All right. Thanks, everyone, for joining us for the next half hour. My name is Dae Gon Ha, one of the biotech analysts at Stifel. So with me for the next half hour, we've got Editas Medicine. So from Editas, we have Eric Lucera, Chief Financial Officer.
She's promoted him.
Cristi, no t hanks.
Thanks, guys, for coming and joining us. Let's briefly start with what Editas is all about, the CRISPR approach that you guys are using, the programs that you have, and then we'll dive into Q&A.
Yeah, sure. So for those of you that haven't met us or met me, my name is Eric Lucera. I'm the CFO. And I've been at Editas for about a year and a half. Before that, I was at a couple of other biotech companies. And before that, I spent 15 years on the buy side as an investor. And I was always attracted to the technology of gene editing and the ability to generate a cure with maybe one treatment or one shot. And what Editas has been focused on is really what we call our three-pillar strategy, which was refined about two years ago when Gilmore O'Neill came in from Sarepta and kind of tried to begin the transition of Editas into an in vivo company. So with that, he set up the three pillars of kind of who we are.
The first is reni-cel, which is our only autologous treatment. It's for sickle cell. We recently announced that we would seek a partner for that. We believe it has potential best-in-class efficacy. But where our focus is for the long term is really on the second pillar of our strategy, which is in vivo, which would be a single shot to a cure rather than a nine-month vein-to-vein treatment. So we think the in vivo gene editing could be the single most important thing in medicine. So we're really excited about that. And we'll get into that, obviously, through your questions. And then the third part of our strategy is to leverage our foundational IP, which we have exclusive licenses to Cas9 and Cas12 from Harvard, MIT, and Broad.
Through that, we're able to bring in truly non-dilutive financing, non-dilutive capital to help fund the rest of our business, exemplified by the deal we did with Vertex for CASGEVY. Really excited about the transition of the company into where we're headed with respect to in vivo.
Right. Let's start with EdiTHAL, sorry, not EdiTHAL, reni-cel across RUBY and EdiTHAL studies. First off, we are going to be getting an update before the end of the year at a medical meeting. So just set some expectations, how many patients, how much of a follow-up. And maybe a loaded question is, at this point, what do you consider to be the differentiation angle when it comes to reni-cel versus like a CASGEVY?
Sure. So yes, you will be getting a data update at ASH coming up in early December, and those abstracts are out and online, so you can see what's in that, but beyond what's in the abstract, we'll be sharing more, so we'll be sharing probably 28 patients' worth of data, considerably longer follow-up than we've shown. I think as of the ASH abstract cut, there are seven patients that are out over a year and at least one that's out over two years, so that will be at the minimum of what you'll see. We're going to show, consistent with what we have been showing, safety and efficacy data, including hematology parameters, VOEs in the abstract. All the patients remain VOE-free, and then we're also going to share patient-reported outcomes, so I know people have been wanting to see that too.
So we're excited to kind of give that first glimpse. From the differentiation standpoint, to us, it's still this correction of anemia. We're still seeing that. The total hemoglobin as of the abstract cut, all patients still remained well, the mean was greater than 14. So that's kind of for any gender, you're in the range of normal. And we think that that will ultimately be meaningful. So not just correcting the pain that's associated with severe sickle cell disease, but also the anemia that comes along with it too, that creates things like fatigue and really can impact a patient's life overall.
What's your latest thinking around this fetal hemoglobin induction that is more robust than a past agent, and also the total hemoglobin, as you mentioned, being in that normal range? I know in the past, Gilmore has talked about, or maybe it was Baisong talking about patients feeling more fatigued easier, and so it's not exactly back to full normal, but it is much better from their baseline, so any light or thoughts you can share around sort of the benefits of fetal hemoglobin that's higher than prior agents and also total hemoglobin that's normalized?
Yeah, I mean, I think we're kind of confident that the raising of the total hemoglobin into normal will actually help because it is the correction of anemia, and I think maybe what they've been saying is a little bit more that sickle cell disease not only has these pain crises, but it's also marked by anemia, and that's one thing that hasn't been focused on, so that's where we think kind of by our deliberate design, where we're doing the edit and how we're doing the edit is actually helping correct that and raising those fetal hemoglobin levels, but raising the total hemoglobin into the normal range as well.
Okay. And then maybe a little bit more of a granular question. Across your RUBY and EdiTHAL patients, maybe I'll just stick with RUBY. What's sort of the average mobilization cycles that your patients had to go through? Is that a point of differentiation, if that could be?
I mean, ultimately, anything could potentially be a possible point of differentiation. Our mean cycles for RUBY is two with a range of one to four. So we think that's a pretty good mean and range. For EdiTHAL, it's actually one. So all patients were able to mobilize within one cycle of apheresis. Another point that we think could actually be differentiation, which you didn't ask, maybe you'll ask it soon, but now I'll just answer it first, is time to engraftment. So we're seeing neutrophil engraftment at a mean of 23 days with a range of, I think, 15 to 29 days. And that's something we think could be meaningful. Ultimately, a patient could potentially get out of the hospital faster, getting back to their new life, if you will.
It could be meaningful for the hospitals themselves, helping to increase their profitability on moving somebody out versus having them in the hospital longer and then freeing up that room that could be for somebody else as well. So that's another point too. So there's kind of the clinical benefit that we think with the correction of anemia and then some of these other benefits too.
So mobilization and the rapidity of engraftment are the two angles. What's the latest physician feedback you're hearing? I mean, it does seem like LYFGENIA and CASGEVY are starting to pick up a little bit, but certainly is still more of a laborious process given the necessities of this treatment. So is it your sense that we're starting to ease up on the bottleneck, or is there still significant bottleneck that another kind of ex vivo approach might still have to get over?
Yeah, I'd say one of the things that we've always talked about is being a fast follower with a differentiated product, and we felt and continue to believe that there were just some structural aspects of the market that would necessitate a slow launch on the part of the other two competitors, one of them being the contracting process. When you're trying to do contracts and figure out where is the risk and who takes that, our understanding is that has gone on for about a year, so that slows things down. Some of the other things that have, I think, impeded the launch are just the natural budgeting cycle, particularly for state Medicaid programs, where if you assume the Medicaid budgets are kind of done in the fall for the next year, I mean, these products were approved in December.
So probably not in a lot of the 2024 budgets, but that will catch up in 2025 and certainly by 2026. Patient awareness, we know, has been picking up. I mean, that was one of the things that drove the acceleration of enrollment in our trial, was the mere fact that we had a couple of products approved with the aforementioned delays due to contracting and reimbursement. We all of a sudden had this trial-free alternative that accelerated our enrollment. So I think all of those things are continuing to go. Obviously, there's been an uptick in the patient collections in the last quarter. And we suspect by the time over the next year or two that that should continue to abate. And it's not unexpected. And I think the market launch is proceeding as we probably thought it would be.
One of the more surprising developments that you guys announced recently was reni-cel's decision to seek partnership here. I guess, why now? And given the progress you've made here, it does seem like it is kind of abrupt. I know investors would say otherwise, but just kind of curious on your thoughts.
Yeah, I mean, it really boils down to a couple of things. Cost of capital, right, with the share price where it is and the amount of capital we'd have to use over the next couple of years would result in a level of dilution that we found unacceptable. Whereas if we're focused more on in vivo, it would be significantly different capital structure requirements. And the second thing is putting the product in the hands of someone that can get it to as many patients as possible. It's no secret. It's been written up how much money some of the other folks are spending on marketing. And we believe we have a best-in-class molecule, and we want to put that in the best possible hands to get it to as many patients as possible. And it's just for a small company like ours, it's just a challenge.
We have to be realistic about what we can and cannot do and where the best source of return on capital is for our investors, which we believe will be in vivo.
So then what would you look for in a partner? Who's your ideal partner? What kind of skill sets do they bring?
When you look at the profitability, and I'll just speak in general terms here, there are certain things that partners can leverage. One is commercial. If we did this on our own, we've got no other products in the bag. The other thing, aside from a commercial infrastructure that we'd be potentially able to leverage, is a quality, a manufacturing-type infrastructures, reimbursement. All of those things, when you just have one product on one P&L, is significantly different than if you have a couple of other products. Maybe somebody has some excess manufacturing capacity. Maybe someone is already having reps visiting the transplant center. So all of those things can improve the theoretical profit margin, operating profit margin of this, and have it meaningfully profitable for a bigger company.
Got it. To the extent you can comment, ever since you made that official announcement, I mean, what can you speak to in terms of the process? What kind of inbounds have you been getting? Any interests?
Yeah, we can't really talk about the process at this point. And I would just say, similar to what we say with respect to the Cas9 licenses and things like that, we'll have something to say, we'll say it. But until then, we want to avoid any speculation.
Sounds good. So it is a snowball that is basically rolling down the hill as it collects more human data, long-term data. It is a program that's going to continue developing, whether you like it or not. So ultimately, the question is, what do you do while you're looking for a partner? Is this a program that you're going to continue enrolling, given the highly anticipated or the demand from the patient side, and then maybe keep bringing it to a BLA stage where you will look at things opportunistically, but you're not going to necessarily put a pause button on this particular program?
The enrollment's complete, so we got that going for us. With respect to the other activities, we're going to continue to do what we think is in the best interest of shareholders in terms of how we allocate our capital and in terms of whether we're putting capital on reni-cel or in vivo and how that's timed out.
Just curious, is that capital intensive, the fact that you're just following patients and collecting from a visitation standpoint versus repeat dosing?
There's a couple of steps in the process. The first is the manufacturing of the cells. So you take the cells out, we do our thing to them, and then they re-dose. So there's really three points along the way. You can probably look at the number of patients that we've enrolled, the number of patients that we've dosed, and then from there, you can deduce the number of patients that are left to still be dosed. I think a lot of the manufacturing of the cells has been done, but then there's the re-dosing of however many patients are left. The longer-term follow-up isn't that capital- intensive. It's really the manufacturing, which I think is mostly done, and then it's the re-dosing.
Right. Okay.
The transplant centers, that's not inexpensive.
Right, right, so on the flip side of this announcement, you also came out with your first in vitro preclinical data. Maybe we can just briefly touch on sort of the key messages that you were able to communicate with the community.
Certainly. Yeah, so excitingly, we hit one of our goals for the year, which was to share in vivo proof of concept by the end of the year, which we shared in October. So very excited to get that data out. And we did it in an extrahepatic tissue. So that was also exciting. So getting into HSCs, HSPCs. So we showed, and the strategy that was communicated with in vivo, one of our goals in our three-pillar strategy was to eventually get an in vivo sickle cell or beta thalassemia medicine developed and brought to market. Also excitingly in it, I think, is the fact that the LNP that we're using to deliver is ours. It's a homegrown proprietary Editas LNP. So that's also very exciting. And we optimized it in such a way with our HSC targeting strategy to get it to the extrahepatic tissues.
So all very exciting. And we showed a level of editing in a humanized mouse model that we think has the correlation to ultimately be therapeutically relevant. So we were very excited about kind of all the steps. And just to back up and give a reminder, it's similar to reni-cel in the target that we're going after and the enzyme using Cas12a, editing at the gamma- globin promoter region. And so the third nut to crack, if you will, was the delivery. And now we're kind of showing that we've done that.
So when you think about the sickle cell opportunity, I mean, your colleagues over in Cambridge have also talked about this as their ex vivo program as well as their in vivo, sort of wave two, wave three, the way they characterized it. So you're obviously following that same train of thought as well. But why sickle cell? I understand that there is a lot of established data and expertise there, but doesn't it kind of create a little bit of a conflict that you have a reni-cel product that you're now trying to out-license, but then you're now developing a homegrown in vivo program?
Yeah, I would say with respect to in vivo, to your point, obviously, one reason to pursue it is the target is validated. The Cas12a is validated by gamma-globin and promoters validated. I think in terms of whether or not there's a conflict, I think it would not be unreasonable to expect that in a curative therapy that a second generation may be part of a negotiation process, so.
Okay. In the LNP side, though, I think on the presentation, there was iteration one, iteration two, and iteration three. Ex vivo versus in vivo, you have that one layer of uncertainty, which is how much is enough to yield CASGEVY or reni-cel-like efficacy. So maybe just high level, how are you thinking about timeline-wise? What additional work needs to get done before you start thinking about IND/CTA filing and getting it to the clinic?
Sure. Yeah, and we'll get more granular on some additional data, possibly timelines in the first quarter. But in general, after the mouse studies, you would also go into non-human primates and kind of test different things. I think one of the things that we showed in that data was how we improved as we kind of optimized further our LNP and added a HSC targeting moiety conjugate to that LNP and were able to get there. To answer the second part of the question, this was one dose, but we don't know ultimately when you go to humans if you might need to have a second dose. But it wouldn't be with gene editing; we would still feel confident that it wouldn't be kind of multiple injections every year.
It would be whether it's a one, two, three-course regimen, and then you'd be done.
You are contemplating a repeat dosing or at least readministration.
If we had to.
Yeah, if we had to. I wouldn't say we're contemplating.
No, not contemplating. The data we showed was one dose, and we felt we got to a level that would potentially be therapeutically relevant.
Got it. The tLNP, as you call it, right? That's, as you pointed out, Cristi, homegrown, home-developed. Anything you can share about how similar or dissimilar it is, aside from the targeting moiety for the HSC, the overall fat, right? How different is that composition from some of the other folks like an Intellia or a Beam or even Verve? Because it seems like there is quite a bit of nuance between the composition that can manifest in terms of safety signals. So anything you can speak to the composition?
Yeah, no, we're not sharing that as of right now, just obviously for competitive reasons. But those are all the tests that we're going through, but we're confident that we're headed in the right direction in terms of what we can tell in the preclinical work in terms of safety and efficacy. And that's, again, why we would be going into from the mice to the non-human primates to be able to gather all that.
Just quickly on the manufacturing side, for the tLNP, what's your current manufacturing capacity for that one if you were to kind of drive it into the clinic and go all the way to commercialization?
I don't think we've shared manufacturing for the tLNPs yet. But we're happy with our model that we've put in place for reni-cel. So I think that if you look at that as somewhat of a blueprint, that might be ultimately it'll be different in terms of what we're doing. But we're happy with how we've been able to manufacture in a very capital-efficient way reni-cel without building huge structures and that sort of thing.
I mean, I think given the experience with the COVID vaccines and some of the others, I think there's probably a plethora of LNP manufacturing capacity and expertise out there that we can access at the right time and at the right price.
Okay. In vivo certainly opens up a lot of opportunities. And to your point, extrahepatic has been kind of the goal for the field for quite some time. Now that you have this HSC targeting approach, sickle, beta thal, clearly a lower hanging fruit given reni-cel. Where else are you contemplating? And at what point do you consider to be significantly de-risked enough to make that new addition or new introduction?
I think one of the things, taking a step back, we don't want to be all things to all people. I think we want to have very focused, high-conviction targets. I think to that point, the fact that we're able to generate extrahepatic delivery, at least in mice at this point, I think puts us in a rarefied air of companies that have done that and will pick target tissue types that we think satisfy our core goals of where we can be first in class, where there's limited to no other alternative therapies. I think that's the challenge we've been clear about with respect to liver knockdown. We don't want to do liver knockdown because a lot of those diseases are already treated by other modalities. So we don't want to do that.
So we're going to find other tissues that we think meet those criteria where we can be first in class, best in class, not making the mistakes of the past of being third to market.
Okay. That raises two follow-up questions for me. One is, within HSC or HSPC targeting after the HBG promoter area that you're targeting for sickle and beta thal, what is the next potential lower hanging fruit that you can continue pursuing on the HSPC side? And then second question is, when you think about the targeted LNP, have you talked about any other moieties that direct your LNP to a different organ other than HSPC, for example?
Yeah, we haven't publicly commented on that, but we're having those discussions internally where we can do exactly as you suggest.
On the second part.
Yeah.
Okay. And then for the first one on the HSPC, is there?
I haven't heard of.
Yeah, no, and we haven't shared any of the other areas that we're looking into, whether it's in HSCs or other tissues, either just for, obviously, with in vivo.
It's fast.
Yeah, it's moving fast. It's obviously due to the plug-and-play nature of swapping out 20 nucleotides on the guide RNA. If we give out our targets to someone that already has a little further along in the, they're just going to hop in front of us, so.
Yeah. So anything you can set in terms of when the next data set would be from your in vivo endeavor? I mean, obviously, we've gotten some sneak peek, which is exciting. But are you guys holding off until you've made some splashy IND or CTA acceptance, here are all the data, or is there something?
No. We'll bring everyone along every step of the way. I think one of the things that, for me being a former buy-side person, we take investor feedback very seriously. I did that at Aveo Oncology. We've done that here. Investor feedback is very important to the decisions that we make, and we want to be very transparent in each step along the way because we want to hear the feedback before we get too far, so we'll bring everybody along. It's not going to be some big splash where we're going to give you everything all at once.
Not an R&D day, five-hour.
No. No, we'll do exactly what we did with the update call. We'll be bringing it along in pieces.
Sounds good. There was also an announcement on the Genevant partnership. So just to kind of clarify, where does Genevant come in? How does that play a role into this tLNP, if at all? If we can maybe sort that out.
So if you think about it, just taking a step back in terms of tissues, right? We've got our in-house tLNP for HSCs, and we have Genevant for liver. So two separate tissues, two separate LNPs.
Okay. So Genevant is for the liver.
And that would be, again, we're not doing knockdown. We would be doing upregulation, rare disease things, again, where we can be first in class, where there's limited treatment modalities. So same philosophy.
One of the other pushback that we have gotten, because I deal with mostly rare disease-focused companies, is some of them are just not commercial, right? It's not attractive. It's too small. You might be able to fast-track the development. So where does Editas draw the line when it comes to rare disease that's commercially viable but also meaningful from your technology standpoint?
Draw the line in terms of financial benchmarks?
Financial benchmark, patient population, standard of care, efficacy bar, anything of the sort.
I think given the fact that the development costs are significantly less for an LNP derived in vivo, I think the number that we've been using is somewhere around $500 million of sales at peak is where you really need something to make it worthwhile financially.
OK. So it's not necessarily you're kind of sticking with your core expertise in the hematology side. You're looking at other areas as well, so long as it satisfies the $500 million peak opportunity.
Yeah, I would say $500 million. But again, within that, what we don't want is $500 million in a crowded area like PCSK9. It would be, again, a rare disease where the patient population is maybe not that great, but you have some way to justify a certain pricing model to be able to recoup the R&D and provide an adequate return on that.
Yeah, OK.
So it's really the decision is really a multitude of factors. It'll be financial, but it's also going to be avoiding competition, avoiding other treatment modalities.
Got it. Speaking of competition, plenty of companies with CRISPR/Cas9. Eric earlier in the commentary talked about the Vertex deal.
Yep.
Remind us the size of that deal and any insight as to what we can expect going forward, given that there are a multitude of programs that are in development?
Yeah. So just by way of background, when we announced the Vertex deal almost about a year ago, maybe 11 months ago, we got $50 million upfront and had to give a mid-double-digit % back to our partners at Harvard, MIT, Broad. And then we also announced, as part of that, we had an annual license payment of $10 million-$40 million a year through the patent expiration of 2033. And the $10 million-$40 million per year would then vary based on its time-based, and then there's a sales threshold in there. There's also a contingent payment. We have not disclosed the contingency conditions. But then what we did with DRI was we monetized half of the contingent payment and then our portion of the $10 million-$40 million a year and brought in $55 million net.
From one license deal, we brought in about $80 million in one year of non-dilutive capital. We think there's probably about 100 programs in development. Half of them are at 8 to 10 companies. We're open to having discussions with those folks at any time.
OK. I guess we'll just wrap it up with your cash position and runway projections.
We ended the quarter with cash runway into second quarter of 2026. When you adjust for the DRI deal, which closed one day after the quarter, we effectively have pro forma of like $320 million.