Q2 2023 Arrowhead Pharmaceuticals Inc Earnings Call

Speaker 2: You.

Speaker 3: Ladies and gentlemen, welcome to the Arrowhead Pharmaceuticals Conference call. Throughout today's recorded presentation, all participants will be in a listen-only mode. After the presentation, there will be an opportunity to ask questions.

Speaker 4: I will now hand the conference over.

Speaker 5: to, one moment, I will now hand the conference over to Vincent Anzalone, Vice President of Investor Relations for Arrowhead. Please go ahead, Vince.

Speaker 6: Thank you. Good afternoon, everyone, and thank you for joining us today to discuss Arrowhead's results for its fiscal 2023 second quarter, and in March 31, 2023. With us today from management are President and CEO , Dr. Christopher Anzalone, who will provide an overview of the quarter.

Speaker 7: Dr. Javier San Martin, 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 Ken Miskowski, our Chief Financial Officer, who will give a review of the financials.

Speaker 8: In addition, Tracy 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.

Speaker 9: Before we begin, I would like to remind you that comments made during today's call contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical fact are forward-looking statements.

Speaker 10: and are subject to numerous risks and uncertainties that could cause actual results to differ materially from those expressed in any forward-looking statements.

Speaker 11: 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 . I'd now like to turn the call over to Chris Anzalone, President and CEO of the company. Chris.

Speaker 12: 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 . I'd now like to turn the call over to Chris Anzaloni, President and CEO of the company. Chris. Thanks, Vince. Thanks, Vince.

Speaker 13: Good afternoon, everyone, and thank you for joining us today.

Speaker 14: In 2017, we introduced our proprietary TRIM platform. We believed then that it could become an industry-leading RNAi platform for hepatocyte-focused therapies, and importantly, one that could bring RNAi outside the liver.

Speaker 15: This was based entirely on our competence and the potential of the science. At the time, we had no clinical programs, a single partner, and our stock was trading for less than $2.

Speaker 16: Six years later, we have 12 individual drug candidates in clinical studies targeting two different organ systems, three ongoing phase three studies, five strong partners, a healthy balance sheet, and a reason to believe that the next six years will be characterized by even more rapid growth.

Speaker 17: We expect to have at least 14 drug candidates in clinical trials by the end of this year targeting three different organ systems, liver, lung, and CNS.

Speaker 18: Gelidomuscle targeting programs could grow this to 16 individual drug candidates across four different organ systems in 2023, but partner and opportunities make that a bit more difficult to predict, and I will touch on that later in the call.

Speaker 19: We are well on our way to reach our 20 and 25 goal to grow our pipeline of RNAi therapeutics to a total of 20 clinical stage or marketed products in the year 2025. I do not believe there is a company on the planet that can match this.

Speaker 20: We've made substantial progress over the past quarter and since our last call. Let's start with pulmonary.

Speaker 21: We recently disclosed early top-line data for aerial range in normal healthy volunteers. The data were very encouraging and indicated a high level of target gene knockdown with a long duration of effect in a well tolerated manner.

Speaker 22: James will talk about these data in a moment, but I want to put this into context. I believe that Arrowhead is the first company to ever show RNAi-mediated target gene knockdown in the lung.

Speaker 23: James will talk about these data in a moment, but I want to put this into context. I believe that Arrowhead is the first company to ever show RNAi-mediated target gene knockdown in the lung. Even more impressive was the magnitude response.

Speaker 24: We didn't just get on the board. We saw up to 90% knockdown in serum after just two inhaled doses at the fourth of fifth of five planned doses.

Speaker 25: We do not yet have data from the highest single or multiple dose cohorts.

Speaker 26: It appears that the pulmonary platform is doing what it was designed to do, and arrow range appears to be highly posed. I expect the durability to enable monthly or less frequent dosing.

Speaker 27: We've often said that clinical validation of the lung platform could mark the beginning of a second rapid wave of growth for our company.

Speaker 28: Cells don't care what the sequence of an RNAi drug is. Once we find that reducing expression of a specific target gene can be done in a well-tolerated manner, we have a high degree of competence, we can replicate it with any number of new gene targets, much as we have done in the liver.

Speaker 29: That is where we may be with the pulmonary franchise. I think the data we reported and the additional data we expect to present at the R&D day on June 1st represent the initial clinical validation we were hoping for. This is a big deal. I fully expect that in the near to midterm, we will have several potentially important new drug candidates.

Speaker 30: targeting the lung that could address grinding unmet medical needs.

Speaker 31: ARIMUC 5AC will be our next pulmonary data set, and I expect that we will have some normal healthy volunteer data by the R&D day.

Speaker 32: These two programs continue to move forward and have both progressed into part two of the phase one, two studies where asthma patients are treated.

We hope to have some data from the patient portion of these studies by the end of the year.

Rounding out our current pulmonary pipeline is Arrow MMP7.

In the last quarter, we initiated a phase one-two study for the treatment of videopathic pulmonary fibrosis, and we are currently dosing normal healthy volunteers.

to phase one, two study for the treatment of idiopathic pulmonary fibrosis. And we are currently dosing normal healthy volunteers. Where do we go next?

The central nerve system. There are a number of untreatable and poorly treated CNS conditions and many genes that could serve as powerful targets for RNA-I therapeutics.

We have spent a substantial amount of time developing the CNS-focused trim platform and are just about ready to bring our first drug candidate to the clinic.

As we announced a couple weeks back, AeroSod 1 is our first CNS target in drug candidate to be nominated.

It will be investigated as a potential treatment for patients with ALS caused by SOD1 mutations.

We have already completed disease model work and CTA enabling toxicology studies and are now on track to file a CTA next quarter.

You will hear more about the platform and the candidates at the June 1st Analyst Day, and we see these as powerful tools for a new set of patients we seek to serve.

Importantly, as with liver, pulmonary, and skeletal muscle delivery, we expect to follow aerosod one with several additional drug candidates.

In addition, we have made impressive progress on different modes of administration. And while we are not quite varied, we believe we are approaching the day where we made Minister RNAI-CNS drug candidates systemically across the blood-brain barrier. This would be a truly disruptive leap forward, and our data suggests that we are close.

We look forward to discussing this as well at the analyst day.

We have said in the past that we are committed to bringing RNAI to where unmet medical need is, and this means constantly expanding trim. We believe we can address a new cell type every 18 to 24 months, and while our CNS franchise meets this, it is not the only new organ system we are exploring. I believe we can now also deliver it to adipose tissue.

and have demonstrated in non-human primates target gene violence of greater than 90% with over six months of duration after a single subcutaneous injection using what we believe are clinically relevant dose levels.

Atepost tissue is the largest endocrine organ in the body, and we believe there are many targets to address and many potential patients to help. You will hear more about this new platform next month at the LSD.

Let's now turn to our more established clinical programs.

We've shared some early data from the phase 1, 2 study of ARO C3 for complement mediated diseases and they are compelling.

We are seeing deep and durable knockdown in healthy volunteers and have progressed to the patient portion of the study.

We also shared liver fat data that Janssen generated in a phase 1-2 study of Arrow PNPLA3 for NASH in patients with PNPLA3 mutations.

Those two were quite encouraging and demonstrated deproductions in liver fat after only a single dose of Aro-P and PLA3.

We plan to move that into a multidose phase 2 study in Nash patients late this year.

Moving on to our later stage pipeline, we continue to enroll patients in the Phase 3 Palisade Study of Aero-ApoC3 in patients with familial, chalimicronomy syndrome or FCS and expect to meet our enrollment goal of 72 patients tomorrow.

There are also some additional patients that have passed screening and who will likely be randomized over the next two weeks. At that point, enrollment will be complete and I expect that we will have closer to 80 patients in the study.

We also receive fast track designation from the FDA for AeroApoC3 for reducing triglycerides in adult patients with FCS, which will be helpful as we advance the program rapidly.

Obviously, I will talk about this in a moment, but I expect this to be our first drug to complete a Phase III study, and if efficacy and safety are established, could be the first NDA that we file. This could be next year, and it would represent an important step for us. Of course, that is not the only population of patients we intend to treat with Aeroapoc3.

Rather, I expect us to take steps toward pivotal studies in patients with severe hypergroposteridemia and those with mixed dyslipidemia later this year.

The Aero-Ans 3 Phase 2 study in mixed-dislippity meat patients is complete as is the Phase 2 study in patients with homozygous, semilial, hyperoclusteralemia, or H-O-F-H. I expect that both of these will move toward Phase 3 studies later this year.

Both Arrow and 3 and Arrow Aploc 3 appear to be potentially powerful drug canterists. We have included nearly 900 patients in the basket of Phase 2 and Phase 3 studies of Arrow and 3 and Arrow Aploc 3 over the past couple of years and continue to be encouraged by the Drug Candidate's activity and safety profiles.

I believe that both of these will ultimately be important drugs for many patients.

Also during the quarter we announced that our partner, Decada, had treated the first patients in the phase three redwood study of a zero seren being investigated as a potential treatment for alpha one antitripsum deficiency liver disease.

This is the third trim enabled candidate to reach a phase 3 study, which earned Arrowhead a $40 million milestone payment.

We also received a $30 million milestone payment from GSK after the start of GSK's Phase 2B trial of GSK 453 2990, formerly called with CARO HSD, an investigational RNAI therapeutic for the treatment of patients with national.

These milestone payments are helpful for our balance sheet, but also represent two more important things. First, there are confirmation that our strategy to have a healthy mix of both Holy-owned and partner programs is playing out as intended.

And second, to the indicate that important new medicines that AeroAID discovered are getting closer for patients who need them.

Before I hand off to Javier, let me say a few words about the skeleton muscle franchise and arrow ducks fork specifically.

We completed everything required for a CTA, including regulatory filing preparation, acute and even chronic GLP toxicology studies.

We are prepared to file the CTA and begin a Phase I II study, but several companies have expressed interest in potentially partnering on the development of AeroDux IV and potentially our next skeleton muscle-targeted drug candidate that will be CTA ready in 2-4.

As such, we pause filing while we explore these options. Of course, I do not know if any of these will translate into license agreements and partnerships, but I expect we will either complete a deal or move forward with the AeroDefs IV clinical program over the next couple of months. I will continue to work with the AeroDefs IV clinical program over the next couple of months.

Arrowhead is executed at a very high level. Our platform is expanding into new areas. Our early pipeline is generating impressive results. Our mid and later stage pipeline are giving us line of sight when we may be able to make the transition into a commercial stage company. And our business development activities continue to bear fruit.

With that overview, I now like to turn the call over to Dr. Javier, San Marti. Javier. Thank you, Chris. Good afternoon, everyone.

Before I go into the mid and late stage, tardium metabolic studies, I want to quickly review the status of the fasciedan, our investigation, RNA-acted apoptic, been developed in partnership with Takeda for the treatment of liver disease, as associated with alpha-1, and the tripsin deficiency.

During the last quarter, we reported data demonstrating that patients receiving 25, 100 or 200 milligrams of acid siren, who had baseline fibrosis, achieved a dose dependent, mean reduction in serum, ZAT concentration, a week 48 of 74%, 89%, and 94% respectively.

leading to dramatic reductions in total-liberal CAT and past the global burden, a histological measure of CAT accumulation.

In addition, 42% of patients show an improvement in important inflammation and 50% of patients achieve an improvement in fibrosis of at least one point by netabuse stage. This data, but very consistent with the prior data generated from the 2002 OpenLevel study.

The sequence, please, Takira initiated and began dosing in the Redwood chemical study. It is a randomized double-blind placebo control phase 3 trial to evaluate the efficacy and safety of fasciosis and in the treatment of A-H-D liver disease.

Approximately 160-odd pages with neta-beard stage F2-2F4 fibrosis will be randomized one-to-one to receive facio-seren or placebo. The primary endpoint of the study is a decrease from baseline of at least one stage of histological fibrosis neta-beard staging.

in the centrally delivered biopsy done at week 106 in patients with meta-abuse stage F2 and F3 fibrosis.

Additional information on the Redwood study can be found at www.theredwoodliverstudy.gov.

I also want to give a brief update on where we are with our CardiMetabolic Candidates, Eroepository and Ero-Einj.

I will start with Aero-Apocetri, our investigation on RNA-IT and about it being developed as a treatment for patient with mixed dyslexia, severe heart-pattern, acetylenia and FCS.

The Shasta II Phase II study in 229 patients with a very high-patterary serendemia, and the mere Phase II study in 350 patients with mixed sleepidemia are both on schedule for data later this year.

This data will enable us to request enough Phase II meeting with regulators to discuss and get feedback on our plans for Phase III studies. I'll say Phase III study in 72 patients with SCS is ongoing. We have enrolled 70 of the planned 72 patients, and we believe we will reach planned enrollment tomorrow.

This is a 48-week study with primary endpoints of percent change from baseline in fasting triglycerides. This is a 48-week study with primary endpoints of percent change from baseline in fasting

This put us in schedule for Stanley completion in Q2 of 2024, a data readout shortly after that and then NDA preparation. I'm also pleased to announce that during last quarter, Eroipocetry was granted fast track designation by the USSTA.

for reducing triglyceres in a voltage with SCS.

Aeroepository was previously granted orphan drug destination by the FDA and the European Union for the same indication. Pastrack is a process designed to expedite the development and review of drugs to treat serious or life-threatening conditions and fulfill an American need.

The purpose is to get important new drugs to patients earlier. This designation makes Arrow Health eligible for multiple potential benefits, including more frequent interaction with the CA, eligibility for priority review and eligibility for rolling the?hpeiahch.

Once we have complete data from the Phase 3 PALSIS study in 2024, we intend to utilize all available mechanisms to get this potentially important drug to patients as quickly as possible.

This will be the first phase 3 without arrow head.

and our pipeline of RNAI that about this that utilize our proprietary stream platform.

That represents a significant milestone for the company.

Moving on to the second wholly owned cardiometabolic candidate, AroH3, which is our investigational RNAi therapy being developed as a treatment for homozygous familial hypercholesterolemia, or HOFH, and heterozygous familial hypercholesterolemia, or HEFH.

We have completed the artist 2 face to study in 204 patients who have missed the sleep themia and were currently in the process of generating an analysis study data which we intend to report on later this year.

The second phase to study for Rero-N3 is the gateway study in 18 patients with H or FH. This study is an open label and was fully enrolled previously.

I'm happy to report that the LDL reduction in this difficult-to-treat population with limited treatment options appear to be competitive with Ebinocumab, a monoclonal antibody that targets the same HPTL-3 protein, which is currently approved for HOFH patients.

We will present interim data from the Gateway Study at the 91st European electricity process Society, Congress, on May 47.

These were welcome results and thus we are currently working on the Phase III study design and plan for A

We were also talking more detail about the environment, need in cardiovascular disease, the results from our cardiometabolic programs, our clinical development plans, and our commercial strategy at the upcoming R&B Day in June .

I will now turn the call over to Dr. James Hamilton. James.

Thank you, Javier. We have demonstrated significant progress across discovery and early development.

We continue to extend the reach of our trim platform to new tissue types and expand our pipeline into new disease areas in which patients have inadequate treatment options. We've also rapidly and efficiently advanced multiple truly clinical stage programs and continue to generate highly encouraging data using various versions of the trim platform.

Each optimized for a different cell type.

I'd like to focus today on a few different areas. The pulmonary platform with recent top-line data announced for error range.

C-0-C-3 are candidate for complement mediated diseases and our emerging CNS platform with the first candidate being AeroSide 1. Let's start with pulmonary.

We have three candidates in the clinic now, Aero Rage, Aero Mok 5 AC, and Aero MMP 7.

which all use the same trim conjugate that targets the alpha V beta 6 integrin for delivery to pulmonary epithelial cells.

I will talk about each individually, but we think one of the benefits of gaining an R&A AI therapeutic delivery platform with increasing validation is that learnings from each platform program can directly inform advances in the others. So we view de-risking events.

for one program, such as the data we saw with error rage, as potentially deresting to some extent to the others. Error rage is our investigational RNAI therapeutic design to reduce expression of the receptor for advanced flakation end products or rage, as a potential treatment for inflammatory, pulmonary diseases such as asthma.

quenchally enrolled NHP cohorts with escalating single dose levels.

The multiple ascending dose portion of the study includes five NHP cohorts and three asthma patient cohorts.

We have fully enrolled and dosed all SAD cohorts and the final MAG cohort is anticipated to be fully enrolled in the coming weeks.

We've also opened the patient cohorts with enrollment of the first cohort nearly complete.

We reported very encouraging top line results from four of the five sad and mad cohorts and NHVs.

We do not yet have data from the fifth and highest dose level, but we plan to report those results when they are available later this year. First, safety and tolerability assessments have been encouraging.

Overall, there were no patterns of adverse changes in any clinical safety parameters, no reported serious or severe adverse events, and no dropouts related to drug or related to adverse events.

In addition to safety and tolerability, the arrow rage demonstrated a strong pharmacodynamic effect.

The mean maximum reduction in soluble range for esterated at the 92 milligram dose has measured the serum after two doses on day one and day 29 was 80 percent with a maximum reduction of 90 percent.

The lower doses of 10, 20, and 44 milligrams also show that dose response ranging from 31% to 59%.

Dear MSRage was also reduced after a single dose with a mean maximum reduction at the 92 milligram dose of 56% and a maximum reduction of 68%.

Reductions in S-Rage has measured in Bronco Aviole of IGE fluid on day 31 after a single dose for also observed with a mean reduction at 92 percent at 92 milligrams of 75 percent and a maximum reduction of 92 percent.

We have additional plan cohorts in which valve will be collected at later time points to quantify the additional lung level knockdown after two doses.

Lastly, the duration of pharmacologic effect persisted for at least six weeks after the second administration of the 92 milligram dose.

This is the last time point currently available, an additional follow-up is ongoing. This suggests that monthly, by monthly, or less frequent dosing may be possible with error range. All in all, we believe these data show good translation of preclinical results to humans. Moving on to Aero-Muck 5AC, our investigational RNA-I therapeutic design to reduce production of Mucin 5AC or Muck 5AC, as a potential treatment for various Mucopestructive Pulmonary Diseases.

or MMP7 as a potential treatment for idiopathic pulmonary fibrosis or IPF.

During the last quarter, we initiated a phase one, two A, single ascending dose and multiple ascending dose study to evaluate the safety, tolerability, pharmacokinetics, and pharmacodynamics of AROM and P7 in healthy volunteers and in patients with IPF.

Disgulation in this study is ongoing. Now let's discuss initial results with arrow C3, our investigational RNA-I therapeutic targeting hepatic C3 expression as a potential treatment for complement mediated hematologic and renal diseases.

Substantial unmet medical need remains in the treatment of multiple complement mediated diseases, including hygiene and frothy.

C3, glomerulopathy, and additional renal and hematologic indications. We are conducting at phase one, two placebo control, to assess collating study, to evaluate the safety, tolerability, pharmacokinetics, and pharmacodynamics, AeroC3, and adult healthy volunteers and patients with complement mediated renal disease.

We originally planned to also include patients with P&H in the study, but we have since decided to eliminate these cohorts. We may decide to study P&H patients in the future, but we believe we can generate the data we need in the other populations.

During the quarter, we reported top-line interim data and presented additional data at the seventh complement, UJ training course in symposium in April .

In part one of the study in NHVs, ARO C3 demonstrated a dose-dependent reduction in serum C3 with 88% mean reduction after two doses at the highest dose tested. A dose-dependent reduction in AH50, a marker of alternative complement pathway hemolytic activity, was also observed with a 91% mean reduction at the highest dose tested.

in the TRMM platform. We've been working on CNS delivery for some time, but have not discussed these efforts publicly until now.

Our trim platform now includes a construct optimized for inter-treatical administration to the central nervous system with good distribution throughout the brain and in all relevant brain cell types.

AeroSide 1, the first program to use this new delivery platform is designed to reduce expression of superoxide dysmutease 1 or side 1 in the CNS as a potential treatment for patients with ametrophic lateral sclerosis or ALS caused by side 1 mutations.

Parasod 1 was highly active against its target, the long duration of effect in multiple pre-clinical models that we believe suggested may be administered quarterly or less frequently.

In pre-clinical studies, Arosod1 achieved 95% spinal cord tissue mRNA knockdown after a single interpigled dose in side 1 transgenic rats and maintained greater than 80% spinal cord tissue mRNA knockdown, three months after a single interpigled dose in non-human primates.

AeroSide 1 is on track for a CTA filing in the third quarter of 2023. We will talk more about our CNS platform and about AeroSide 1 at the R&D day in June . But I wanted to introduce the program because we were very excited about the potential SIRNA in the CNS. I will now turn the call over to Ken Miskowski. Ken? I will now turn the call over to Ken Miskowski.

our net income for the quarter ended March 31st, 2023 was 48.7 million or 45 cents per share based on 108.1 million fully deluded waste average shares outstanding.

This compares with net income of 44.4 million or 41 cents per share based on 107.9 million fully diluted weighted average share is outstanding for the quarter ended March 31st, 2022.

for the quarter ended March 31st, 2022.

Revenue in a current period primarily relates to our collaboration agreements with Decada and GSK. Revenue is recognized as we complete our performance obligations, which include managing the ongoing AAT phase two clinical trials for Decada. There remains 31 million of revenue to be recognized associated with the Tullet Decada.

and GSK does the first patient in its Phase II B trial of GSK 453 2990 formerly known as HERO HSD in March triggering a $30 million milestone payment.

Revenue for these milestone payments will be reflected in fiscal Q2 while cash receipt will be in fiscal Q3. Revenue in the prior period primarily related to the recognition of $129 million associated with the upfront payment received from GSK in addition to a portion of the payments received from our license.

and collaboration agreements with Cicada and Horizon. Total operating expenses for the quarter ended March 31, 2023 for $98.1 million, compared to $110.3 million for the quarter ended March 31, 2022.

The key driver of this change was decreased candidate costs and lower stock compensation expense.

The decreased candidate costs were primarily due to the reduction in outsourced manufacturing in toxicity studies. Study costs relating to our cardio-medabolic studies as the company's pipeline of candidates progressed through clinical trials in 2022.

We're primarily due to the reduction in outsourced manufacturing and toxicity studies. Study costs relating to our cardio-embellic metabolic studies as the company's pipeline of candidates progressed through clinical trials in 2022.

Netcash used by operating activities during the quarter ended March 31, 2023, was 107.2 million, compared with Netcash provided by operating activities of 1.4 million for the quarter ended March 31, 2022.

The prior period includes $120 million cash inflow from the GSK licensing and collaboration agreement.

We expect our cash, we expect our operating cash burn to be at the lower range of $70 to $90 million per quarter in fiscal 2023.

We expect capital expenditures of approximately $9 million in the second half of fiscal 2023 as we near completion of our footprint expansion projects, including GMP manufacturing.

Turning to our balance sheet, our cash and investments told 559.8 million at March 31, 2023, compared to 482.3 million at September 30, 2022. The increase in our cash and investments was primarily related to

the $250 million payment from Royalty Pharma offset where operating cash burn along with continuing capital projects. Our comment share is outstanding at March 31, 2023 for $106.9 million.

With that brief overview, I will now turn the call back to Chris. Thanks, Ken. We've already had a busy 2023 and made a great deal of progress on many fronts.

However, we anticipate that the middle and into the second half of the year will be even busier and offer even more opportunities to demonstrate what our pipeline can bring to patients. We've always been clear that we believe for RNAI to reach its full potential as a revolutionary therapeutic modality, it needs to be able to address gene targets wherever they are. That is no longer a long-term goal between the liver franchise, the pulmonary franchise, the skeletal muscle franchise, the CNS franchise, and the adipose franchise.

We have the opportunity to help a lot of people and create a substantial amount of value. But this is just the start. I expect us to blow through 20 and 25 and build a uniquely large and diverse pipeline of important medicines across multiple therapeutic areas.

We hope you can join us on June 1st at our R&D day to hear more. Thank you for joining us today and I would now like to open the call to your questions. Operator.

We hope you can join us on June 1st at our R&D day to hear more. Thank you for joining us today. And I would now like to open the call to your questions. Operator.

All right. All right. Can you hear me okay? Yes. All right. Just make sure you hear me okay. Thank you all. At this time, we will conduct the question and answer session. As a reminder, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. So if you draw your questions, please press star 11 again. Please stand by while we compile the Q&A roster.

I also want to just remind the analyst that we, in the interest of time, we'd like to limit the questions to one question and one follow up. All right, our first question comes from the line of Murray Raycroft with Jeffries.

I was going to ask if you can provide some additional detail on what new data we will see at the R&D day from the cardiometabolic and pulmonary programs specifically. And as follow-up for the Phase III Palisades study, you mentioned readout in second quarter 2024. I'm just wondering if you will report on patient baseline characteristics at the R&D day or potentially at a medical meeting this year.

early normal health, you volunteer data from what by VAC. I don't expect to have MMP7 data, but we'll we'll also likely have a bit more of of error age. We also we know we'll talk about those indications or those targets as well as indications on the cardi metabolic side.

It will be a good chance for us to talk broadly about how we see arrow-ins, three in arrow-ins, three fitting into treatment paradigms. We'll talk a bit about a more recent data as well. We'll talk about the new CNS platform. We'll probably go into a little bit.

of the ATAPOS platform a bit. We'll talk about SOD1, we'll talk about the portion of ALS that we'll be addressing with SOD1. I'm sure I'm forgetting some things. It will be a bit of a busy day. We have a lot going on as you know, Maury, and we hope.

patients that you've enrolled into the study, is that something we can learn more about this year? Sure, I think we will review the M3 criteria, and that would give you a really good idea, but I don't think we're gonna look at the baseline characterities and report that ahead of the NFS studies. This is a phase three registration studies going really well.

So, I will review the key inclusion criteria so you get a sense of the patient population. Got it. Okay. Thanks for taking my questions. All right.

I will review the key inclusion criteria so you get a sense of the patient population. Got it. OK. Thanks for taking my questions. OK. All right. Thank you.

For our next caller, we have Eliana Murrell with UBS. Please go ahead. Your line's now open. Hey guys, thanks so much for taking the question and can grab on the recent pulmonary data.

in terms of the patient cohorts that we can expect later this year. I guess how should we think about what endpoints in particular you'll be reporting out I guess between like FINO, FIB1 and what you'll be looking to see in some of that early data thing. James, you're under a set.

Sure, yeah. So for rage, we're enrolling patients with mild to moderate asthma. And I think these are relatives, relatively small cohorts. So not powered for FEV1, although we will be measuring FEV1. Some of the key biomarkers that I think could be indicative of pathway engagement that knocking down a rage is affecting the inflammatory pathways. Are things like Feno, which is an IEL 13 driven parameter. We're also measuring blood and sputum, eocinophils. I think that that'll be interesting as well. And Perry Austin is also IEL 13 driven.

We will say, however, for rage, for instance, we were seeing, you know, me max knockdown after two doses in the zero least at around 80 percent. In the animal models that we have studied, that was more than enough to, you know, to affect.

phenotype. These are severe models. And so that gives us some confidence. But again, they're just models. And so we really have to wait to see in humans what this looks like. We are excited about that level of knockdown. It's a good deep knockdown.

and it appears to be durable and so we are optimistic that we are on the board for a rage and for mock and for NMP7 and as well as for future targets. We believe that because this is a target rich environment, it feels likely to us that if you can knock a gene product down by 80 or so percent then you are going to affect disease states in the least some of these targets.

Awesome, thanks guys.

Awesome, thanks, Ed.

Thank you. Our next question comes from the line of Joel Beatty with Bayer, one moment.

with SBB go ahead. Sorry. So I want to dive in a little bit on some of the modeling impacts financially. The updates you've given us. Obviously you've got a NAS program back in your hands. Part of the HPV remains in the James James hands. You know, you talked about moving a number of other assets forward, DNS. How should we think about what this means for the tempo of catbacks and off-backs going forward from here? And so what extent is that already contemplated in the comment who you gave us last quarter and prior around, you know, ramping catbacks and off-backs then to drive your. Sure.

This was already factored into our plans over the next few years. I don't think anything that's happened over the last few couple of quarters has materially changed those things. You know, we are growing so fast now, you know, Manny, as you know, and we've got 12 clinical programs.

you know, by 2025, and no company, I don't think, certainly not a company our size, can commercialize all those. And so we have an awful lot of ammunition to, you know, to find good partners to bring in non-dilutive capital, and that continues to be an important part of our ongoing financial planning. I think that that job gets even easier, you know, as we expand these platforms, to include CNS, to include skeletal muscle, pulmonary, adipose. We've got an awful lot of opportunity to find good partners. But, you know, while still holding on to a very large number of, you know, we think potentially important medicines to drive value for us. Okay, that makes a lot of sense. Thank you.

the PD marker is clear for clearer for age but but is there anything that we can glean from the different programs that you know help us think about the de-risking that is underway for the pulmonary delivery and then I have a quick follow-up

Sure, the crime tax is not complete. Those are ongoing. Then the next question is, is D-RISK in events? Well, James, do you want to address more data through this year? We will have more data.

on knockdown health volunteers shortly, we'll have patient data late this year, and then we'll have the contact data. I guess all of those are somewhat, are incrementally de-risk. We feel really good about.

about the changes we made in AeroRage, AeroMUC5AC, AeroMMP7, compared to AeroENAC a year ago. These are substantially more potent constructs. We're using, in broad terms, and James, correct me if I'm wrong here, around one big per gig at this fourth dose that we reported on.

A little less than we're rich. A little less than within one week per gig. And as you may recall, in the pulmonary day, a year plus ago, around a year ago, I guess, we graphed the various talk studies and where we started to see local blood inflammation and over six months and the cumulative...

the cumulative dose is around 100 mix per tick where we started to see that inflammation. And so we feel like we are in good shape here, that we should be substantially underneath that for RAGE. You know, we'll see where we are with MMP7 and with MUC, but at least so far, the data we've seen is encouraging to us that we have something that's extraordinarily more potent than the Aro-ENAC. And again, remember, and again, I know you will recall this, our dosing for Aro-ENAC was

with three daily doses every two weeks. For arrow range, we are once a month and as James pointed out, we have data out through six weeks and we are still, we're still seeing deep knockdown. So this may not be...

This may not be once a month dosing, maybe once or two months dosing, it may be once every three months dosing. So we feel like we're in good shape here. Great, yeah, look forward to seeing more of the R&D day. And then just another high level question, as you've decided on ducts for muscle, for externalization and not maybe on SOG1 and CNS. So I mean, how are you thinking?

you know about which muscle types to you know, go forward with internally versus externally and you know for DUX4 muscle, skeletal muscle, are they like kind of deal analogs that exist out there for the kind of value you might be looking for? Thanks for taking our questions. Sure, so let me be clear, we've not made a decision on partnering with the DUX4 muscle type.

we are right now, we'll see if those, if any of those turn into an actual deal, if they do, that's great. We know, hopefully, we'll find a right partner for that. If not, that's great too, because we believe in the drug, we believe in the platform, and we'd be happy to push that into the clinic ourselves. It just made sense for us to wait a couple months to see where these things go. We are in a good spot, I think.

for not only Aeroducts4 but also the follow-on clinical candidate that as I mentioned that we think will be CTA ready in the fourth quarter. We're in a good spot where we are almost diagnostic. I'm happy to bring both those to the clinic ourselves but also I'm happy to listen to offers and that there are good companies who can.

who have experienced in these types of drugs and come up with proper values and we're happy to talk about that as well. Got a high-class problem to have. Thanks for the question. You're welcome. All right. Thank you so much for that.

And a quick note you all please do not find your questions. I let you know that your line is now open. Our next question comes from Patrick.

Tro- Tro- Keo. I apologize for saying your last name wrong with HC Wainwright and Company. Patrick, your line is now open. Thanks and good afternoon. Just a follow up question on the CMS platform. I'm wondering if you can discuss

The pre-clinical data that's been generated today and the level of confidence in the safety profile, these are a cyanide constructs and delivery methods of you transition to human trials. And then secondly, I'm wondering if there's an update on the HPV program and what that collaboration may look like going forward.

I'm sure, so let me, I'll give you the high level answer to the CNN's question and then James can give you a more granular answer if necessary. So we have done the GLP-TOC studies and we feel comfortable about the safety margins there. We've done exhaustive non-GLP-TOC studies with Aerosod 1 as well as other potential candidates and we feel good about what we're seeing.

With respect to HBV, I don't have anything to update you on now. I believe that Janssen is running their process and so I don't have any information on where that's going to be in the next.

over the next several quarters. Yeah, I think I would just add on the CNS platform, we'll share more of the specific data at the analyst's day in June . We're seeing 80-90% reduction in various brain regions in both.

rodents and non-human primates with good duration, duration that should support at least a Q3 month dose administration. And we'll share more early next month.

That's helpful. Thank you very much. You're welcome. All right. Thank you so much, Patrick.

Our next question comes from the line of key match with Shardon.

All right. Thank you. Question on top.

benefit from as you proceed into the clinic.

Yeah, I mean, it's very helpful to have another asset out there that's getting the same gene target that's kind of gone through the whole process. And I think...

learned a lot from what they did in their early clinical studies, their phase one, two design, and then their pivotal as well. Yeah, I would like to add that the regulatory person is very, very important. The accelerated approval based on the validated.

Bio-marker, this is like this, I think it's huge for the field. It's really important for our program. It will enable us to go a lot faster. I think in this condition and thanks to the award, there is a very good data about the natural history of this SOD-1 ALS patient looks like.

and also was a benchmark for efficacy both in neurofilament and also clinically. So I think this success program opened the door for advance our program even faster.

Great, thank you. All right, thank you so much. Our next question comes from Prachar.

Our girl, our girl, sorry for messing your last name up with cancer, Fitzgerald, one moment.

you are looking at about 100 milliliters improvement approximately in FEV1. So that's the benchmark, I think, for a Phase II study. And that's also something that we will discuss at the Analyst Day in June 1st. Thank you. And just curious as to the broader long-term strategy in asthma, given you have two targets, is the plan to continue developing both assets into Phase II, Phase III? Or you could make a decision to prioritize one over the other at a certain time and what drives that decision? Thank you. Data. As with ANS III and APOC III,

we're just going to have to wait and see. It's a good problem to have because we think we think we have a good opportunity for both of them to be important medicines. And so let's just see what the data, what the data show over the next couple years. Yeah, the other thing I would say is remember, Mark 5 AC is a very new constructive type of drug. And there are other new construction diseases that are very prevalent and the American use is very significant. So as Chris said, we will evaluate those are indications such as COPD or bronchitis as well as we go along. All right, thank you so much. Our next question comes from Luca.

in-house, full stop. Any thoughts there would be much appreciated. And maybe on SOD1ALF, can you just talk about why going after this indication? Obviously, you're a few years behind Biogen. There are only 200 or 300 patients in the United States. So why not going after other targets with bigger TAMPs like maybe tau or taxin-1 or other? So again, any thoughts there appreciated. And that last one quickly on cap.

Sure, thanks, Luca. Ken, you want to address the last first? Sure. The 200 that we mentioned was the amount that we thought we were going to spend this year. The total project was anticipated to be $280, $290 million in total. We have spent less than the $200 million this year. We expect to spend probably around $200, $200 million this year.

$90 million more in the second half, and probably about $100 million toward that in fiscal 24. Okay, so the other two questions, the first one was around pulmonary partnering. So look, uh, I leave it at the couldn't answer answer. So, but uh, you move quite a bit into to be specific in this because a lot of people are already under district and

We aren't rushing to partner the current three assets anytime soon, or frankly even the broader platform right now. We want to learn more, we want an additional data.

I don't think that we should be in a hurry to do that. This is an important space for us. As we've said in the past, we don't see two or three or four drugs here. We see eight or nine or ten drugs coming out of the pulmonary platform. There are 16,000 or so pulmonologists in the U.S. We like the idea.

building a commercial infrastructure to address that market with several drugs in our own back. Having said that, it's probably not going to be 10, 11, 12 drugs. So there will be partnering within this platform, I think, at some point. I don't think it makes sense to spend too much time on it at this point because we're still early days. But this is a good opportunity for us, again, internally to create value.

and to serve patients ourselves, but also to find additional partners in order to really extract proper value from this part of the TRMM platform. The second question I do with SOD1, why are you going after SOD1 instead of something else? Well, I'll tell you. We are also going after something else. We're an AND company, we're not an OR company. It just so happened that SOD1 popped first and we think it's a good place for us to be. We think we'll stack up well against a person. As we talked about, it's kind of nice.

to learn from somebody and accelerate our pathway because somebody went ahead of us. And then if we have a better drug for those patients, then so much better. And so we believe in ZOD1, we believe in helping those patients who need it, but that's just the first of we think many. Like the pulmonary space, CNS is a target rich environment and there's no shortage of important targets that we will be going after.

All right. Thank you so much.

Last question is coming from the line of Madhu Kumar with Goldman Sachs. One moment while your line opens. Hey, thanks for taking our question. So one kind of science question and then one big picture strategy question. So the science question is what do you think is the fundamental...

what is the floor in the lung, at least in bronchial alveolar lavage for S-Rage as well. And then kind of the big picture strategy question is kind of related to Luca's question. Effectively, like what would you need to see to really reposition the company to focus on these eight, nine or 10 lung indications.

relative to the kind of current menagerie of liver directed drugs. Sure, yeah, so the floor of of S rage, maybe the second part of that question is easier. I think measuring if you assume that the valve

S rage is exclusively coming from the lung. And, you know, I mean, the floor would be close to zero that you maybe get a small amount of S rage coming from endothelium or some of the other cell types.

But really the most of the S-rage in the bowel should be coming from the type 2 alveolar epithelial cells. Now, that doesn't mean that we'd be able to get 99.9 percent knockdown. I think even with our best triggers in the liver, we were getting the manage mark-up of 99.9 percent knockdown.

95% plus knockdown. So that's just not the way RNAi tends to work. In the serum, I don't think we know the answer to that. Really, I think the best indication are the data that we've shared so far that you can achieve, you know, 90% reduction in the blood.

it's not entirely clear how much S rage in the blood is coming from extra pulmonary sources, although I think it is clear that most of it is coming from the lung. So, and that number may vary from person to person or either in between.

healthy volunteers and asthma patients. I think we're still trying to sort that out. What's the floor in S-RAGE in the blood? It was one of the reasons why we added an additional dose level to this healthy volunteer study. I think we're getting very close. You can already see 90 percent. If you look at APOC3, It's quite the short remediation,

of drugs? So look, we're not going to refocus this company to be a pulmonary company. I think there's no reason to do that. We actually like this strategy of having a broad pipeline across therapeutic areas. I think we can do it. In part, I think we can do it because we are relying on well-validated targets, and hopefully we stay disciplined.

Thanks very much. Thanks, Madhu. All right. Thank you all so much for your questions. I would now like to turn it back to Chris Anzalone for our closing remarks.

Thanks very much for joining us today and we look forward to speaking with you on June 1st.

Thanks very much for joining us today and we look forward to speaking with you on June 1st.

for joining us today and we look forward to speaking with you on June 1st.

Goodbye. All right, make sure everyone can hear me. Thank you for your participation in today's conference. This does conclude the program. You all may now disconnect if you haven't already. Uh huh.

I will be ending.

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