Voyager Therapeutics, Inc.
Q1 2017 Earnings Call Transcript

Published: 12 May 2017

[Operator:]

Good evening and welcome to the Voyager Therapeutics First Quarter 2017 Financial and Operating Results Conference Call. At this time, all participant lines are in a listen-only mode. Following the formal remarks, we will open the call up for your questions. Please be advised that this call is being recorded at the company’s request. At this time, I would like to turn it over to Matt Osborne, Voyager’s Head of Investor Relations and Corporate Communications. Please proceed.

[Matt Osborne:]

Thank you. Good evening and welcome to the conference call. This afternoon, we issued a press release, which outlines the results for the first quarter of 2017, as well as corporate highlights. The release is available at voagertherapuetics.com. Today on our call, Dr. Steve Paul, Voyager’s President and CEO will briefly discuss the recent corporate highlights. Dr. Bernard Ravina, Voyager’s Chief Medical Officer will review the pipeline program highlights. Jane Henderson, Voyager’s Chief Financial Officer will review the first quarter financials, and then we will open up the call for your questions. Before we begin, just a reminder that the estimates in other forward looking statements included in this call represent this company’s view as of today, May 9, 2017. Voyager disclaims any obligation to update these statements to reflect future events or circumstances. Please refer to today’s earning’s 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’ll pass the call over to Steve.

[Steven Paul:]

Thank you, Matt, and good evening, everyone. Voyager continues to execute on all aspects of our business, including research and development, as well as production and manufacturing, which positions us nicely for both the near-term and long-term. As Bernard will briefly discuss, we recently for the first time presented our interim Phase 1b data, or VY-AADC01 for advanced Parkinson’s disease at major medical conferences attended by both neurologists and neurosurgeons, which represent our target position audiences for this new therapy. The new data presented at the American Academy of Neurology meeting here in Boston showed that the improvement in motor symptoms with VY-AADC01 was dose dependent and translated nicely into improvements in patients’ quality of life, which are important measures of therapeutic benefit and the value of this one and done treatment for advanced Parkinson’s disease. We believe these results further indicate that the motor symptom improvements we are seeing with VY-AADC01 are real, robust and reproducible. Now, our rich pipeline of potential gene therapy medicines continues to advance well and through careful optimization of both vector design and delivery, we remain on track to deliver three INDs over the next 24 months. During the first quarter, we were pleased to select a lead clinical candidate, VY-SOD101 for a monogenic form of ALS. And soon, we plan to announce lead clinical candidates for our Huntington’s disease and Friedreich’s ataxia programs. I want to emphasize the quality of these clinical candidates, which have been selected after a very thorough drug, or in our case, vector delivery and discovery optimization effort. Let me also emphasize that our planned advancement of VY-AADC01 into late-stage clinical trials, in the advancement of our preclinical programs towards the clinic require the capability of manufacturing GMP quality vector at scale. And we are pleased that to-date, our baculovirus/Sf9 cell production and GMP manufacturing process have resulted in both high-quality and high-yield of our vector campaigns. We are very excited with the progress we’ve made this year on our multiple programs and remain committed to investing in our core competencies, our people, our pipeline, our vector engineering platform, and our manufacturing capabilities. With that, I’ll now turn it over to Bernard, who can discuss further the progress with our Parkinson’s disease program.

[Bernard Ravina:]

Thank you, Steve, and good evening, everyone. As Steve mentioned, the interim Phase 1b results were selected for oral presentation at the American Academy of Neurology meeting in Boston and at the American Association of Neurological Surgeons meeting in Los Angeles. Feedback from attendees at these conferences confirm our interpretation of our interim Phase 1b data that has targeted one-time delivery of VY-AADC01 was well-tolerated, increased AADC enzyme activity in the putamen and allowed patients to lower their doses of oral levodopa, while also providing durable and clinically meaningful improvements in motor symptoms and quality of life. With the caveats that these data stem from an open label Phase 1b trial, the attendees were uniformly encouraged by these results. As you know, we fully intend to explore the dose range for this program and are in the final stages of dose and delivery optimization. Having successfully completed dosing in all five patients in Cohort 3 late last year, we will soon begin treating patients with a posterior trajectory that aligns more with the anatomical structure of the putamen, which could result in higher total volume of coverage of the putamen and also a higher total dose of VY-AADC01. Additional clinical trial sites have been activated and will soon begin dosing patients with this approach. Preliminary delivery data from this approach, along with data from Cohorts 1 through 3 in the third quarter of this year will provide us with sufficient information to design and begin implementing our double-blind, placebo-controlled trial later this year. As a reminder, the initial data we generated from the interim results from Cohort 2 from the Phase 1b trial are well within the goals we’ve set out to achieve and have already yielded clinically meaningful results. Replicating these results in Cohort 3 would be further validation of the approach and we are excited to continuing to optimize both delivery and dose. Our preclinical programs also continue to advance with our lead candidate, the ALS program targeting the SOD1 mutation approaching the clinic. With a single intrathecal injection, VY-SOD101 has the potential to thoroughly reduce the levels of toxic, mutant SOD1 protein in the spinal cord and slow the progression of ALS. Preclinical data in large mammals demonstrated that a single, IP administration resulted in robust knockdown of SOD1 in motor neurons. Slowing the progression of this fatal disease for the hundreds of patients in the U.S. with this mutation would be a dramatic advancement. For our Huntington’s disease and Friedreich’s ataxia programs, which are not far behind our ALS program, we’re making good progress on selecting the lead candidates. In these two programs, we aim to suppress the expression of the toxic mutant Huntington and replace missing frataxin, respectively, with a goal of slowing or halting the progression of these devastating neurological diseases with a one-time treatment. So, we are very pleased with the progress of the lead Parkinson’s program with further data expected during the third quarter of this year, and with our progress in advancing our pipeline with lead clinical candidates selections in INDs fast approaching. I will now pass the call over to Jane, who can walk you through our financials in more detail.

[Jane Pritchett Henderson:]

Thank you, Bernard. I’ll spend the next few moments reviewing the financials and guidance before moving to Q&A. Voyager reported a GAAP net loss of $16.6 million, or $0.65 per share for the first quarter ended March 31, 2017, compared to a GAAP net loss of $7.2 million, or $0.29 per share for the same period in 2016. Collaboration revenues of $1.5 million for the first quarter of 2017 compared to collaboration revenues of $4.8 million for the first quarter of 2016. Collaboration revenues reflect Sanofi Genzyme recognized payments for R&D services and primarily due to ongoing reassessments of performance periods for individual programs under the collaboration, as well as previously announced deprioritized development of VY-SMN101 for spinal muscular atrophy. R&D expenses of $14.1 million for the first quarter compared to $8.7 million for same period in 2016. The increase in R&D expenses year-over-year for the quarter were largely due to expenditures associated with the development of Voyager’s pipeline and increased personnel and facility cost to support the advancement of the pipeline programs. G&A expenses of $4.9 million for the first quarter of this year compared to $3.6 million for the same period in 2016. The increase in G&A expenses was primarily due to personnel costs to support Voyager’s growth and facility costs. Voyager ended the quarter with total cash, cash equivalents and marketable debt securities of $157.7 million and the company has no long-term debt. In terms of guidance, we continue to expect to end 2017 with total cash, cash equivalence, and marketable debt securities of approximately $90 million to $100 million. We continue to project that our existing cash, cash equivalents and marketable securities will be sufficient to fund operating expenses and cap expenditures into 2019. As a reminder, the guidance for year-end 2017 cash and projections for cash runway sufficient into 2019 does not assume that Sanofi Genzyme opts in for the ex-U.S. rights to the Parkinson’s program sometime during this year. For this particular program, as a reminder, there is no upfront cash payment from Sanofi Genzyme, should they opt in for ex-U.S. rights. The costs for this program are roughly shared between the two companies once they do opt in. The cash runway into 2019 also does not include potential additional business development activities, which we remain committed to pursuing, particularly around some of our unpartnered programs and platform capabilities. With that, we would now like to open the call up for questions. Operator?

[Operator:]

Thank you, Ma’am. [Operator Instructions] Our first question comes from the line of Phil Nadeau of Cowen and Company. Your line is open.

[Phil Nadeau:]

Good afternoon. Thanks for taking my questions and congratulations on the progress. First one on manufacturing. It appears that it took Spark about 12 months post the end of the Phase 3 to negotiate all the manufacturing QA and QC requirements with the FDA. Could you give us an update where you are in that process? Is that something that you’ve begun? Is that something that you could do in parallel with conducting the Phase 3 in order to have a pretty definitive understanding at the time that the Phase 3 concludes?

[Steven Paul:]

Yes, for the Parkinson’s – this is Steve Paul. For the Parkinson’s program, we’ve already had a pre-IND meeting with the FDA. A big part of that discussion was around the bridging strategy we have for GMP vector for our VY-AADC02 program. We feel very confident that the requirements for bridging are well laid out and well attainable from our perspective,. And so we don’t anticipate any issues. We’ve also made great progress in producing the vector at scale under GMP conditions, and that’s basically where we are right now.

[Phil Nadeau:]

And do you feel that you have a good understanding of what QA/QC assays will be necessary for the commercial…?

[Steven Paul:]

Yes, absolutely. Yes, we’ve gone through that in great detail with the agency and feel we have a very, very good understanding. I just would add that, while the vector requirements for our Parkinson’s program are somewhat less than they are for systemic administration, we also very much like the scalability of the process that we are using.

[Phil Nadeau:]

Got it. That’s helpful. And then second, on the VY-SOD101 program, what remains to be completed before moving that into a clinical development?

[Steven Paul:]

So the toxicology work is underway. This is the pre-IND safety testing that goes in for every drug candidate and that – those studies are underway. We also need to make sure that we can produce that vector again, GMP quality vector, so we’ve got both toxicology work and some manufacturing process work. Again, we are feeling pretty good about where we are in those programs, and so in that program and with respect to both toxicology and manufacturing.

[Phil Nadeau:]

Great. And then one last question for me. It sounds like from your prepared remarks the decision of which dose and surgery trajectory to use in the Phase 3 trial will be based on kind of full or long-term data – intermediate to long-term data from the first three cohorts of the study and then some initial data from the posterior trial, is that correct? And if so, how would you, I guess, how do you assess the chances of the posterior volume and larger vector dose introducing side effects that weren’t seen at the lower – essentially lower doses tested in the first phase – in the first three cohorts?

[Steven Paul:]

Yes. Well, of course, that’s why we are doing the study. We feel pretty confident that we will find the adequate dose among the three cohorts. We’re already seeing what we believe are very encouraging data from Cohort 2. We’ll see what happens with Cohort 3, which as you know, is a dose about three times the dose used in Cohort 2. The posterior trajectory has been used before for other surgical procedures. And so, we are pretty confident, we won’t see any significant issues with that. But, of course, we are going to dose a few patients to see what we see with respect to the clinical response to the vector. So, we’re cautiously optimistic that posterior trajectory will work. But, as I’ve said earlier, we feel very good about where we are with respect to the top of the head trajectory that we’ve already have more or less perfected we believe.

[Phil Nadeau:]

Great. Thanks for taking my questions.

[Operator:]

Thank you. Our next question comes from Jim Birchenough of Wells Fargo. Your question please.

[Jim Birchenough:]

Yes. Hi, guys, congrats on all the progress as well. Can you say for the posterior trajectory, what dose level you are using in that next dose cohort?

[Bernard Ravina:]

Yes. We’ll go up to the same concentration that was used in Cohort 3. We don’t believe there’s any reason to go to higher concentrations. So if anything it will be incrementally higher dose than Cohort 3 in the ongoing trial. And as Steve said, there’s experience with posterior trajectory. And, I think people can kind of simplistically think about it just a different angle to do what we have done successfully with the top of the head or the transfrontal trajectory. So essentially, we are looking for a somewhat more efficient surgery potentially with a single injection into the putamen and perhaps a little bit more coverage.

[Steven Paul:]

And Jim, the volume will be increased in that posterior trajectory up to 1.8 ML, so about double what we’re doing now in Cohort 2, which, as you know, and Cohort 3 and, as you know, that will hopefully increase the volume coverage from the 42% that we’ve seen in Cohort 3 to somewhere north of that. So we’re anticipating a simpler procedure, potentially as well as even better coverage. And that’s the goal of that posterior trajectory study.

[Jim Birchenough:]

And Steve, at the point where you expect to start a Phase 3 study, how many sites will have had experience with the therapy? And do you think that will be sufficient to match what you’ll need in a Phase 3?

[Steven Paul:]

And so, we’ll have a least four sites in the US, the ones that are participating in this posterior trajectory study that have done the surgery, and we plan to add sites for the randomized studies. We’ll go up to eight surgical sites, give or take, and we think that will be sufficient bandwidth to conduct the randomized trials.

[Jim Birchenough:]

And then just following up on Phil’s question on manufacturing. Can you make any general comments about cost of goods at the gene and cell therapy meeting today? There was one gene therapy manufacturer that threw cold water on the margins they were getting form their process. But do expect to have pharmaceutical, or biotech type margins? Can you just maybe comment in general?

[Bernard Ravina:]

I anticipate, particularly for the Parkinson’s program Jim, which as you know, is intraparenchymal in the brain relatively small volume. Think of it as a similar volume as to the anterior chamber of the eye, not very much. I consider that the cost of goods to be quite reasonable here, because, we’ve already calculated a number of runs that we would have in a – let’s say a 200 liter bioreactor as being quite modest. So we don’t think that’s going to be an issue for us at all. I think the challenge there becomes more when you go after systemic IV administration, where you are administering possibly two orders of magnitude more vector than we are administering, okay? So I think we are going to be in really good shape for the Parkinson’s program.

[Jim Birchenough:]

And just a final question, just on the ongoing dose Cohort 3, obviously, we’ll get the full data in the third quarter. But have there been safety interims or safety looks? And can you provide reassurance that there’s no new issues that have come up with that higher concentration?

[Steven Paul:]

Yes Jim, that’s right, we’ll have the readout in Q3, that will be the six month from Cohort 3 and we’ll also provide updates on Cohorts 1 and 2 at that point. There have been no new safety signals, and if there were something material, we would let you know.

[Bernard Ravina:]

Yes. We’ve been pretty encouraged, Jim, about the safety. And as you know, the actual procedure the surgeons are getting better and the actual variability between patients in Cohort 3 is really very minimal, quite impressive in my view.

[Jim Birchenough:]

Great. Thanks for taking the questions.

[Operator:]

Thank you. Our next question comes from Christopher Marai of Nomura Instinet. Your question please.

[Christopher Marai:]

Hi, thanks. I’ve got a few. So just to touch upon the last point that you made the variability across patients. When do you expect that we are going to see the patient by patient data from whether it’s across the cohorts or Cohort 3 and the later ones?

[Steven Paul:]

Yes.

[Bernard Ravina:]

As I mentioned to Jim, we’ll give the update Cohort 3 six month Q3 updates on the first two cohorts. We’ll take a look when we put those data out what the best way to present it is.

[Steven Paul:]

Yes, yes. It’s a good question and a great point and…

[Jim Birchenough:]

Right.

[Bernard Ravina:]

Yes. And as we’ve presented the [Multiple Speakers]

[Jim Birchenough:]

…is the question?

[Bernard Ravina:]

Yes.

[Jim Birchenough:]

Right.

[Bernard Ravina:]

As we’ve presented the first [indiscernible] in our previous presentations, we have all the – we have error bars, whether it’s confidence intervals to standard errors and everything.

[Steven Paul:]

Yes.

[Bernard Ravina:]

So you get a good sense of the variability from that.

[Steven Paul:]

Yes.

[Bernard Ravina:]

We’ll make sure that’s…

[Jim Birchenough:]

[Multiple Speakers]

[Bernard Ravina:]

No, no, but we’ll make sure that’s – that the variability from the standard errors or standard error, the means are apparent when we present the data.

[Jim Birchenough:]

Okay. I was just thinking about concordance across different endpoints for individual patients. It would be nice to see patient by patient data in terms of the various measurements. Are you planning on presenting that?

[Bernard Ravina:]

Point well taken, we’ll look at what…

[Steven Paul:]

Yes, I mean, we could, you will see – what I was referring to by the way was not so much variability on the clinical outcome measures. I was talking more about variability on delivery. But both of those are reasonable things to discuss, yes.

[Bernard Ravina:]

And we’ll point out the overall point that you are getting at is what’s the internal consistency of the data, and overall that’s been very good.

[Steven Paul:]

Yes.

[Bernard Ravina:]

They are not presented at patient by patient, but you see very consistent trends in all the endpoints across the two cohorts so far and across time.

[Jim Birchenough:]

Okay. Well, that’s helpful. And then maybe one on manufacturing to touch back on that earlier question. When you think of going into the Phase 3, are you looking at 12-week sort of bridging type scenario going from this Phase 1 batch to the new bathes, or how should we think about that study? And then secondarily, will you be able to use, I guess, this next manufacturing process to help bring forward the SOD1 program and the next programs into, I guess, there –let’s call it, Phase 3 studies, the point being, would you be able to do SOD1 and may perhaps get away with one study and not have to worry about this manufacturing change again?

[Steven Paul:]

Yes. So just on bridging, let me be clear. So for the Parkinson’s program, the bridging requirement, this has been all established by our pre-IND meeting on the new vector that we are making, won’t require any clinical bridging at all. That’s going to require some preclinical assessment of the quality of the vector, which we specified, as I said in my response to the earlier question, that’s all been laid out what that has to look like. But also a toxicology study, which will be done in rats and completed. And all of that will be part of that package, but it won’t require any clinical bridging at this point. And similarly we hope to maintain that platform. The reason we are doing a bridging study, as you probably know, is that the material that we are currently using in the clinic was made in 293 cells using triple transient transfection and is made with a different process. But what we need to do is show that this new process or the process that we are using, which involves baculovirus and Sf9 cells produces comparable vector. And that’s all been laid out and discussed with the FDA.

[Jim Birchenough:]

Okay. Great, thanks. And then just maybe one last one on that procedure. How is the different trajectory perhaps impacting procedure times, maybe remind us just the total procedure time for these patients? Obviously it’s a little bit important, given potential CM controlled Phase 3?. And that’s my last question. Thank you so much.

[Bernard Ravina:]

Yes, so we are screening for the posterior trajectory study now. So we’ll get a better sense once we have a few cases in. And the efficiency of the surgery and reduction in time would come from the potential to just have a single cannula trajectory rather than two that we’ve generally done per putamen for the transfrontal or top of the head approach. So we will – as soon as we have a few cases, we will update you on that.

[Steven Paul:]

Yes. So the new trajectory, just to be clear, aligns the injection trajectory with the anatomy of the putamen. And as Bernard said, theoretically could allow just a single pass, which will cut down the surgical time considerably, but also give us the opportunity of filling up even a greater amount of the putamen.

[Jim Birchenough:]

Okay, great. And sorry, what’s that total procedure time that you’d anticipate or estimate?

[Steven Paul:]

Well, we don’t know yet. We really want to get a few procedures under our belt and that will really help us know. And of course, these procedure times, as you probably know, they start out a little bit on the long side as the surgeons are learning and just starting and then they get shorter and shorter as time goes on. Same thing of course happened with deep brain stimulation or DBS.

[Jim Birchenough:]

Got it. Okay, thank you.

[Steven Paul:]

Thank you.

[Operator:]

Thank you. [Operator Instructions] Our next question comes from Katherine Breedis of Stifel. Your line is open.

[Katherine Breedis:]

Great. Thank you for taking my questions. With the data readouts for Cohort 3 and the posterior delivery study coming in the third quarter, are you still anticipating that you will be on track to potentially start a pivotal study in the fourth quarter of this year?

[Bernard Ravina:]

Yes, we are, yes.

[Katherine Breedis:]

Okay.

[Bernard Ravina:]

So the key information we need concentration, we’ll get from the Cohort 3 and then a few cases of the posterior delivery. Again, it’s not that different a surgery, it’s simply a different angle of entry to do what we’ve done in the first study with 15 subjects, 30 putamens. And so we’ll have the data about that trajectory, how much volume we could infuse and the increased concentration from Cohort 3 and we believe that will be sufficient to select a dose. And the rest of the elements of the design are things that are actively under discussion right now.

[Steven Paul:]

Yes. A lot of work, Katherine, is already ongoing and so it’s just a matter of kind of plugging in the trajectory and dose and we are ready to go with that point.

[Katherine Breedis:]

That’s great. I understand that the posterior delivery technique is used often in epilepsy surgeries. So does that help in terms of the surgeons at Emery in Ohio State coming up to speed more quickly? And do you have any anecdotal comments on the patient recruitment efforts at those centers for the posterior delivery study?

[Bernard Ravina:]

You are absolutely right that we’ve selected sites that are familiar with that trajectory, especially Emery and the Ohio site has done a tremendous number of infusions for different purposes, including brain tumors, so they’re very experienced. We are really just getting that posterior delivery study going. We are screening right now. So we’ll have further information when we have that Q3 readout and be able to comment further about times and how the surgeries went overall.

[Katherine Breedis:]

Excellent. Thank you for taking my questions.

[Steven Paul:]

Thank you.

[Bernard Ravina:]

Thank you.

[Operator:]

Thank you. If there are no questions in queue, I would like to turn the call back over to Dr. Paul for any closing remarks. Sir?

[Steven Paul:]

Okay. Well, thank you. That concludes our call. We want to thank everybody for attending and for your questions this evening. We look forward to updating you on our progress in the near future. Thank you so much.

[Operator:]

Thank you, sir, and thank you, ladies and gentlemen. That does concludes your program. You may disconnect your lines at this time. Have a wonderful day.