high impact, as I said, on patient health. So the way we do that is by first our editing strategy, which is to drive towards functional upregulation. Many, if not most, in the space are using editing to knock down gene expression with a particular focus on toxic gain-of-function proteins. We're using a totally different approach.
We are actually functionally upregulating, for example, proteins that can compensate for loss of or a dysfunctional protein, and we've actually proven that ex vivo by using that strategy to functionally upregulate gamma globin, which is a functional homologue or essentially compensatory protein for dysfunctional or absent beta globin, dysfunctional in sickle cell disease or absent in thalassemia.
So that's an approach we're actually basically broadening and generalizing to use in vivo across a number of tissues. So apropos tissues, that's another important element of our strategy, which is to actually target specific tissues with a particular interest in doing it extrahepatically. Now, we do have interest in liver, but that is or liver-expressed tissues, or liver-expressed targets, excuse me, using functional upregulation. But we're actually also very interested in going to other tissues.
From the start, when we rolled out our new three-pillar strategy for Editas, we talked about our interest in hematopoietic stem cells, and more specifically, in treating sickle cell disease and thalassemia or beta thalassemia in vivo. So how do you do that? LNPs innately love to go to the liver. But one of the things you can do is essentially alter or amend their chemistry to make them liver-avoidant, and then actually you may, in addition, dress them with binders that may actually specifically target specific cells based on their expression of a highly restricted or constricted canonical recognition sequence.
Okay, well, we'll certainly have some time to dive deeper into the in vivo strategy. But of course, the lead program is Rene-cel, an ex vivo product. How does that? Maybe first, just how do you balance or think about the level of investment ex vivo versus in vivo?
Yeah, so, we're very conscious of how we deploy our capital. We have to say that right now, because we're in a registrational study, and looking out to a potential approval, that Rene-cel is a key driver of our capital use. We're very consciously ensuring that we also deploy capital in a very methodical and
intentional way towards our in vivo, following along the lines of that differentiated strategy that I've outlined. But I think the important thing about Rene-cel is, as you asked that question, is, well, what is the value or what is the relative value of that to us as an organization? I think it was a key part of our strategy, when we actually rebooted our strategy a couple of years ago, and remains so.
It has enabled us to be a company now that can execute really well. It has enabled us to develop a therapy which is clearly highly efficacious, and indeed differentiated, and I believe best in class. Largely because it doesn't just functionally upregulate a fetal hemoglobin levels at meaningful levels that completely control VOEs.
We have seen no VOEs since transplant. Once a patient's been transplanted, they have gone from having a mean of four serious vaso-occlusive events to zero events, and that was the data we presented last June at EHA. But in addition, every single patient at five months and beyond has a sustained correction of their anemia in well within the normal physiological range for hemoglobin. Why does that matter?
Because beyond patients' complaints and distress, and frankly, the huge adverse impact on their lives and the economic impact on the healthcare system of vaso-occlusive events, fatigue, lack of energy, are enormous sources of problems for patients, and anemia is a key driver of such events.
Okay, maybe one more higher level strategy, and then we'll get into some of that differentiation for Rene-cel. But on the strategy side, you did talk, at least on your Q2 earnings call, about potentially partnering Rene-cel. Why would that make sense, and what would you need to see from a deal in order to pursue that strategy?
Yes. So in fact, since I took over at Editas, I've articulated an interest in potentially partnering Rene-cel. It makes certainly, at the very least, a major upside benefit for the organization at a very minimum, for enabling us to reach patients and markets outside the United States, and we have been open about that since 2022. Obviously, where the terms conditions are conducive to maximizing value for shareholders and patients, we would consider something obviously more comprehensive around that.
Okay. Let's go then into Rene-cel and the opportunity in sickle cell disease.
Yeah.
Just first, you spent a lot of time, obviously, looking at this market. You're very involved in this market. From an investment standpoint, I think a number of us have probably been, you know, somewhat disappointed with the initial uptake of these-
Mm-hmm
... cell therapies. But what is your, you know, kind of what are your take-home learnings from what we are seeing from either the Lyfgenia or Casgevy products that are out there?
So, my key takeaway is, one, is that we are looking at the beginning of a ramping curve for cell therapy. Two, we're actually seeing, certainly for Vertex and Casgevy, a ramp that we anticipated. This is exactly what we expected. And I think very importantly, when we actually look at the timelines between the earlier launches of, before Lyfgenia, for Bluebird, for their leukodystrophy program, for example, that there are a number of factors which have actually steadily improved over time, which give us faith in our belief that we're looking at the beginning of a ramp, that that ramp will actually continue to grow.
So if I may just break those down, if you think about patient and referring physician demand, treating physician demand, transplant center capacity and contracting, and finally, payer and reimbursement contracting, let me just sort of go through it. You know, the first thing obviously is clear to us in our research and market research is that patient and referring physician understanding of gene therapies is still very immature, and that actually means there's a substantial opportunity to educate and grow that demand.
And I think that is something that I know from past experience in both developing medicines and then launching them into rare disease markets, that notwithstanding high efficacy, or in this case, extraordinary efficacy, that ignorance, pardon the expression, ignorance, but that lack of understanding and awareness is certainly a lever that can be pulled to grow and develop that demand and market.
On the case of the treating physicians, interestingly, the treating physicians, that is, the transplant physicians, are very sophisticated, really a very good understanding of gene therapy, very enthusiastic, and talking to them, they're actually very keen to have a number of therapies, and actually very bullish about bringing this therapy to their patients because they actually know the efficacy, even as they know the complexity of giving that therapy.
At the site capacity, site or contracting, one of the things we have noticed, as we expected, and it's sort of confirmed, is that when Bluebird starting their contracting with centers, it was taking 18-24 months. Vertex, in contrast, about 15-18 months. At the time we think we launch, we think that contracting with sites will be a much simpler process and take 3-6 months.
Why it will be simpler? The sites will be used to this. You know, allogeneic transplant is effectively de facto a surgical procedure/experimental therapy. It doesn't actually create a substantial commercial burden. So this is a substantial change for them, so they're going through that, and that will have matured, we think, by the time we launch.
And then finally, on the payer level, you know, there are commercial and Medicaid or state Medicaid payers to think about. On the commercial side, there are case-by-case approvals. Obviously, policies will be developed, are being developed, and will be matured in the next year or so. And then Medicaid, at the state level, are obviously building their budgets. I think this year, an approval in December is kind of- can actually be quite challenging to absorb into a Medicaid budget. But, you know, those Medicaid budgets will mature and develop over time.
In addition, HHS, Health and Human Services at federal level, has the CMMI or Center for Medicare and Medicaid Innovation, leaning in here and piloting sickle cell disease in their cell and gene therapy program, which is an innovative model to look at how the federal government can actually help and work with multiple Medicaids to actually speed up the process of negotiating and creating agreements and contracts for use of the therapy.
So in sum, we're at the beginning of a curve. We've actually seen some upticks in curve. I should have actually also pointed out Vertex between Q1 and Q2 earnings showed a threefold increase in cell collections, and we're actually even beginning to see in the public media, dosing of patients. And then, of course, there's other factors about demand, center contracting, and payer evolution maturation.
I mean, today, if we drill down into each of those four variables or potential constricting factors you mentioned, very helpful, by the way, it sounds like maybe even on the very, very front end, the patient demand and education that's required of the referring physician may not be there, right? I mean, we've got 50, 60, 70 centers that are probably open for business if they can get-
Yeah
... patients in, or is it, more on the back end with regard to, I think, the other constraining factor that you mentioned is reimbursement?
Yeah. So I think there are a number of points. I think these are going to play together. You know, demand is actually a very important driver, frankly, of payers. Their patients are their customers. And you know, when patients speak up as they actually grow and evolve their understanding of the therapy and their belief in the therapy's availability to them, and this is an important factor that also we are addressing,
we and our peers in this space we're addressing, which is helping patients understand not just the nature of their disease, which they do understand, but the potential of gene therapies, the incredible potential of gene therapies and the availability of those therapies.
I think that will actually be very important and actually help payers accelerate and develop their policies. So I think there is an enormous amount of work that can be done here, and you know, I'll just speak from, again, experience. You know, I had the privilege and the very good fortune to oversee the development of Spinraza in my time at Biogen and worked with our Chief Commercial Officer, Caren Deardorf, who launched Spinraza.
Now, Spinraza, again, was. It doesn't have the potency of what we're seeing with Rene-cel, but it had remarkable potency. It transformed the lives of SMA babies who went from certain mortality in a year to actually extended high-functioning lives of many years, and we could see that very readily. However, while we were looking at a very large or a meaningfully addressable population, there was no addressable market because that market hadn't been developed, and suddenly treating physicians, referring physicians,
families, state neonatal screening facilities all had to think about identifying patients early and then transforming their therapeutic models from a multidisciplinary palliative care model to a therapeutic interventional model for a high potency, but also how should I say demanding therapy from a point of view of the infrastructure required.
We at Biogen built that, and then, of course, what was interesting was that other companies came in, Novartis and Roche came in with their products, and were able to leverage that infrastructure, and the reason I say that as a model, 'cause in many ways, it's an analog of where we are, you know, where we actually-
Yeah
... are coming in as a fast follower, what we believe is a differentiated and potentially best-in-class therapy, but actually also with a lot of clear understanding of where the barriers are and what we can do to address them, 'cause they're not fixed barriers.
So as a fast follower, is there anything you can do to help those folks ahead of you on the front line?
Yes
... get there faster, or are you just turning over the wheel to them?
No. There are things we can do to help. You know, and I'm not going to go into specific details because I think there are things we can talk about at another point. But you know, at the policy level, et cetera, both at the government state level, from the point of view, interacting with patient advocacy groups, helping empower them and raise their voices.
These are things that we can do. Obviously, negotiation directly with payers are things that we can't do, but from the point of view, actually increasing awareness of the therapy and frankly, working at the back end from the policy point of view, these are areas that we can actually help, and we're very interested in doing so. Because...
Yes, we are here to bring value for shareholders, but we believe we bring shareholder value by ensuring that patients get access to really effective therapies. And the only way to do that is to make sure that market grows. And we grow that market, it raises all patients and all the players trying to give them therapeutics.
So obviously you think you're not just a fast follower, but also a fast better. Maybe we should talk about that differentiation, Gilmore.
Tell me about that last word. I didn't quite hear you.
Fast better.
Fast better.
A better. It's not a real word.
Oh, that's better. Sorry, I thought you were going-
Fast better.
I thought, actually, Editas in Irish, it means that we're all betters.
Yeah.
I see that we bet on things.
So-
Okay. Right, yes. Yes.
That too.
Yeah.
It's my job. But yeah, we should talk about the differentiation in your product.
Yeah.
You've shown us, I think now, you know, a fair bit of evidence to suggest that you're able to get better hemoglobin out of production.
Yes. Yeah.
I'd say you've also shown us a fair bit of evidence, maybe it's not yet conclusive, that you're able to reduce the time to engraftment.
Mm-hmm.
Are these advantages enough coming, you know, two, three years late to market, that you think will enable meaningful share? And how are you pitching those advantages?
Yes, so I think those, and there are other elements, and, I'm going to say fast follower, not late to market. Just to - sorry, just to, you know... I can't say anything about Philly sports, so I'll say that instead. But, we actually do believe that hemoglobin, as I say, and we are measuring, and we have design elements in our clinical trials to capture the benefits through PROs, with ASCQ-Me, PROMIS-57, et cetera, which include, or sorry, PROMIS certainly includes measures of fatigue or domains for fatigue. We are looking at physiologic measures for end organ function.
Obviously, that's something that's evolving, because this kind of efficacy has not been seen in sickle. So the interaction of a high-potency therapy with known outcomes and organ systems is actually something we're learning as we go, that it...
The graft versus time does actually matter, you know. Even right now, we're seeing a 23-day graft, which creates several days shorter than others. Why does that matter? Well, it matters to patients because they're less time in hospital and more time they can get back home. Secondly, it reduces their exposure to risk of opportunistic infection, which is significant risk under the context of busulfan conditioning immunosuppression.
But actually also it's important for the centers in that, you know, it opens, it frees capacity for the next patient, and frankly, based on how DRGs work, it does have a significant impact on, frankly, the surplus that they make from the reimbursement they get. So all of it, that's an important factor. Then there are other factors that matter.
You know, at the end of Q2, we reported that specifics, that we are very happy with the, the success rate of our manufacturing. So our yields are actually very high. And we're, you know, very happy with that. I, I call it... We're not quite sure exactly what's happening with others, but we're certainly very happy with that.
And I think also importantly, when it comes to being a fast follower and a market that's evolving, you know, on a curve, that we actually think is a curve, not a straight line, for ramping, is that we have built a very carefully constructed model, which is CapEx and OpEx efficient, where we're actually working with the Azzur Group, to lease clean rooms, where our people and our processes are in there.
Instead of using a CDMO, a traditional CDMO, or building our own plant, this basically gives us a couple of things. It actually keeps capital use low, but it also allows us to flex in a very efficient, OpEx-efficient manner, to actually flex to altered and rapidly increasing market demand, but without actually, you know, a substantial upfront or significant liabilities.
The benefit of the high yield results that you're getting, that's just a single cell collection, fast information?
Well, the net benefit is obviously a patient who goes through is going to actually have material ready for them sooner. And that sooner may either be because there's more efficient collection, but in the absence or, sorry, in the context of a success and higher yield, it means the probability of they're being treated within reasonable time-
Is higher
... is much higher. And that is actually important both for health outcomes... It's actually important, and I will tell you, the people who talk about it a lot, we're hearing now, are the treating physicians in the transplant centers, because they obviously want to be able to plan, and there is no worse conversation for a patient or a physician to have with the patient than say, "I signed you up for the therapy, but I can't give it to you." So these are important factors that we actually also think will actually help our differentiation edge.
Okay, and you were chiding me earlier, Gilmore, about just maybe skipping over thalassemia, which obviously is an important market-
Yeah
... and a lot of unmet medical need here. Is there as much unmet medical need in thal as there is in sickle cell, or do you think these therapies are putting aside that there are more sickle cell patients?
Yes. Yeah.
Is this thalassemia market going to be, you know, just as meaningful over time as sickle cell in a treatable population?
Yeah
... % basis, maybe?
I think the thalassemia patient population in the United States is actually smaller than the sickle cell population. There are obviously significant disease burden in other parts of the world, including the Middle East and Europe, and indeed, Southern China, believe it or not. I mean, it's actually a swathe. It basically spreads from South China across into the Mediterranean.
But I think there is a significant opportunity there, but a large part of it sits outside the United States. There is some value here in the United States, but you probably figured that, you know, a key focus for us right now, because of our size and, you know, to smartly adapt or apply capital, is being focused in the United States. You know, de facto, we're driving sickle cell very aggressively.
... Okay, let's switch over to your in vivo programs now in the last six or seven minutes that we have. You outlined the strategy already. Makes a lot of sense, quite intuitive actually. Why aren't others with gene editing technologies doing these extrahepatic indications where gene knockdown might play a role in a rare disease?
I'm always loath, ever since I was in clinical development, to speak on behalf of others, and particularly the FDA, and so I maintain that process, but I'll tell you why we are doing it, which is we believe that it will clearly differentiate from other technologies. You know, the power of editing, CRISPR editing, is you can do so much more than what an siRNA, a small interfering RNA, or an antisense oligonucleotide could do,
just for example, and of course, we can antagonize protein function with antibodies and small molecules, so this idea of reducing or knocking down function really is something we've played with for decades. The CRISPR editing technology gives an opportunity to do so much more. It opens up a whole new swathe of diseases.
It opens up a whole white space, that we can go into. Now, obviously, one reason that people sometimes go into areas where others have been or other technology can be is because they've seen a pharmacological de-risking. One of the beauties about the state of genetics today, and frankly, computational capacity and computational sciences, is that we can actually substantially de-risk these biological pathways we're up-regulating by essentially interrogating large, well-curated biobanks of genetic data. A very simple analog for that, again, is going to be Rene-cel.
Obviously, it's a little cruder than that because the recognition that the co-inheritance of hereditary persistence of fetal hemoglobin with sickle cell genotype would mitigate the phenotype came decades ago when people were freezing hemoglobin, and they could see sickle hemoglobin in somebody who looked otherwise normal and had no obvious VOEs.
But then they observed a co-inheritance of fetal hemoglobin or rather a persistent fetal hemoglobin, which we all have in utero, but is knocked down. So essentially, that observation is a perfect example of how nature taught us that it had already de-risked that biological pathway. Analogs to that sit inside these biobanks.
They may not be as obvious or as crudely obvious, but with the computational power we have, with the evolution of statistical genetics and an expertise we have built internally, and Editas has, we can interrogate those systems and de-risk the biology of those targets in a way, I think, that believes that we can go forward.
You tie that to selecting diseases where there are chemical or biochemical biomarkers that you can get a rapid readout, and that they're readily accessible, whether they're soluble or readily accessible in other way, means that you can actually select targets where you can de-risk them biologically using your biobank database, and you can rapidly get to an answer in the clinic, using a chemical biomarker. We think overall that is a very sound strategy for us to justify going, towards functional-
Should we expect your first few indications will fall right into that box, where there are genetic variants to support the biology as well as quick biomarker readouts?
So that would be our goal. So when you say generic, you mean genetic?
Genetic.
Sorry, forgive me, sorry. Yeah, it might have been a red herring, sorry, but genetic, so essentially, where there are genetic variants, that's certainly. That'll be a key narrowing focus for us or a focusing strategy for us, and that's another part of the fun, as you say, with biomarkers, so yes, largely yes.
Yes. And how many programs have you already identified and may be working on within that box?
We've actually identified several programs with that box. Obviously, one already, and we were very clear about at the beginning of 2023, was that we were going to go into... We're interested in vivo hematopoietic stem cells in general, and in vivo treatment of sickle cell and beta thalassemia, specifically, and obviously, that's because we have a target.
You know, we have clinically validated the use of AsCas12a to edit the regulator or the promoter for HBG1-2. We have several others in other tissues. We haven't shared those with you, and I think the key thing is, you know, we're not interested, and I think you've heard us say this before, we're not interested in shots on goal. We believe that you should select focused target. You should be very focused in your efforts. You should select a meaningful set of targets that you can actually address within the context of your ability to deploy capital and drive them as fast as possible to a clear answer.
Okay. And should we expect that these might be knockouts of repressors, much, much the same way Rene-cel works?
I think in general terms, yes. I mean, the repression mechanisms are protean. Obviously, you can work on suppressors, repressors, and obviously. But essentially, you can probably sense that they will largely be in non-coding-
Okay
... non-coding DNA. Yes.
Okay. So how, You've been loath, I think, to provide specific guidelines. What are you needing to see internally in order to be able to guide to an IND, or is it just a matter of getting a little bit closer and knowing you can hit your timeline?
I think there'll be two things we want. I think we want to be closer, you know, with our timeline, to actually disclose the details of a specific target 'cause we're sensitive. You know, one of the beauties of CRISPR editing, and it's probably one of the things that's going to truly transform healthcare, you know, as we have that in vivo application, that machine coming through, is you can rapidly plug and play.
Once you have a formulation, with your guide, your message, and your LNP, in this case, you just change 20 nucleotides in your guide RNA, and you have a new target. So obviously we're sensitive to that, and so we want to be sure that we are on track with our hype. But what we are sensitive to is also the needs of our investors and the investment community. So what we would do, as we talk about these, we will talk about certainly broad elements that help people to actually build their models around the addressable market, timelines, et cetera.
Okay.