Voyager Therapeutics, Inc.
Q1 2016 Earnings Call Transcript

Published: 12 May 2016

[Operator:]

Good morning and welcome to the Voyager Therapeutics First Quarter 2016 Financial and Operating Results Conference Call. At this time all participants are in a listen-only mode. Following the formal remarks we will open the call up for your questions. Please be advised 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, operator. Good morning and welcome to the Voyager Therapeutics first quarter 2016 financial and operating results conference call. This morning we issued a press release which outlined these results and provides the business update that we plan to discuss today. The release is available at www.voyagertherapeutics.com. Today on our call, Steve Paul, Voyager’s President and CEO will discuss the business and product program highlights; Jeff Goater, Voyager’s CFO will review the financial results and then we will open up the call for your questions. Bernard Ravina, VP of Clinical Development is also on the call and will be available for Q&A. Before we begin just a reminder that the estimates and other forward-looking statements included in this call represents the company's view as of today May 12, 2016. Voyager disclaims any obligation to update these statements to reflect future events or circumstances. Please refer to today's earnings 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 let me pass the call over to the Steve.

[Steven Paul:]

Thank you, Matt and good morning everyone. Thank you for joining us today. For those of you who may not be aware this is Matt’s first week here at Voyager. We are very pleased to have him join the team and all of you should be anticipating hearing from Matt soon. As you can see from our update this morning and recent R&D day we are off to a strong start in 2016. Our lead program VYAADC01 for Advanced Parkinson’s disease remains on track to deliver key milestones this year. We announced today that we have completed enrollment of the second cohort of the ongoing Phase 1b dose-ranging safety trial and we have also enrolled our first patient at the recently initiated second clinical trial site. We continue to anticipate announcing top line human proof-of-concept results from the ongoing Phase 1b trial in the fourth quarter, which will include six month follow-up on safety, efficacy and bio-marker data from the first 10 patients cohorts one and two enrolled in the trial. As an interim update on June 22 we will be presenting surgical coverage data from cohorts one and two at the 20th International Congress of Parkinson's disease and Movement Disorders being held in Berlin, Germany. We also continue to make good progress advancing and expanding our pipeline. And at our recent R&D Day in New York City we announced two new preclinical programs focused on the molecular targets tau and Nav1.7 which have the potential to be important treatments for several severe CNS disorders including frontotemporal dementia and Alzheimer's disease as well as severe chronic pain respectively. The company remains in a strong financial position with $214 million of cash, cash equivalents and marketable securities as of the end of March which we believe will be sufficient to take our operations into 2019. We are very excited to now have seven AAV gene therapy programs in our development pipeline highlighting the leverage we are able to achieve via our product engine. We believe strongly that being able to effectively deliver our Novel AAV Gene Therapies to the appropriate target region of the body, optimizing the design of our gene therapy vectors and the ability to manufacture our Novel Gene Therapies at high quality and at scale are critical success factors, both for our current and our future programs. In addition to the three programs I mentioned earlier we also are working on the potential treatment of a monogenic form of ALS, Friedreich’s ataxia, Huntington’s disease and spinal muscular atrophy. We are targeting an IND filing for our ALS program VY-SOD-101 in late 2017 which we anticipate will be our next clinical program. Now let me take a few minutes to again review our most advanced clinical candidate VY-AADC01 which is under development for the treatment of patients with Advanced Parkinson's disease. Parkinson's disease affects approximately 700,000 patients in the U.S. and seven to ten million patients worldwide. While most patient symptoms are reasonably well controlled by medications, most notably Ldopa or levodopa for three to five years post diagnosis, patients that have the disease long enough will often reach a point where their motor symptoms are no longer adequately controlled by levodopa. It is estimated that up to 15% of the prevalent population with Parkinson's disease or approximately 100,000 patients in the U.S. have motor fluctuations that are not adequately controlled with levodopa or other existing oral therapies. These patients with advanced Parkinson's disease currently have very limited therapeutic options and could be candidates for our gene therapy product. With our gene therapy approach we are seeking to restore Parkinson's disease patients' responsiveness to levodopa or to literally turn back to clock on their disease by delivering the gene for the critical enzyme AADC. This is the enzyme that converts Ldopa or levodopa to dopamine and only in a specific region of the brain it controls the motor symptoms of Parkinson's disease. Our Parkinson's disease program has a combination of biomarkers that are relatively unique in the gene therapy field. First, we are delivering our gene therapy vector using a real time intraoperative MRI guided system that allows the neurosurgeon to visualize precisely where the vector's being infused and importantly we can also quantify and optimize how much of the target tissue, in this case the containment [ph] is being exposed to the therapy. Second, we are using positron emission tomography or PET and a radio tracer called fluorodopa that allows us to literally measure the activity of the gene product, the enzyme AADC that we’re delivering. We measure the activity of AADC at baseline prior to gene delivery and again six months after the patients are treated to confirm adequate delivery and expression of the therapeutic gene. Finally, we using an intravenous Ldopa Challenge Test which allows us to objectively measure patients' increased sensitivity to Ldopa six months after treatment compared to their baseline. Now in addition to the biomarkers I just described we’re of course also evaluating the severity and change in the patient’s motor symptoms based upon clinical end points that have historically been used to gain regulatory approval of Parkinson’s disease medications, such as improvement in the patients self-rated off time, using a diary and Unified Parkinson’s disease Rating Scale or UPDRS administered by a clinical research neurologist. As I mentioned earlier, enrollment in our ongoing Phase 1b trial remains on track. In June, we will provide an interim clinical update, specifically the surgical coverage data of the putamen from the first ten patients enrolled in this trial. And we remain on track to report top line human proof-of-concept data in the fourth quarter of this year. Earlier this year, we initiated GMP production activities for our Parkinson’s disease vector in collaboration with MassBiologics an FDA license manufacturer affiliated with the University of Massachusetts Medical School. The collaboration is utilizing MassBiologics new 30,000 square foot manufacturing facility in Fall River, Massachusetts. Now I will just briefly highlight our two newest preclinical programs announced at our R&D Day last month. VY-TAU01 is an AAV vectorized version of an anti-tau monoclonal antibody. Pathological and aggregated tau protein is believed to play a key role in diseases such as Frontotemporal Dementia caused by mutations in the tau gene as well as in Alzheimer’s disease. We are developing VY-TAU01 for direct delivery to the CNS. Based on preclinical data we believe that this approach could achieve significantly higher levels of the therapeutic anti-tau antibody in the CNS when compared to systemic administration or traditional passive immunization. In addition, such an approach could achieve durable clinical benefits following only a single administration of the vector. VY-NAV01 is targeting the knockdown of Nav1.7, a sodium ion channel subunit that is required for pain transmission. We believe that an AAV gene therapy approach targeting the knockdown of Nav1.7 and specifically in sensory neurons could be an effective treatment for certain forms of severe chronic pain. In addition, such an approach could achieve a durable clinical benefit following a single administration of the therapy and avoid the addictive potential associated with many current drugs used to treat severe chronic pain. VY-NAV01 leverages our extensive experience designing novel microRNA knockdown cassettes and delivering them, in this case to sensory neurons using AAV. This is an approach that we are also using for our ALS and Huntington’s disease programs. And with that, I will pass the call over to Jeff to walk through our financials in more detail.

[Jeff Goater:]

Thank you, Steve. In this morning’s press release we reported cash, cash equivalents and marketable securities totaling approximately $214 million, as of March 31, 2016, compared to approximately $224 million on December 31, 2015. Our GAAP net loss for the first quarter of 2016 was $7.2 million or $0.29 per share, compared to a net loss of $15.8 million or $15.79 per share, for the same period in 2015. Our R&D expenses for the first quarter of 2016 were approximately $8.7 million compared to $5.5 million for the same period in 2015. The increase was largely due to expenditures in advancing development of our pipeline and product engine, including increased R&D personnel costs associated with the growth of the company. Our G&A expenses were $3.6 million for the first quarter of 2016 compared to $1.9 million for the same period in 2015. The increase was largely due to expenditures in G&A personnel, associated with the growth of the company and expenses related to operating as a public company. This morning, we are reiterating the financial guidance that we initially provided on March 17, 2016. Based on our current operating plans, we expect to end 2016 with cash, cash equivalents and marketable securities of approximately $160 million and we project that our existing cash, cash equivalents and marketable securities will be sufficient to fund operating expenses and capital expenditure requirements in to 2019. Now before I turn the call over to the operator for your questions, I do just want to take a moment to briefly highlight our upcoming Investor events mentioned in our press release. All of these events are being held in New York City. On May 17, we will present at the Piper Jaffray GenomeRx Symposium; on May 23, we will present at the UBS Global Healthcare Conference; and on June 7 we will present at the Jefferies Healthcare Conference. With that, we would now like to open up the call for questions. Operator?

[Operator:]

Thank you. [Operator Instructions] And our first question comes from the line of Phil Nadeau of Cowen & Company. Your line is now open.

[Phil Nadeau:]

Good morning. Thanks for taking my questions and congratulations on the progress. First, just a couple on the Phase 1, 2, what are your plans for future enrollment of patients? Is there going to be a cohort three and how will cohort three differ from cohorts one and two if there is going to be one?

[Steven Paul:]

Yes, Phil thanks for that question. And indeed there will be a cohort three. We do plan to continue to dose patients. While we're seeing encouraging data in cohort two clinical data, we must be mindful of a couple of facts. One is that this is still a Phase 1 safety dose ranging safety study. And number two these are uncontrolled trials. So we don't have a sham group in this trial. So we want to be absolutely sure before we go to a pivotal trial which will be a sham controlled trial that we've optimized the dose. Now the current dose may be optimal. But we have flexibility with the current formulation to actually increase the dose at least fivefold by increasing the concentration of the vector that we're administering. So assuming we get a green light from the Data Safety and Monitoring board in late June. We will continue a cohort three most likely at a fivefold higher dose as we -- or at least threefold higher dose for sure as we go up. And again, exactly what the results are from the five patients in this cohort two, but we want to continue to explore higher dose given the safety profile that we've seen so far.

[Phil Nadeau:]

Okay, that's great. And just so I'm clear that vector concentration will be increased but the coverage of the curtailment will probably remained the same in cohort three versus cohort two?

[Steven Paul:]

That’s right. As you know we increased the volume. We've doubled the volume to 900 microliters in cohort two. We're getting pretty good coverage right now. And so we don't think we need to increase the volume any further. We'd like to explore a higher concentration which will increase the transduction and increase the delivery of AADC.

[Phil Nadeau:]

That's great. And second on the PET scans, sounds like from your prepared remarks, there is just two PET scans being taken, one at baseline and then one at six months. Is that correct or do you have intermediate PET scans where maybe you can get some idea of the return toxin [ph] efficiency?

[Steven Paul:]

No, just two PET scans. This is a radio tracer, it's an isotope. So we want to minimize the amount of radiation patients get. And we think that this six time point, pre-six months post-surgery is long enough in terms of optimizing expression to see the signal that we're going to see. And as you recall in the earlier studies done by Professor Bankowitz [ph], he actually did PET scans every year for up to four years in patients and saw a very durable response. No diminution in the PET signal post-surgery versus pre-surgery. So we're encouraged by this and we may in fact follow patients subsequently but for the purposes of the readout later this year it will be the six month point in all 10 of the patients.

[Phil Nadeau:]

Got it. And then last question on VY-SOD01 what type of optimization are you doing before the IND? Do you have a lead candidate now or are you still in the processes of selecting one?

[Steven Paul:]

Yeah, we have several potential lead candidates now and we’ve narrowed the capsen [ph] that we’re going to use and we’d like to see the capsen that gives us -- the vector that gives us the maximum silencing of SOD1 in the most motor neurons in monkeys. And that’s kind of where we’re at right now. So before we pull the trigger and say this is our candidate that we would move to the pre-IND safety testing we want to make sure it's optimized at least in our hands in non-human primates.

[Phil Nadeau:]

Got it. Thanks for taking my questions and congratulations again on the progress.

[Steven Paul:]

Thank you, Phil.

[Operator:]

Thank you [Operator Instructions] And I'm showing no further questions at this time. I’d like to turn the conference back over to Mr. Paul for any closing remarks.

[Steven Paul:]

In closing we are extremely excited about the transformative potential of AAV gene therapy and we are highly motivated to develop our novel therapies for patients suffering from a variety of disabling and fatal CNS diseases. Thanks again for your time this morning and we look forward to updating you on our progress again soon.

[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 everyone.