Q2 2023 Freeline Therapeutics Holdings PLC Earnings Call
Speaker 1: I do.
Speaker 2: Good morning, everyone, and welcome to the Freeline Second Quarter 2023 Financial and Business Update Conference call. All participants will be in a listen-only mode. Should you need assistance? Please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask the question, you may press star in one on your touch-tone telephones. To withdraw your questions, you may press star in two. Please also note today's event is being recorded.
Speaker 3: At this time, I'd like to turn the floor over to Naomi Ayoki, the SVP of investor relations and corporate communications. Man, you may begin. Thank you, operator, and thanks to everyone for joining us on the call. Earlier today, we issued a press release and filed our quarterly report on Form 6K with our second quarter 2023 financial results and business updates. The release and 6K are both available on the investor section of our website. We'll begin the call with prepared remarks by Michael Perini, our chief executive officer, Pamela Folls, our chief medical officer, and Paul Schneider, our chief financial officer. Rose Sheridan, our SVP of research, is also on the call and will be available for Q&A. Before we begin, I would like to remind everyone that we'll be making forward-looking statements, which may include our plans and expectations with respect for our research and development pipeline, clinical trials, and financial productions, all of which involve certain assumptions and risks beyond our control that could cause our actual developments and results to differ materially from those statements. A description of these risks is in our most recent annual report on Form 20F and other periodic reports filed with the SDC. Pre-Line does not undertake any obligation to update any forward-looking statements made during this call. I'd now like to turn the call over to Michael.
Speaker 2: Thanks, Naomi, and thank you everyone for joining us today. At Freeline, our goal was to bring life-changing gene therapies to people with chronic debilitating diseases. We strive to do this by optimizing all components of our gene therapy candidates to truly unlock the great potential in this modality. We have taken important steps towards that goal, with the dosing of the first two patients ever treated with FLTA 201, our AED gene therapy for Goshade. The dosing of these patients represents a significant milestone for FLT 201, for Freeline, and most importantly, for Goshade patients who need a deserve better treatment options.
Speaker 2: As previously announced, we dose the first patient in our Galileo 1 Phase 1-2 trial on FLT-201 in late June . Following the stagger between patients that is built into the trial protocol, we dose the second patient in the trial last week, marking the completion of dosing in the first cohort.
Speaker 2: and putting a squarely on track to report initial clinical data this quarter. This initial data will focus on assessments of safety and enzyme activity in these first two patients. I will have more data on the first patient in a second. We expect to have enough data on both patients.
Speaker 2: to provide meaningful insights into safety and enzyme activity to help inform FLT201's emerging product profile as a potential best-for-class therapy. FLT201 is a highly differentiated gene therapy candidate.
Speaker 2: and provide meaningful insights into safety and enzyme activity to help inform FLT201's emerging product profile as a potential best-for-class therapy. FLT201 is a highly differentiated gene therapy candidate that delivers a novel trans gene developed by our scientists.
Speaker 2: for a rational engineer, longer action variant of G-Kids. The enzyme deficient in people with gochegas. We believe FLT-201 has the potential to be life-changed for people with gochegas, type 1, which is the most common type of gochegas with approximately 18,000 patients.
Speaker 2: in the US, UK, EU4 and Israel. Many go-shade patients continue to experience serious symptoms despite treatment with currently approved therapies. Current therapies also carry a heavy lifelong treatment curve.
Speaker 2: Earlier this month, we hosted a virtual KOL with Dr. Rina Schott, a GoShay Disease specialist at the Saltford Royal Hospital in the UK.
Speaker 2: Dr. Sharma Highlight, the unknown and met me in Goche disease, the rationale for gene therapy in Goche and the opportunity to dramatically reduce both disease and treatment burden.
Speaker 2: We believe that FLT-201 has the potential to do just that by providing better up-and-seeding current treatments for the one-time therapy. Furthermore, we believe FLT-201 is the opportunity to be first to market gene therapy for Goshet and Type 1.
Speaker 2: And we are extremely pleased with our progress and with the momentum we are seeing in the trial. Turning now to our early stage pipeline. We are building on our work, negotiating, to extend the impact of our innovation around our longer active GK's bare hands into GBA-1-linked parking spaces. As in gocheted, GBA-1 mutations lead to a deficiency of the GK's end zone. GBA-1 mutations are present in 5 to 15% of parking spaces in these patients.
Speaker 2: making them the most common genetic risk factor for developing Parkinson's. And they're associated with earlier onset and more severe disease. The early pre-critical data looked promising.
Speaker 2: and we aim to move this program forward expeditiously. The GBA-1 Link Park Institute's disease program also represents our first step toward our broader research strategy of moving gene therapy into larger disease areas. We have made tremendous progress this year. We are focused and working on programs that we believe are highly differentiating with the potential to address serious ongoing unmet needs for patients and drive significant value for shareholders.
Speaker 2: With the momentum in the Galileo 1 trial of FLT-201, initial clinical data this quarter, and the natural extension of our work into Parkinson's disease, I firmly believe that three-linus poise were both near and long-term success. I will now turn the call over to Pam to provide him with detailed overview of FLT-201. Thanks, Michael. We're very proud of the progress we're making in the Galileo 1 trial of FLT-201.
Speaker 4: Investigators and patient interests are strong. We have line-up site into multiple additional patients and we're executing against our timelines to deliver meaningful initial data this quarter and continue to efficiently advance the trial. As we look ahead to the initial clinical data readout, I want to take this opportunity to help set the stage by highlighting the rationale for gene therapy and go-shade disease, reviewing the compelling preclinical data supporting FLT 201, and explaining why we believe these initial data will provide important insights into safety and potential efficacy.
Speaker 4: Goshay disease is a rare genetic disorder characterized by a deficiency of glucose cerebrositis or G-Case, and ends unneeded to metabolize a certain type of lipid.
Speaker 4: As a result, harmful substrates, known as GV1 and LICA GV1, build up in multiple organs, including the spleen, liver, bone, and lung.
Speaker 4: And then the placement therapy is the standard of care and has made a significant impact on the disease. Despite treatment with ERT, however, many patients continue to have symptoms, particularly those associated with deeper tissues, including bone and lung.
Speaker 4: ERT also carries a heavy life-long treatment burden requiring lengthy bi-weekly infusions, impacting decisions about work, where to live, abilities of travel, and overall quality of life. Additionally, the wild-type G-Case delivered by ERT is a short half-life, meaning patients experience troughs and end-line levels in between infusions, giving harmful substrates the opportunity to build back up.
Speaker 4: potentially contributing to disease progression. As Dr. Sharma outlines during our KOL event, both success and shortcomings of ERT support the rationale for gene therapy in Goshet disease.
Speaker 4: ERT has shown the introducing G-Case into the bloodstream leads to efficacy.
Speaker 4: Support in the case for gene therapy that does the same.
Speaker 4: Unlike ERT, however, a gene therapy has the opportunity to deliver a continuous level of enzyme with a one-time infusion. In addition to potentially delivering continuous enzyme, FLT201 delivers a longer acting GK variant.
Speaker 4: Because the variant is more stable than wild type, we believe it has the potential to reach the deeper tissues that ERG poorly addresses.
Speaker 4: and to stay in tissues longer, more effectively clearing harmful substrates and improving clinical outcomes. This potential is borne out in our pre-clinical data, which show that FLT 201 induced high GK's expression at low doses. This potential is borne out in our pre-clinical data, which show that FLT 201 induced high GK's expression at low doses.
Speaker 4: Increased uptake of G-Case and disease-affected organs, including bone and lung and Goshemites compared to ERT.
Speaker 4: and reduce pathological substrates in disease-affected organs, again, including bone and lung and gochemis compared to ERT.
Speaker 4: The initial data readout this quarter will focus on safety and plasma GK levels, experience, and nearly 20 patients. We would expect meaningful increases in plasma GK levels within four to six weeks of dosing. Face of what we see preclinically with FLT201, as well as what we know from ERT.
Speaker 4: There's strong correlation between plasma G case levels and substrate clearance. And subsequently, between substrate clearance and clinical outcomes. As we look toward these initial data, we believe that a good safety profile and plasma G case above the normal level would constitute a positive early clinical signal of FLT 201's potential. With that, I'll turn the call off to Paul to review our financial results.
Speaker 4: between plasma G case levels and substrate clearance, and subsequently between substrate clearance and clinical outcomes. As we look toward these initial data, we believe that a good safety profile and plasma G case above the normal level would constitute a positive early clinical signal of FLT 201's potential. With that, I'll turn the call off to Paul to review our financial results. Thank you, Pam.
Speaker 2: In addition to our clinical and research progress, we have also made significant strides to build a leaner, more focused, and sustainable organization. We review operating costs on an ongoing basis to ensure all spending is focused on high priority activities aligned to our strategic focus.
Speaker 2: Our six month results of operations and cash flows.
Speaker 5: Reflect the actions taken to prioritize the portfolio, downsize the organization.
Speaker 5: Finalize the sale of our Germans in Sidiary. Settle the arbitration with Brahma.
Speaker 5: and execute the ADS ratio change to regain as that compliance.
Speaker 5: Even with one-time charges related to these actions, our total operating expenses decreased 34% in the first half of 2023 compared to the same period last year.
Speaker 5: With that, I'll turn to an update on our CAF position and runway guidance.
Speaker 5: All figures reported in US dollars.
Speaker 5: In the second quarter, our cash and cash equivalence totaled 38.8 million compared to 55.4 million as of March 31st, 2023. We expect our current cash and cash equivalence to enable us to fund our planned operations into the second quarter of 2024. Our R&D expenses for the six months ended June 30th, 2023, for 19.7 million.
Speaker 5: compared to $38.8 million for the same period in 2022. The 49% decrease was primarily attributable to a decrease in expenditures related to the company's deprioritized FLT180A and FLT190 programs, including CMC costs and related capacity fees and reduced headcount-related costs. Our G&A expenses for the six months ended June 30, 2023, worth $17.6 million compared to $16.3 million for the same period in 2022. The increase was primarily attributed to $2.2 million in costs associated with the sale of our German subsidiary and $2 million associated with depository fees paid in connection with the ADS ratio change. These increases were offset primarily by reduced G&A headcount-related costs. The company also recorded a gain of $2.2 million due to the mutual release and settlement agreement.
Speaker 5: compared to a net loss of $51.1 million, or $0.95 per ordinary share, in the same period in 2022. With that, I'll now turn the call over to the operator for Q&A. Ladies and gentlemen, at this time, we'll begin that question and answer session.
Speaker 6: the keys. To withdraw your questions, you may press star and 2.
Speaker 6: Again, that is Star and then one to join the question queue.
Speaker 6: Our first question today comes from Patrick, Tricchio from H.C. Wainwright. Please go ahead with your question.
Speaker 7: Good morning. This is Luis Santos for PATRICK, and thank you for taking our questions. We're curious about a little bit more detail on the baseline characteristics of the patient in the first cohort and which data.
Speaker 5: Hey, Louise. Thank you. It's Michael Perini. I appreciate the question. Maybe we'll take the second part first, and I can take that, and then I'll turn it over to Pam to talk about patient entry criteria and baseline characteristics. In terms of data expectations, as we mentioned in our release, we dose the second patient to complete the first cohort for the Galileo 1 trial that was in early August . We previously reported that we dose the first patient back in late June .
Speaker 2: So we're really excited about the opportunity to generate and share some data later this quarter on both patients. We expect to share obviously safety data for both patients and we'll have more on patient one and patient two, but also enzyme activity levels.
Speaker 2: giving our experience with the ABS-3 captured from prior programs. We do expect to see end-on-activity improvements during this, this early phase of the trial and they should be meaningful as we, as we look to see what's the future development plan for the program in terms of dosing. And ultimately, the goal was to really find the phase three dose for FLT-2-O-WARV. So we should have meaningful insights on those questions as it resulted in this first data code.
Speaker 4: So while we have an announced specifics about the individual patients, I can share the answer criteria. And so for the trial, it is for Goshet disease type one only. Males and females above the age of 18, so no upper age limit.
Speaker 4: Patients do come in on stable doses of ERT or SRT coming in, and they can have clearly have also the confirmed diagnosis of Goshai, there's multiple other inclusion exclusion, but those are the key criteria for entry.
Speaker 7: And what would you want to see, what would you like to see in a safety and tolerance really perspective in this, in this gene therapy space, it's differentiated and so are we expecting that? The doses that were required to get to that normal range of GCA is expression.
Speaker 5: for the follow-up, please. Maybe Tammy, you wanna talk a little bit about what our expectations are for data from this cohort, including a bit about the normal range for GK levels and go shape patients.
Speaker 4: Sure, of course. So first off, this is clearly predominantly a safety study. So that's going to be a major component of our assessments as we go along within this cohort and with any subsequent cohorts that we have.
Speaker 8: We.
Speaker 4: We can only, we will only be speaking to the safety of these two patients when we have the data. So, you know, we can't say about future doses, but we can talk about these here. Importantly, we'll be looking not only at general safety, like you wouldn't any clinical trial, but clearly also those that are relevant within the gene therapy space, especially with AAV.
Speaker 4: long-term safety, whether that's any change in liver enzymes, we'll be assessing all of that. And we hope to have, we'll certainly have some safety data when we present in end of Q3.
Speaker 4: In terms of sort of expectations, again, hard to say, we'll follow the data, but importantly, when we look at G-Case levels, plasma G-Case levels specifically are a marker for us for how our liver is expressing.
Speaker 4: the gene basically that we have given. So that's going to be a really important and key component of our endpoints and we'll be sharing that data. The normal range for plasma g case is about one, if you will. It depends on the different labs. It can be between one and 1.5. So we'll be looking at those levels compared to what would be normal within our labs as well. So we will be presenting all that data.
Speaker 6: Once again, if you would like to ask a question, please press star and then one.
Speaker 6: Our next question comes from Dejan Ha from Steeple, please go ahead with your question.
Speaker 4: Hello, this is Betty here on for Dagon. Thanks for taking our question. One of the key advantages of FLT201 was really the expression of in key unmet tissues like the lung and the bone marrow. Can you speak to any measurements that you're taking either maybe not even in this next follow, in this next readout, but just going forward that will kind of help...
Speaker 2: further build on preclinical findings that show that there was expression in these other tissues? Thank you. Thanks for the question. Maybe, Pam, do you want to talk a little bit about what data we'll be collecting during the trial? Obviously, it's early days in this first cohort, and I think...
Speaker 2: there is a very strong correlation between plasma G case activity and clinical outcomes.
Speaker 2: I think your questions are a bit more specific about other parameters of efficacy. And so Pam, maybe you could shed a little bit of light on that.
Speaker 4: Of course. And so, as Michael mentioned, we have strong...
Speaker 4: We strong non-climical data, demonstrating the correlation between plasma G case and LISO GB1 reduction. LISO GB1 is a toxic substrate, which has a very clear correlation to humans, to clinical outcomes.
Speaker 4: In terms of what data we will be collecting, or we are collecting in this study, not only are we collecting, if you will, the usual suspects of hemoglobin and platelets, we'll be looking at liver and spleen size, getting a sense of...
Speaker 4: expression or activity in those deeper tissues like lung and bone marrow, we have multiple assessments planned. We will be looking at pulmonary function tests. We'll be looking at chest x-rays as well. We will be assessing bone density. We'll be looking at bone MRs.
Speaker 4: MRIs. And so those are some of the key components. We'll be also assessing things such as fatigue, pain, quality of life. There's a GoShade disease severity scale that we will be assessing as well. So we'll be utilizing multiple clinical outcomes to...
Speaker 6: get some picture of efficaciousness of our product over the longer term. Okay, excellent. Thank you so much. Ladies and gentlemen, at this time, in showing no additional questions, I'd like to end today's question and answer session and turn the floor back over to Michael Parini for any closing remarks.
Speaker 5: Thanks, and thank you all for your time and participation in today's call.
Speaker 2: With the momentum we have going in Galileo I for FLT201, the exciting initial clinical data readout later this quarter on the promising research projects.
Speaker 5: that we've announced, in particular the GBA1-linked Parkinson's disease.
Speaker 5: I truly believe we are well positioned for near and long-term success.
Speaker 2: But before closing, I did want to thank the free line team for all their hard work, as well as our study investigators and the patients who are participating in our trials. Thank you all and have a good day.