Good morning, and welcome to Editas Medicine's Third Quarter 2019 Conference Call. All participants are now in a listen only mode. There will be a question and answer session at the end of this call. Please be advised that this call is being recorded at the company's request. I would now like to turn the call over to Mark Mulliken, Vice President of Finance and Investor Relations at Editas Medicine.
Thank you, operator. Good morning, everyone, and welcome to our Q3 2019 conference call. Earlier this morning, we issued 2 press releases that will be discussed on this call. The first announces an amendment to our long standing collaboration with Celgene. The second press release provides our financial results and corporate updates for the Q3 of 2019.
A replay of today's call will be available on the Investors and Media section of our website approximately 2 hours after its completion. After our prepared remarks, we will open the call for Q and A. As a reminder, various remarks that we make during this call about the company's future expectations, plans and prospects constitute forward looking statements for purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward looking statements as a result of various important factors, including those discussed in the Risk Factors section of our most recent quarterly report on Form 10 Q, which is on file with the SEC. In addition, any forward looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date.
We specifically disclaim any obligation to update or revise any forward looking statements even if our views change. Now, I will turn the call over to our Chief Executive Officer, Cindy Collins.
Thank you, Mark. Good morning, and thank you, everyone, for joining us for our Q3 2019 corporate update. In addition to Mark, I'm joined by several members of the Editas executive team, including Charlie Albright, our Chief Scientific Officer Judith Abrams, our new Chief Medical Officer and Eric Eck, our Interim Chief Financial Officer. Editas has had a productive quarter and we are as our new Chief Medical Officer. Judith has tremendous experience and an outstanding reputation.
She is a valued addition to our executive team and her arrival is ideal as we prepare to dose the first patient in the BRILIANCE Phase III clinical trial. 2nd, we announced this morning an amendment to our long standing collaboration with Celgene to develop engineered T cell medicines for cancer. As you may recall, our original collaboration spanned the entire field of engineered T cells. The amended collaboration will focus on alpha beta T cells, freeing up Editas to develop its own medicines using non alpha beta T cells. As a result of this amendment, we are entitled to receive a payment of $70,000,000 with the potential for future milestones and royalties on alpha beta T cell medicines developed by Celgene using our technology.
3rd, we are making solid progress with EDIT-three zero one, our preclinical candidate to treat sickle cell disease and beta thalassemia. We look forward to sharing in vivo data at the upcoming ASH meeting, demonstrating why we believe it has the potential to be a best in class medicine. 4th, we recently formed a new collaboration with Ask Bio, a leader in AAV gene therapy to develop in vivo CRISPR medicines to treat neurological diseases. This marks our 2nd therapeutic focus for our in vivo CRISPR medicine portfolio in an area with high unmet need. Finally, our ophthalmology portfolio is advancing with the 1st patient dosing of EDIT-one hundred and one for LCA10 anticipated by early 2020.
With that, I'd like to turn the call over to Judith Abrams, our new Chief Medical Officer to introduce herself.
Thanks, Cindy, for your warm introduction, and
thank you all for being with us on
the call today. Over the course of my career spanning more than 25 years, I've had the opportunity to lead the development of medicine through all stages of clinical development across a number of therapeutic areas, including immunology and neurology. I'm thrilled to join Editas Medicine during the pivotal time and look forward to advancing EDIT-one hundred and one as well as additional experimental medicines in our pipeline through clinical development, including EDIT-three zero one for the treatment of sickle cell disease and future engineered cell medicines for the treatment of cancer. Now let me turn the call over to our Chief Scientific Officer, Charlie Albright, to update you on our pipeline.
Thank you, Judith. As Cindy mentioned, we have amended our collaboration with Celgene to focus on developing autologous and allogeneic engineered alpha beta T cell medicine to treat cancer and autoimmune diseases. We've been working with our partners at Juno Therapeutics and now Celgene since 2015 to develop engineered T cell medicines to treat cancer. As the original research term was set to expire in May of next year, we've extended and focused our collaboration to enable the advancement of medicines into the clinic. As a result of the amendment, we have regained rights to develop non alpha beta T cells in all disease areas.
These rights were previously exclusive to Celgene for oncology. For example, we now have the right to pursue gamma delta T cells for oncology. Gamma delta T cells are part of the innate immune system as our NK cells, where we have a significant effort using both donor derived and iPSC derived NK cells. We believe that cells from the innate immune system both complement alpha beta T cells and increase the potential to treat solid tumors, an area of significant unmet need. Moving on to our other area of focus in engineered cell medicines, we are developing EDIT-three zero one as a best in class medicine to treat sickle cell disease and beta thalassemia.
EDIT-three zero one uses an engineered Cpf1 enzyme to edit hematopoietic stem cells at the beta globin locus. We are confident in this program as other editing approaches target the BC11A erythroid enhancer, which we believe may impact overall survival of the erythroid lineage. At last year's American Society of Hematology meeting, our work showing this effect was recognized as a Best of ASH award. We will present additional data from our program at the upcoming ASH meeting describing our product configuration, in vivo efficacy data and off target analysis. The totality of the data captures why we are so encouraged by this program, and we think clinicians and patients will be as excited as well.
Switching gears to our in vivo CRISPR medicines pipeline. In partnership with Allergan, we are developing a portfolio of gene edited ophthalmology treatments for inherited retinal diseases. Our lead program EDIT-one hundred and one is a treatment for patients suffering from LCA10 and the BRILIENCE Phase III interventional study is underway to evaluate its safety, tolerability and efficacy. The first potential patient that we anticipate participating in the trial has been successfully screened and confirmation of a surgery date by early 2020 is pending. With that being said, drug product has been manufactured and is available for dosing, multiple sites are recruiting, and we are actively engaged with clinicians to identify, screen and schedule patients for the initial cohort.
Our ophthalmology portfolio also includes an experimental medicine treatment for Usher syndrome type 2a To restore fully functional Usherin protein and correct the disease, we knockout exon 13, which contains the most common disease causing mutation. At the European Society of Gene and Cell Therapy meeting, we demonstrated therapeutically relevant editing of up to 60% in human retinal explants. This data gives us confidence in our ability to treat the disease and supports further preclinical development of our lead candidate. The program draws heavily on the work we've done to research and develop EDIT-one hundred and one, utilizing the same AAV vector, promoter and Cas9 enzyme, leveraging many of the same functional assays and models and following on the regulatory path paid by EDIT-one hundred and one. Beyond ophthalmology, we have recently formed a collaboration with Asp Bio to develop in vivo CRISPR medicines to treat neurologic diseases.
SBIO brings significant expertise in AV development and manufacturing. With SBIO, we target cells in the peripheral and central nervous system, a well known challenge for drug development. The combination of AskBio's expertise and knowledge in vector engineering and manufacturing, coupled with Editas' gene editing expertise could address the host of neurologic diseases with high unmet need. For example, we are excited about the potential for gene editing to treat debilitating pain and Huntington's disease. We look forward to providing additional updates on our programs in the near future as Editas works to translate gene editing into transformative treatments for patients with serious diseases.
With that, I'd like to turn the call over to Eric, who will provide a financial update.
Thanks, Charlie. I'm pleased to update all of you on our business and present the latest financial results. These numbers are summarized in the press release that we issued an hour ago, and full details will also be available in our Form 10 Q. Our cash, cash equivalents and marketable securities increased by $15,000,000 in the 3rd quarter to $333,000,000 as of September 30, 2019 from $318,000,000 as of June 30, 2019. Our uses of cash totaled $29,000,000 and include cash operating expenses of $27,000,000 and capital expenditures of $2,000,000 Our sources of cash totaled $44,000,000 and consisted of $41,000,000 related to the at the market offerings, dollars 2,000,000 of stock option exercises and $1,000,000 of interest income.
We believe our cash, cash equivalents and marketable securities of $333,000,000 as of September 30, 2019 provides at least 24 months of capital to fund our business. And with that, I will hand it back to Cindy.
Thanks, Eric. It has been a busy past few months for Editas as we work to deliver the promise of CRISPR into treatments for patients with serious diseases. It is truly an exciting time for us with the work we have been doing to advance our programs and explore new possibilities for genome editing. Editas programs have the potential to revolutionize the treatment of genetic blindness, cancer, sickle cell disease and neurological conditions, but our work is only getting started. We are what the future holds with upcoming data readouts, scientific achievements and program advancement.
Thank you all for your interest and support during this journey we have been making alongside researchers, clinicians, investors and most importantly patients. With that, we are happy to take your questions. Operator?
Our first question comes from Steve Seedhouse with Raymond James. Your line is now open.
Hi. This is Timur Ivannikov on for Steve Seedhouse. And we have a couple of questions for EDIT-one hundred and one based on a recent competitive readout. So they had a couple of super responders in LCA10 and then they had the worst vision at baseline in the low dose cohort. And it turns out the best responder took the longest time to lose his vision.
And the company didn't specifically say what the genetic or epigenetic differences were. And in addition, there was one patient whose contralateral eye improvement of 0.2 LOCKMAR was relatively significant. So given the potential for super responders and potentially high placebo response, we were wondering how you address those issues in your study? Thank you.
You're right. This is Charlie. Those are things we will be monitoring and they're not obvious explanations for some of the phenomena they've been seeing today.
Okay. And I guess, do you also in terms of a safety follow-up, do you have an expectation for how many patients will develop cataract in your study just to see what the baseline rate would be? Thank you.
We don't have any expectations than the other therapies in this space, the other AAV based therapy. So it's something we'll clearly be monitoring.
Okay. And then just a quick housekeeping question on your updated Celgene partnership. So it looks like you're getting additional 70,000,000 dollars Is that mostly just for the expanded timeline? Not clear, is it how much after 2020 it is because it seems like you're also getting back some of your rights. So if you could explain a little bit better.
Thank
you. The $70,000,000 is an upfront payment in recognition of the work we've done to date and the contributions going forward. And yes, you're right, we are getting some rights back.
Our next question comes from Matthew Harrison with Morgan Stanley. Your line is now open.
Hi, good morning. This is Kostas on for Matthew Heirishon. My first question is, can you explain a little bit what caused the timeline for the first dosing of EDIT-one hundred and hundred and one to be pushed back into 2020 from 2019?
Sure. This is a as you can appreciate, this is a rare inherited retinal disease. And as with all rare diseases, accruing patients is challenging, particularly challenging since the entry criteria for this first patient is restricted because that's the right thing to do. This has to be an adult with light perception only. And it's further complicated by challenges with the holidays.
The patients typically need to bring a caregiver, need to arrive before the surgery and they can't fly for 10 days after the surgery. So the combination of those things has just made it complicated as we've approached the holiday season.
Thank you. And how is the screening progressing for other patients beyond the first patient?
We're progressing well. We've in addition to the patients we've identified in the natural history study, We've opened 2 sites, 2 more sites are pending, and we continue to screen for patients outside the natural history study. And so we have, as part of our screening, identified other patients, which are potential patients in the subsequent cohorts.
Okay. Thank you. And one more question, please. Can you talk about the reason for Cpf1 in your hemoglobinopathies program?
Sure. And so our general strategy is to use the best enzyme for the application. And in this, the hemoglobin program is a fascinating one because you're knocking out a transcription factor binding site. And as we'll show at the ASH meeting, not all edits at the transcription factor site are actually productive edits where they knock out the binding of the transcription factors. So it turns out in this case that when we edit with Cpf1, we get a much higher fraction of productive edits in the long term hematopoietic stem cells.
And so what we've done there is really to create a relatively unique product where we maximize the ability to induce fetal hemoglobin, which is, of course, the objective of this program. So it's really been an interesting journey there, and we look forward to the upcoming ASH meeting.
Okay. And one last question and follow-up on this. Given that we expect data from another CRISPR medicine in hemoglobinovasis again before year end, can you talk a little bit about how this data could inform your strategy in this area of
diseases? Well, we carefully monitor the competitors in this space as we do in every program we have. We do have reason to believe that we have developed a best in class medicine, and we clearly monitor that with time. And it will be interesting to see the upcoming data, particularly in light of the abstracts we've seen to date.
Thank you very much.
Our next question comes from Whitney Ijem with Guggenheim Securities. Your line is now open.
Hi, good morning guys. This is Anwita on for Whitney this morning. Could you please give us more color on the vectors that you may gain access to under your AskBio collaboration and the initial indications that you may be considering in this CNS space? And then what attracted you to AskBio in particular versus other next gen vectors in the space? And then I have an additional follow-up.
Thanks.
Sure. We're very impressed with AskBio. And not only are they a leader in AV and have a track record, the people involved in NASA Bio have a significant track record of putting medicines into the clinic that are efficacious. They've also developed a nice infrastructure. They have an excellent manufacturing facility.
They've acquired some significant businesses that go with their core business and complement the core expertise they've developed in AAV manufacturing. So it is a very impressive group and we're super excited to be working with them on a neurologic disease. Our initial efforts would be pointed to severe pain. And so we don't want to say a tremendous about it now, but it's an area of high unmet need where the targets are genetically validated, and we think we can do something very unique.
Okay. And then in your beta cell and sickle cell program, what is the HBF target that you're aiming for? And is it any different between the two diseases? Thanks for taking my questions.
Thanks. We believe we need to get more than 30% fetal hemoglobin increases and needs to be significantly pan cellular, obviously. And so we'll show data at ASH that we've exceeded those targets and believe we have a very interesting experimental medicine.
Our next question comes from Gena Wang with Barclays. Your line is now open.
Thank you for taking
my questions. This is David on for Gena. My first question is regarding LCA10 data read through. How do you think that the LCA data read through to the Usher syndrome in terms of initial dosing?
For each of these, we are doing the pharmacology modeling to correlate the editing with the dose. We haven't shown that data, but we do anticipate that dose responses between medicines will be quite similar, and we've seen some of that pre clinically. We'll show more of that next year. So as with all molecular medicines, the pharmacodynamic, pharmacokinetic relationship is typically reasonably well maintained across therapies in different spaces. We anticipate the same thing here.
Second question is regarding the preclinical data for beta thalassemia and sickle cell disease. Your preclinical data at ASH, how does it compare to BCL11A approach? And what do we expect in terms of timing to Phase 1?
Taking them in reverse order, we haven't disclosed the timing to Phase 1. We said those were in a position to begin IND enabling studies and are advancing it as rapidly as possible. We, of course, stand by that. The data compares favorably. I think you'll be able to judge that when you see the poster as far as hemoglobin is.
Okay, very helpful.
And then last question on the recent prime editing news that came out. What do you think is the impact to the CRISPR?
We monitor the competition across the space, both the direct gene editing approaches and the modified gene editing approaches. The prime has many similarities to the base editing and has many of the same we anticipate many of the same issues, quite frankly.
Our next
So just a few questions, I guess, on the Celgene change or re up the agreement and then also just kind of what you've been up to on that front. I know you've been presenting for a while now at various conferences preclinical data on TPS1 and T cells. So just curious kind of if you can update us on what I guess, A, what happens to the work that's been done previously with TGFY and T cell rate that you've presented? And then, I'm assuming that also includes engineered TCRs in terms of taking that sort of back, if you will. So curious if you can just update us on both of those programs, where you're at with those and when you think you might have an update on timing and indications and things like that?
Yes,
I wish I could be more clear about the timing and the details of the Celgene programs. Unfortunately, that's not possible. Suffice it to say that the work that we have shown will carry forward into the new collaboration, and we have shown a lot of data on multiplexing, targeted integration, knockout of what one would say are the typical genes in the space. All of that work gets rolled into the new collaboration with Celgene. As you can imagine, as a leader in we believe the leader in T cell medicines for oncology, including arguably the best CD19 and the best TCMA CAR T programs, that have a strong interest in maintaining their leadership position and gene editing is certainly an important part of what are likely to be the next generation of T cell medicines for oncology.
So we're excited to continue to work with them in that space and we'll be able to use the knowledge we've gained to date to do that. And unfortunately, we just can't be transparent about the nature of the products or the timing of the products.
Okay, fair enough. And then just on the NK program, I mean, I'm sorry if I missed this. Have you kind of talked about there what your timing is? I know you had sort of an NK cell program that was sort of running individually and then you obviously have the iPSC collaboration and I think you've talked about iPSC derived NK cell as well. So just looking for an update there if you can provide one.
We provide a general update without the specifics that you probably really want. Suffice to say that the science is going really well, and you'll hear a lot more about that next year as we go into the oncology and the stem cell meeting. We are able to, with our collaborators BlueRock, identify well defined and characterized iPSC lines. We've been able to edit those iPSC lines. We've been able to differentiate them into NK cells that have potent killing activity in vitro.
We're starting to combine all those things now into what we believe will be interesting experimental medicines and accumulate the data as rapidly as we can to advance those into the clinic. We have a similar effort in the healthy donor derived NK cells that we think complement the iPSC derived NK cells. So we do anticipate providing significant update next year that illustrates that progress in a scientific venue.
Got it. Again, if I can sneak in one more about EDIT-one hundred and one. So it just reminds us again from a protocol perspective what's required for sort of second patient dosing? Is that going to be a little more ready? I just forget just a reminder on the timing there.
Yes. So the entry criteria for both patient 1 and patient 2 are quite similar, light perception, only adults. There's an interval between the dosing of those two patients, which I believe is 6 weeks. And so we're obviously trying to accrue both the first and the second patient, because that's what's required in the first cohort.
Our next question comes from Joe Toome with Cowen and Company. Your line is now open.
Hi there. Thank you for taking my questions. The first one on the 101 program. In terms of patient screening, I know you mentioned that obviously this first cohort we patients with only light perception and kind of advanced disease. Have you screened patients that maybe just didn't have advanced disease enough that would be applicable for a later cohort or kind of how is patient interest in the program sitting?
Yes. The simple answer is yes. We have screened patients that did not fit the criteria for Cohort 1 that could fit the criteria for Cohort 2 and 3. And so obviously, we're interested in them. The interest in patients and the physicians remains high, and we're optimistic that we're going to start to get this study dosing and further enrolled.
And then one more on that program. I know it's looking ahead, but in terms of data disclosure, I know you're following for a year, but there is the potential for some interim. How do you anticipate releasing data? Would you release data from the 1st cohort or would you wait for your a year until you had a few cohorts of patients dose for a meaningful amount of time?
Right. It depends on the data quite frankly. And so remind you that we are partnering with Allergan in this study and they're going to have an important say in the release of data. We have said we're not going to release data on a patient by patient basis because we don't believe that data will be representative. And as illustrated by one of the earlier questions, there are some super responders here and you could be significantly misled by releasing patient by patient data.
And so I think it will very much depend on what the data is and our discussions with our partners Allergan. Great.
And then just one last kind of housekeeping question on the Celgene deal. The $70,000,000 milestone, do you expect to receive that in Q4? And maybe how are you going to account for that? And in terms of when Celgene can opt in on some of these programs, is there a specific time after proof of concept, before pivotal or how are they thinking about that?
So yes, we are going to accrue in the Q4. The deal is structured so they opt in they can opt in at any point in time.
Okay, great. Thank you.
Our next question comes from Gullah Lipchis with Chardan. Your line is now open.
Thanks. Good morning, everyone, and thanks for taking my questions and congrats on the progress. So a quick one on LCA10 and then one on the oncology. So with respect to the LCA10 program, to make sure I understand, was that first patient that was identified rolled in from the natural history study?
Yes.
Great. And then with respect to the Celgene collaboration and in terms of overall oncology strategy, kind of a broader question. So you have a number of tools at your disposal now. And I'm just wondering how you're thinking about the decision process towards deploying a particular T or NK or gamma delta T cell therapy, I should say, towards a given target or towards solid versus liquid tumors and internal versus Celgene collaboration, yes, if there's any color that you can provide on that?
Yes. So the collaboration with Celgene is very much about working with somebody who's a leader in beta T cells, and as you know, they're a leader in alpha beta T cells directed at hematologic indications. CD19 and BCMA are at the top of their portfolio, as we believe, and I said they arguably have the best medicines in both of those spaces, and I think that maintaining that leadership will be at the top of their list of things to do. We are going to focus most of our effort on solid tumors, an area of significant unmet need where engineered cell medicines have been relatively unsuccessful to date, but we believe we can get there and that you're going to need significant genetic changes and editing to do that. And the iPSC platform really provides that ability to make the genetic changes that are going to be required.
For instance, you're going to need targeting, you're going to need increased persistence, evasion of the immune system, evasion of the tumor microenvironment and probably ability to stimulate the endogenous immune system. And there's no way you're going to get there with any cell type derived from healthy donors. And so we're building a platform we believe is unique in this space and, of course, the ability to make complex products, which will get us into a space that has a significant unmet need. Right now, our efforts internally are focused primarily on NK cells. They are one of the easier cell types to make from the iPSC platform, and there's emerging clinical data that they are indeed efficacious in patients, albeit in hematologic indications to date.
So we are very excited about that. We've made a lot of progress in that area, and we look forward to disclosing all that at the meetings next year.
And so this is kind of theoretical, but then would Celgene's potential OctonRx include something like an iPSC derived alpha beta T cell based on the structure of the agreement?
It could. That's not the initial focus of the agreement.
Great. And then just one last one on the AskBio collaboration. So you mentioned with your UTAS bio. And so just out of curiosity, under the collaboration, do you have access to the Symproic Informatics platform?
We do. We have access to whatever is under the ASP Bio umbrella, and that's a great example of the way they're expanding their technology footprint to really become what we believe is one of the leaders in the AAV field.
Our next question comes from Silvan Turkaly with Oppenheimer. Your line is now open.
Well, congrats on the quarter and thank you so much for taking my question. First off, I wanted to ask you about Matthew Portoises' approach, which is academic that was presented at ESGCT in sickle cell disease. He will be starting up a Phase II trial next year. Is there anything could you maybe highlight the differences between your approach and his? And is there potential read across from HIS trial that could apply to EDIT-one hundred and one?
Sure. His approach, as I understand it, is to actually target correction of the sickle cell mutation. And that has some obviously has some theoretical appeal because you're going right after the greatest mutation. As you can appreciate though, not all of the genetic changes at the sickle cell allele are productive, I. E.
Not all of them lead to correction of the mutation. And the problematic aspect to that strategy is when you don't correct, you actually make an indel, which is highly likely to be nonfunctional. So those alleles and potentially those cells will now not contribute hemoglobin to the patient. And so if you don't get enough correction, you actually have the potential to make beta thalassemia patients, take sickle cell patients and make them beta thalassemia patients, which we have found to be a significant risk.
Great. And could you please remind us of what's left to do to file an IND for Ashar and what could be a potential timeline?
We haven't disclosed the timeline. What we have said is that at the end of the year, we anticipate having a molecule that'd be ready for an IND enabling study. And so you recall that the Usher program is part of our collaboration with Allergan, and it's an option agreement. So we provide packages at the end of the discovery phase to Allergan and then they have the right to opt in. So we anticipate delivering that package to them at the end of the year.
We remain on track for that. And at that point, they'll have a decision to make. And once they've made their decision, we will have a potentially have a decision to make as well.
And at this time, I'm showing no further questions. I'd like to turn the call back over to Mark Mulligan for any closing remarks.
Great. So with that, we thank all of you for participating in today's call and for your support as we work to bring transformative new medicines to patients. Have a great day.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.