Q4 2022 Arrowhead Pharmaceuticals Inc Earnings Call
Ladies and gentlemen, welcome to Arrowhead Pharmaceuticals conference call throughout today's recorded presentation, all participants will be in a listen only mode.
After the presentation there'll be there will be opportunity to ask questions I will now hand, the conference over to Vincent Anzalone.
Vice President of Investor Relations for Arrowhead. Please go ahead Vince.
Thank you Justin good afternoon, everyone and thank you for joining us today to discuss arrowheads results for its fiscal 2022 fiscal year ended December 30 of 2022 with US today from management are president and CEO , Dr. Christopher Anzalone, who will provide an overview of the quarter Dr. Javier.
San Martin <unk>, our Chief Medical Officer, who will provide an update on our mid and later stage clinical pipeline Dr. James Hamilton, Our senior Vice President of Discovery, and translational medicine, who will provide an update on our earlier stage programs and Ken Moskovsky, Our Chief Financial Officer, who will give a review of the financials. In addition, Traci Oliver.
And commercial officer, and Patrick O'brien, our Chief operating Officer, and General Counsel will both be available during the Q&A portion of the call.
Before we begin I would like to remind you that comments made during today's call contains certain forward looking statements within the meaning of section 27, a of the Securities Act of $19 33, and section 21 E of the Securities Exchange Act of 1934, all statements other than statements of historical fact are forward looking statements.
Subject to numerous risks and uncertainties that could cause actual results to differ materially from those expressed in any forward looking statements for further details concerning these risks and uncertainties. Please refer to our SEC filings, including our most recent annual annual report on Form 10-K, and our quarterly reports on Form 10-Q.
But that said I would like to turn the call over to Christina <unk>, President and CEO of the company Chris. Thanks.
Thank you Vince good afternoon, everyone and thank you for joining us today are quickly.
Quickly Vince Exclaim, a spoke and he said that our fiscal fourth quarter ended December 30 is what he meant was September 30 of 2020, I just want to make too.
Our fourth fiscal quarter and period since our last call has been highly productive we've seen clear progress of cost across our large and balanced pipeline large because it now includes 12 drug candidates in clinical trials and balanced because it spans multiple therapeutic areas and includes six partnered programs and fix that are wholly owned.
It is a good representation about what makes us different we are a company built on an increasingly validated technological platform applied to a large number of buried diseases across multiple organ systems, where development is uncommonly rapidly from idea to the patients in need and we use targeted disciplined partnering to help finance development of our wholly owned drugs.
This is who we are and these factors are not new.
What is new is the growing sense of clarity we are achieving.
I think I think that this recurring I think this is a recurring theme of this update we.
We have increased clarity as to the makeup of our multiple phase III programs increased clarity as to how we intend to use our late stage drug candidates in different patient populations increased client count increased.
Increased clarity as to when we expect proof of concept from our earlier stage programs increased clarity as to where we planned to go next with the expansion of our platform into new cell types increased clarity as to how large we think our pipeline of clinical candidates will be over the next few years and increased clarity about how we intend to finance our growing pipeline.
Let's touch on some of these.
First we expect to report on progress brokerage Easter an R. A T program partnered with Takeda in the near term.
We'd like to report topline data from the phase two Sequoia study at the same time, we provide guidance on the phase III study design.
Ideally Takeda and Arrowhead would do these together.
Takeda submitted a phase III protocol to the U S. FDA at the end of last quarter and is waiting for feedback we expect Takeda to receive that feedback. Shortly if there are any comments at all we believe the fda's feedback from prior meetings has been appropriately incorporated into the study design. So we do not expect any major surprises.
I believe we have clarity on the future development pads and timelines as well as what this quiet data are telling us and we will share that as soon as we can.
Second we are gaining a clear understanding about how our cardio metabolic programs.
<unk> in different patient populations, and thus are better able to determine the positioning of each and importantly, the development paths and studies needed to seek approval for various indications.
We are we will talk about this in a moment, but the interim analyses for the shaft two Amir studies of Aero Apoc, III and the <unk> two study of Aro and three <unk>.
We presented a J and add in an analyst investor events. Shortly thereafter gave us some critical insights that are helping to accelerate the path to phase III studies, we are working on determining the optimal pad and we expect to have further clarity, including from multiple anticipated regulatory interactions in 2023.
Present, we plan to pursue studies to enable us to treat patients with homozygous familial hypercholesterolemia or HOS age and heterozygous familial hypercholesterolemia or <unk> FH with arrow and <unk> III.
We hope this would enable us to pursue a stage commercial strategy, whereby we could serve the small HOS age market first and grow into the HTS market. After those larger studies are complete and supplemental regulatory approval is obtained.
For Aero Apoc III, we're conducting studies now to enable us to treat FCS patients followed by treating patients with severe hyper triglyceride EMEA and eventually the broad population with mixed dyslipidemia.
With the HOS <unk> approach, we like the stage commercial strategy and hope we can serve a small fcs market rather quickly.
<unk> to the larger <unk> population and eventually the even larger mixed dyslipidemia populations. When those studies are complete and their respective supplemental regulatory approvals are obtained.
Third we have line of sight on timelines for initial interim clinical results for two of our pulmonary program.
James will give details on the status, but arrow rage, and <unk> are progressing well and we anticipate being able to provide interim data publicly in the first half of 2023.
Should we have data that provides clinical proof of concept.
This would be a potentially big derisking event for the candidates and for the pulmonary platform generally.
We believe we've made a lot of progress with the platform since our generation one candidate Aro <unk> and gaining clarity.
<unk> on how the generation two candidates perform will be exciting.
Importantly, we are performing various analyses to assess pharmacodynamics using different methods. So we are confident that we should be able to define knockdown and duration of effect at different dose levels and different time points.
The Arrow MMP seven phase one started later than Aero rage, and Aramark by basi, but dosing in healthy volunteers, which should begin eminently.
Fourth our <unk> three program continues to progress well and we expect to have interim knockdown and safety data in the first half of 2023.
This is an important program for us because <unk> is squarely in our wheelhouse as in the past they target and B because of the variety of opportunities, we can pursue and various complement mediated.
And then associated diseases.
Fifth we continue to expand our platform into new cell types and have made enough progress to give us line of sight as to when we can discuss one of them publicly.
Expect to provide guidance about our next cell type and initial targets by the end of the first half of 2023.
Our goal is to continually expand our platform to gain access to a new cell type every 18 to 24 months.
So far we are ahead of that goal and you should be hearing more about the work that has gone into the newest cell type and the encouraging preclinical results we are generating.
We have a good idea about how large do you think we can grow our pipeline in the near to midterm and are announcing our 2025 program.
We plan to have 20 individual drug candidates through clinical trials are in the market in 2025.
Between a rsi directed programs are pulmonary programs potential skeletal muscle targeted programs and new cell types. We believe we will hit 20, EMEA 2025 between wholly owned drug candidates and partner programs. This will be a remarkable achievements that has the potential to touch millions of lives and create substantial value.
Kevin we have better clarity about our financial resources.
We currently have partnerships with five different companies and we expect to receive milestone payments from each over the next 12 months.
Further our expanding platforms give us the ability to continue to do new business development deals that could continue to provide capital to fund our own programs.
Notwithstanding access to capital will be at these meetings, we recently decided to sell the potential royalties, we would receive from Amgen on future all pass around sales to royalty pharma.
We received $250 million in cash upfront and up to $160 million in additional payments contingent on the achievement of certain clinical regulatory and sales milestones.
In addition, we retained rights to $400 million in development regulatory and sales milestone payments potentially due from Amgen from the 2016 license agreement.
We have been very impressed with the data from the program.
And we are confident that it has the potential to be an important medicine.
Over the next step in development as a cardiovascular outcome study that will not readout for multiple years. So it made sense for us to monetize the potential future royalties.
It allows us to continue investing in our wholly owned programs, which we think are advancing rapidly towards potential commercialization and also continue to invest in our expanding pipeline and platform technology.
Our overarching goal is to bring important medicines to patients as quickly as possible and I believe there are two critical interrelated pieces to that.
<unk> developed and commercialized some drugs ourselves and to substantially increase our market capitalization. So we can do more of number one that has surprised we need to keep our eye on so every decision we consider should be made by asking ourselves if it gets us closer to or farther from that goal.
My mind the decision to sell these future royalties clearly gets us closer to that goal.
With that overview I'd now like to turn the call over to Dr. Javier San Martin Javier.
Thank you, Chris and good afternoon, everyone I want to be updates on two main areas of our late stage development efforts first on our cardio metabolic pipeline and second answer <unk>, formerly called <unk> and tech $99 million.
Earlier. This month data was presented on all three of our cardio metabolic programs plus three.
<unk> <unk> and I'll pass it out of the American Heart Association scientific sessions in 2022, and other virtual analyst and Investor event that we hosted a couple of days after the ALJ.
Equals a very comprehensive review of the data and our plans for the program. So if you want to hear more from us from external key opinion leaders in the cardio metabolic space you can listen to a replay of the webcast I'll review the presentation slides both are available on the Arrowhead website.
Today I want to give some context about why we perform an interim analysis highlights the most important results.
Any guidance on where we see the progress going in the future.
Chris mentioned earlier that we are gaining clarity across multiple programs and this is a key point.
Italy for the cardio metabolic programs, we now have more clarity on how each of the candidates perform in various patient populations and importantly, where we should focus late stage developments. So.
So let me start with Congress will maintain the analysis that led to the American Heart Association presentations, our wholly owned cardio metabolic candidates.
And NATO AMC each target different gene based on human genetic studies preclinical model, each lipid and lipoprotein levels in different ways.
Remember that we have data from different patient population in the completed phase one two studies and multiple additional clinical studies going on now for each program.
For <unk>, we had the following steps.
It's just the two phase two study in patients with severe hypercholesterolemia, the new phase two study in patients with mixed Dyslipidemia and the palisade phase III in patients with familial <unk> syndrome or <unk>.
<unk>, we have the following studies two.
<unk> phase II study in patients with mixed Dyslipidemia and David.
Phase two in patients with homozygous familial hypercholesterolemia, we combined with the phase one data within these studies give us good picture of how the different candidates.
<unk> protein levels, and thus, which patient populations, we should focus on for each.
Therefore, the Infineon analysis enable us to start the important work required to prepare for phase III study.
This includes dose and interval patient population selection length of the study modeling to estimate event rates and effect size registration path in phase <unk> science.
We haven't had to execute the studies.
We essentially gave our set for six months is that on all of that work. This is critical as we plan on having multiple and a phase II meeting and moving forward with multiple phase III studies over the next 12 months.
First I want to highlight some of the fringe.
The phase II study that we presented at the American Heart Association and our webcast.
<unk> <unk> agency and I'll pass it on but all highly active Ah silencing they respected gene targets, which resulted in encouraging changes in multiple relevant lipid and lipoprotein levels.
Adjusted to study inception, with Davita hybrid UC, Dania, who had baseline taken issue with OTT greater than 500 milligrams per deciliter.
800, <unk> at doses of 10 milligrams 25 milligrams 50 milligrams, all do level decreased a paucity up to 87% <unk> up to 86% non HDL up to 45% and increased HDL cholesterol up to 99%. So the week 16 time Paul.
<unk> has been well tolerated with treatment emergent adverse event reported today that reflect the underlying commodities and conditions.
Patients under study.
The new study, especially with mixed Dyslipidemia, who had baseline average TCE of 2020 $220 million per deciliter non HDL.
50, LDL collect enough 110 in April of 95 trim.
<unk> collected fully safe and Hcl, correct 42 per deciliter, Sydney with <unk>.
25 milligrams 50 milligrams resulted in substantial reduction of a paucity of 80% Cts of 65% non HDL cholesterol as 25% LDL cholesterol at 20% and April 20% payment collateral decreased by 60% and HDR greater increase by 50%.
We believe these changes all represent key reduction in residual cardiovascular this is Chris.
Two study inception with mixed Dyslipidemia, who had baseline media NTT of 226 milligrams per deciliter <unk>.
Agency at dose of 50 milligrams 100 milligrams 200 meeting has resulted in a substantial reduction of <unk> up to 71% at week eight.
Up to 59% of which $60 16, an LDL cholesterol up to 32% that we see.
<unk> was also associated with median relative reduction in liver fat fraction at week 24 of 28% for the 102 hundred milligram dose with no adverse events related to liver function tests changed just reported today.
<unk> has seen well today with treatment emergent events have been reported to date consistent with those expected in this patient population and with S&P underlying comorbidities.
<unk> also presented enough treatment data from its phase II Ocean.
Those study of <unk> in adults with elevated level, but then a little a level greater than 100.
$150 animals per liter in the history of our data across the cardiovascular disease. These data were also published in the New England Journal of Medicine.
<unk> adjusted knee percent reduction of LP, little a where 75%.
Patients receiving 10 milligrams every 12 weeks 97, 4% for patient received $75 million at 12 weeks.
One 1% for patients receiving $225 million every 12 weeks and 105% for patients receiving 225 every 24 hours.
The totality of these data demonstrate the significant progress achieved in drug.
Drug development specifically.
The potential future ceiling and part of that.
As appropriate <unk> technology may be permanently leverage in preventive kind of the LNG.
So what do we do with <unk> for <unk>, we're focusing on patients with hypercholesterolemia.
<unk>, a key regulator of lipid and lipoprotein metabolism that inhibit that we're putting lipase an endothelial light.
<unk> has a unique make any profession to address hybrid linear distinct from other LDL cholesterol lowering setup in.
It may address unmet need in patients with specific genetic mutation for example patients with essentially an LDL receptors.
It will be added to other LDL cholesterol lowering therapies in patients reached.
Patient, we hit to the cellular familial hypercholesterolemia or <unk> typically have LDL cholesterol greater than $190 million distributor and have increased rates of H CVD.
Estimated to be around one 4 million patients in the U S with HSH.
Patients with homozygous familial hypercholesterolemia or HOS H typically have LDL cholesterol greater than 400 milligrams per deciliter.
Around 1012 patients with <unk> in the U S. You said the two indications that we're focusing on initially for <unk>. Our plan is to have end of phase two meeting in the first half of 2023, and then potentially begin phase III studies in the second half of 2020.
We view <unk> as having potentially broader set of indications in patient population or what it might provide finish it.
It potentially address the recent oncotype is in severe hyperthermia city, they need seamless AWP ICT also modulate multiple lipids and lipoproteins that contribute to different seasonal rates of cardiovascular in patient with <unk>, which has the potential to translate into a decrease in our previous clearances.
This is rich.
<unk> is a key regulator of lipid and lipoprotein metabolism inhibiting metric within light based and maybe hepatic uptake of Friedman of decreasing the LPL independent pathway.
<unk> improved multiple.
This may provide clinical benefit in that population with the CPD and.
In clinical studies of <unk> in patients with severe hypercholesterolemia, including FCA is at least has the potential to decrease the risk of acute pancreatitis.
Also reduce multiple residual cardiovascular risk factors, such as <unk> LDL cholesterol April be Redman collateral and now this in patients at risk of ASC Bebe.
But already conducting the palisade phase III study of <unk> in patients with FCS, which is approximately 50% enrolled at this time our plans for the additional indication is to have regulatory interactions in the second half of 2020 and.
And begin phase III studies in the first half of 2024.
This additional indication SATA SSD Chi Wen.
With a prevalence of around $4 million in the U S and patient at risk for ASC me, the Sky maximally tolerated statin with a prevalence of around $12 million in the U S.
Now I want to move on to facility done our investigation.
<unk> designed to reduce production of the near term from the Alpha one antitrypsin protein called <unk>.
So potential team therefore, the rare genetic liver disease associated with Alpha why don't we had seen deficiency.
Accumulation is believed to be the cost of progressive liver disease in patients with <unk> deficiency.
Production of the pulling inflammatory protein has the potential to halt the progression of liver disease and potentially allow delivered to the generate and repair.
Data from our label our open label Phase II study was published earlier this year in the New England Journal of Medicine. Those state that suggested that the <unk> was very effective at reducing the production of the protein.
The levers of this patient was able to begin the process of healing. This includes breaking down and clean the accumulated <unk> deliver decreasing the histology global burden, demonstrating histology implementing inflammation, reducing in biomarkers of liver injury, and ultimately decrease fibrosis severity.
These were very encouraging signs for the potential of <unk> to help patients with HDD liver disease.
We now look to the FERC fit on phase II placebo controlled Sequoia study and regulatory interactions on the phase III study the Sequoia data, mostly in now and we're waiting to see the feedback if any from the FDA on the proposed design for the Phase III studies.
<unk> picked it soon so.
We and our partner Takeda together to determine the best way to communicate these publicly Takeda is still on schedule to begin the phase III study in the first quarter of 2023.
Im confident that we can have an update publicly on sequoia and guidance on the phase III prior to that.
I will now turn the call over to Delta James Hamilton.
Thank you Javier I want to give updates on our <unk>.
Four of our earlier stage programs that includes three pulmonary candidates.
Getting rage, Mach five AC and MMP seven and on our candidate targeting complement to <unk>.
Let's start with <unk>.
<unk> is an investigational <unk> therapeutic designed to reduce hepatocytes expression of complement component three or <unk> three as a potential therapy for various complement mediated hematologic and renal diseases.
We are conducting a phase one two clinical study now that includes two parts.
Part one is placebo controlled in healthy volunteers and includes single ascending dose or sad cohorts and multiple ascending dose or mad cohorts.
All of the sad and Mad cohorts are fully enrolled and participants are being followed to assess safety and tolerability dose response based on serum <unk> levels.
And duration of effect at various dose levels.
We are confident that we will have sufficient data in the first half of 2023 to report interim results from part one of this study.
Part two is open label and eligible subjects with paroxysmal nocturnal hemoglobinuria or <unk> and complement mediated renal diseases, including Iga nephropathy and <unk> obviously.
Data from part one will inform part two dose selection, which we expect to happen in the coming months and then the patient cohorts will be opened for enrollment in the first half of 2023.
We are very excited about this program and believe it has the potential to address multiple serious complement mediated or complement associated diseases with unmet need in the renal and hematologic spaces.
We know that complement <unk> inhibitors are disease, modifying and conditions, such as <unk> and believe that proximal <unk> three inhibition may confer advantages over <unk>.
For example, <unk> monoclonal antibodies only blocked the terminal complement pathway and many of the proximal complement actions remain intact and.
In addition, clinical validation exists pursue three inhibitors and we believe our NII based C. Three inhibition could have cleared dosing advantages over other mechanisms.
Furthermore, alternatives Pan inhibition.
Is likely a key relevance for treatment of conditions, such as Iga, nephropathy, <unk> and potentially others <unk> diseases.
<unk> three is a subcutaneously administered candidate with an expected long dosing interval of once every three months or less frequent.
We think this would be much more patient friendly than currency three inhibitors that require a high volume infusion multiple times per week.
I will now move on to our three pulmonary candidates starting with Arrow MMP seven.
<unk> is designed to reduce expression of matrix Matala proteinase, seven or MMP, seven as a potential treatment for idiopathic fibrosis or IPF.
And then <unk> seven is thought to play multiple roles in IPF pathogenesis, including promoting inflammation and aberrant epithelioid repair and fibrosis.
Silencing <unk> seven expression in a rat Ips model reduced inflammatory cell infiltration limited lung fibrosis and preserve pulmonary function.
In August we filed a cta to begin a phase one two clinical study of <unk> seven.
The phase one two study will be similar in design to our other first in human studies and includes a healthy volunteer portion followed by a patient portion.
Now moving on to our two other pulmonary programs era marked by they see an arrow rage or investigational RNA therapeutics designed to reduce production of Houston, five AC or Mach five AC and.
And the receptor for advanced location and products or rage, respectively as potential treatments for various nuclear obstructive and inflammatory pulmonary diseases.
These two programs are on largely parallel paths and at approximately the same stage.
They are both in phase one two studies designed to assess safety and Tolerability pharmacokinetics, and pharmacodynamics and healthy volunteers first.
And then in patients with asthma.
For both programs, we are approaching full enrollment of the healthy volunteer said cohorts and are well into enrolment of the healthy volunteer Mad cohorts.
And both the sad and Mad we have various methods to assess target engagement, including <unk>.
Sputum, and bronchial alveolar lavage fluid and for range. We are also measuring serum <unk> protein circulating biomarker for rage target engagement and alone.
We anticipate that we will be able to report interim results from phase from part one of these studies and begin part two in patients with asthma in the first half of 2023.
These are potentially important new medicines that address targets that have been difficult to drug with other modalities and are designed to treat nuclear obstructive and inflammatory lung diseases and fundamentally new ways. We are.
Excited to see and share these results and we are confident in the progress we've made on our pulmonary trim platform and these two these generation two candidates I will now turn the call over to Ken Moskovsky Ken.
Thank you James and good afternoon, everyone.
As we reported today, our net loss for fiscal 2022 was $176 1 million.
Or $1 67 per share based on $105 4 million fully diluted weighted average shares outstanding.
This compares to a net loss of $140 9 million or $1 36 per share based on $103 7 million fully diluted weighted average shares outstanding for 2021.
Revenue for fiscal 'twenty, two was $243 2 million compared to $138 3 million for 2021.
Revenue in the current period, primarily relates to our collaboration agreements with Takeda and horizon.
Revenue will be recognized as we complete our performance obligations, which includes managing the ongoing <unk> phase III clinical trials for Takeda and delivering a phase one ready candidate to horizon.
There remains $128 4 million of revenue to be recognized associated with the Takeda collaboration, which we anticipate will be recognized over the next two to three years.
And there remains six $6.7 million of revenue to be recognized for horizon, which we anticipate will be recognized.
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Sorry folks we had a connection problem there will continue we're about halfway through our.
My prepared remarks, net cash used by operating activities. During fiscal 2022 was $136 1 million compared with net cash provided by operating activities of $171 2 million during 2021.
The increase in cash used by operating activities was driven primarily by development.
Development expenses.
We expect our operating cash burn to be $70 million to $90 million per quarter in fiscal 2023 and.
And we expect capital expenditures up to $200 million.
As we near completion on our footprint expansion projects, including <unk>.
GMP manufacturing.
Turning to our balance sheet, our cash and investments totaled $482 3 million at September 32022, compared with $613 4 million at September 32021.
The decrease in our cash and investments.
Primarily due to cash used for operating activities.
Our common shares outstanding at September 32020 to 106.0 million.
As Chris mentioned earlier on November nine 2022, the company and royalty pharma entered into a royalty purchase agreement pursuant.
Pursuant to which royalty pharma agreed to pay up to 410.
And cash to the company in consideration for the Companys future royalty interest in El Paso room, originally developed by the company on out licensed to Amgen in 2016 pursuant to the royalty pharma agreement royalty pharma paid $250 million upfront and agreed to pay an additional up to an additional 160 million.
Contingent upon the achievement of certain clinical regulatory and sales milestones.
Company retained rights to $400 million in development.
<unk> and sales milestones payments sales milestone payments potentially due from Amgen from the same 2016, our licensing agreement.
Pro forma cash and investments at September 32022, including the rail firm a cash receipt would be $732 3 million.
I will now turn the call back to Chris.
Okay.
Ken.
And our business opportunity bounds.
There is no sort of shortage of need.
Biopharmaceutical industry can endeavor to serve and no shortage of lives that can be touched.
There is also no shortage of risks as unknowns abound as.
As such clarity is at a premium and will often be a primary value drivers.
We feel good about the clarity we have recently achieved and expect to achieve in the short term. These include the following.
Planning for a busy surrounds our phase III is complete and currently under review with the FDA antiquated data are in we expect to be able to give guidance on the phase III and present top topline Sequoia data with Takeda shortly.
Interim phase II data from Arrow and three an arrow apoc III suggest that both drug candidates are doing what they're designed to do and we have good plans as to how to apply these in various patient populations. We expect multiple end of phase two meetings in 2023 and to initiate multiple phase III studies shortly thereafter.
Progress with Harrow Mach five AC rage in phase one two studies has been good.
We expect interim data that could provide clinical proof of concept in the first half of 2023.
<unk> three is progressing well in our phase one two study and we expect interim data that could provide proof of concept in the first half of 2023.
Our discovery engine continues to perform and we expect to announce the next cell type we will be targeting in the first half of 2023.
We have provided better clarity with respect to our balance sheet with our salable pass around royalty rights for $250 million upfront plus $160 million potential additional payments on top of the remaining $400 million, we could access and clinical regulatory and sales milestone payments from Amgen and.
And finally, we have announced our 2020 five campaign, our plan of having 20 individual drugs in clinical trials or AD market in 2025 will be a remarkable accomplishment that we believe will represent a large leap forward for medicine and position Arrowhead as a truly unique and impactful biopharmaceutical company.
Thank you for joining us today, and I would now like to turn the call over to questions operator.
And thank you as a reminder to ask a question you will need to press star one on your telephone we ask that you limit yourself to one question and one follow up please standby, while we compile the Q&A roster.
And one moment for our first question.
And one moment for your first question and our first question comes from Maury Raycroft from Jefferies. Your line is now open.
Hi, Thanks for taking my questions I was going to ask one on a T. I'm wondering if you can clarify if you were Takeda has shared the base to biopsy data with FDA and if their feedback will be based on the biopsy data or only the serum biomarker data knockdown data.
Yes.
We're looking at said the phase III protocol design that was already discussed twice and as Keith said, we already Takeda already incorporate and most of the feedback. So this is more to presidio that anything else.
Sequoia they may sell part of this.
FIFA that we're looking towards.
Another way to Sequoia they thought it was necessary to inform the phase III, what's already presented and as part of the discussion that we've been having with the agency over the last.
Photo five months.
Got it okay, Okay and then.
For the a T data that you have in hand can you comment on what Youre seeing in better set expectations for what you will disclose and if you start the phase III in the first quarter of next year do you think the update will happen in December or more likely around JP Morgan meeting in early January .
Yes, I can't give too granular guidance on the on the timing for the update.
I'll tell you my hope is that that we can do that in December we just have to see what schedules look like we expect the feedback if any from from FDA.
Almost any day now.
And so so we do have time to get that in in December and so we will see with respect to to give you further guidance on the on this quite data, we're just not going to do that we will.
We'll provide that update at the same time as we as we.
As we give guidance on what the phase III will look like.
Okay sounds great I'll hop back in the queue. Thanks for taking my questions.
Thank you.
Thank you.
And one moment for our next question.
And our next question comes from Luca <unk> from RBC Capital. Your line is now open.
Oh, great. Thanks, so much for taking my question Congrats on the progress I have a quick one on April versus edge.
With you to your prioritizing apoc three over <unk>, three especially for the larger mixed dyslipidemia population can expand a little bit more on the rationale behind the decision and is it fair to assume that you are looking for a partner for apoc III given that you need to run a cardiovascular outcome trial. Thanks, so much.
I'll take the second part and then I'll hand, the first part over to Javier The answer is no. We're not looking for a partner for apoc, III and that to us feels like.
An important opportunity for us the data have been from our perspective unequivocal.
And we see a large opportunity and that in large markets as well as smaller S. H D. G market and then of course, the very small FCS market. So we like the opportunity and we intend to conduct.
That cardiovascular outcome study ourselves into and to commercialize that drug ourselves.
Yeah. So.
Couple of things so first the face to date, though the entering data that we presented at the American Heart Association really confirmed what we learn in the phase one two studies. So it wasn't about prioritization. He was about to really learn unconfirmed specific fit up otic effect of these two molecules.
West We said before age safe to via though that the small focused called hypercholesterolemia and that is how we see the opportunity now that that much.
Crowded space when you think about the general hypercholesterolemia population, but this show has a very unique.
We have make any full function that kind of addressed this a specific a smaller population that gray on the HOA face in the not so <unk>. So it's not about prioritization by this about where the profile of the feed in the conduct of clinical care particular, when you fast forward a few years from now so Adrian.
Opposite DSC you saw the data that we knew about the severe hypercholesterolemia population is confirmed and is very remarkable and it's consistent NSA always said would be split about <unk>. We have a 100% response with regard to hyper <unk> City Dania. So our initial plan to go we did too.
<unk> hybrid producer at any single <unk> continued to be the same.
Well, we are learning and I think that was a key feature of highway analyst and Investor day.
What is the unmet medical need in cardiovascular risk reduction in the next five to 10, yes.
We believe that the LDL cholesterol nishu is probably well taking care of.
And the rest of the risk come from different surface of lipid and lipoprotein most of which I addressed with the HOA proceed see molecules. So so.
In conclusion, we see the opportunity where the unmet medical need is in AIA, because you'd be feet very well those criteria. So it's not about prioritization, but it's really going to web adults.
Had the biggest problems.
Yes.
I think that our development program has worked exactly as we as we design them to work.
We had these these two drug candidates that were clearly active and clearly had some overlap in their activity.
And people would ask how we're going to apply these these two drugs to various patient populations in our answer always was we need to look at the data and that will that will guide us.
That was not SaaS factory answered to some people, but that was the answer now that we have an interim look we've got a better idea about about how these wells will.
We'll help various patient populations and so now I think we've got a good idea and again.
As Javier said, we don't view this as prioritize we view this as just following where these drugs are going to have there. There there are the greatest benefit in which patients.
Great I'll hop back in the queue.
Thank you and thank you.
And one moment our next question.
And our next question comes from Ellie Merle from UBS. Your line is now open.
Hey, guys. Thanks, so much for taking the question.
For the initial pulmonary readout in the first half of next year I guess, what are you looking to see in terms of the degree of protein not that based on the dose levels that you are studying.
In healthy volunteers and I guess, when you think about pulmonary delivery I guess, what is proof of concept for.
The pulmonary platform looks like.
From this readout or is perhaps for you to wait for.
Longer term data thanks.
Sure I think he is a well validated targets.
In particular, a particularly marked by basi.
But I think even our agents certainly MMP seven and so it's our thinking is that if we can see a well tolerated deep knockdown.
A healthy volunteers that is a that is a substantial.
<unk>.
Clinical proof of concept.
We will also have some data.
Later in the year on.
In various patient populations, but I think I think if we can see good consistent knockdown in healthy volunteers with well tolerated I think that's a that is a <unk>.
<unk> borrowed for the entire platform and certainly for the individual candidates with respect to how much knockdown we need I.
I don't think were setting I don't think we're set expectations for ourselves here I think we want to see what we see.
But our our our our hope is that we see consistent.
And at least relatively deep deep knockdown.
And if we can I think that given the importance of these targets I think that they will have disease modifying effects.
Okay, great. Thanks.
Youre welcome.
Thank you.
And one moment our next question.
And our next question comes from Joel Beatty from Baird. Your line line is now open.
Great. Thanks for the lung programs Mcfatter AC been rage.
I think in prepared remarks, you mentioned that these programs are going to be from the top of theirs.
Cohorts and also following medical here, how do you decide that the peak dosing of those.
And just kind of preset or are you looking at safety or efficacy markers.
This is the dose levels for this the sad and Mad are are largely preset and then.
As we go from one dose level to the next we have an independent data safety committee that reviews aggregate safety data and boats to allow dose escalation from the dose just completed to the next higher dose.
Believe that addresses your question.
Great. Thanks, and then for the cardio drives efficacy of three announced three.
Do you see the market opportunity as more.
Of.
Displacing current drugs and being used in place of them or as add on therapies too.
Set of drugs on the market.
Okay.
I think it's a little bit too early.
<unk>.
To opine on that.
Rod question.
Give us some more give us some more time. So we can complete the phase II and we have a better idea about what that looks like and we can go from there but at this point.
I don't think that we want to get into how we slot into various.
Theyre good paradigms.
Great. Thank you.
Sure. Thank you.
And one moment our next question.
And our next question comes from Edward <unk> from Piper Sandler. Your line is now open great.
Great. Thank you very much two questions if I may.
Just.
Uh huh.
Housekeeping, what was the fourth quarter weighted.
Average shares outstanding if you have them to three decimal points put them.
For Chris.
Good question.
You guys have been so successful at partnering.
Different therapies, you've been clear that cardiovascular is a key area of focus how are you really looking at the pipeline going for like is pulmonary disease can be an area of circa Mario a proactive.
Are you going to look to partner some of those therapies, how should we be thinking about sort of where you guys are going to stay focused and specialized thanks.
Sure. Thanks, Ken you want to address the first question.
Yes.
Thanks, Ken.
I always ask you this.
The weighted average shares for Q4 were 105 879.
Awesome. Thank you and then again just in terms of higher level, obviously, a focus on cardiovascular disease.
What else are you guys thinking about partnering or what is can record.
Sure.
Thanks, Matt So so broadly of course Thats a dynamic question.
Because as the company grows and as as <unk>.
Market.
Appetites for various targets and the drug is changing.
Change of course that which can be partner Jenkins, having said all of that look we as we said in the past we liked cardiovascular we like we like what we're seeing with Apoc III <unk> III. We liked the idea of building commercial force to address those we liked the staged approach there starting with HOS age in and expanding into AG.
<unk>, we like the idea of starting with small Fcs spanning into ethanol species and expanding into makes us a mixed dyslipidemia now with regards to the pulmonary lucky.
That's a very interesting area, we think thats a target rich environment.
That feels to us like another liver.
And and and we think look there.
I can address that that that market I think there are six selling yourself pulmonologists in the U S.
And and we see not two or three or four drugs, but eight or nine or 10 drugs. So so I think that we will play there now because its so jargon rich I think we also could do some partnerships there and not looking to partner. These first three right now, but I think there is room there for us to build a real franchise and then also to get to.
Work with the right companies.
On on a handful of other targets potentially.
And then you look at our other candidates in our Q3, that's a very interesting.
Drug candidates to hold onto ourselves that that gives us an awful lot of optionality in terms of how we commercialize that where we go how fast we can get there.
So anyway, so that's sort of a broad answer to your question I guess.
Alright, we'll stay tuned.
Just hats off on the royalty financing.
Great Bill.
Thank you.
Thank you.
Yes.
And one moment our next question.
Yes.
And our next question comes from Patrick <unk> from H C. Wainwright. Your line is now open.
Thank you.
I'm just wondering I have a follow up to fund the on the platform and if you can discuss the relative advantages of DSI RNA approach as it compares to others, such as small molecules or gene editing specifically in the area of Alpha one. They are also more broadly across the pipeline what is your level of confidence that fire and there will be the preferred mechanism and means.
<unk> targets.
Indications in the programs currently underway, particularly with these other modalities advancing clinical development.
Sure So look.
Thats a little bit of a hard question to answer broadly because because various drug candidates will have we will have some more specific.
Specific advantages, but I'll tell you I'll tell you broadly the way we look at this.
Arnie I is not is not the right modality for every indication of course.
But but for for many indications where were you really what you need to to a reduced expression of <unk> product. It is a good one.
We've shown you.
We and others have shown time and time again that RNA eye appears to be.
A potentially better modality than antisense oligos in terms of dosing schedule in terms of of depth of knockdown in terms of safety. We think that will continue at least as it relates to two two a parasite targets and we'll see if that applies more broadly.
When you look at gene editing look I think that's an interesting idea.
I think that we're not quite ready for prime time, there and I think that there is a a permanence associated with gene editing that that may be.
They may cause some some pause with with the at least for certain locations and what's great about <unk> is that we get a good long durable effect, but yet it is ultimately reversible after after some period of time.
That drug wears off and it doesn't knock down the gene product any longer what would concern me.
In the near to mid term with a gene editing approaches.
Our approach is that is that.
The idea of having to <unk> something is a daunting and so I think it's still a bit of an early technology.
But at least as it relates to the indications we're going after we we believe it is at Rei.
At least in our current pipeline is likely the and from my perspective at least.
The preferred modality.
Yeah. That's helpful. And then earlier in the call. There is commentary around increased clarity on which programs and how large the pipeline could become in the next few years with the goals outlined through 2025. So I'm wondering if you can elaborate a bit more on this commentary, particularly regarding gating factors involved in deciding which targets or disease to pursue such as the level of genetic.
Clinical validation required and how many programs either in terms of new ideas or some other metric would you be expected to announce on an annual basis going forward as you expand the pipeline.
Well, so we're excited about that about our 2020 five.
Graham we feel comfortable that we'll get there I think 20 clinical candidates.
Bill.
Wholly owned or partnered is a is a lofty goal and I think we're going to achieve it.
Yeah.
Regarding regarding genetically validated targets is that if you go down our pipeline.
I think that that there is pretty good consensus that that these are all well validated targets with a possible exception of HBV just because it's a complicated the virus of course, but everything else I think clearly there is consensus among kols that if you can reduce expression of these various targets positive phenotypes will result in.
And our goal is to continue with that second if you look at our pipeline and everything we've gone. After we had been the first RNA I player. There I'd like to continue that at least in the near term I think we will be continuing that and then finally with respect to our ability to get outside the liver as we talked about with pulmonary with skeletal muscle will be will be.
<unk>, our next sell side and the <unk>.
First half of next year with all of these it gives us it gives us the ability to run out and and and.
And take land right, we don't see any near term competitors in these in these extra paddick spaces, we so far and so it gives us the ability to really be choosy and and and.
And go after targets that are well validated well validated to decrease our biology risk.
Okay. Thank you very much.
Sure.
Thank you.
And one moment our next question.
And our next question comes from Madhu Kumar from Goldman Sachs. Your line is now open.
Oh, hey, thanks for taking our questions. So maybe following up on Ali's question. What do you think is the dynamic range of Rage, and Mark said why they see knockdown that would be predictive of clinical benefit in these obstructive pulmonary conditions.
Okay.
Yes so.
Yes.
For Rage, I would say based on our animal data.
We were.
Yes.
In the ultra and area model that we presented at <unk>.
Etfs, we were wanting to get.
Better than 50% knockdown, 60% to 70% knockdown in that particular animal model.
And then for Mark.
I think if you look at the <unk>.
The patient data versus the healthy volunteer expression level four per month, they see the patients have a tenfold more muck Bay B C compared to towards the healthy said so.
I think that you have.
We don't have to bring the patients back to normal levels to have a benefit.
But particularly in the patients I think there is pretty significant dynamic range in terms of <unk> knockdown.
Such that if you get 50% reduction in <unk> expression.
A N associated clinical benefit Apollo that it addresses your question.
No that's helpful and maybe on an H T E.
Just kind of.
How much different would you expect to Sequoia data to be from the phase two open label extension, given kind of like patient recruitment and Sequoia relative to the open label extension like is there any reason is going to be a significant difference in the disease course in the Sequoia patients relative to the open label extension.
I don't I don't believe so no.
They should be similar.
Look we we.
We always viewed that open label data is as important in terms of.
Pegging, a story with a small number of patients, but we thought it.
Okay.
Pegged the story.
And we had been looking for we've been hoping that Sequoia would confirm that story.
Okay, great. Thank you very much.
Welcome and thank you.
And one moment our next question.
And our next question comes from ink, Montana from B Riley. Your line is now open.
Hi, good afternoon. Thanks for squeezing me in and I. Appreciate you are putting out the 2025 campaigns. So maybe on the SaaS steady good quick follow up on the dual pancreatic events that you saw there.
Admittedly in a blinded manner, but is that what you would expect for a study of this size then.
And in general like what would be the event rates.
S. S D D study in <unk> maybe.
Second, but as you think about validating triglyceride as an approvable endpoint.
Or either assets D. G. R. R for larger mixed Dyslipidemia indication how are you sort of thinking about that next.
Next year.
Yes, so with regard to the two cases of pancreatitis out are well within the specter of embrace which is about 3% to 5% per year. In these patient population until we thought two cases seen over 200 patients by the time we.
I mean by now we have all of them.
With one year follow up and most of those patients. So yes. The event rate is what we expected.
And to think about with regards to the phase III study.
I think we commented on this before.
The registration program for eight O apus you'd see in distributor hybrid of publicity is any indication thats no need oncotype is endpoint for the approval, but of course, we will like to enrich the patient population as much as possible to do provide information about bunker that is reached with ocean.
Which <unk> paid up beyond that would be very important for many other reasons.
Really.
Lastly, the clinical benefit.
Define the value proposition and so forth so.
The approval path, that's not required Oncotype is we will do our best to have enough number of patients at higher rates. So we can see that at least for those who didn't pancreatitis as a consequence of normalizing trade initiatives levels.
Thank you and then just a quick one on <unk> are you able to comment on how as you think about phase III.
Are you thinking about placebo response, because there have been studies recently put out independent of this program and also by Takeda.
About how to sort of think about after we have three basins differently.
So is there anything you could comment on that on the on the placebo response of phase III, how you might be thinking about.
So we're going to use the totality of the data available to estimate the placebo rate and that will be part of the equation for the effect size on the power.
For the study so you would see that in detail whenever we can do these recent bandwidth Takeda precentor Sequoia data on the phase III study design. So we of course use it totally feel debate that too.
Planned for that study.
Thanks for taking the questions.
And thank you and one moment our next question.
And our next question comes from Kay Mackay from Chardan. Your line is now open.
Yes, Thanks, Chris.
One question on <unk> the phase III design is it your expectation that.
The agency will or will not require cash.
Our biopsy data.
Yes so.
The biopsy data is likely to be the key endpoint and Thats, where we will.
Thinking therefore, we studied thus for the disease is defined by so this business is about fibrosis progression that.
And at an end stage liver disease or <unk>. So the goal of therapy is to prevent.
Fibrosis progression to reduce fibrosis severity. So that seems to me illogical approval endpoint in a condition that is defined by fibrosis krish.
Okay. Thanks.
Thank you.
And one moment for our next question.
And our next question comes from Manny floor from SBB. Your line is now open.
Hey, guys. Thanks for taking my question and congrats on all the progress.
Got a couple of questions more about your own sort of rationale and strategy given a lot of other analysts have dug into the details of this or that specific program. So I'll start with Sequoia did I hear right that.
That you're planning to disclose the upcoming Sequoia data Green biopsy alongside the phase III trial design.
So.
Could you give me a sense of the rationale of why those two should come out at the same time.
And then secondarily there has been a few people who've asked about your strategy around running cbot's, which asset to hold onto or not.
Could you give me a sense of what your ballpark estimate around b.
Size cost and the operational burden of the cbot would be for you and how you guys think about the number of studies of that scale that you could run for your assets simultaneously.
Sure.
The first question is going to exist.
I've got more.
Sure on the <unk>.
Question on the second question.
So look.
The.
Having a complete data set for Sequoia.
Having.
Having clarity on what the phase III look like it looks like.
Just happened to come out at around the same time and so it made sense for us to to present both of those at the same time.
And I think I think they're both related of course and they feed on each other of course, if there was a big time.
Delta between the two we would have been happy to just to separate those but it just turns out that that that again, that's quite data are analyzed and we expect to have.
Final clarity on the phase III data at about the same time. So so it makes sense to do this together and we'd like to do them in conjunction with Takeda that makes sense as well.
We'll just we'll just see win win.
When the calendar is well aligned for that.
Back to Steve outlook, we haven't given any guidance on on on how large a study would be on how much of a cost yet.
In large part because we haven't had those end of phase II meetings with the FDA, we really want to start to have these discussions before we opine on that because there are several ways you can do with <unk> of course.
And it just feels a little bit early to opine on that we will give guidance on that once we have it but.
But we just we're still pretty early here, we've got an interim look we have a pretty good idea about what the data we think are telling us.
And then we.
Still we still are going to run the studies out to the end and then have end of phase two meetings and so I expect that next year. Some time, we can give you a better guidance or some guidance on size cost.
Et cetera for the <unk>.
Hey, Thanks, guys can I ask one quick follow up on that second half of that question.
Sure.
For <unk> in particular.
How do you think about the appropriate patient population to study there are number of approved therapies out there P 59 targeting and otherwise.
But the university of available therapies varies pretty widely across geographies.
So the approvals are the actual availability to patients given reimbursement et cetera.
And realized barriers.
So how do you think about the strategy between pursuing a study focused in areas where patients don't really have access to approve therapies.
Versus a study an add on with approved therapy to allow you to access the U S and western European market with more real world relevant data like how do you balance those two with cbot is with <unk> studies.
So I'm going to capture that you and one larger multi arm study.
Help me think about how you strategize and think about the likely outcomes for that path forward in that indication.
Yes, again this will be an unsatisfying answer to you on I apologize, but but but until we start to have these interactions with the regulators.
It's hard it's hard for us to get.
No what.
It's hard for us to give you a good answer on that.
Again keep in mind that we're still we sum finish that study yet.
We wanted to to tell the street as quickly as we could where we where we think we can apply these two drugs I think we've done that.
But we're not yet ready to talk about about how we would roll this out where we'd roll this out what sorts of studies would support these kind of.
Zero populations until we start to have those interactions.
Okay.
Great I look forward to more detail bank. Thanks, guys.
Yes.
And thank you.
And I am showing no further questions I would now like to turn the call back over to Chris Anzalone for closing remarks.
Thanks, everyone for joining us today, I hope everyone had a pleasant that Thanksgiving holiday and have a nice larger holiday season, I apologize for the technical difficulties mid call today, but we will talk to you soon.
This concludes today's conference call. Thank you for participating you may now disconnect.
The conference will begin shortly to raise your hand during Q&A you can dial star one one.
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Yeah.
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