Wave Life Sciences Ltd.
Q4 2022 Earnings Call Transcript

Published: 22 Mar 2023

[Operator:]

Good morning, and welcome to the Wave Life Sciences Fourth Quarter and Full Year 2022 Financial Results Conference Call. At this time, all participants are in a listen-only mode. As a reminder, this call is being recorded and webcast. I'll now turn the call over to [Kia Telepore] (ph), Wave's IR Consultant. Please go ahead.

[Unidentified Company Representative:]

Thank you, operator. Good morning, and thank you for joining us today to discuss our recent business progress and review Wave's fourth quarter and full year 2022 financial results. Joining me today are Dr. Paul Bolno, President and Chief Executive Officer; Anne-Marie Li-Kwai-Cheung, Chief Development Officer; Kyle Moran, Chief Financial Officer; and Dr. Chandra Vargeese, Chief Technology Officer. The press release issued this morning and the slide presentation to accompany this webcast are available in the Investors Section of our website at www.wavelifesciences.com. Before we begin, I would like to remind you that discussions during this conference call will include forward-looking statements. These statements are subject to several risks and uncertainties that could cause our actual results to differ materially from those described in these forward-looking statements. The factors that could cause actual results to differ are discussed in the press release issued today, and in our SEC filings. We undertake no obligation to update or revise any forward-looking statements for any reason. Now, I'd like to turn the call over to Paul.

[Paul Bolno:]

Thanks, Kia. Good morning and thank you all for joining us. I'm excited to begin today's call with a review of recent business highlights and how they position Wave in 2023 and beyond. I'll then turn the call over to Anne-Marie to discuss our clinical development update with a focus on DMD. Kyle will discuss our financial results and I will end with a summary of upcoming catalysts expected in 2023. We'll then proceed to the Q&A portion of the call where Chandra will also be available. At Wave, we believe the power of our PRISM platform and the potential of our current and future pipeline has positioned us to become the leading RNA medicines company. PRISM is the most versatile discovery and drug development platform in the industry. It offers three distinct RNA targeting modalities

[Anne-Marie Li-Kwai-Cheung:]

Thanks, Paul. In 2022, we delivered key data sets for each of our lead programs, including positive clinical data from our DMD, HD, and ALS/FTD trials. I will review each of these programs today beginning with WVE-N531 for DMD and the next steps we are taking to evaluate dystrophin. Next, WVE-006 shown here in green is rapidly approaching the clinic. We believe 006 may also be best-in-class in the treatment of AATD and our partner GSK is well positioned to maximize the opportunity of 006 around the world. Finally, we continue to advance our CNS silencing program shown on the right of this slide in dark blue under our Takeda collaboration. WVE-003, which is the first allele selective candidate for Huntington’s disease and WVE-004 for C9orf72 associated ALS/FTD. In 2022, we demonstrated target engagement in the CNS for both programs after patients receive a single dose of 003 or 004 and we're working towards the next stage [indiscernible]. Starting with WVE-N531, in December 2022, we achieved proof-of-concept for N531 [indiscernible]with DMD amenable to exon 53 skipping. This study was designed to rapidly evaluate whether N531 as a pharmacological profile, but also comes the limitations of our first generation DMD candidate dystrophin with muscle concentration and safety and tolerability as primary endpoint. Three ambulatory boys participated in this open-label, intra-patient dose escalation clinical trial. The boys received single escalating doses of one, three, six and 10 mg/kg of N531. In the multidose portion of studies, the same boys received three doses of 10 mg/kg every other week. A biopsy was taken after three bi weekly doses of treatment. We were excited to observe the high muscle concentration of N531, which exceeded our expectations and even more excited to see 53 exon skipping at this time point. It's particularly notable that all three boys in our study had similar levels of exon skipping despite having different underlying mutations. Additionally, you may recall that our non-human primate date showed muscle concentrations of N531 in the heart and diaphragm that were higher than those in the skeletal muscle, suggesting these results from the deltoid and bicep may be underrepresenting what is happening in other critical muscle tissues impacted by DMD. We also observed a plasma half-life of 25 days which is a tremendous improvement over [Super Destin’s] (ph) plasma half-life of less than 24 hours. N531 also appeared safe and well tolerated. Treatment related adverse events were generally mild and there were no treatment related SAEs. These data are consistent with our preclinical observations, thus our next generation PN chemistry is increasing muscle exposure and target engagement without needing peptide or antibody conjugate. It's exciting to see this level of exon skipping after just three doses, especially since skipping may increase with longer dosing. We also expect dystrophin protein to accumulate with continued exposure and dosing. These data strongly support the continued development of N531 to assess dystrophin. Later today at the MDA Clinical and Scientific Conference, Wave's Dr. Mike Panzara will be sharing these data with clinicians, as well as the next steps for N531, but I'll also review here in a moment. Since the data in December, we have been discussing potential next steps for N531 with researchers and key opinion leaders. Each of these discussions was the right time point to assess dystrophin, given its unique biology and the fact that meaningful dystrophin production does take time. On this slide, we provide background as to why that is as explained in the scientific literature. In boys with DMD, nonsense-mediated decay associated with the mutation and the general lack of healthy cellular environment destabilizes the dystrophin transcripts, limiting their low numbers to nearly undetectable levels. In this stage, full length transcript were rare and most transcripts that are produced are short and stable and do not support dystrophin production. By promoting exon skipping in [indiscernible] transcripts, treatments should start producing very low levels of dystrophin. Dystrophin protein has an exceptionally long half-life, even low levels will start to create a healthier cellular environment. This healthier environment in turn improves the cells ability to support transcriptional initiation and increases the number of full-life transcripts available to skin. Then as the number of transcripts rise, dystrophin protein should also start to accumulate at more meaningful levels. For this process to work, persistent exposure in the right compartment of the cells is crucial for creating a feedback loop and rebuilding the [indiscernible] system. The data shown high concentrations of N531 in muscle and importantly in the nucleus as well as at 25 day half-life are highly encouraging in this regard. Over time and with consistent exposure to high levels of exon skipping produced by N531, we expect this feedback loop to support cumulative increases in the expression of dystrophin protein. Dystrophin takes time to accumulate and this has been seen by others. However, with this level of exon skipping, we expect to see more dystrophin with longer treatment. So, I'm excited to share the next step for N531. We plan to initiate Part B of the Wave N531 study with the goal of enrolling up to 10 boys with DMD. This will be a Phase 2 open-label study with doses of 10 mg/kg administered every other week. And we plan to assess dystrophin protein after 24 weeks and 48 weeks of treatment. The primary endpoint will be dystrophin protein restoration and we will also assess pharmacokinetics functional endpoints such as NSAA and others, as well as safety and tolerability. If the data were supportive, we will discuss regulatory pathways for approval with regulators. We expect to initiate dosing in Part B in 2023 and expect dystrophin data in 2024 and we plan to share more updates on timing once the cohort is underway. Moving on to Wave-006, which is our first AIMer development candidate. 006 is a first-in-class investigational treatment of AATD which has the potential to comprehensively address both liver and lung manifestations of this [indiscernible] disease. 006 was designed to correct mutant SERPINA1 transcripts, restoring circulating wild type M-AAT protein. Our preclinical data has demonstrated a significant seven fold change in AAT protein, which is well over 11 micromolar. Importantly, we also demonstrated that restored AAT protein is wild type and that it is functional as demonstrated by the neutrophil elastase inhibition. We see the transition of 06 to the clinic -- 006 to the clinic as an important catalyst for Wave and for the field. Success in the first in-patient study would provide proof-of-concept for 006 in AATD and for RNA editing broadly. We will measure success in this study as restoration of functional M-AAT protein. Additionally, while 006 uses a new therapeutic modality, we have the benefit of following a well understood path laid out by regulators. There are now multiple programs approved or in late stage development that use GalNAc. And additionally, regulators are well versed in the use of oligonucleotides to recruit endogenous cellular machinery, like slicing machinery in DMD and Ago2 for RNAi. IND enabling studies for 006 are nearing completion and we remain on track of file CTAs in the second half of 2023. We have also started to work with GSK to map out our development pathway for 006. And we're looking forward to sharing more about the first in human study later this year. I'll touch briefly on the current status of WVE-003, the first allele-selective candidate for HD and WVE-004, our variant selective candidate for C9orf72 associated ALS/FTD. In September 2022, Wave became the first company to demonstrate the feasibility of selectively silencing a mutant allele with our single dose data for 003. We remain convinced of the importance of preserving as much wild type protein as possible in the [indiscernible] in Huntington lowering. And 003 remains the only allele selective approach in clinical development for HD. This could be particularly important in pre and early manifestation. We've always believed that we needed to achieve between 20% to 30% lowering of needs in Huntington to impact disease progression. So it is encouraging that our single dose 30 and 60 milligram data suggests we may already be within this range. Based on these data, we adopted to select HD trial to expand the single dose cohort to better define the treatment effect and decide on optimal doses, the multidose phase of the study. We expect to share biomarker and safety data from these cohorts in the first half 2023. In April 2022, our FOCUS-C9 study of WVE-004 became our first to show successful translation of our preclinical data in the clinic. For the remainder of 2022, we have completed the single dose cohort, made progress on the multidose cohort and initiated the open label extension trial, also in consultation with the independent data safety monitoring committee. We completed enrollment of the multidose cohort shown here on the slide, which keeps us on track for data in the first half of 2023. This will be a substantial data set consisting of several single and multidose cohorts, which will inform our next step, including discussions with Takeda. In summary, we have an exciting year ahead with multiple important clinical catalysts. These programs all underscores the promising breadth of our best-in-class multimodal RNA medicines platform, as well as our commitment to advance first or best-in-class therapies for patients. I will now turn the call over to Kyle Moran, our CFO for our financial update.

[Kyle Moran:]

Thanks, Anne-Marie. Turning to the financial. Our net loss for the three months ended December 31, 2022 was $43.7 million as compared to $34.8 million in the same period in 2021. The increase in net loss year-over-year was primarily driven by increased spend on our clinical program, as well as increased compensation-related expenses. We recognized approximately $1.2 million in revenue from our Takeda collaboration for the fourth quarter of 2022 as compared to $1.8 million in the same period in 2021. R&D expenses increased $5.3 million to $31.1 million in the fourth quarter of 2022 as compared to $25.8 million in the same period in 2021. This increase was primarily due to increased external expenses related to our AATD, C9 and DMD program and compensation related expenses, partially offset by a decrease in spending in our HD program. General and administrative expenses increased $1.6 million to $13.7 million for the fourth quarter of 2022 as compared to $12.1 million last year, primarily due to increases in professional and service fee expenses. We ended the fourth quarter with $88.5 million in cash and cash equivalents as compared to $150.6 million as of December 31, 2021. Additionally, in Q1 2023 where strategic collaboration with GSK became effective and provided upfront cash of $170 million to Wave. Accordingly, we expect our cash and cash equivalents will be sufficient to fund operations since 2025. As a reminder, we do not include future milestones or opt in payments under our GSK or Takeda collaboration in our cash runway. I'll now turn the call back over to Paul.

[Paul Bolno:]

Thanks, Kyle. I am proud of how the team continues to execute with resolute focus on unlocking program value through our ability to align the right target with the best oligonucleotide approach, be that editing, slicing or silencing with antisense or RNAi. In the year ahead, we expect to deliver on multiple pipeline and platform candidates. With our clinical silencing programs, we're advancing two candidates for which we expect additional data in the first half of this year. WVE-003 and HD is the only clinical stage mutant Huntington lowering wild Huntington sparing approach, while WVE-004 offers a variant selective approach to C9orf72 associated ALS/FTD. We'll have substantial data sets to determine the next step for these programs and if successful would initiate discussions with our partner Takeda. With slicing, WVE-N531 is demonstrating the potential to be a best-in-class approach in the DMD space. We plan to initiate dosing in Part B in 2023 and announce data in 2024. If successful, these data would unlock high value DMD franchise. In addition to DMD, we see future expansion opportunities for slicing in other muscle diseases as well as CNS. With editing, WVE-006 is the most advanced candidate and potentially a best-in-class approach for AATD. We expect transition of this program to the clinic in the second half of this year, if successful, WVE-006will unlock the broad potential of AIMers. With RNAi, our preclinical data suggests that we have best-in-class potential with this modality and is shaping up to be a powerful silencing component our RNA medicines platform with applicability in the liver, CNS and beyond. We are rapidly advancing discovery activities in RNA editing and beyond and expect to announce new programs and share preclinical data this year. Finally, we are already advancing collaboration activities with GSK with potential for additional cash inflows over the course of this year and beyond. 2023 promises to be another great year of PRISM innovation and progress towards bringing medicines to patients. With that, I'll now turn it over to the operator for Q&A.

[Operator:]

[Operator Instructions] The first question comes from Salim Syed with Mizuho. Your line is now open.

[Mike Linden:]

Hi, good morning. This is Mike Linden on for Salim. Thanks so much for taking our question. I guess just on WVE-N531. So for Part A, we saw this three patients at the six weeks starting after the 10 milligram dose. What are the plans to follow-up on these patients? Is there any update you can provide maybe on the protocol going forward here for the first three patients? And then I guess to follow-up with that on Part B, maybe how should we be thinking about the regulatory pathway going forward and potential timeline for that?

[Anne-Marie Li-Kwai-Cheung:]

Thanks. So the Part B that we announced today looking at up to 10 boys includes boys who were originally enrolled in our Part A, so they have the opportunity to also enroll in this Part B extension. With regards to regulatory pathways, as you're alluding to, there are well trodden regulatory paths for accelerated approval on the basis of dystrophin. And obviously, when we have our data, we will be assessing and discussing with the regulators what the best pathway is for us.

[Mike Linden:]

Got it. Thanks.

[Operator:]

Please stand by for our next question. Our next question comes from Joon Lee with Truist. Your line is now open.

[Joon Lee:]

Hi, thanks for the updates and for taking our questions. The FDA is hosting a couple of Adcoms that directly impacted programs. One is happening today to discuss the neurofilament light chain as a potential surrogate endpoint. And the other is sometime next month to discuss dystrophin as a biomarker for DMD. How likely do you think the Adcom will be supportive of these biomarkers? And how would these decisions impact your clinical development strategy for your programs? And I have a quick follow-up.

[Anne-Marie Li-Kwai-Cheung:]

Sure. So obviously, we'll be watching the outcome of these Adcoms very closely. And I can't of course state what the outcome will be, but I would say that any indications that the FDA is still supporting the use of biomarkers to aid the approval of new therapies, the rare diseases is highly encouraging and supported, of course, by us. And when we see the outcome of those ADcoms we will be assessing how it impacts our own therapy.

[Paul Bolno:]

I think the added nuance to, Joon, your second point on the direct the Adcom on micro dystrophin. I mean, I think it will be an interesting discussion, one on the continued support of dystrophin as a regulatory endpoint potentially for accelerated approval. But I think what we think consistently in the exon skipping field is, approvals based on dystrophin level. So I think, again, it's encouraging to see the agency continue to leverage these clinical biomarkers as potential registration info.

[Joon Lee:]

Great. And regarding the Huntington's program, are you looking to -- what exactly are you looking to achieve with the additional SAD study before you feel confident enough to advance to MAD study? Correct me if I'm wrong, but the 30, 60 and 90 milligrams were already studied in the prior SAD study? Thank you.

[Paul Bolno:]

Yes. I think that's the follow-up of the expansion cohorts are going to help with them read that I think establish the dosing regimen for multi dose in the progress?

[Anne-Marie Li-Kwai-Cheung:]

Yes. So that original cost that we reported was underpowered and so we wanted to further explore those doses before we move into the multi dose cohort. Obviously, when you move into the multi dose, you want to be sure that you are selecting the right dose for a continued study. So it's the logical and normal way to follow the drug development.

[Joon Lee:]

Thank you.

[Operator:]

Please stand by for our next question. The next question comes from Paul Matteis with Stifel. Your line is now open.

[Julian Pino:]

Hi. This is Julian on for Paul. Thanks so much for taking our question. On the AATD program, is there anything specific or out of the ordinary that may be required for the CTA? Just given it's a first of its kind technology entering the clinic? So if there's any specific ask from the regulatory agency or any other requirements, it would be great to hear. Thanks so much.

[Anne-Marie Li-Kwai-Cheung:]

No. There are no specific or unusual requests for our filing CTAs. They'll just follow the normal route for a CTA filing.

[Paul Bolno:]

And I think stepping back, I mean, this is an important reason of our unique approach of using oligonucleotide to engage with endogenous RNA editing. So again, I think the question obviously refers to a whole bunch of other approaches predominantly based on the DNA editing space, the base editing space. But I think our approach has been to use endogenous enzymes as we've said very similar to what's used against Ago2 for RNAi with acceptable for [indiscernible]. And so we're following a well driving path of RNA therapeutics.

[Julian Pino:]

Great. Thanks so much.

[Operator:]

Please stand by for our next question. The next question comes from Luca Issi with RBC. Your line is now open.

[Unidentified Participant:]

Perfect. Thanks for taking our questions. This is Lisa on for Luca. Just on the APP program. I have a three part question here. It looks like your mouse data is Intracerebroventricular delivery. But is it fair to assume that if you were to move this program into humans, you would use [intrasaccular] (ph) delivery like [Nylem] (ph) is using for their program? Also on the chemistry, we know a Nylem is using C16 ligand. So just wondering if you can remind us about the chemistry that you're using for your program for CNS delivery here? And finally, just maybe a bigger picture question. How are you planning to differentiate your siRNA platform? Is there any technological differentiation that we should be aware of? Or is it more of an indication selection type of play here? Any color would be much appreciated. Thank you.

[Paul Bolno:]

That's great. And look, I appreciate the question, because a lot of this is building on work that we began last year and, obviously, we're continuing to build on. So I think to your question, starting with the first on mouse data and ICV delivery, that's pretty standard for mice. But obviously, we have a long history of looking at CNS translation from IVB data in mice to [indiscernible] nonhuman primates and ultimately into patient. And again, in that case, using the [indiscernible] dose. We do recognize the translational value and we've seen that data from others in the space. I think what was impressive to us is, it doses better our own par, if not, more effective potentially than others have shown. We've seen target engagement across all regions of the brain with ICV administration. I think that's important because I think there's always a question of where do these drugs distribute in CNS. I know these questions come up a lot as we think about potential target implications. But I think it's encouraging again with the first CNS experiment to be able to see broad potent. And most importantly, I think relative to what we've seen with others, it's durable. We know that's an important function even when we think about ICV – sorry, IC injection is that the durability effect is critical because, obviously, it means reduce dosing administration frequency. So we're encouraged by again the initial data, exciting to continue to see more work and it's obviously something that we’ve has interest in from a number of parties. Additionally, to that, you asked a question about chemistry and I think that was the piece that was, I think, unique to what we've been developing all along around PN chemistry distribution. So again, utilizing our unique chemistry, that's where we've been able to see that potency durability and distribution with RNAi. And then that gets the differentiation. And so I think with the ability to have that potency durability, that lets us end distribution, lets us think about differentiation in the target space within CNS and have an alternative approach to be able to look at both conjugated with GalNAc in the liver and beyond to think about the expanded target universe. It's one of the pieces, as we said, again, in addition to our focus that we've been building in AIMers for RNA editing of really unlocking the power of potential genetic target validation. So we'll get to the targets in the space that we make a unique insight into in development. So again, early days were last year showing that PN chemistry and our unique chemistry would be applicable to RNAi with the extension of that this year to see it have the opportunity to open up more broadly and to be able to think about this as a powerful tool to use for silencing. And we'll continue to provide updates as we said later this year on additional potential targets that we can explore. But again, put us in a position of being either first in class in the target or best in class.

[Operator:]

Please standby for our next question. Next question comes from Mani Foroohar with SVB. Your line is now open.

[Unidentified Participant:]

Hi. [indiscernible] on for Mani. Thank you for taking our question. Regarding GSK collaboration, so for 006 first, given that this first in human study could potentially derisk RNA editing, how quickly could we expect the expansion of clinical development in other follow on indication? And more broadly, in regard to the collaboration, should we expect to see simultaneous program moving on to the clinic alongside GSK? Or is there a limitation in terms of the number of programs that could be pushed through development every year?

[Paul Bolno:]

Thank you for your question. And again, I'll pause between them in case it was unclear. So, yes, as you know, the first in human study we announced this year will begin with that translation to the clinic. And I think this is an exciting meaningful inflection for our relationship with GSK. And most importantly for the AATD patients with whom we're going to accelerate, Wave developing this medicine for initially. I think to your point, the other substantial portion of this collaboration is the research and discovery portion of the collaboration. And I said in the beginning, this is underway. And so, we did say that this has those targets that get selected. There's a research period where as we said we announced the deal, we could be working on more, what are called, target validation, more programs than they have the ability to select and nominate. And so, I think what's exciting for us is, we are working together, we are initiating some of these programs to begin to start working together to understand the target. And I expect over the course of this year, more opportunities to keep you all updated on our progress with that relationship. Both on the targets that GSK is working on, although we may not be able to disclose the targets per se, but at least the momentum on that side of the collaboration. But importantly, on the other side of the collaboration where our access to unique genetic insights enable Wave distillate programs. And those programs, we will be able to share our progress on. So it really is a multi [indiscernible] collaboration. I think it's off to a great start. And obviously, all of that gets driven on the productive translation of the first potential clinical program, [indiscernible] excited about our progress. I'll pause just because I've lost the tail end of your last question just to make sure we answered your question.

[Unidentified Participant:]

Thank you. I guess just as a follow on regarding those, would there be a pathway to potential foster approval in a subset of population for AATD?

[Paul Bolno:]

So I think that's something that we and importantly GSKs are interested in exploring, obviously, off of the biomarker. Again, it's an important factor of how we think about -- thinking about programs that we select as we're developing our programs within our pipeline, which is, if you have a clinically validated biomarker and that biomarker is actually the treatment for disease on the case of Alpha-1 antitrypsin deficiency, it's the deficiency of Alpha-1 antitrypsin deficiency protein. If you can restore that protein back to functional levels and that creates the potential for registration. So I think both we and GSK are interested in utilizing that biomarker as a potential strategy, but thinking then more broadly about how to continue to build that to optimize the commercial. So I think there's a lot of opportunity for AATD and we're excited to work with our partners to maximize that opportunity.

[Unidentified Participant:]

Thank you.

[Operator:]

[Operator Instructions] Our next question comes from Joon Lee with Truist. Your line is now open.

[Joon Lee:]

Hey, thanks for taking our follow-up. Regarding the sRNA program, angiotensolivos can just about do many of the same things that sRNA's can do. So how are you thinking about diseases for which ASL may be more appropriate versus sRNA? And it's a bit of a loaded question, but in your opinion, do you think the valuation discrepancy between [indiscernible] differences in the size of the adjustable targets or some perceived superiority of one versus the other platform? Just would appreciate your thoughts there. Thank you.

[Paul Bolno:]

I'll take your last question first and say that you all are much better than I am around assessing the differential valuation between [indiscernible]. I think they're both companies that have been in the space for a long time and are both trying to address unmet need as best possible utilizing their platform. I think to your first question, I think what this technology capability inside Wave does by having what we believe through the best in class RNAi approach, is really do what we set up from the beginning to do, which is not to be restricted by a particular modality. I think if you're a hammer everything looks like it now and the opportunity for us to say, well, what's the best way to address the given target with the right tool? I think this establishes for silencing the ability for us to think creatively really about what is the best opportunity for different indications and separate tissues, not because that's the technology we have, but we have the optionality of thinking about qualitative. I think that's the real opportunity set. I think that was one of the real drivers for why we were excited usually to work with GSK is really to think about a target universe. Where we're unrestricted on RNA medicines and can really think about the flexibility of again, right target right indication. Again, a great example is, we could have used RNAi to silence AATD as others are doing. We thought for the biology, the best approach was to correct it, fix it and restore the protein function, not just by giving it like protein ingredient, but actually fixing it and generating more of it and that comes through RNA editing. And so, I think having these tools on our hand, to really say best approach to deal with really important meaningful diseases, I think does set us up for future success.

[Joon Lee:]

When do you think we'll see first update on sRNA?

[Paul Bolno:]

As we said, I think we're going to give a broader update, historically, as you know, we have done R&D days with big updates both on platform. And then importantly, programs as we shared earlier, when we typically share updates on programs, it's not just a list of target that usually is substantiated by data. So excited to share progress later this year.

[Joon Lee:]

Thank you.

[Operator:]

I show no further questions at this time. I would now like to turn the conference back to Dr. Paul Bolno for closing remark.

[Paul Bolno:]

Well, thank you everyone for joining the call this morning. This is an exciting time for our organization and we are grateful to every Wave employee for their dedication and unrelenting commitment to our mission and to the patients and families we serve. Have a great day. Thank you.

[Operator:]

This concludes today's conference call. Thank you for participating. You may now disconnect.