Q1 2023 Arrowhead Pharmaceuticals Inc Earnings Call
Ladies and gentlemen, and welcome to the Arrowhead Pharmaceuticals Conference call.
Today's recorded presentation, all participants will be in a listen only mode. After the presentation. There will be an opportunity to ask questions I will now hand, the conference over to Vincent Anzalone.
As president of Investor Relations for Arrowood. Please go ahead Vince.
Thanks, So much good afternoon, and thank you for joining us today to discuss arrowheads results for its fiscal 2023 first quarter ended December 31 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 chief of Discovery, and translational medicine, who will provide an update on our earlier stage programs.
And Kim Moskovsky, our Chief Financial Officer.
Who will give a review of the financials. In addition, Traci Oliver our Chief commercial Officer, and Patrick O'brien, Our Chief operating Officer, and General Counsel will 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%.
<unk> active 1933.
Section 21 E of the Securities Exchange Act of reaching 34, 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 report on Form 10-K, and our quarterly reports on Form 10-Q.
With that said I'd like to turn the call over to Chris Anzalone, President and CEO of the company Chris.
Thanks, Vince and.
Good afternoon, everyone and thank you for joining us today.
I would currently occupies a unique position within the Biopharma World I.
I believe there are any I guess modality and our proprietary trim platform in particular are considered increasingly validated.
Rei is a potentially powerful way to treat many disease states.
We're still largely work as intended across numerous clinical studies has the potential to be highly specific and it has been generally well tolerated.
Overlay on top of this scarcity premium.
There is a clear scarcity of companies capable of developing RNA therapeutics, well extreme scarcity of those capable of bringing <unk> outside the liver.
These factors combined position at arrowhead to create substantial value for our shareholders and the patients who rely on us for life altering new medicines.
I think it's also frame how we should view arrowhead currently.
We will discuss today and what these mean for the future.
Two primary components of this sort of analysis are the ways in which we are expanding our technology our technological reach.
The ways in which we are leveraging our proven technology.
Let's begin with how we are expanding our reach.
As you know our pulmonary franchise is currently comprised of three clinical candidates Aro Rage, Aramark, five AC and Aero MMP seven.
With our announcement last week that the Arrow LNP seven phase <unk> study initiated we are now treating subjects in all three programs.
We remain we remain on track to begin early data disclosures for Aero Rage, and Aramark by Basie in the second quarter.
This is an important milestone for us we view the lungs as a target rich environment and don't see two or three drugs coming out of that franchise, but rather potentially eight or nine.
As with the pad sites once we have clinical validation that we are able to address the sell side and reduce expression of the target gene and a well tolerated fashion, we believe the franchise will be substantially derisked.
The point, we have we have an expectation of success for future programs in terms of our ability to safely silence target genes.
As such clinical proof of concepts and the first one or two programs with the NFL type has the potential to unlock substantial value.
We believe we will be Barry.
We will be there for our pulmonary franchise next quarter.
And given what we learned with Aro <unk> and our non clinical data using arrow rage, Aramark, five AC and Aero A&P seven across several animal models. We are optimistic that we will see clinically relevant gene knockdown and a well tolerated fashion.
We've not spoken about a muscle targeted franchise for some time and I am pleased to announce today that we intend to move arrow dux for our candidates designed to treat vascular scapulohumeral muscular dystrophy, RFS HD into clinical studies next quarter.
This is another example of our drive to apply or unmet medical needs wherever they are.
We have completed a large number of non clinical studies, including acute and chronic toxicity studies and we look forward to bringing this potentially important medicine to the patients who need it.
Another important milestone relating to technology expansion that we expect next quarter. The disclosure of the next cell type will be targeting and a presentation of our supporting non clinical data.
Based on our work in the pulmonary and skeletal muscle spaces represent substantial growth opportunities for the company and will bring our NII closer to reaching its full promise as a revolutionary therapeutic modality with the potential to address many new diseases. These.
These programs are early but they are the next great leaps forward for Arrowhead.
The second calendar quarter of 2023 is indeed, a busy time for demonstrating arrowhead innovation.
Let's now turn to our liver programs, we have demonstrated across multiple candidates and many clinical studies and thousands of patients in our liver directed candidates appear to achieve high levels of target engagement and have encouraging safety and tolerance and tolerability profiles as such we are focused on executing on our current liver programs and aggressively expanding our <unk>.
Pipeline, where we can.
Last month, we announced topline results from the phase III <unk> clinical study of <unk> for the treatment of liver disease associated with Alpha one antitrypsin deficiency.
The active treatment arm had results that were highly consistent with the <unk> 2002 Open label study, which had previously published in the New England Journal of Medicine.
So these are and appears to be active against its targets with all treated patients achieving a high level of production of the mutant Z <unk> protein, which is known to be the root cause of HDD liver disease.
This reduction over 12 months led to promising downstream changes in markers of liver disease, including reductions in inflammation and 50% of patients experienced a regression in fibrosis.
These encouraging results are exactly what we had hoped for the only data point that was a bit difficult to interpret wasn't the placebo arm.
They're three of eight patients with paired biopsies showed an improvement in fibrosis.
We know that score and fibrosis is a notoriously noisy measure and a way to smooth out such data is to ensure a large enough sample size.
Unfortunately, with just eight patients a single patient in either direction can lead to confusing percentages. We believe that is what happened here. Fortunately, we can look to a previous two previous studies for guidance on what fibrosis should look like in untreated patients for.
For instance, a previous natural history study that followed over 50, a TD patients showed about 15% had improvement in fibrosis.
We believe that the 50% of patients who showed improvement in fibrosis on disease or an is it reliable measure because the treatment groups had a larger sample size in placebo and b. The improvements in fibrosis was part of a larger dataset that made sense together patients.
Patients on <unk> had dramatic reductions in <unk> monomer, globules and they demonstrated decreased inflammation.
The patients in the placebo arm showed none of these features.
Takeda is now initiating the phase III study that will enroll up to 160 patients, which is which is designed to be sufficiently large to smooth that variability to approximately the levels expected on natural history.
Arrowhead is eligible to receive a milestone payment from Takeda when the phase III study begins.
During the previous quarter Q of our other partner programs generate milestone payments as they advanced into the next stage of development.
Horizon Therapeutics enrolled the first subject in the phase one study of <unk> 457, formerly called Aro <unk> for the treatment of gout, earning arrow had a $15 million milestone payment.
In addition, we earned a $25 million milestone payment from Amgen. After the first subject was enrolled in amgen's phase III trial, with El Paso and for the treatment of cardiovascular disease.
We believe in that program and in the potential of <unk> to help patients with the risk of cardiovascular disease associated with elevated levels of LP Little a.
However, with.
With the recent presentation and publication of positive phase II data, we determined that the timing was right to monetize our royalty stream associated with potential future I'll pass around sales too.
To that end in exchange for rights to the El Paso, and royalties royalty pharma paid us $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.
In addition, we retained rights to $400 million in development regulatory and sales milestone payments potentially due from Amgen from the 2016 license agreement, including $25 million milestone payment I just mentioned.
During the quarter promising new clinical data across three late breaking presentations were presented at the American heart at the American Heart Association meeting on three investigational candidates for cardio metabolic diseases Aero Apoc, III, <unk>, III and I'll pass around.
The totality of these data demonstrates the significant progress achieved in our NII drug development.
Specifically suggest a potential future treatment paradigm, where arnie I may be prominently leverage and preventative cardiology.
As I mentioned, a phase III study has already been initiated with El Paso Ann.
Aero Apoc III is also being investigated in a phase III study against FCS and we expect that 48 week study to be fully enrolled next quarter.
We also expect end of phase II meetings this year to speak with regulators about phase III studies, using arrow, apoc, III and <unk> patients as well as broad mixed dyslipidemia populations.
My expectation is that we will launch those phase III studies at the end of the year.
I expect that we will move <unk> into phase III studies in familial.
Hypercholesterolemia this year.
I also expect several data presentations from four phase III studies with these candidates throughout the year.
Finally, we continue to make progress in our phase <unk> study of <unk>, our candidate designed to treat several complement mediated diseases.
Expect to release initial data next quarter.
Janssen has also made progress with their phase one study in J&J O 795 are partnered candidate against Nash and we expect a data disclosure that includes liver fat reduction this quarter.
Turning to J&J $39 89.
<unk> seen the media reports about Janssen de prioritizing HBV broadly and that is consistent with our understanding.
We have not received the termination letter for our license agreement and it is our understanding that some legacy HBV studies are continuing but we do not know where J&J <unk> thousand 989 will ultimately end up we will assess our options and rights when Janssen decides the path forward for the program.
With that overview I'd now like to turn the call over to Dr. Javier San Martin Javier. Thank you Kris and good afternoon, everyone.
I want to describe if assisted US before you have data that we presented last month and then give you an update on where we are that we need in late stage studies of our cardio metabolic candidates.
Keith mentioned earlier, the Sequoia data from the treatment arms were very encouraging and consistent with the prior to.
Data generated from the 2002 open label studies.
It is what we and our partner advocate that wanted to see.
<unk>, receiving 25, 100, or 200 milligrams of <unk>, who have baseline fibrosis demonstrated a dose dependent reduction in serum concentration at week 48 of 74%, 89%, 94% respectively.
All three doses lead to a dramatic reduction in total leavers EAP with a median of 94% of the post baseline needle biopsy base.
In addition, as the global burden of histological measures.
The accumulation of a mean reduction of 68%.
Incumbent in portal inflammation was offsetting 42% of patients while only 7%. So it was.
Lastly, 50% of patients achieved an improvement inclusive of at least one point by.
<unk> stage.
In contrast by week 48 patients receiving placebo, who have baseline fibrosis, so no meaningful change from baseline in soon.
At a 26% increase in leverage.
No meaningful change in <unk> global.
No placebo patients experienced an improvement in portal inflammation, while 44% ex bidding wars.
Do you have the eight placebo patients experienced an improvement in fibrosis at the bus baseline liver biopsy.
This finding highlights the known body of Uniti fiber.
Fiber success.
With a larger sample size liking the planned phase III study the rate of improvement in patients receiving placebo.
The approximate result from natural history study of patients with HCV.
<unk> has been well done today with Keith and I mentioned that <unk> appointed debate generally well balanced between assisted and amplify what groups. There were no treatment emergent adverse events, leading to drug discontinuation dose interruptions or <unk> study with both in any study group.
I'm fairly placebo no dose dependent of clinically meaningful changes quite a failure pulmonary function test over one <unk> with first you'll see that.
These are all encouraging signs for the program and for patients.
We know this is a progressive disease of the liver caused by one theme the accumulation of the mutant <unk> protein, which cannot efficiently gave out of India.
The data suggests that assistant and reduce their president of Nu.
And then the leverage the presence of breaking down and clearly in the accumulated.
<unk> <unk>.
Reducing inflammation and ultimately progressing fibrosis. This is essentially the cascade with <unk> liver disease in reverse.
We believe that this reverse I can only start with the removal of insult to the liver, which is the accumulation of <unk> mutant <unk>.
Got it.
State that represent a hope for competition under the patients with <unk>, who have no approved treatment options.
We also announced that Takeda has initiated a randomized double blind placebo controlled phase III study to evaluate the efficacy and safety of our Cincinnati and basically with F. Two F for fibrosis.
Approximately 160 patient will be randomized one to one to receive <unk> or placebo.
My empathy studies decrease from baseline of at least one stage of histological fibrosis met every staging in the centrally read liver biopsy done at week, six and basically we met WD stages phase two X two or ft.
I also wanted to give a brief update on where we are with our cardio metabolic candidates.
<unk> and <unk>.
<unk>.
<unk>, our investigational <unk>.
<unk> targeting April electrical D&C.
Or <unk> being developed as a treatment for patient with Mississippi, the EMEA severe hypercholesterolemia EMEA diluting renaming this syndrome.
<unk>, a key regulator of lipid and lipoprotein metabolism that inhibits lipoprotein lipase and maybe Patrick uptake of framework, particularly in the LPL independent pathway.
Clinical studies Jim.
Jim to multiple lipid parameters and may provide clinical benefit in a broad population would be CTV news.
<unk>, we've had the following ongoing studies.
It's just the two phase II study in patients with severe hypercholesterolemia.
<unk> phase II study in patients with mixed Dyslipidemia and the palisade phase III study in patients with familial <unk> syndrome.
Sure.
On schedule for data Readouts later this year. These studies will inform the development path. They will have the interactions on phase III study design.
Palisade continuous on world facing efficiently and we believe we will achieve full enrollment in the second quarter of 2020 and fee PVC yet alone studies. So this will allow us to study completion in Q2 2024.
<unk>, our investigational <unk> signed two silenced the hepatic expansions angiopoietin like protein three or <unk> being developed as a treatment for homozygous familial hypercholesterolemia or HOS H and the hit for the cycle.
The linear or HD FH.
<unk>, a key regulator of lipid and lipoprotein metabolism that each division.
Lipoprotein lipase, an endothelial light.
<unk> has a unique mechanism of action for evidence hypercholesterolemia. This thing from other LDL cholesterol lowering therapies for <unk>.
<unk>, we have the following ongoing studies there because two phase II study in patients with mixed Dyslipidemia and they gateway phase II study in patients with homozygous familial hypercholesterolemia.
In analyzing the middle of the year.
Gateways fully enroll.
Initial data around the middle of this year as well, we intend to interact with regulators about our plans for a phase III study this year.
I'll now turn the call over to James <unk>.
Thank you Javier we announced last week the initiation of a phase one two study apparel MMP seven so I want to talk about that first.
Aero MMP seven is designed to reduce expression of matrix <unk> protein 87, or <unk> seven is.
As a potential treatment for idiopathic pulmonary fibrosis or IPF.
<unk> seven is thought to play multiple roles in IPF pathogenesis, including promoting inflammation and aberrant <unk> repair and fibrosis.
Significant unmet medical need exists for patients with IPF, who experienced progressive decline of lung function. Despite current therapies.
Aero MMP 71001 is a phase <unk> single ascending dose and multiple ascending dose study to evaluate the safety Tolerability pharmacokinetics and pharmacodynamics of Aero MMP seven.
Up to 56 healthy volunteers and in up to 21 patients with IPF.
Now moving onto our two other pulmonary programs era marked by Basi and Aero Rage, our investigational <unk> therapeutics designed to reduce production of using five AC or Mach five AC.
And the receptor for advanced location and products for rage, respectively as potential treatments for various mugar obstructive and inflammatory pulmonary diseases.
As Chris mentioned, we are on schedule to have initial data from the healthy volunteer portion of the phase one two studies in the first half of this year.
The healthy volunteer portion of these studies has two parts.
A single ascending dose part and a multiple ascending dose component.
The studies are designed to assess safety and Tolerability pharmacokinetics and pharmacodynamics.
We will be assessing pharmacodynamics by measuring available biomarkers and Bronchoalveolar lavage fluid induced sputum and for Rage, We're also measuring serum <unk> protein.
The second portion of the study is in patients with moderate to severe asthma with.
We recently initiated enrollment in asthma patient cohorts in both the Arrow Mach five AC in Aero rates studies initial data should be available around the end of the year.
Finally, moving on to <unk>, three which is our investigational <unk> targeted RNA therapeutics targeting <unk> three expression as a potential treatment for complement mediated hematologic and renal diseases.
We remain on track to report data from part one of this study in healthy volunteers in the first half of this year.
Based on an analysis of data from the healthy volunteer single and multiple escalation dose cohorts, we anticipate selecting doses for the park to open label patient cohorts. This month and we are on track to open patient cohort enrollment in the first half of this year.
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 the quarter ended December 31, 2022 was $41 3 million or <unk> 39 per share based on $106 million.
Diluted weighted average shares outstanding.
This compares with a net loss of $62 9 million or <unk> 60 per share based on $104 5 million fully diluted weighted average shares outstanding for the quarter ended December 31 2021.
Revenue for the quarter ended December 31, 2022 was $62 5 million compared to $27 4 million for the quarter ended December 31 2021.
Revenue in the current period, primarily relates to our collaboration agreements with Amgen horizon and Takeda.
Revenue is recognized as we complete our performance obligations, which include managing the ongoing <unk>.
Phase II clinical trials for Takeda and delivering the phase one ready candidate to horizon.
There remains $107 million of revenue.
We recognized associated with the Takeda collaboration, which we anticipate will be recognized over the next one to two years.
Additionally, horizon enrolled the first subject in a phase one trial of <unk> hundred 57, formerly known as Arrow, SDH, which triggered a $15 million milestone payment to us and Amgen enrolled the first subject in its phase III registrational trial of old passerine which trigger.
At a $25 million milestone payment to us.
<unk> milestone payments were received in the second quarter of fiscal 2023.
Revenue in the prior period, primarily related to the recognition of a portion of the payments received from our license and collaboration agreements with Takeda in horizon.
Total operating expenses for the quarter ended December 31, 2022 for $104 7 million compared to $90 8 million for the quarter ended December 31 2021.
The key driver in this change was increased candidate costs and salaries as the Companys pipeline of clinical candidates has both increased in advance into later stages of development.
Net cash used by operating activities. During the quarter ended December 31, 2022 was $75 5 million compared to $61 3 million for the quarter ended December 31 2021.
The increase in cash used by operating activities is driven primarily by higher research and development expenses, we expect our operating cash burn to be 70 $70 million to $90 million per quarter in fiscal 2023 and <unk>.
Capital expenditures up to $200 million as we approach completion on our footprint expansion projects.
<unk> GMP manufacturing.
Turning to our balance sheet, our cash and investments totaled $617 6 billion at December 31, 2022.
Compared to $482 3 million at September 32022.
The increase in our cash and investments was primarily related to the $250 million payment from royalty pharma offset by our operating cash burn along with continuing capital projects.
Our common shares outstanding at December 31, 2022 were $106 1 million.
With that brief overview I will now turn the call back to Chris.
Thanks, Ken.
We're making good progress on our 2020 five initiatives, where we expect to have 20 individual drug candidates in clinical trials for AD market in the year 2025.
We currently have 12 drug candidates in clinical studies six of which are wholly owned and six are partnered.
That 12 to become 15 or 16 by the end of this year.
I mentioned <unk> four moving into the into the clinic next quarter I expect two or three additional new drug candidates. This year and we have never talked about them publicly.
Having such a large clinical pipeline provides us with a broad base from which to build value and spread risk and it also gives us consistent opportunities to share data and progress.
In the near term we think these opportunities will include the following.
Phase one Nash data from J&J over 795% this quarter because these are in Sequoia full 12 month biopsy data in the second quarter and.
Initiation of Aero HST phase to be in.
In Q1 or Q2.
Early Arrow Rage phase one two data in the second quarter.
Early Arrow <unk> five phase one two data in the second quarter.
<unk> Aero C. III phase one two data in the second quarter.
Initiation of the Aero Dux for Phase one two study in the second quarter.
Closure of our next cell type and supporting data in the second quarter.
Aero Apoc III data throughout the year.
Aro and three data throughout the year.
Initiation of two to three new phase one studies toward the end of the year.
Initiation of J&J over 795 phase II in Q3 or Q4.
Early Arrow MMP seven data in Q4 <unk>.
Initiation of Arrow and three phase III studies in Q4 and initiation of additional Aero Apoc three phase III studies in Q4.
As you can see we expect a busy 2023 thank.
Thank you for joining us today, and I would now like to open the call to questions operator.
Yes.
Okay.
Operator.
Yes.
Okay.
Okay.
Our first question comes from the line of Ellie Merle of UBS.
Your line is open early.
Hey, guys. Thanks, so much for taking my question.
Just in terms of the data in the second quarter from the pulmonary franchise I guess, what exactly are we getting in terms of the number of patients in dose level.
And what are you looking to see I guess, what degree of lowering these dose level.
We are in sort of the target levels that youre looking for Anwar confirm I guess kind of this target engagement that we're hoping to see.
Thanks.
So I don't know that we have but we have a target knockdown.
They were looking for.
This is this is our first.
These will be our first data.
Data and <unk>.
Subjects and so we're looking to see what sort of knockdown, we get again I don't I don't know if we have a bogey James you want to talk about about some of the cohorts really have you seen sure right. So.
We'll have data in the sad cohorts for the <unk>.
First for <unk>.
Those levels.
And then <unk>.
Likely as well.
The mad cohorts through at least the first three cohorts the two dose cohorts. That's all in the healthy volunteers, we won't have any patient data.
That point.
Great. Thanks.
Sure.
Thank you again to ask a question. Please press star one on your telephone again Thats Star one on your telephone the task of question. Our next question comes from the line of Maury Raycroft of Jefferies. Your.
Your line is open Maury.
Taking my question.
Question about the pulmonary data as well.
Wondering if you expect the bronchial lavage data to correspond with the rates <unk> PD biomarker data.
Maybe you can talk a little bit more on.
What kind of proof of concept, we should be looking for in this update.
James.
Yes, I think directionally.
I would expect based on what we've seen in.
In animals in monkeys, specifically.
The lavage data should.
Rage device data should.
And Directionally behaved the same as is the serum data.
Okay.
Thinking on that is it is this.
And it looks like but.
My sense is that as the villa buys data make give us more accurate.
Mark down because its because its local of course the challenge with the with a systemic is that there may be there may be extra pulmonary sources of <unk>.
<unk> got it and so that may much good data a bit but that will give us.
That will give us a better idea of duration because we.
We're not breaking these individuals more than once.
Got it okay, that's helpful and.
Also just put.
The J&J media reports I'm wondering if you've had any discussions with J&J regarding 398, 9% ongoing studies and have a sense of when they could make a decision on the program and what are some options you are considering if J&J terminate the license agreement.
So this is this is all.
New for Us and so we don't have too much comment on this at this point.
Again, we understand that they are prioritizing in HBV.
Lee.
And this doesn't have anything to do with our with our candidate as I understand it.
And so so they do not have again my understanding.
And.
Patrick O'brien can correct me if I'm wrong. Your my understanding is that they don't have the right to sub licenses, but they could assign it to so and so we will see what they decide to do there and maybe if they do decide to assign it.
It requires our approval otherwise it will come back to us and so we don't know what their what their goals are here.
And we'll just have to wait and see but look.
We believe in that program.
I think that drug clearly does what it's designed to do we're seeing substantial reduction in viral antigens I think thats important that is.
Maybe the critical component to getting to a functional cure, it's not the only component, but I think it's the critical one.
And they were getting a number of different strategies to just see what they can combine with that to get to functional cures.
Look forward to seeing more of those data.
Because we are only sell close to at this point of course.
Got it Okay make then I'll hop back in queue. Thanks for taking my questions.
Yes. Thank you.
Thank you. Our next question comes from the line of Mike <unk>.
B Riley your line is open.
Hi, Thanks for taking our questions it looks like a busier trailers or anything for you than last year. So maybe just following up on the.
By many.
<unk> on the safety and Tolerability data that we'll have for arrays and Marc if I may.
Could you talk about sort of the implications of that broadly portfolio delivery system, and just maybe remind us of the nebulizer system is the same.
All of the different programs and.
And second question on the MMP seven why does the frequency of administration.
You are looking to target.
<unk> nowadays.
A lot of progress in the pipeline, but some.
Some antibody appointed answer coming in.
Sure, Yes, so I think.
The safety data that we'll have for rage and marked by they see I think while it will be.
Candidates specific and target specific I think will be applicable to the broader platform.
Yes.
Will help too.
Support.
Pulmonary delivery platform generally.
In terms of the Nebulizer question Pat.
This is it's the same nebulizer system that we're using across the three different programs, it's different than what we used with <unk>. So this is a more efficient nebulizer versus what we used with with <unk> and then there's a third question there I think.
B seven dose interval.
So the initial dosing interval for MMP seven is every two weeks in the Mad cohorts in the side of course, we just.
Single doses, but then we're investigating.
At day one.
15, and 29% in MMP seven.
To what we're doing in the Mad cohorts four five AC now.
That may not be the dosing regimen going forward, that's sort of a more intensive regimen.
Consistent with what we used in the animals to generate maximal knockdown.
We will have to see what the duration knockdown is after both the single dose and after the multi dose.
Administration.
Got it and then just a quick follow up on J&J zero 795.
Just remind us what the.
Doug there is in sort of the.
Progress how far along that that program is.
No. It's again, Jay Bachmann program, and then just broadly on the.
On sort of the partnership with J&J is inside a program by program Im assuming and whenever it happens with 290 899 no implications on.
How things May progress.
Nine five.
The targeted <unk> III.
<unk>.
A cautious maybe the most genetically validated target for our for Nash.
Phase one study that includes SaaS as well as the Mad portion.
And it is my expectation that we.
Can I start to report at least some not.
Not at least certainly 77 SaaS data this quarter.
Okay. Thanks for taking my question and look forward to be Youre welcome.
Thank you. Our next question comes from the line of Joel Beatty of Baird. Your line is open Joel.
Again, Joel Beatty of Baird. Your line is open.
Hello can you hear me.
Yes.
The lung program.
And the data coming in Q2 could you elaborate.
<unk>.
How meaningful the data is for other programs and in the prepared remarks, you talked about eight or nine programs that could come for long how do you risking as this data that we got in Q2.
I think its substantially de risking.
This is this will be the first.
Clinical data from our from our lung franchise.
The.
The structure of these candidates is really quite similar between <unk> seven five AC rage and future ones. They are simple.
Conjugates as you know it's simple Rei triggered that is chemically modified linked to a targeting moiety and so to the extent that that debt as.
<unk> is well tolerated and can get into these pulmonary epithelium cells.
I think it is I think it is telling.
As it relates to future.
B cells don't care, what the sequence of the R&D I trigger is once you get into this out.
And get loaded into the risk complex.
It can be any sequence. So I think I think that it is a substantial derisking event again to the extent that we do show clinically relevant knockdown.
Well tolerated mesh.
Okay. That's helpful and then for <unk>.
<unk>.
Are you able to discuss the powering assumptions or otherwise just kind of speak at a high level.
What gives you confidence in the powering for the 160 patient Registrational phase III at this plan.
Yes.
It's going to give you a high level concept.
Hey.
First of all define it.
Already.
In the public domain and clinical Tayo Dot Gov.
But essentially if you look at Takeda has been thinking is taking a conservative approach for the active treatment group.
And I'll ask one facility for the placebo group and with that maybe assumptions. The typical of some of the aviation. The respective then with that in mind. We are powered by population. They took we think.
Good and conservative approach with regard to the today show, which is 106 weeks two years, essentially and the sample size and the patient population. They selected so it's not just the assumption, but is the assumption in the context of the sample size of and covered 60 patients with two year observation and all basically we would have.
And if two fibrosis stage based on the mid <unk>. So when you look at the totality of the study design. We believe this study.
Well fit to show that they benefit in <unk>.
Fibrosis.
<unk>.
And then to the telco, but can't eventually will come out with more details.
Great. Thank you.
Thank you. Our next question comes from the line of Matt.
Kumar of Goldman Sachs. Your line is open.
Hey, great. Thanks for taking our questions. So I guess, our first one relates to the idea and the lung of which sell type matters and how do you think about in PE pulmonary indications.
Getting in the lung epithelium risk does it make solid in the lung epithelium versus say other cell types that are present in the lung, particularly immune cells, along how do you kind of a thread that needle and then kind of secondly.
Hello, My question sort of threading the needle how do you think that kind of a goldilocks phenomenon of Knockdowns and he is pretty powerful inflammatory modulators, where you wanted to impress them enough. So that you reduce that kind of autoimmune functions, but you don't surprise me. So much that you reduce the viral protective how do you think about kind of that debt balances.
Sure so.
Okay.
Well first of all the regarding the <unk>.
Cells that are the cells that were trying to target those are generally.
The cell types, where we're looking for targets. So we're looking for.
Targets that are expressed by lung epithelium cells.
And if there is a target that is.
Related to a disease that we can knockdown.
Deal situation, I think that's where our system.
Performs best.
Getting into those cell types, and knocking down targets expressed in pulmonary epithelium cells or or some of the derivatives something like the basal Lloyd sales that.
But more specific to an IPF patient population.
Now we are not targeting.
Any gene targets in macrophages or other immune cells in the lung we're pretty focused on the.
Absolutely.
The oil or epithelium cell derived.
Types of cells and then the.
The other question was about modulating inflammation, so for something like.
Like rage that knocking down range like you said could be fairly powerful as an anti inflammatory.
There are other there is redundancies built into into the system. So I think some of the.
Eight noon functions that would be inhibited by silencing rage or can also be activated through a tailor for pathway. So youre not completely wiping out the innate immune system altogether. There is some redundancy there.
Okay. Thanks, a lot for taking our questions.
Sure.
Thank you. Our next question comes from the line of.
Amy <unk> of SBB Your line is open.
Yeah.
Hi, Anthony this is referring to that as little harvest of Morgan Stanley .
Quick question, we have a question regarding the pulmonary program.
What would be the level of knockdown that will be expected in order to reach.
Functional benefit that in the clinical setting.
We don't know the answer to that.
Yes.
There are there are advantages and disadvantages to being pioneers here.
The advantages out of the way the first one the disadvantages are that bet.
David.
No. One has no one has done this before and so and so.
We will be learning the field as we go.
So I don't have a good answer for you on that one.
Unfortunately.
Alright, I guess, we'll have to ask again, and then you talked a little later.
So I guess, maybe just then.
A different question in terms of the HBV program. So it shouldn't be asset be returned by J&J, what would be your development plan would you consider given that most assets.
In this particular sector are partnered especially for the combination program would you consider developing it internally are seeking out a new partner.
Yes, it's a good question.
So look again as I mentioned that drug is doing what it's designed to do and that's exciting.
Janssen has done a phenomenal job with with a number of very large studies and so they are sitting on a on a ton of data.
We're familiar with some of those data, but not all and so its hard for us to make a diehard it's impossible for us to make a decision about how we might develop that that drug until we get into those data. We are we are certainly interested again because of the drug.
It appears to be doing what we intended to do so.
So we just have to take a look at all the data to see what the path forward will be I do I do.
We firmly believe that there is a path forward I just don't know what it is until we see the data.
Yeah.
Thank you and I guess lastly, flipped would there be any sense of timing in terms of maybe when you'd be able to either.
Maybe more clarity from J&J access to that data. So you could make an informed decision.
I don't have an answer for that unfortunately.
I don't know what their I don't know what their what their timeline is.
In prepared remarks, my understanding is that there are some ongoing studies I assume that those are still ongoing but I don't know to be honest I think this is all happening in real time and my my expectation is that we'll have better clarity from Janssen over the next coming weeks.
Alright, thank you.
Youre welcome.
Thank you.
Our next question.
Comes from the line of Luca <unk> of RBC capital markets. Your line is open Luca.
Oh, great. Thanks, so much for taking my question I have two maybe circling on a 180 circling back on the prior question Javier.
Just talk a little bit more about the powering assumption here in the phase III at 160 patients for the primary endpoint of two years, what is the minimum delta in fibrosis between the active arm of placebo that is actually sufficient to hit the stack any color there would be great and then maybe on ducks or can you just talk a little bit more about that program I think in the past.
You have mentioned that expression can be quite variable there. So wondering how you're planning to mitigate their risk and maybe more broadly how confident are you in that program.
Okay.
Hi, Luca.
I don't know how much detail I can provide.
<unk>.
That team on this decision.
What they need to power the study at the size of the study.
160 patients and like I said the primary endpoint. The primary analysis is that two years of 106, when all patients with <unk> that would be about $100.
Then also complete the two year study so that gives you a really for what we learned so far.
We can pay these.
50%, representing diversities that will place until the first study who are the same and in similar patient population as a good point of reference I would say.
And then you need to look at that.
Our history data versus the Sequoia golf.
Somewhat in between and if you do that exercise you will come out with the same number of more likely so that's how I will I will address this comment.
And importantly, as you mentioned.
That two year time point is at around 110 patients not the full 160 and importantly, he was powered based on that so.
So given their assumptions.
They determined that a 110.
Should be sufficient.
James you aren't sure yet.
The Ducks question, it's correct that the expression of Ducks four stochastic.
So the measurement of protein in the muscle and the downstream dux for affected genes can be can be challenging at least one other company has demonstrated and that was one of the reasons. If you recall that we wanted to be sure that we had the tox coverage.
Two to cover a longer phase III study is something if we werent able to see any any knockdown and gene expression that we could do a longer study.
See some proof of concept efficacy with imaging, specifically MRI or with functional endpoints things like reachable workspace.
<unk> now have that stat that tox coverage.
At least from the chronic monkey study and I think the.
Chronic rat.
Readouts should be available shortly so.
We have.
But the ability to design a study that not only could potentially give us biomarker readouts. If we're able to measure dux for downstream gene expression, but also a study that would have an MRI and functional endpoints built into it as well.
Got it thanks, so much.
Thank you.
Our next question.
Sorry, our next question comes from the line one moment.
Our next question comes from the line of <unk> Agarwal of Cantor.
Your line is open.
Yes.
Hi, This is <unk> from Cantor. So first question. Thanks for taking my questions. So first on Aro <unk>.
Primary completion date of March 2027.
Would imply roughly two years when enrollment is that the right proxy to think about the timing of the three note or what the timelines will be expedited.
And I had a quick follow up.
Yes.
I think it's inappropriate for us to to opine on that Takeda will be running that I think probably best at best to ask them what their expectations are.
Okay.
Second on Apoc.
Apoc III any comments of how youre thinking about the trial size and duration for the <unk>.
For the CV outcomes trial.
Or do you think you need to show on our CV outcomes, what that asset to have a broad uptake in this match population. Thank you.
Yes, we're at the very beginning of that process as you know it's not.
The simple process with a group of expert.
At the beginning of establishing a goldberg.
To design and execute the study.
We said in this call we are wrapping up the phase II study within the next quarter to quarter that will be the.
The way that we would be fine. The study design, we're planning to have interaction with the FDA to talk about that this year.
The expectation that we will start the.
The study in 2020, please so.
They are beginning the process a lot of water that needs to be done.
Put them decisions that will be related to the specific of the study design how loading with less it's likely to be on a of course, an event driven trial.
Most of these studies.
So a lot to come I love to talk about over the next few quarters.
There are at least a couple of things.
That.
But our gating for us to figure out what what those spots might look like and one thing is look we still havent read out the entire phase two studies yet.
We have interim analysis that looks quite positive and we're excited about that but when we need to finish those days and see what those look like that's first second is that we haven't had discussions with the FDA about about their expectations. We have to have those I think I think I think once we once we get through those those two.
And those two issues and we will have we can have a better idea about what these things might look like.
And thank you for taking the questions.
Yes.
Thank you at this time I would like to turn the call back over to Dr. Chris Anzalone, President and CEO for closing remarks, Sir.
Thanks, everyone for joining us today and have a nice evening.
This concludes today's conference call. Thank you for participating you may now disconnect.
Goodbye.
The conference will begin shortly to raise and lower Johan during Q&A, you can dial star one one.
Yes.
[music].
Yes.
Okay.
Okay.