Editas Medicine, Inc. (EDIT) Q3 2016 Earnings Report, Transcript and Summary

Good day, ladies and gentlemen. And thank you for standing by. Welcome to the Editas Medicine's Q3 2016 Conference Earnings Conference Call. At time all participants are in a listen-only mode, following the prepared remarks we will host a question-and-answer session and our instructions will follow at that time. [Operator Instructions] I would it now pleasure to hand the conference over to Mr. Mark Mullikin, Senior Director of Finance and Investor Relations. Sir, the floor is yours.

Good afternoon this is Mark Mullikin, Senior Director of Finance and Investor Relations at Editas and I'd like to welcome you to our update call for the third quarter of 2016. We issued a press release earlier this afternoon providing our third quarter 2016 financial results and updates regarding our company. A replay of today's call will be available approximately 2 hours after its completion on the investors and media section of our website. After our prepared remarks we will open up the call for Q&A. As a reminder, various remarks that we make during this call about the company's future expectations, plans and prospects constitute forward looking statements for purposes of the safe harbor provision under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward looking statements as a result of various important factors, including those discussed in the risk factors section of our most recent quarterly report on Form 10-Q which is on file with the SEC. In addition, any forward looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. While we may elect to update these forward looking statements at some point in the future, we specifically disclaim any obligation to do so even if our views change. Now, let me turn over the call to our Chief Executive Officer, Katrine Bosley.

Thank you, Mark. Good afternoon everybody and thank you for joining us for our third quarter 2016 update call. I am joined today by several members of our executive team, including Andrew Hack, our Chief Financial Officer, Alexandra Glucksmann, our Chief Operating Officer and Vic Myer, our Chief Technology Officer, and also Charlie Albright, our Chief Scientific Officer and Gerry Cox, our Chief Medical Officer who both joined us over this past quarter and it is great to have them here as part of the team As we are working to build our company, we have three key objectives, and as always, we do appreciate the opportunity to update you today on our progress. As a reminder, these projects are number one, to advance our pipeline and expand our platform, number two, to build the business for the long-term and three, to develop an outstanding organization. This is been a particular active quarter in terms of organizational development, and I'd like to make a few comments on that. We made a number of key tier hires, including Charlie Albright, as CSO and Gerry Cox, as CMO and in addition, Ken LeClai joined us as Vice President of Technical Development and Manufacturing, and Semi Trotto joined us Vice President of Human Resources. These are all important additions which round out our senior management team and ensure that we have the right leadership in place as we advance generic medicines into the clinic and as we continue to grow the organization. We have also continued to build Editas's team across many dimensions more broadly, the quality of the people we've recruited at the most senior level is reflective of our overall philosophy to hire the best and the brightest and in line with our plan we currently have approximately 90 full-time employees on board. In addition, we recently moved into our new headquarters in Kendall Square in Cambridge and here we have ample room to further build the organization for the long-term. Charlie and Gerry are on the call with us today and they will share with you their perspectives in Editas and on the field of genome editing. Building the leading genome editing company means we need scientific and clinical leadership with a unique combination of insight and experiences, as we were looking for the right people for these leadership roles, we knew it was critical to find individuals very specific capability. First, significant expertise in genomic and advanced biologic and second, meaningful experience developing important new medicines at every stage of discovery to approval. In addition, we got experience developing medicine for rare diseases, which is quite different from other areas of drug development. We're very fortunate to have found both Gerry and Charlie who are unique leaders in the industry in all of these regards. So I'd like to introduce our Chief Scientific Officer, Charlie Albright, who will then be followed by our Chief Medical Officer, Gerry Cox and then Andrew Hack, our Chief Financial Officer will share some brief remarks on our finances. Charlie?

Thanks, Katrine. So it’s a pleasure to be with you today. I joined Editas from Bristol-Myers Squibb, where I was Vice President of genetically defined diseases and genomics. In the genetically defined diseases group we discover potential medicines directly towards [indiscernible] were identified by human genetics and intensive of these molecules in patients with rare diseases. In genomics group we provided genomic tools and information for all of the research and development. There is a drug discovery biologists to depth and quality of discovery platform is one of the several things that attracted me to Editas, particular Editas is well on its way to industrializing genome editing based on crisper technology. The adultification of impotence like the guy is the one example of this industrialization. For instance, we developed a combination of proprietary and silicon methods, cell based assays and bios methods to detect all target cutting in order to identify impotent and specific guide or NAs. A recent disclosure reediting as the PD1 gene in T-cells illustrates what we can do, specifically were able to buy directly knock out PD1 in more than 90% of primary MN T-cell without measurable off target setting. The differentiated investment Editas has made in platform innovation is also an impressive. In addition to the original Cas9 for Scrotum Streptococcus pyogenes Editas has several Cas9 enzymes at its disposal, including high fidelity Cas9, Cas9 with altered PAM specificities and Staphylococcus aureus Cas9. The PAM variant Cas9 to increase a number of genomic sites we can access and we believe this will eventually help us address more disease targets. In contrast to the more widely used pyogenes Cas9, the smaller staph aureus Cas9 get us the ability to put two guide RNA and Cas9 coding sequence in a single and associated virus. We are exploiting staph aureus Cas9 to create a therapy for LCA10 who will deliver Cas9 and two guide RNAs of the subretinal space using NAV. Importantly, this therapeutic approach would not be possible without the staph aureus Cas9. Taking all these proprietary advances together, I think the discovery platform and product candidates put us in an excellent position to deliver transformational medicine for patients with a wide range of diseases. Now I'll turn it over to her new Chief Medical Officer, Gerry Cox.

Thanks, Charlie. Hello to everyone on the call. I joined Editas from Sanofi Genzyme where over the course of nearly 2 decades, I rather development of many of Genzyme's [indiscernible] products as Vice President of rare disease clinical development. I've also continue to practice medicine as clinical geneticist at Boston Children's Hospital where I care for children suffering from debilitating genetic diseases every week. Through my work in clinical development and as a practicing physician, I witnessed the potential of new therapies to dramatically expand and improve patient's quality of life, transforming diseases that were once disabling or fatal and to chronic, but manageable conditions. Among the many reasons that I decided to join Editas is the company's commitment to developing and applying crisper technology broadly across numerous therapeutic areas. This is evident in our approach to delivery where we're working across multiple delivery modalities, whether that’s without adeno-associated viruses with the nano particles or electroporation in the case of our ex vivo programs. We're not constrained by the delivery modalities, which gives us the flexibility to select and optimize whichever works best for each indication. That's really exciting to me because it means that we can address the broadest range of diseases in patients possible. I'll now turn over the call, to our Chief Financial Officer, Andrew Hack.

Thanks, Gerry. As I our convention, I will review the most important components of our financials, but won't be walking through all of the details of the result that can be found in our press release. In the third quarter of 2016, our net cash used in operations was approximately $17 million, and as of September 30, 2016, we had approximately $200 million of cash and cash equivalents. The primary drivers of our spending are our expanding pipeline, our platform and our legal expenses. Based on our current cash position, as well as research support under our collaboration with Juno Therapeutics and payments from the Cystic Fibrosis Foundation, we believe we have at least 24 months of capital to fund the advancement of multiple therapeutic programs in parallel and to further expand our technology platform leadership. And with that, we'll open up for your Q&A. Operator?

Thank you. [Operator Instructions] Our first question comes from the line of Gena Wang with Jefferies. Your questions, please?

Hi. Peter Ash [ph] today for Gina. Thank you so much for taking our questions. So maybe start with the IT question. So what would be your expectation for the interference outcome at the motion face and what would be your expected outcome of strategy after the board ruled that they start interfering or say there is no interference? Thank you.

Sure. Thanks, for your question. We believe the interference is going well and it was proceeding as we had anticipated, there really haven't been any surprises. As you noted, we're partly through this procedural phase, there will be some decisions to patent office will make in Q1 and it will go from there. But overall we remain confident in our overall IP position. The foundation is very strong and the proceeding is going well, no surprises.

Thank you. Our next question comes from the line of Mac Frahm with Cowen and Company. Your questions please?

Hi, thanks for taking for questions. Can you just give us update on kind of where things stand in LCA10 and whether formal IND enabling phase is started yet, and if not, you know what the schedule is going to be there?

Sure. So we - as we said before our aim is to initiate clinical development program next year. We do remain on track for that for goal, for that aim. You may recall, we've publicly shown data and shown we have guys of high efficiency detectable of target and are able to significantly increase protein expression of LCA10 in of fully expressions of protein in patients out with LCA10. We will continue to provide updates on the data at major scientific conference and on quarterly call. In terms of the steps towards IND will share those data in due course if the program advances, but I think overall the key point is that we remain on track to initiate clinical development next year as he head for our goal for sometime.

Okay. And when the kinds of formal INDs took to start up, do you intend to disclose that immediately or is that something we should just kind of expect to hear on a quarterly call or kind of what's the disclosure plan there?

Andrew, do you want to talk a little bit about how we share information and how we take that on?

Yes, sure. So obviously we update each quarter our progress against our goal, so you can hear all of us on this call that things are progressing well. Beyond that we shared data at major medical and scientific conferences and you guys have an opportunity to help then people along with the progress we're making in our programs. So those are the two primary venues, you should expect us to continue to use those as the places that we communicate.

Okay. Thank you.

Thank you. Our next question comes from the line of Roy Buchanan with Janney Montgomery. Your question please?

Hi. Great. Thanks for taking the question. I had a couple on ASH [ph] abstract, what I though you guys have about the editing in HSPC, the score is getting up to 12% from modest recombination, but had a question that’s in adult CD34+ cells, is biallelic and is that sufficiently for the clinic and if not what you needed to do to get the clinic?

Okay. I'll ask Charlie Albright, our CSA to speak to that. Charlie?

Sure. That’s a combination of mild [ph] and biallelic editing as you appreciate there is range of opinion on how much of the combination you need to go into the clinic, that's in the low end. And so we would want to comment if that sufficient to go to the clinic or not.

Okay. And then there's another abstract as to products to yours, but they sort of pre-high leveled, although its small end of errors with modest recombination, can you guys give us a sense of what you might expect to see as far errors with from all the three combination is that may be an outlier? Thank you.

Yes. This is Vic Myer, the Chief Technology Officer, it’s probably immature for us to comment on other folks abstracts. But as you know, from the all the direct repairs is a complex profuse the cell undergoes. In our reported data and data that’s should go for publication we have not absurd such a high rate of edits happening using single strength all of those cell culture systems. We've in fact are editing our HDR correction when there is HRD is solid and there is not unexpected edits at the site.

Okay. That’s helpful. I think it was an academic group, maybe that’s the reason. Thanks.

Thank you. There are no further questions in queue. So now, I'd like to hand the conference back over to Katrine Bosley, Chief Executive Officer for closing comments and regards. Ma'am?

Great. Well, thank you, I definitely appreciate for your participation and at this point we continue see to build Editas work to bring new medicines to patients. Have a great evening. Thank you.

Ladies and gentlemen, thank you for your participation on today's conference. This does conclude the program and you may all disconnect. Everybody have wonderful day.