Good morning, and welcome to the Wave Life Sciences second quarter 2022 financial results and the Business Update conference call. At this time, all participants are on a listen-only mode. As a reminder, this call is being recorded and webcast. I'll now turn the call over to Kate Rausch, VP of Investor Relations and Corporate Affairs at Wave Life Sciences. Please go ahead.
Thank you, operator. Good morning, and thank you for joining us today to discuss our recent business progress and review Wave's second quarter 2022 financial results. Joining me today are Dr. Paul Bolno, President and Chief Executive Officer, Dr. Mike Panzara, Chief Medical Officer and Head of Therapeutic Discovery and Development, Dr. Chandra Varghese, Chief Technology Officer and Head of Platform Discovery Sciences, and Kyle Moran, Chief Financial Officer. The press release issued this morning and the slide presentation to accompany this webcast are available on the investor section of our website, www.wavelifesciences.com. Before we begin, I would like to remind you that discussions during this conference call will include forward-looking statements. These statements are subject to several risks and uncertainties that could cause our actual results to differ materially from those described in these forward-looking statements.
The factors that could cause actual results to differ are discussed in the press release issued today and in our SEC filings, including our annual report on Form 10-K for the year ended December 31st, 2021, and our quarterly report on Form 10-Q for the quarter ended June 30th, 2022. We undertake no obligation to update or revise any forward-looking statements for any reason. I'd now like to turn the call over to Paul. Paul?
Thanks, Kate. Good morning, and thank you all for joining us. In the second quarter, we continued to make meaningful progress both on our therapeutic program and our platform. I will start with some recent highlights. I'll then turn the call over to Mike, who will provide updates on our innovative pipeline. Chandra will then share some examples of how we continue to expand the addressable biological targets with our unique RNA-based editing platform. Finally, Kyle will discuss our financials. I'm excited to begin today's call by announcing the selection of WVE-006 as our first RNA editing development candidate for alpha-1 antitrypsin deficiency, or AATD. We're also announcing that we expect to initiate clinical development of 006 in 2023.
WVE-006 is a first-in-class RNA editing candidate and the most advanced therapeutic program currently in development to harness an endogenous enzyme for editing. There are approximately 200,000 people carrying homozygous ZZ mutations in the U.S. and Europe, and WVE-006 has the potential to transform how these patients are treated. Demonstrating clinical proof of concept in AATD with WVE-006 would serve to de-risk RNA editing for additional monogenic diseases, as well as open opportunities to address larger disease indications through modulation of proteins such as disruption of protein-protein interaction and upregulation. Continued investment in our PRISM platform has positioned us as leaders in oligonucleotide innovation, and we continue to be encouraged by the translation of our guide strands across multiple modalities.
Earlier this year, we shared positive target engagement data from our ongoing FOCUS-C9 clinical trial in C9 ALS and FTD, which demonstrated how our preclinical data are now translating in patients. New pharmacokinetic data from our ongoing DMD and HD studies, which Mike will share today, further supports this clinical translation of differentiated pharmacology. We remain on track to share data from all three of our clinical studies this year. In June, we completed a successful follow-on offering which put Wave in a strong, well-capitalized position entering the second half of 2022. We continue to execute on multiple pillars of value creation, including delivering clinical updates and rapidly advancing our novel RNA-based editing pipeline led by WVE-006.
We also continue to advance discussions with potential strategic partners who share our vision for broad applications of Wave platform and support expansion of our pipeline while unlocking value in GMP manufacturing. I'll now turn the call over to Mike to provide an update on our pipeline. Mike?
Thanks, Paul, and good morning to everyone on the call. Today, I will discuss the continued progress of our therapeutic portfolio, beginning with our CNS programs. The FOCUS-C9 clinical trial for WVE-004 in patients with C9orf72-associated ALS and FTD continues, with administration of single and multiple doses underway. Back in April of this year, we announced the first data update from our FOCUS-C9 program, which demonstrated a robust dose-related target engagement, confirming translation of our preclinical work into the clinic. I shared these data with the ALS community in June in an oral session at the Conference of European Network to Cure ALS, or ENCALS, in Scotland. The presentation highlighted not only the clinical data seen here, but the wealth of information illustrating the differentiated preclinical profile of WVE-004.
We anticipate delivering an update with additional single and multi-dose data for WVE-004 in the second half of 2022, and are on track to initiate an open label trial in the same timeframe. Moving on to Huntington's disease, WVE-003 is our allele-selective oligonucleotide currently being evaluated in a SELECT-HD study targeting a polymorphism, SNP3, associated with expanded CAG transcript in certain patients with HD. The goal, as we have said many times, is to preserve production of wild-type huntingtin, given the importance of this critical protein. Preservation of wild-type huntingtin continues to be a key objective that is supported by the HD community and by emerging preclinical and possibly clinical data. WVE-003 is the only allele-selective program currently in clinical development.
Similar to WVE-004, we were able to leverage preclinical in vivo models to establish a starting dose of WVE-003 that was predicted to achieve CSF concentrations needed to engage target. We designed and implemented an adaptive trial with the goal of accelerating time to proof of concept. The SELECT-HD study is progressing well and is already yielding interesting information from blinded assessments. The right-hand side of slide nine shows the concentrations of WVE-003 measured in patient cerebrospinal fluid or CSF in the first cohort of patients dosed in the trial. On the same graph, we have plotted the CSF concentrations observed following administration of 32 mg of WVE-120101 and WVE-120102, which were the highest doses used in the PRECISION-HD studies, where we evaluated these first generation PS/PO compounds for HD.
Approximately one month post this single starting dose, we are seeing CSF concentrations 20-fold greater than the maximum observed with these previous compounds. You may recall at the time we discontinued the PRECISION-HD program, we said the primary reason for doing so was modeling that indicated that we could not achieve CSF concentrations needed to engage target with those first generation compounds. The profile WVE-003 appears quite different. Dose escalation continues in the SELECT-HD study, and we expect to share clinical data in the second half of 2022. In Duchenne muscular dystrophy, our open label clinical trial of WVE-N531 for DMD patients with mutations amenable to exon 53 skipping is progressing well also.
You will recall in our preclinical studies in the DKO or double knockout mouse, treatment with an exon 23 surrogate of N531 resulted in significantly prolonged survival at dose levels and frequencies achievable in human studies. Of course, after converting to estimated human equivalent dose levels. These data guided our target dose selection and escalation planning in our open label clinical trial. On the right-hand side of slide 10, you can see some preliminary pharmacokinetic data from this study compared with data from suvodirsen, our first generation PS/PO compound. The figure shows plasma concentrations following single doses of N531 at three dose levels compared with the top dose of suvodirsen used in our discontinued phase II/III study.
What's clear is that approximately one week following dosing, plasma concentrations of WVE-N531 were already 40-fold greater than those achieved with suvodirsen, and dose escalation has yet to be completed. Dosing is underway at dose level 4, and we look forward to data from muscle biopsies in the fourth quarter of this year. I'll now give an update on our newest candidate, WVE-006 for AATD. WVE-006 is designed to address the therapeutic goals essential when developing a novel therapy for AATD, namely restoration of circulating wild-type M-AAT to address lung disease and reducing Z-AAT protein aggregation in the liver to address liver disease. Our hypothesis is that through RNA editing in homozygous ZZ patients, one can shift the phenotype towards a heterozygous MZ phenotype, lowering the risk of disease pathology.
In the second quarter, we shared data using one of our lead AATD AIMers to restore functional AAT protein. At 19 weeks, restored AAT protein was determined to be functional as measured by robust inhibition of neutrophil elastase as well as PAS-D staining of liver biopsies demonstrating reduced accumulation of Z-AAT aggregates over the duration of the study. The selection of WVE-006 to take forward into IND-enabling toxicology studies followed a thorough evaluation of multiple lead compounds, each with potent editing capability. In preclinical studies in mice and non-human primates, in order to choose the molecule with the best overall profile. Slide 13 shows the efficacy of WVE-006 in the NSG-PiZ mouse model, which is well established in this space. WVE-006 was administered subcutaneously following an initial loading dose.
At week 13, SERPINA1 RNA editing was approximately 50%, and serum AAT protein restoration ranged from four to seven-fold higher than PBS control, remaining above an 11 micromolar level throughout the dosing interval. Additional data supporting the favorable preclinical profile of WVE-006 are shown on slide 14. Potent concentration-dependent editing of SERPINA1 was observed in primary human hepatocytes derived from a donor with the MZ genotype, reaching as high as 80% for the highest concentrations tested. Where are we now with WVE-006? IND-enabling activities are underway, and we expect CTA submission next year. In summary, Wave's diverse portfolio of therapeutic candidates continues to advance through development as we are beginning to see our preclinical observations translate into the clinic.
The data generated with each candidate continue to demonstrate the potential when principles of rational design and chemistry innovations are applied to oligonucleotide, enabling novel approaches to complex disease biology. With that, I will turn the call over to Chandra. Chandra?
Thanks, Mike. The substantial progress to date with our WVE-006 program for AATD demonstrates the potential of AIMers technology for precise correction of Z-AAT driver mutations. We like to think of our AIMers as Swiss Army knives, and restoring or correcting protein functions is only one example of how we can use AIMers to potentially treat diseases. Recently, we have generated multiple proof of concept datasets that demonstrate how AIMers can activate gene pathways by modulating protein-protein interactions and upregulate RNA expression by editing RNA binding protein motifs. These applications demonstrate the potential to design therapeutics to precisely control gene upregulation by titrating RNA editing levels and AIMer dose. I'll review these in vitro and in vivo editing data sets on the next few slides. We have used the NRF2-KEAP1 system before.
This system shows the potential to edit a single site to activate a transcription factor and upregulate downstream genes. As shown on the right-hand side of slide 17, using GalNAc AIMers, we achieve efficient editing, resulting in a dose-dependent upregulation of NQO1, a gene regulated by the NRF2 transcription factor in vitro. We recently repeated this study in vivo and again saw efficient editing with multiple GalNAc AIMers in the liver of mice, which resulted in downstream gene upregulation. If we properly disrupted the NRF2 protein interaction, we would expect upregulation of a key set of genes that are regulated by NRF2, which we successfully confirmed by RNA-Seq transcriptome analysis, as shown on the bottom right side of slide 18. Another potentially disruptive application of AIMer is to upregulate RNA to treat haploinsufficient diseases or diseases that require overexpression of target genes.
We have now demonstrated the ability to upregulate several different targets, including both metabolic and immune targets, by editing RNA motifs to regulate RNA half-life in vitro. While much of our presentations today have focused on GalNAc conjugated designs, we also have achieved substantial RNA editing with systemic delivery of unconjugated AIMers. We do not need to use complex delivery vehicles such as lipid nanoparticles or viral vectors. In vivo mouse studies, we observe editing of UGP2 targets across multiple tissues, including kidney, adipose tissue, and a range of liver cells with a single subcutaneous dose of unconjugated AIMers. I'll now turn the call over to Kyle Moran, our CFO. Kyle?
Thanks, Chandra. Net loss for three months ended June 30th, 2022 was $41.3 million. We reported $0.4 million in revenue for the second quarter of 2022. R&D expenses were $29.7 million for the second quarter of 2022, as compared to $31.6 million for the same period in 2021. This was primarily due to decreased external expenses related to our previously discontinued clinical program, partially offset by increased share-based compensation expense and increased external expenses related to our AATD program. G&A expenses were $12.8 million for the second quarter of 2022, as compared to $11 million last year, primarily due to increases in compensation related mainly from share-based compensation, offset by decreases in other external general and administrative expenses.
We ended the second quarter with $148.2 million in cash equivalents, and short-term investments. This includes net proceeds of $65.5 million from our financing we completed in June 2022. With this financing, we extended our cash runway, and we currently expect that our existing cash equivalents, and short-term investments will enable us to fund our operating capital expenditure into the end of 2023. As a reminder, we do not include potential milestones or upfront payments under our Takeda collaboration in our cash runway. I'll now turn the call back over to Paul. Paul?
Thanks, Kyle. Over the past decade, we have established a disruptive oligonucleotide platform and are now seeing these innovations translate in the clinic. Our unique guide strands enable us to target diverse biology with multiple therapeutic modalities. In addition to what we have shared today around antisense splicing and RNA editing, we have previously demonstrated how PRISM can significantly improve siRNA silencing in vivo over industry state-of-the-art and advanced PS/PO chemistry. These capabilities, together with our GMP manufacturing, position us well to become a leading genetic medicines company. Looking ahead, we expect several milestones in the second half of the year, including data from all three of our ongoing clinical trials.
We achieved our goal of selecting an AATD development candidate and initiating IND-enabling studies in the third quarter and expect to submit multiple clinical trial applications for WVE-006 in 2023. Importantly, we are well-capitalized to execute on all these milestones. With that, we'll open up the call for questions. Operator?
Ladies and gentlemen, if you have a question or a comment at this time, please press star one one on your telephone keypad. We'll pause for a moment while we compile our Q&A roster. Our first question comes from Salim Syed with Mizuho. Your line is open.
Great. Good morning, guys. Congrats on the progress, and thanks for the question. Paul, I guess there's a lot of data coming between now and year-end. I was hoping, if you could just pick through
The three programs here, the DMD program, the HD program, and the ALS program, in terms of what do you perceive to be, you know, winning scenarios for these three programs, you know, vice versa, how much dystrophin production you expect to see on the knockdown data for Huntington's, how much, you know, mutant huntingtin knockdown data do we expect to see? And then specifically, on the Huntington's, are we gonna be getting single dose data and/or multi-dose data? For the two programs that you didn't specify whether it's third quarter or fourth quarter, are we thinking more, you know, pumpkin spice latte time or eggnog time for the HD and the C9orf72? Thank you so much.
Thank you, Salim. I'll start and I'll transition to Mike as well. Just in no particular order, and I think that's critical as we lay this out. To start with your since you ended with SNP3, I'll start with SNP3. The SNP3 data will be single dose. I think stepping back ten thousand feet and looking at all these data sets, I think they're important because they're gonna give us, again, more indication, hopefully, of what we saw earlier this year with C9 on our single dose, which is potent, durable target engagement. I think firstly, as we think about preclinical translation to clinical translation, we'd like to see the continuation of our preclinical data extending into clinical data readouts. SNP3 is single dose.
This is the same valuation that we had done on C9. It'll give us the opportunity to look at target engagement on the mutant protein, preservation of wild type, which as Mike alluded to earlier, continues to be an important metric to study, and other clinical biomarkers. Again, it will be a biomarker-driven study. As it relates to C9, we'll have continued data on both the multi and single dose. Again, continue to be able to look at the pharmacokinetics and target engagement. DMD will give us the first opportunity again to look at preclinical to clinical translation as we shared today based on tissue concentrations and exposure related to the DKO mouse model, where we did see a restoration of phenotype. That's gonna give us an opportunity in muscle biopsies to look at tissue exposure to target engagement.
Turn it over to Mike for any additional follow-up on that, but that's gonna be the key. It's a robust data set across multiple programs, all related to PN that answer key questions related to target engagement in various tissues, the CNS versus muscle, as well as being able to look at individual disease indications for cross silencing and splicing.
I think nothing really much to add other than to address the other question, is the, you know, the DMD study. We've said the fourth quarter. That's the open label. The patients are within dose escalation. We have a good sense of when that's going to happen. The other studies, as you know, are adaptive. They're driven by recruitment, timing of data collection, and basically the timing of the reviews by the independent committee. That's why we've been a little bit more little less definitive on the timing there. It just really depends upon those factors because those are the blinded adaptive studies.
If I could follow up, guys, thanks for the color. On the DMD specifically, do you have a number in mind in terms of dystrophin production you're targeting on this particular readout? I know it's single.
This particular readout, yeah, at this point in time, the target right now is being able to evaluate the translation. I think the study is really determined to see, can we see the preclinical data and exposure from the double knockout translate into humans? This time we're not laying out what a target exposure is. We'll continue to evaluate where we are based, as Mike said, we're now into dose four, so there'll be more modeling as we get closer.
The big factor, Salim, is does it look different from suvodirsen, right? Because you know, when you remember with suvodirsen, we just couldn't get into cells. We couldn't engage target. We couldn't even see any transcript production at all with suvodirsen. Here we have very different concentrations as we've highlighted, and then we're gonna be looking at distribution. If we see dystrophin, we'll be quite excited. That's sort of how we're looking at that one.
Got it. Thanks so much.
One moment before our next question. Our next question comes from Joon Lee with Truist. Your line is open.
Hi. Good morning, and congratulations on the quarter. This is for Medi on for Joon . My question is related to the PN chemistry. Recent studies in Angelman published, they show that the traditional PS/PO backbones have sort of relatively limited penetration into deep brain tissues. Could you provide some data on the function of PN chemistry in your studies and which type of tissues and which type of distribution you got with these versus the traditional PS/PO backbones? Thank you.
Yeah, I mean, yeah, no, it's a great question because I think it's data that we've shared, and we're happy to continue to share more. What we have shared in the past is with the addition of PN chemistry, we do see much deeper, broader penetration across the CNS. So that's translating to uptake across tissues. The data that we share related to mutant huntingtin reduction from the BACHD model, which is in the corporate deck, is striatal data. So what we've seen differently with the application of PN is broader, deeper penetration. But ultimately, that is why, you know, to Salim's earlier question, I think why the data for SNP3 is going to be interesting. Because one of the things that we've seen too is C9, we're gonna be looking is primarily cortex, spinal cord.
As it relates to HD, we know that that's cortex and deep gray structures like striatum. These data will help clarify for us preclinical to clinical translation as we measure this. But we've seen that it's not tissue specific either. We've seen deep penetration as Mike was talking about, with looking at tissue concentrations in DMD and muscle. We think, you know, not only is it helping with distribution, it's helping with retention, stability, and we believe that's why we're seeing target engagement at low single doses that's also durable. I think these data being able to translate it from preclinical to clinical is going to be important.
I think to your point as well, being able to dose with lower doses, you know, we think has a lot of advantages as we're going forward to be able to explore a multitude of diseases. As we shared today, WVE-006, our first AIMer for alpha-1 antitrypsin deficiency, we had shared that one of the advantages to being able to get potent durable editing was a function of being able to apply PN chemistry on top of our stereocontrol molecules.
Thank you. If I may, a very quick follow-up. Another question is that, could you provide any high-level plans that you have for the design of Wave WVE-006, how this trial will be designed?
I mean, what we'll do is, as we said, we're engaging in the IND-enabling studies. Planning will be underway as we think about 2023 clinical trial updates, and we'll definitely provide a full update on alpha-1 antitrypsin clinical program.
Yeah. The only other thing I'd say to that is we've been really engaging on outside experts in the community to sort of help us in that regard in terms of how we approach this and how we can do it in a way that accelerates time to proof of concept as we have for each of our CNS folks.
I mean, we'll share and, you know, there'll be more opportunities, I think about the second half of the year. The clinical community is extraordinarily excited about an RNA editing approach to being able to treat and restore protein function and protect liver. It's an exciting time, I think for the field to now have a candidate to be able to start exploring clinical trial designs with.
Awesome. Thank you very much.
One moment before our next question. Our next question comes from Paul Matteis with Stifel. Your line is open.
Great, thanks. This is James on for Paul. Maybe a quick one on ADAR and AAT. Do you have a sense of how much endogenous ADAR is expressed in your animal model? How does that compare to what we know about you know endogenous expression levels of ADAR in humans? Thanks so much.
Chandra. I mean, the model, we've shown this across now multiple models, we're using the standard model. I don't know, Chandra, if you have a specific answer on the amount of ADAR expressed in the animal model.
In the mouse model, we are using the mouse endogenous ADAR. In the human ADAR mouse model that we described before, the expression levels are very similar to what we see in humans. We have actually provided the data in the previous presentations.
I think there was an old question of whether or not the human model had actually amplified it. We have demonstrated and actually presented those data that there is not an overexpression. Actually the amount of ADAR actually correlates. We've also shown that you don't exhaust ADAR, so it's not an overexpression, and you don't also exhaust the endogenous by my understanding.
Great. Thanks. That's very helpful.
One moment before our next question. Our next question comes from Luca Issi with RBC. Your line is open.
Oh, great. Thanks so much for taking my question. Congrats on the progress. Maybe on ALS, we've obviously seen tofersen NDA getting accepted by the FDA based on NfL as a surrogate biomarker. Wondering what was your reaction to that news and how you're thinking about implications for you and maybe for the field more broadly. Second, on AAT, circling back on a prior question. Again, I know super early days, but how are you thinking about the phase I study design? What are the efficacy endpoint that you will be focused on in order to potentially capture benefits for both liver and lung? Thanks so much.
I'll start with the AATD and then transition to Mike for your ALS question. You know, as it relates to AATD, obviously for the phase I study into phase I/II, our goal will be to establish dose frequency like we have done for others, driven primarily on the plasma biomarkers. We're gonna have the opportunity, I think, to do two things. One is validation of editing in the production of protein, and to see how that correlates again with our preclinical data. That data, again, as we've shared on the call, I think serves two purposes. One, obviously incredibly exciting for the alpha-1 community in terms of advancing a therapeutic program and designing a program for both lung and liver. We'll also be looking at biopsies to that important point to study liver and editing.
Secondly, that really does unlock for us then once we've established that preclinical to clinical translation opens up modeling for us to be thinking much more broadly about our AIMers across multiple therapeutic areas. I'll turn the call over to Mike now for the question related to ALS.
Yes. You know, whenever FDA in a CNS disease, now is starting to pay attention to, biomarkers like this, CSF serum, whatever, it is a positive development. This is, these are very bad diseases. These are diseases that progress and progress has been limited. The idea that there is the potential of a easily, measurable biomarker that they may now be viewing as relevant, from the standpoint of, or I should say, reasonably likely to predict clinical outcomes
is encouraging, and we'll be watching to see how this plays out, both for us but for the community at large.
Got it. Thanks so much.
One moment for our next question. Our last question comes from Mani Foroohar with SVB Securities. Your line is open.
Hi, good morning. This is Lily Misango on for Mani Foroohar. I just had a question regarding the novel WVE-006 program. Would you be able to give us an overview of the expected commercial opportunity there? Thank you.
We'll obviously be providing a lot more, but I mean, what's exciting for us is it is a consequential indication. We have and one only needs to look at some of the programs that have, you know, faced challenges to see kind of what the market reaction's been to that. Our focus has been on the 200,000 patients in the U.S. and Europe that are the homozygous patients that are amenable. We're not even looking yet at the broader population beyond that, but the 200,000 ZZ patients that really have the opportunity to be corrected back to the MZ phenotype. Consequential patient population, we've seen this play out in terms of the translation in other substantial valuation programs at other companies.
It's attracts a lot of interest both from the patient community, investor community, and our potential partners. We think it's a really interesting space for us to be able to think much more broadly about. Be able to do it differently. I should also remind people. We've seen the silencing programs really focused on targeting siRNA in the liver. That's exciting to watch. I think we've seen the protein replacement side of companies generating commercial revenue in terms of protein replacement, IV weekly infusions. I think our opportunity to impact both with a single subcutaneous injection that treats both liver and lung will be consequential to the field.
Thank you.
All right. I'd now like to turn the call back over to Dr. Paul Bolno for our closing remarks.
Thank you. Thank you everyone for joining the call this morning. This is an exciting time for our organization, and I'm grateful to every Wave employee for their dedication and unrelenting focus on our mission and on the patients and families we serve. Have a great day.
Ladies and gentlemen, this does conclude today's presentation. You may now disconnect and have a wonderful day.