Voyager Therapeutics, Inc.
Q4 2020 Earnings Call Transcript

Published: 25 Feb 2021

[Operator:]

Good afternoon, and welcome to the Voyager Therapeutics Fourth Quarter and Full Year 2020 Financial Results Conference Call. At this time, all participant lines are in a listen-only mode. This call is being webcast live on the Investor and Media section of Voyager's website at voyagertherapeutics.com. This call is property of Voyager Therapeutics and recordings, reproduction or transmission of this call without the expressed written consent of Voyager Therapeutics is strictly prohibited. Please be advised that this call is being recorded. I would now like to introduce Allison Dorval, Chief Financial Officer at Voyager.

[Allison Dorval:]

Good afternoon, and thank you for joining us. With me on the call today are Andre Turenne, our President and Chief Executive Officer; and Omar Khwaja, Chief Medical Officer and Head of R&D. This afternoon after market close, we issued a press release which outlines the financial results and corporate highlights for the fourth quarter and full year 2020. The release is available at voyagertherapeutics.com. Before we begin, just a reminder that the forward-looking statements included in this call represent the company's views as of today February 25, 2021. Voyager disclaims any obligation to update these statements to reflect future events or circumstances, except as required by law. Please refer to today's press release, as well as Voyager's filings with the SEC for information concerning risk factors that could cause actual results to differ materially from those expressed or implied by such statements. With that, I will turn the call over to Andre.

[Andre Turenne:]

Great. Thank you, Allison, and good afternoon, everyone. Welcome to our Q4 earnings and corporate update call. I'll begin by walking through the highlights from 2020 and expectations for 2021. Omar will discuss our pipeline programs and plans, and Alison will close with our financial results and guidance. Once we've concluded our remarks, we'll take questions in the Q&A session. In 2020, we remain focused on moving our pipeline in our key platform activities. Among the key highlights, we made significant progress in readying our Huntington's disease program for clinical trial. Based on our preclinical data, we believe that VY-HTT01 has the potential to be best-in-class therapy for this devastating disease. We achieved highly promising results using our tracer platform to identify capsids with a much better ability to cross the blood-brain barrier and current serotypes. The implication of these advances could be profound for both, our own pipeline, and for the field of gene therapy through collaborations. We also advanced our overall pipeline and platform and provided updates on the progress through 18 presentations at scientific conferences and 4 publications and peer-reviewed journals. And finally, we made key additions to our team at the Board level, at the SAD level, and also at the senior management level. While we made very good progress, the past year wasn't without it's challenges. Our Huntington's IND was placed on clinical hold pending resolution of additional device and CMC related requests from the FDA. The Parkinson's IND was also placed on clinical hold; in that case pending follow up in the gene and clinical assessments requested by the DSMB, and a risk benefit assessments requested by the FDA. And Neuro Trend recently notified us that it intends to terminate the portion of our collaboration related to the VY-AADC program.

[Omar Khwaja:]

Thanks. Andre. I'll walk through our program updates in more detail. Today we'll start with BY zero one our wholly-owned program for hunting these, I think the disease affects approximately 40,000 people in the United States and it's the most common monogenic neurological disorder in the developed world. It's a relentlessly progressive and ultimately fatal disorder that strikes people in the prime of life. It's a disease characterized by a toxic gain of function and mutation in the Huntington gene. This leads to abnormal Huntington protein aggregates that cause neuronal cell death. For patients, their families, and care partners. It's a devastating disease that results in a progressive decline of motor skills and cognitive functions, our therapeutic candidate VY-HTT01 is an AB1 gene therapy encoding a novel microRNA designed to potentially reduce human HTT messenger RNA. We've developed our candidates and routes of administration to safely delivered a highly potent gene silencing microRNA where it can impact the Neurotechnology of the disease and the cost structures of the striatum and Cortex.

[Allison Dorval:]

Thanks so much. I'll review the highlights of our financial results and guidance. We ended 2020 with $174.8 million in cash, cash equivalents and marketable debt securities compared to $281.5 million at the end of 2019. We booked collaboration revenues of $6.5 million in Q4 $2020 and $171.1 million for the year compared to $32.7 million and $104.4 million for the same periods of 2019. The quarter-over-quarter decrease reflects the reduction of revenue related to research services and cost reimbursements from the collaborations with Neurocrine and AbbVie. Full year 2020 revenue includes $105.2 million related to the recognition of the remaining deferred revenue for AbbVie upon the collaboration termination in the summer. All research services related to the AbbVie collaborations were completed prior to the fourth quarter of 2020. Net loss was $15.9 million for Q4 2020 and net income was $36.7 million for the full year compared to net losses of $12.6 million and $43.6 million for the same periods of 2019. R&D expenses were $22.0 million for Q4 2020 and $108.8 million for the full year compared to $36.6 million and $119.7 million for the same periods of 2019. The decrease in R&D expenses was primarily related to lower external costs for services supporting our clinical and preclinical pipeline programs. G&A expenses were $8.3 million for Q4 2020 and $35.0 million for the full year compared to $9.9 million and $36.3 million for the same periods of 2019. The decrease in G&A expenses was primarily related to legal and professional fees. Turning now to our financial guidance excluding any potential financing or business development activities in 2021, we expect to end the year with cash, cash equivalents and marketable debt securities between $50 million and $60 million. Based on our current operating plan, we expect this cash balance, along with the amount that we expect to receive for reimbursement of development cost from the Neurocrine collaboration. We will continue to be sufficient to meet our needs for projected operating expenses and capital expenditures into mid-2022. We've consistently demonstrated a disciplined financial approach and strategic partnering strategy and we'll continue to evaluate opportunities to thoughtfully fund our business. We look forward to continuing our progress through multiple milestone events across our programs in 2021.

[Operator:]

Our first question comes from the line of Phil Nadeau with Cowen. Your line is open. Please go ahead.

[Phil Nadeau:]

Good afternoon. Thanks for taking my question. Just two questions from us. First on the HTT clinical hold, are you able to give us any more information about what it is, you have to accomplish and what's going to be in your complete response submitted to the FDA in the first half of the year?

[Andre Turenne:]

Yes. Thanks, Phil. For the question. Omar, over to you for this.

[Omar Khwaja:]

Yes, thanks. So the FDA's concerns are limited to CMC issues and just to emphasize that there's been concerns of the pre-clinical safety of toxicity. We had a request from the FDA related to sort of 2 pieces of data, one is information regarding devices and we're seeking that from the thirds parties that have been in both of the manufacturing or licensing of those devices. So I mean that's almost a pure information request. And then the second relates to the biocompatibility of the gene therapy product, not just with the cannula that's used to infuse the gene therapy, but also the entire fluids pathway, so the tubing and syringes, which we used as well. And so we're generating that bio compatibility data and that will be the other significant piece of the information that we will submit to the FDA in response to the clinical hold.

[Phil Nadeau:]

Yeah. That's very helpful. And then second on the restore trial. What do you hope to learn over the next few months that could better elucidate the causes or consequences of the MRI abnormalities? Are you watching the patients to see if those abnormalities cure themselves or is there other information as particularly important that you'd like to submit to the FDA?

[Andre Turenne:]

Yes. So, thanks, Phil. There are some imaging data that we're going to get from later time points for the patients that were enrolled in the Phase 1, and for the RESTORE study, there are a couple of additional clinical assessments that they're going to be gotten for those patients as well as additional PET scan, for the patients that were in the RESTORE-1. So these are the -- that's the information that Neurocrine is working and we're supporting them to collect over the coming months.

[Phil Nadeau:]

That's very helpful. Thanks for taking my questions.

[Andre Turenne:]

Thanks, Phil.

[Operator:]

Thank you. And our next question comes from the line of Laura Chico with Wedbush Securities. Your line is open. Please go ahead.

[Ken Shields:]

Hey, guys. It's Ken Shields on for Laura Chico. Thanks for taking our questions. So the first is, how are you guys prioritizing the pipeline with respect to test position or you guys still plan to develop VY-AADC independently at this point.

[Andre Turenne:]

Yeah, so we have a number of programs that we've been advancing, as we've said, we'll look to announce some of these programs, scientific meetings, and throughout our presentations in the first half of the year, at this point on the VY-AADC program, what we're focused on is getting the additional information that the DSMB has requested, and based on that, we're going to be able to make an informed portfolio decision as to the best path forward for the program. But at the moment, the key priority for us portfolio wise is on the Huntington's program, to submit the complete response, and then advancing some of the earlier stage program, including some of the novel payloads, and some of the programs that are enabled by the novel capsids we've been working on. So we'll look forward for an opportunity in the first half of the year to provide updates on the full portfolio.

[Ken Shields:]

Okay, thanks. And then I guess, just one more. I mean, you mentioned the novel capsid program, and it looks like you guys have been exploring them in non-human primates. And you're going to be sharing data later this year. But can you provide an update on maybe what the next steps or the overall strategy will be there so important? Thank you.

[Andre Turenne:]

Sure. Omar, you want to address this?

[Omar Khwaja:]

Yes, of course. So in terms of the next steps from the first series of capsids that we're getting from the first library human primates. So capsids are very promising in terms of their port performance characteristics, versus AV9, for example, those capsids are now in advanced stages of characterization, including understanding the manufacturability of the capsids, as well as identifying potentially the receptors that are involved in the parent improvements and transduction that we're seeing with these capsids. So, so there's a sort of detailed characterization from the first tranche of capsids that are emerging from the libraries. We then have a significant number of libraries from a number of different parental captured serotypes that are now going through the tracers, some are in late stages of the tracer screening, others are in earlier stages, and we're trying to advance those through the tracer process and then begin to characterize the promising capsids that emerge from those as well. The second part of the strategy will relate to deploying the tracer platform. So other captured characteristics that will be beneficial for neuro AV gene therapy, including cell specific tropisms for different cell types in the nervous system, as well as potential other fishy systems as well.

[Ken Shields:]

Okay. Thanks so much, guys.

[Operator:]

Thank you. And our next question comes from the line of Jay Olson with Oppenheimer. Your line is open. Please go ahead.

[Unidentified Analyst:]

Hi, this is Matt on for Jay. We were wondering, I guess, generally, how is the how's your view for gene therapy in Parkinson's? If that's changed at all, as a result of the clinical hold on BYD, etc. And also in general, maybe just given recent setbacks for others who have gene therapies, including Bluebird and UniQure, obviously different but what would you just say to investors who may now perceive gene therapy generally in negative light? Appreciate the color. Thank you.

[Omar Khwaja:]

Yes, I think obviously the patient safety is our top priority. And so in terms of the VY-AADC program, our goal is to really determine whether the radiological findings that we've reported, have any clinical significance, and so that's the immediate focus and understanding that. And then, as we get that information and can prepare those requests of the DSMB and also respond to the FDA requests for more detailed assessments of the risks, benefits of the product, will in parallel determine the next steps for the VY-AADC program. I think in terms of the field of view therapy, I think one of the things too, that's probably important to differentiate from, is the actual type of viral vector that's used. So an AB is generally a non-integrating virus. And that's somewhat different to lentivirus, which is a integrating virus. And so, the safety liabilities from AV are quite different from lentivirus. So, we anticipate limited returns from the challenges that may be for example, . Andre, do you want to add anything to that?

[Andre Turenne:]

I'll only add that part of our embedder with novel capsides is to be able to lower the doses to when we deliver systemically. And that may be like most that are therapeutics, where there could be some liabilities that start surfacing with the higher doses. So that's part of the benefit of getting improved capsides with better properties. It may allow for lower doses to be administered with the benefit on both the safety and the efficacy front.

[Unidentified Analyst:]

That's helpful. Thank you, and looking forward to the novel capside data.

[Operator:]

Our next question comes from the line of Jeff Hung with Morgan Stanley, your line is open. Please go ahead.

[Hannah Latimer:]

Hi, this is Hannah on for Jeff. So just two quick questions. So for Parkinson's, what protocol amendments are you thinking might be necessary, is it there for monitoring, or are there other ways to change the administration to reduce the risk of the MRI abnormalities? And then just second, any read through to the Huntington's program since the drug candidate is also injected directly into the brain? Thank you.

[Omar Khwaja:]

In terms of the protocol amendments, the most -- had most immediate protocol amendments are really focused on adding the additional imaging as well as clinical assessments that the DSMB have requested. So we're not anticipating otherwise any significant change in the routes of administration or the infusion procedure, but really, the protocols are being amended right now to implement the additional assessments has been requested. So, MRI and clinical assessment. In terms of potential breakthrough, I think it's important to understand that the two programs are quite different. And so they both utilize inter-predivtable administration, however, the vectors are difference between the two programs. So VY-AADC program, it's AB two, whereas in the Huntington's program, we're using AB one. Also, the Parkinson's program is a protein, it's an enzyme that's being replaced, that's quite different to the Huntington's where we're delivering a micro RNA to knock down the toxic species -- hundreds of species. And the third thing is that the doses are quite different between the two programs, because the micro RNA that we're using in Huntington's disease is extremely potent, and so we're using significantly lower doses. And the fourth thing is that we've got a very extensive nonhuman primate safety package, with data up to one year after dosing in non-human primates at a range of doses. And so, we believe that's also going to be important in understanding the safety profile of VUI HTT program. So we're looking forward to submitting our response to the FDA and anticipating moving forward with the clinical trial once that dose is listed.

[Operator:]

And our next question comes from the line of Brian Skorney with Baird. Your line is open.

[Unidentified Analyst:]

Jack dialing in for Brian, thank you so much for taking our questions. The first one is a bit more of a housekeeping question. If you could provide some comments about the financial implications of the Neurocrine dissolution of the partnership? And then decide question is more, quite early but the novel capsides are very interesting. And you did mention some potential indications. But we were wondering if you provide some more color as to what areas you'd be looking to move these assets into?

[Allison Dorval:]

Sure. So on the financial side, we've projected that we'll end 2021 with $50 million to $60 million of cash and cash equivalents on hand, and that we continue to have cash on hand to reach mid-2022, which is consistent with what we've said in the past. We continue to execute on a strategy with financial discipline and evaluating strategic alternatives for additional financing to run our business. At this point, I think, no real impact from the termination of Neurocrine program.

[Andre Turenne:]

And on your second question around the targets for novel capsides, the early campaigns that have read through and that are in various stages of characterization, these are for IV delivering to enable good transduction of target cells, different regions of the brain. So we have an opportunity with different capsides that have different distribution, to be able to marry the neural pathology with the distribution of a given capside. So that's the process that we have gone through, and will continue to go through as we read through additional capsides. And that's the type of information that we want to provide an update on in the first half of the year.

[Operator:]

And our next question comes from line of Aydin Huseynov with Benchmark. Your line is open. Please go ahead.

[Aydin Huseynov:]

Hi, thank you for taking my questions. The first question is about Parkinson's program. So you have 23 patients that were treated in Phase I studies so far. Did you see any MRI abnormalities in those 23 patients, and did DSMB request the MRI images from the Phase I trials as well?

[Omar Khwaja:]

Yes, so a couple of things to note. So the DSMB have requested MRI scans to be reviewed from the Phase I B patient. One of the differences between the imaging that was collected in the Phase I studies and in RESTORE one is the timing of the imaging. So in RESTORE one, there was imaging out to one year, whereas in the Phase I studies, the imaging went out six months. So one of the things that DSMB requested is to get longer term imaging from both Phase I patient, as well as a review of the imaging already collected to date. It's not really possible because it's not an apples-to-apples comparison on the imaging front, until we've had longer term imaging data from the Phase I patient.

[Aydin Huseynov:]

And for Huntington, I have another question. So you mentioned that this could be potential best-in-class therapy. Could you give us some more color, why do you think it could be the best-in-class? And do you have any specifics from the preclinical data other than the safety? Thank you.

[Andre Turenne:]

Yes, thanks for that. So what we know from our preclinical work is that we have a very potent construct. We know also that through the work we've done to optimize the delivery, that we get some good transport of the vector genomes through travel. So the route of administration that we've chosen to target the putamen and the thalamus from the preclinical work suggests that we should be able to get a broad distribution of HTT knockdown and we have the results, as Omar mentioned, from our transgenic rodent models, showing that we get some strong phenotypic rescue in these HD disease models, transgenic models, so it's the value of the evidence that we've developed to date that gives us some confidence about their profile the program. And we'll look to present additional preclinical results later this year on the program, so that we can show the longer term results that we've had in non-human primates, where we've studied the knockdown up to 12 months. We'll be able to provide the update from these longer term NHP experiments.

[Operator:]

Thank you, and actually no further questions at this time, and I would like to turn the conference back over to Andre Turenne for any further remarks.

[Andre Turenne:]

Okay. Well, thanks everyone for joining us today and we look forward to keeping you updated on our progress through the rest of the year. Thanks very much.

[Operator:]

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program and you may all disconnect. Have a great day.