Intellia Therapeutics, Inc. (NASDAQ:NTLA) Q1 2024 Earnings Call Transcript May 9, 2024

Intellia Therapeutics, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Good morning, and welcome to Intellia Therapeutics’ First Quarter 2024 Financial Results Conference Call. My name is Drew, and I will be your conference operator today. Following formal remarks, we will open the call up for a question-and-answer session. This conference is being recorded at the company's request and will be available on the company's website following the end of the call. As a reminder, all participants are currently in listen-only mode. [Operator Instructions] I will now turn the conference over to Ian Karp, Senior Vice President of Investor Relations and Corporate Communications at Intellia. Please proceed.

Ian Karp : Thank you, operator, and good morning, everyone. Welcome to Intellia Therapeutics first quarter 2024 earnings call. Earlier this morning, Intellia issued a press release outlining the company's progress this quarter, as well as topics for discussion on today's call. This release can be found on the Investors and Media section of Intellia's website at intelliatx.com. This call is being broadcast live and a replay will be archived on the company's website. At this time, I'd like to take a minute to remind listeners that during this call, Intellia Management may make certain forward-looking statements and ask that you refer to our SEC filings available at sec.gov for discussion of potential risks and uncertainties. All information presented on this call is current as of today, and Intellia undertakes no duty to update this information unless required by law.

Joining me from Intellia are John Leonard, Chief Executive Officer; David Lebwohl, Chief Medical Officer; Laura Sepp-Lorenzino, Chief Scientific Officer; and Glenn Goddard, Chief Financial Officer. John will begin with an overview of recent business highlights. David will provide an update on our clinical pipeline progress, Laura will review our R&D updates, and Glenn will review our financials before we open up the call for questions. With that, I'll now turn the call over to John, our Chief Executive Officer.

John Leonard : Thank you, Ian. Good morning, everyone, and thank you all for joining us today. We've made outstanding progress in the first quarter of 2024 with one ongoing in two, soon to be initiated pivotal Phase 3 trials, Intellia is undoubtedly leading the gene editing revolution, and with well over 100 patients already dosed across our two lead programs. We have already amassed the largest set of safety and clinical activity data for any in vivo CRISPR based therapies. Notably, we believe our one-time treatments for ATTR in HAE offering potentially unmatched clinical profiles could overcome key hurdles faced by patients in two large and rapidly growing commercial markets. Moreover, our first two investigational gene editing therapies are designed to be especially patient friendly and convenient for physicians and caregivers.

There is no extensive preconditioning regimen, no long-term steroid requirement, and no hospital stay, all of which can be very challenging for patients and limit commercial uptake associated with other gene therapies. And of course, with a one-time treatment, there's no annual insurance reverification needed, which is typically required for chronic specialty therapies and can be a tremendous burden. But this is just the beginning for industry leading CRISPR based technology. We're now entering the next stage of growth, pushing the boundaries of what we can do and expanding where we can go with CRISPR from gene knockdown to gene insertion, from liver targets to a broader set of tissues. Our first wholly owned CRISPR based gene insertion program, NTLA-3001, is expected to enter human clinical development this year.

NTLA-3001 holds the potential to provide normal alpha-1 levels after a single dose treatment for people with alpha-1 antitrypsin deficiency. We will also have a second clinical program utilizing our modular gene insertion platform run by Regeneron for hemophilia B expected to start patient dosing later this year. Building on our clinical success, we are now pursuing gene editing in five new tissue types outside the liver. As part of this expansion strategy, we have and will continue to establish collaborations with external innovators, these R&D efforts have already yielded at least a dozen potential drug candidates utilizing our technology. Further, we're advancing our modular platform by developing a diverse set of editing and delivery tools for in vivo and ex vivo applications.

Whether it's our proprietary LNP formulations, novel gene editing tools, or differentiated allogeneic cell therapy approach, we emphasize safety and therapeutic activity at each step of development. Through our commitment to these principles, we are well on the path towards transforming cutting edge scientific tools into real world medical treatments. With this as a backdrop, we expect to end this year with five enrolling clinical studies, three of which are in Phase 3. This includes a newly planned Phase 3 for NTLA-2001 in patients with ATTR polyneuropathy. Additionally, we plan to submit a BLA submission in 2026 for NTLA-2002, which we anticipate will lead to the first ever approval for an in vivo CRISPR based therapy. By that time, our expectation is we'll have accumulated safety, efficacy, and durability data for over seven years and have treated as many as a thousand patients in our clinical studies.

In summary, we will continue transforming medicine with gene editing therapies with at least three important clinical data readouts expected this year. I'll now hand the call over to our Chief Medical Officer, David Lebwohl, who will provide an update on our clinical programs. David?

David Lebwohl : Thanks John, and welcome everyone. I'll begin with 2001, our in vivo CRISPR candidate for the treatment of ATTR amyloidosis. This multisystem disease primarily manifests as either cardiomyopathy due to amyloid deposits in the heart, or polyneuropathy through the progressive accumulation of protein deposits in the nervous system. As demonstrated in our Phase 1 study, a 1x treatment of 2001 led to greater than 90% TTR reduction. Importantly, we demonstrated best-in-class reduction of absolute TTR levels among TTR silencing agents, which we believe will be a key differentiator for treating patients with CM and or PN. In ATTR-CM, despite the introduction of TTR stabilizers, patients continue to experience worsening heart failure, hospitalizations, strokes, and heart attacks.

Ultimately, it remains a fatal disease. Today, I'm pleased to report that patient enrollment in the Phase 3 magnitude trial for patients with cardiomyopathy is off to a great start. In March, we announced the first patients in both the U.S. and globally had been dosed with over 30 patients already dosed and another 40 plus in screening, we are tracking well ahead of our initial projections. Further, we expect many additional sites to open in the weeks and months ahead, which will further accelerate enrollment in the trial, while we will not be providing patient by patient enrollment updates moving forward, we will look for opportunities to keep you abreast of our progress. The rapid rate of enrollment reflects their enthusiasm we hear from physicians and patients who believe 2001 holds a potential to revolutionize the ATTR treatment landscape.

In parallel, we are also excited to announce today that we now expect to initiate a new Phase 3 trial for patients with ATTR polyneuropathy by year end. Importantly, ATTR-PN patients are typically diagnosed earlier in adulthood and their disease often progresses more rapidly than ATTR-CM. Published data from chronically dosed TTR silencing therapies demonstrate that deeper reductions of TTR are highly correlated with improvements on standard measures of neuropathy. To date, no other agent approved or in clinical development has demonstrated the depth and consistency of TTR reduction, regardless of baseline levels like 2001, which gives us tremendous confidence in our ability to positively impact patients. Based on productive discussions with the FDA, we have aligned on a trial design to support a BLA filing for 2001, subject to review of the IND application.

We plan to initiate the Phase 3 by year end. The study is expected to be a small placebo-controlled trial of approximately 50 patients conducted in ex-U.S. regions with limited or no access to silencers. We are making significant strides in advancing 2001 and look forward to presenting data from the ongoing Phase 1 trial in the second half of the year. We expect to be presenting safety and TTR reduction data on all 72 patients from both the CM and PN arms. Additionally, we plan to include for the first-time data beyond TTR levels, such as NT-proBNP, six minute walk test, and mNIS+7. In summary, we continue to believe 2001 may halt and potentially reverse the disease, as well as dramatically reset the ATTR treatment landscape. I'll now turn to 2002, our in vivo CRISPR program for the treatment of Hereditary Angioedema or HAE.

In January, landmark findings from the Phase 1 were published in the New England Journal of Medicine, highlighting a single dose of 2002 led to a 95% attack rate reduction. On June 2nd, we'll be presenting updated data from the study at the European Academy of Allergy and Clinical Immunology Annual Congress. These long-term data will speak to the safety and durability of effect on both kallikrein and attack rate reduction. Importantly, we will also present on the number of patients who remain completely attack free with extended follow-up now reaching beyond 18 months for all patients and longer than two years in some. Additionally, we plan to report top line results from the randomized placebo controlled Phase 2 study shortly thereafter. Full results evaluating the 25 milligram and 50 milligram doses are expected to be presented at an upcoming medical meeting.

These data updates will provide clarity on which dose to move forward into the Phase 3 trial. Assuming 2002 continues to show a strong safety and efficacy profile, we believe that 2002 will become the preferred prophylaxis treatment in a growing commercial market. In the US market, for example, currently about 70% of HAE patients use chronic prophylaxis treatments, and that number is increasing. Many patients continue to seek better efficacy and more convenience, expressing a strong willingness to switch to new treatments that can deliver on both fronts. As previously discussed, we plan to initiate the pivotal Phase 3 trial in the second half of 2024. At this point, we are mainly waiting for the Phase 2 data before submitting regulatory amendments to begin our global Phase 3.

Notably, we have now also completed the additional preclinical mouse study requested by the FDA to support inclusion of women of childbearing age in the U.S. As expected, these data did not show an impact to female reproductive health in the animals treated with 2002. This is consistent with the extensive preclinical work completed and reviewed by regulators prior to our initial IND clearance, and we plan on submitting these data to the FDA prior to Phase 3. Let me now turn to exciting developments with our modular gene insertion platform. Here we are leveraging the same LNP platform used in our gene knockout program to deliver the CRISPR machinery along with an AAV to deliver a functional gene. Unlike traditional gene therapy, we expect our approach will permanently restore a missing or defective protein without a waning of effect over time.

We expect to begin this year a first in human study of 3001, our wholly owned gene insertion program for alpha-1 antitrypsin deficiency. As a reminder, the main hurdle with treating this disease is getting patients to consistently normal levels of alpha-1. Current standards of care, which involve weekly infusion of augmentation therapy does not choose this. Other approaches in development have also been unable to yield normal levels of alpha-1, and in some cases have only been able to produce a modified version of the protein with unknown consequences. 3001 is the only drug candidate to show AAT levels restored to normal levels after a single dose in non-human primates. It is designed to precisely insert the wild type SERPINA1 gene, and permanently restore production and secretion of fully functional alpha-1 protein.

Assuming success 3001 could be life-changing for alpha-1 patients and unlock the whole new category of diseases we can pursue with in vivo gene insertion. Separately, our collaborative Regeneron has achieved clearance from both U.S. and EU authorities for the Factor IX program using our modular gene insertion platform and plan to enroll the first patient later this year. Our clinical development of the in vivo pipeline is rapidly accelerating and Intellia is well-positioned as a leader in this new era of medicine. I'll now hand over the call to Laura, our Chief Scientific Officer, who provide updates on our R&D efforts and what's coming next.

Laura Sepp-Lorenzino : Thank you, David. Good morning, everyone. At Intellia, we're advancing novel gene editing and delivery technologies for in vivo and ex vivo therapeutic applications. As John mentioned, core to our strategy is the emphasis on safety and performance at each step of development. Our success to date is not by chance, and it's a common misconception that gene editing and delivering tools have become commoditized. By leveraging experience of a world class team and making dramatic improvements and adaptations to our platform technologies, we have been able to lead the entire industry forward. But don't just take my word for it. Let me give you some real world examples. Intellia is now 545 in IND approved by the FDA for our investigational therapy.

Groundbreaking clinical dataset for both NTLA-2001 and NTLA-2002 have been published in the New England Journal of Medicine. We have already gained regulatory clearance for multiple clinical trials in eight different countries. Together, we Regeneron, we're conducting the largest global Phase 3 study of a genetic medicine. Intellia has become the reference gene editing company, which has to help us foster important relationships with the world's leading scientific and medical experts, as well as advocacy organizations. And now building on the success of our work in diseases that originate in the liver, we're expanding the tissue types that can be targeted with our CRISPR based technologies. We now have active research programs in five different tissues outside the liver, either independently or in collaboration with partners.

This includes the bone marrow, brain, eye, lung, and muscle. We're particularly excited about pursuing diseases such as sickle cell disease, muscular diseases, cystic fibrosis, ALS, and many other [Indiscernible] genetic conditions. We're also advancing a pipeline of ex vivo programs, both wholly owned and in collaboration with partners for the treatment of immuno-oncology and autoimmune diseases. In fact, two of our partners are leveraging our allogeneic platform, one of which is already in the clinic. Our differentiated allogeneic solution, including HLA matching, is uniquely positioned to avoid both T-cell and NK cell mediated rejection and result in cell persistence and disease control. Further, therapies engineer with our allogeneic platform combined with edits to enhance the function, offering new approach to target solid tumors.

We look forward to updating you on our progress across our R&D platforms more broadly this year. And now hand over the call to Glen, our Chief Financial Officer, who will provide an update on our financial results as the first quarter 2024.

Glenn Goddard : Thank you, Laura. Good morning everyone. Intellia continues to maintain a strong balance sheet that allows us to execute on our pipeline and platform. Our cash, cash equivalence and marketable securities were approximately $953.4 million as of March 31, 2024, compared to $1 billion as of December 31, 2023. The decrease was driven by cash used to fund operations of approximately $137.2 million. The decrease was offset in part by $58 million of net equity proceeds from the companies at the market program. $12.6 million of interest income, $5.9 million of collaborator reimbursements and $2 million in proceeds from employee based stock plans. Our collaboration revenue was $28.9 million during the first quarter of 2024 compared to $12.6 million during the first quarter of 2023.

The $16.3 million increase was mainly driven by a $21 million non-cash revenue recognition adjustment related to the AvenCell collaboration. R&D expenses were $111.8 million during the first quarter of 2024 compared to $97.1 million during the first quarter of 2023. The $14.7 million increase was mainly driven by the advancement of our lead programs. Stock-based compensation included in R&D expenses was $20.2 million for the first quarter of 2024. G&A expenses were $31.1 million during the first quarter of 2024 compared to $27.4 million during the first quarter of 2023. The $3.7 million increase was primarily related to stock-based compensation. Stock-based compensation included in G&A expenses was $14 million for the first quarter of 2024.

Finally, we expect our cash balance to fund our operating plans into late 2026. Notably, our strong balance sheet gives us the financial power to execute on the three year strategic priorities laid out at the beginning of this year. First to execute pivotal trials for our first two in vivo CRISPR based therapies. Second to launch the next wave of in vivo and ex vivo clinical programs, and third, to deploy new editing delivery modalities. We're well on our way to realizing the promise of -- this will be a catalyst rich year for Intellia, and we look forward to updating you on our contingent progress. With that, we will now open the call for your questions. Operator, you may now open the call for Q&A.

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