Editas Medicine, Inc. (EDIT) Q4 2017 Earnings Report, Transcript and Summary

Good afternoon and welcome to Editas Medicine’s Fourth Quarter and Full Year 2017 Conference Call. [Operator Instructions] Please be advised, this call is being recorded at Editas’s request. I would now like to turn the call over to the Editas team. Please proceed.

Good afternoon. This is Mark Mullikin, Senior Director of Finance and Investor Relations at Editas Medicine. Welcome to our fourth quarter and full year 2017 conference call. We issued a press release earlier this afternoon reviewing our fourth quarter and full year 2017 results and updates regarding the Company, which will be covered on this call. A replay of today’s call will be available on the Investors & Media section of our website approximately two hours after its completion. After our prepared remarks, we will open 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 provisions 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. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to today. Now, I will turn the call over to our Chief Executive Officer, Katrine Bosley.

Thanks, Mark. Good afternoon, everybody, and thank you for joining us for our corporate update call for the fourth quarter our full year 2017. I am joined today by several members of our executive team, including Charlie Albright, our Chief Scientific Officer; Vic Myer, our Chief Technology Officer; Gerry Cox, our Chief Medical Officer; Andrew Hack, our Chief Financial Officer; and Tim Hunt, our Senior Vice President of Corporate Affairs. Editas Medicine is positioned stronger than ever to pioneer a broad new class of genomic medicines for patients. Our team made tremendous progress in 2017 and that provides substantial momentum into 2018. Today we will briefly recap this progress, outline our goals for year ahead, as well as our long-term goals and vision. 2017 was a year of a number of major accomplishments for Editas. We generated a robust preclinical data package for our lead experimental medicine EDIT-101. We advanced in collaboration with Juno Therapeutics; our first oncology medicine candidate for HPV-associated solid tumors towards the clinic. We formed an alliance with Allergan to develop genomic medicines for patients with serious eye diseases. We deepened our capital foundation, adding approximately $250 million to provide funding through multiple value-inflection points. And we added regulatory and manufacturing talent to translate our unparalleled platform into transformative medicines. These accomplishments set the course for 2018 and create a strong tailwind to carry us forward. Our goals for this year include filing the IND for EDIT-101 by mid-2018; demonstrating preclinical proof-of-concept for additional ocular and engineered cell medicine programs; further building out our manufacturing capabilities to enable additional INDs in 2019 and beyond; establishing additional strategic alliances where they expand, improve or accelerate our pipeline; and continuing to build a best-in-class organization and culture. We’ve also defined and articulated our five-year goals and vision for Editas Medicine where we expect to be by the end of 2022. We call this plan EM22. And our EM22 goals focus on translating our unmatched CRISPR platform into a broad portfolio of transformative genomic medicines for patients. By the end of 2022, we aim to build the pipeline that will have at least five experimental medicines in the clinic, at least three of those in early stage trial and at least two more either in ready for late stage clinical trials. These five clinical programs will both, build on our success to date with programs in eye disease and edited T cells for cancer, and leverage advances in our platform with other programs incorporating new editing capabilities that we’ve developed. This robust pipeline will be underpinned by a continued focus on differentiated technologies and gene editing strategies to deliver best-in-class medicines, amplify our commitment to advancing organizational excellence and cultivating an exceptional culture at Editas. These goals are built on Editas Medicine’s current successes, as we see evidence of what’s possible in our laboratories and beyond. Now, I’d like to turn the call over to our Chief Scientific Officer, Charlie Albright to discuss our plans to advance our pipeline this year. Charlie?

Thanks, Katrine. We’re excited about the year ahead for our programs in ocular and engineered cell medicines. But before I discuss our programs, I want to start with our translational work on immunogenicity of Cas9. The potential immunogenicity of Cas9 has been on our radar since the founding of Editas. And to address this question, we formed a research collaboration with scientists at the FDA in 2016. As part of this collaborative work, we developed sensitive and specific assays to detect anti-Cas9 antibodies in humans and preclinical species. We shared some of the details of these assays in the fourth quarter of last year. And more recently, we presented data using these assays at the Keystone Precision Genome Editing Symposia. In this study, we tested serum from 200 human donors for preexisting antibodies to either Cas9 for streptococcus pyogenes or staphylococcus aureus. While the data is still being evaluated, we estimate that 10% or less of these samples had antibodies of either species of Cas9. This low level of anti-Cas9 antibodies gives Editas confidence that immunogenicity is unlikely to be a significant issue for the development of CRISPR-based medicines. And we continue to work in this area and look forward to sharing more of the data set at upcoming medical conferences. Our work on the immunogenicity of Cas9 is the one example of the types of questions that need to be addressed as we translate the exciting academic work on CRISPR gene editing in the medicines, and we continue to invest in these types of translational research. Moving onto our ocular pipeline. We are advancing EDIT-101 for LCA10 towards clinical trials and continue to project a mid-2018 IND filing. As we approach the filing, we’re also conducting a clinical natural history study to inform our interventional trial design and facilitate enrollment. The study is progressing and we expect to report initial data in the first half of next year. Beyond EDIT-101, our broader pipeline of ocular medicines is emerging nicely to address additional inherited retinal diseases and infectious diseases of the eyes. Starting with inherited retinal diseases, Usher Syndrome type 2a or USH2a is inherited retinal dystrophy and that causes degeneration of photoreceptors, leading to severely impaired vision. Progressive vision loss begins in adolescence or adulthood, starting with night vision loss and then followed over time by ever-narrowing tunnel vision. We’ll plan to present results generated with our collaborators from Massachusetts Eye and Ear that validate a potential gene editing approach for USH2a patients in the upcoming months. We talk about how advances in our first experimental medicine can be leveraged to develop future medicines. As an example, we expect that the medicine for USH2a will leverage several features of EDIT-101, our experimental medicine for LCA10. In particular, we expect the USH2a medicine to use staphylococcus aureus Cas9, AAV5 to deliver the editing machinery and the subretinal delivery of the entire approach. Turning into infectious diseases affecting the eye. Herpes simplex virus type 1 or HSV-1 is the leading cause of infectious corneal blindness. HSV-1 is most commonly recognized as a cause of cold sores, the same virus that often infects the eye leading to a late pool of virus in trigeminal neurons. The reactivation of this latent virus in these neurons can cause ocular keratitis, where viral replications leads to a destructive inflammatory response in the cornea. Repeated reactivation episodes lead to scarring and blindness. And though there are treatments for ocular keratitis, the current standard of care failed to block latent virus reactivation for many patients. To address this unmet medical need, we developed a CRISPR-based approach to target latent HSV-1 genomes and thereby reduce reactivation in ocular keratitis. At the Association for Research in Vision and Ophthalmology meeting, next month, we’ll show in vivo proof-of-concept in a rabbit model that our approach reduces viral reactivation and corneal scar. These data are encouraging and we continue to advance this program. Switching gears to our programs in engineered cell medicine, I’d like to start by sharing progress in our collaboration with Juno Therapeutics to develop engineered T cell medicines to treat cancer. As you appreciate, existing engineered T cell medicines use chimeric antigen receptors or CARs to recognize tumor antigens. Unfortunately, chimeric antigen receptors are limited to tumor antigens expressed on cell surface. To recognize tumor antigens inside the cell, engineered T cell receptors are needed instead of CARs. These intracellular antigens, include the majority of known tumor-specific antigens including antigens such as human papillomavirus associated solid tumors. To develop a medicine for papillomavirus-associated solid tumors, Juno scientists identified an engineered T cell receptor for papillomavirus and introduced this receptor to T cell. To maximize the expression of this engineered T cell receptors, Editas scientists optimized CRISPR molecules to knock out the endogenous T cell receptor. Junior scientists then showed that the loss of the endogenous T cell receptor significantly increased both the expression and function of the engineered T cell receptor. Juno expects to begin IND-enabling studies this year and aims to be in the clinic next year. We are encouraged by our approach on this program, both because of the potential to address the unmet need for papillomavirus-induced tumors and because of the likely applicability of T cell receptor knockouts to all medicines containing engineered T cell receptors. Juno’s been an outstanding partner as evidenced by the strong progress we’ve made in advancing engineered T cell medicines for cancer. Some of you may be wondering about the implication of Celgene’s pending acquisition Juno for our collaboration. Let me say, we are enthusiastic continue working with the newly combined company which we believe has the potential to further accelerate and expand our work on engineered T cells for oncology. In addition to our progress on engineered T cells, we continue to make progress toward a superior medicine for patients with sickle cell disease and beta-thalassemia. We’re pursuing multiple differentiated approaches including edits increase fetal gamma-globin and edits to restore adult beta-globin expression by targeted integration. In contrast to others that are targeting the BCL11A erythroid enhancer to increase fetal gamma-globin, we are interrogating novel genomic excites for a more potent and durable globin expression. We plan to present our latest progress in the first half of the year. Now, I’ll turn the call over to our Chief Financial Officer, Andrew Hack to discuss how are building the business and to review the financial results we reported earlier today.

Thanks, Charlie. We made strong progress in building a sustainable and valued business in 2017. Early in the year, we formed a strategic collaboration with ocular leader Allergan that has enabled us to accelerate and expand our pipeline of medicines for serious eye diseases. Allergan has been a highly engaged partner, providing valuable perspective and input as we advance our portfolio of ocular medicines. Then, in early 2018, we acquired guide RNA assets and capabilities from i2 Pharmaceuticals and certain of its affiliated companies that will be critical for making high-quality CRISPR-based medicines, particularly making engineered cell medicines. i2 has been a tremendous technology partner for us for a number of years. Given the importance of the guide RNA chemistries that we have discovered through our work together, we felt it was critical to acquire assets related to these technologies and also valuable to bring the i2 team onboard. We are well on our way towards integrating the assets and team in Boulder, Colorado, and look forward to continuing to define the cutting-edge and guide RNA chemistry. Each of these transactions exemplifies our commitment to establishing the right business relationships with world leaders in every aspect of what we do, whether on a particular therapeutic area or in technology. In doing so, we believe we will accelerate, improve and expand our pipeline of transformative genomic medicines. Turning to the numbers, we have summarized our financial results for the fourth quarter and full-year 2017 in the press release that we made available roughly an hour ago. Our cash operating expenses in 2017 totaled approximately $93 million and our spending on capital equipment totaled approximately $2 million. Key non-cash items recorded in our income statement include approximately $23 million of stock-based compensation, $14.5 million of non-cash R&D charges associated with payments to our licensers and $2.7 million of depreciation. Over the course of the year, we grew the size of our organization by roughly 25%, increasing 112 full-time employees from 89 at the end of 2016. The primary drivers of growth in our spending in 2017 were our expanding and maturing pipeline and advances in our platform. And we expect these to continue to be primary drivers of spending growth in 2018. As of December 31, 2017, we had approximately $329 million of cash, cash equivalents and marketable securities including the $57.5 million in gross proceeds from our underwritten bond [ph] deal in December. Based on our yearend cash position, we believe we have at least 24 months of capital to fund the advancement of multiple therapeutic programs in parallel and to further extend our technology and leadership. In addition, in the first quarter, we took advantage of strong liquidity in our stock, selling the full $50 million available under our existing ATM facility, further extending our runway and our ability to reach critical value inflection points with cash on hand. And with that, I’ll hand it back to Katrine.

Thank you, Andrew. Building a Company like Editas takes a tremendous range of skills, talents and capabilities. And I’d like to close by welcoming several new members of our extended Editas team. First, welcome to Jessica Hopfield, who just joined our Board of Directors and brings great scientific and business expertise to the table; and second, welcome to Editas Boulder. As Andrew noted, we have closed the acquisition of assets from i2 Pharmaceuticals that we announced earlier in the year. And we are very excited to welcome our talented new team members out in Boulder, Colorado. This is our first acquisition. And not only it brings critical RNA chemistry capabilities and leadership to Editas, it also exemplifies our continued commitment to build an unparalleled genome editing platform. As always, we thank all of you for your interest and support. And with that, we will open it up to Q&A. Operator?

[Operator Instructions] Our first question comes from Gena Wang from Barclays. Your line is now open.

This is Parag [ph] on for Gena. Just wondering -- a couple, two quick questions, first one the cell therapy collaboration. Could you provide some color on the development of autologous therapies? Is this part of the Juno collaboration? And then, secondly on Usher Syndrome, just wondering, if you could share your views regarding the competitive space, specifically any potential gene therapy competition using nanoparticle deliveries and how you might think about your differentiation against that?

Sure. So, let me first ask Vic Myer, our Chief Technology Officer, to talk a little bit about the Juno collaboration. And then, I’ll ask Gerry Cox, our Chief Medical Officer, to talk a little bit about USH2a and different approaches that others may have. Vic?

Yes. So, we remain really excited about our work with Juno Therapeutics after the merger with Celgene. We continue to work very closely on scientific strategy. We haven’t yet to-date, disclosed an allogeneic program but we have disclosed the ability to perform multiple edits in T cells and high rates of targeted insertion in T cells.

In terms of the USH2a program, USH2a is a very large gene. It’s not able to be packaged within a conventional AEV vector. Our approach using genome editing is size-agnostic, which we believe gives us advantages over other replacement type approaches.

Thank you. And our next question comes from Matthew Harrison with Morgan Stanley. Your line is now open.

Hey. This is Ishmael [ph] on for Matthew. My first question is, can you talk about the size of the opportunity for recurrent HSV infection in the eye and the unmet need right now and the indication, and how quickly do you think you can progress into the clinic?

So, I will ask Gerry to speak to the patient size, question. With regards to advancing to the clinic, we haven’t disclosed specific timelines on that just yet. But, we’ll obviously look forward to keeping people updated as we make progress. Gerry?

Sure. So, the disease we are referring to is ocular herpes, called herpes keratitis, which is an infection of the cornea. Each year, there is about 25,000 cases reported. Of these, about 8,000 stroma, called stromal keratitis, which due to repeated bouts of reactivation of the virus can lead to corneal scarring and blindness. It’s actually the most common cause of infectious blindness in the eye.

So, just two more for me. For sickle cell, you’ve already demonstrated the high rates of editing in some preclinical models. What are you still looking to do before you progress into the clinic? And can you give us a taste of what you expect to be able to report in the first half of the year? And my second question would be, could you talk about your strategy in oncology more broadly? And I know you have arrangement in engineered T cell therapy, but could you speak about how you can leverage the platform in other of oncology?

Sure. So, Charlie, would you like to address the question with regard to sickle cell disease, please?

Sure. Our aim in sickle cell disease is to develop a differentiated product, and that would be one that would either induce more fetal hemoglobin and more broadly than the current approaches with BCL11A enhancer, or lead to the real re-expression of beta-globin in a way that’s more reproducible and robust and currently possible with lentiviral-based approaches. So, we are at this point trying to determine which of those approaches is going to give us the most differentiated medicine. And those experiments will be gating for entering the clinic.

And then, to touch on your question on our broader strategy, one of the things we’ve talked about a little bit is how some of those -- the lines are blurring a bit between what might have historically been called a cell therapy or gene therapy. And in particular as genome editing has really begun to truly mature, it actually significantly expands the range of products that are achievable, particularly with regard to cell therapy. So, we view that the universe of opportunity in cell-based medicines as expanding because editing makes that expansion possible. So, I think that’s something that you’ll hear us talking more about over the coming months and frankly years. Clearly, our initial and linchpin relationship there is with Juno, now Celgene with regard to engineered T cells CARs and engineered T cells in oncology/ And that’s certainly been an excellent for us. But, there’s -- it is a wide opportunity set with cell-based medicines, variety of cell types, as well as the fact that editing makes many more products possible than could be achieved without editing.

Would there be a particular area of oncology that you guys will be looking to go into?

I think the opportunities extend far beyond oncology as well.

Thank you. Our next question comes from Peter Lawson with SunTrust Robinson. Your line is now open.

Thanks for the update for the EM22. Just maybe as we’re kind of thinking about number of kind of disease verticals, how should we think about that over that period of time? I mean, you’ve got a really broad technology and kind of how you stay focused and number of disease verticals we should think through?

Yes. No, it’s a great question. It’s actually exactly the kind of thing that, one, has been excellent opportunity to wrestle with when you have a platform. This is broadly applicable as the one that we’re developing here. Clearly, we have two established areas that we talked about quite a bit with regard to ocular disease. And we benefit greatly from the biological and clinical expertise that Allergan brings to the table there. So that has -- we get a lot of leverage from that. We don’t have to build all of that expertise internally. So that is certainly an area where we have a long-term commitment and where the relationship with Allergan is exemplary of our business development strategy as well because it really helps us accelerate in an area and be expert in it faster than we would have, if we had to build it all on our own. Clearly, second area where we have already deep commitment in and will continue is the -- within ex vivo, the relationships through Celgene with engineered T cells in oncology in that area. But, as we’ve noted, there’s a lot more you can do in engineered cell medicines, even beyond oncology. We do get a lot of a technical leverage from the work that we’ve done, both with Juno but also in the work in our wholly owned programs. And some of those we will pursue themselves, some of those with partners. I think, finding the right balance will in part depend on where we see the right kinds of partnerships because sometimes that will enable us to go faster. That’s really a stressful question for us for any partnership. But, we do expect to both, develop -- continue to develop programs on our own and with partners. And that will expand over time.

Thank you. And then, what venue should we think about for the release of data over the next the 12 months? And the number of patients you’d release data on, would it be kind of ends of ones, or you think you need to kind of ends of tens? Anything around that would be really helpful. Thank you.

So, with regards to the LCA10 program, as we said, our goal is to file the IND by mid this year. I’ll ask Gerry to talk a little bit just with regards to the clinical trial design and what we think that Phase 1/2 study will look like. But, what we have not done is given an anticipated schedule of data release. I think it’s a little premature to talk about data release. But, in terms of the study design, Gerry?

Sure. So, this year, we’ll be enrolling the natural history study. We’ll be reporting out preliminary data early next year in the first half. The Phase 1/2 study or the first in human study will be a dose escalation design in which increasing levels of doses are administered to small cohorts of patients. We initially will be treating adults and then expanding into pediatric patients from there. As we progress through the different cohorts, we’ll be assessing both safety and efficacy, and making decisions about dosing of a next cohort, enrolling additional patients. So, that will occur in real time throughout the study. Right now, it’s planned to be a one-year study between 10 and 20 patients in the enrollment.

For the natural history study, how many patients do you think you’ve kind of identified that you could roll in to the Phase 1? Would it mostly be the sites we should think about?

So, the natural history study is taking place in both the U.S. and Europe at multiple sites. We are planning to enroll up to 40 patients. And some of those patients obviously would probably be interested enrolling in the Phase 1/2 study. But it’d be premature right now to say what number of patients from that study would be enrolling.

And then, just final question Katrine, just one the Adverum collaboration, could you give us an update on that and kind of where it’s headed?

So, we had established a relationship with Adverum a little over a year ago now, largely driven by the fact that they’ve done some very interesting and innovative work with regards to as novel vectors in our ophthalmology. And I think there is some very intriguing work that they’ve done there. That would not be for our EDIT-101 product, because that product configuration is already defined, but it would be for potential future product. And we continue to be encouraged by what we see there. We’ll keep you updated as we have data that we would share at a medical meeting.

And our next question comes from Phil Nadeau with Cowen & Company. Your line is now open.

Couple, first on the guidance, the long-term guidance of having two programs near or in late stage testing by 2022. It seems like that most likely programs to be in late stage testing at that time would be the EDIT-101 program and the Juno TCR. Am I thinking about that right or are there other programs that could also potentially make it to late-stage testing within a few years?

Yes. I think that’s right in the sense that the later stage programs will be the ones that are going to be the ones you have the most visibility on now. So, it’s certainly the early programs to the clinic. And in the next year or two as additional programs are more clearly defined as on a particular time line to IND, you will be able to see what the constellation of programs that can be potentially be in late stage in that timeline. And so, you think about it the right way and that ocular work and the engineer T cell work is what will advance in that timeframe?

And then, second on business development. You mentioned a couple of the deals that you’ve done recently to bring new elements into the platform or done over the last few years to bring new elements into the platform. If you were to look at the platform now, what else do you think you need, what are the complementary technologies would be useful to fill out your abilities?

So, I’m going to ask Vic Myer, our Chief Technology Officer, to talk to that. But, as you know, it’s also something where one continues to look over time. I think that we have an excellent platform today. But, you always are looking at how things are evolving in the scientific world.

Yes. So, maybe to recap, so we brought in what we think is world-class chemistry and analytics around the guide. We did that in the first half -- the first quarter of this year. We brought in Cpf1 over a year and a half ago, and we continue to look into nuclease engineering for all for additional technologies that can help bolster us. But right now, we feel frankly, like things are really sort of well-suited in that space. So, it’s not a huge area of additional external exploration for us. We’ve also reported some really nice work in primary cells around being able to do targeted insertion and gene correction. And so, again, that’s a place where we continue to investigate new technologies, so they come out. But, it’s not a huge area of investment. I think the place where we do spend a lot of time and energy or an increasing amount of time and energy is looking at alternative delivery formats. We do think that delivery ultimately is going to be a disease by disease and tissue by tissue based opportunity. And so, we’re always exploring actively new delivery technologies as they apply to our current therapeutic areas and potentially the new ones.

And then, one last question just on the interference between University of California, and your academic collaborators. What are the next steps there? When might we hear of any developments out of that dispute?

Sure. So, as we’re sure everybody recalls, in February of last year, the U.S. Patent Office issued a very favorable decision in favor of the Broad’s division, upholding their issued patent in United States. That was appealed by the other parties and that appeal process goes through Federal Circuit Court. And there has been a number of motions and replies that have occurred over the past few months all of which is in the public domain. And the next step would for there to be an oral hearing that is not yet scheduled, but we anticipate it likely in Q2. And when that is scheduled, that will be a publicly disclosed fact as well. So, there will be hearing. And then subsequent to that, a decision from the Federal Circuit Court, there is not an explicit deadline for that decision. We can look at the conventions of how long they typically take. But, I think, we will just have to wait and see what that timeframe is. It’s not like there is a statutory requirement of when they decide.

And our next question comes from Mike King JMP Securities. Your line is now open.

I wanted to maybe start off picking up a bit where Phil’s line of questioning was going. Just wondering if you could help us, because I look at CRISPR as sort of an open source space where so many labs are working on the technology that lots of things get published and lots of innovation makes the headlines. But, you really don’t know what’s going on behind the scenes. I just wondered you could help us understand sort of what Editas’s view is of certain things like improvement to guide strand or recent publication that talked about the new PAM approach where you can get greater specificity f gene editing. How do you guys look at that from where you sit versus what investors see in the outside world?

Sure. I’ll ask Vic to talk to that particularly with regard to the PAM question. But, let me offer a little bit of framing to this. First of all, anytime anybody has questions on this, give us a call. Because we live in this world everyday and we completely appreciate that there are some things that make headlines because there is so much intense focus on this field that sometimes it can be a little bit challenging to interpret what does it mean? A great example would be the paper that was posted to bio archive in early January this year that was an epidemic assessment of immunogenicity cause a lot of people to say, oh, my gosh, is this an issue…

I was going to ask you about that next.

Sure, absolutely. And that’s one of the reasons -- we’ve been working on that already for a year and a half with a collaborator at the FDA because we felt like it was an important question and we wanted to address it a very rigorous manner. So, I’ll ask -- Charlie can speak to that a little bit more. But, of course we work on that. That’s the kind of fundamental translational science that to move young academic science into making medicines; that’s why we’re here. A lot of these kinds of translational science questions are ones that are often not the purview of academic science. It really is kind of the stuff that companies do, specificities and other great examples where we’ve made tremendous progress. We’re very confident on that front and our capabilities. And there are a number of other aspects. So, I think -- we appreciate that a lot of things will get the headlines and attention at a level that maybe wouldn’t be the case in other fields, and we can help interpret that for you. But, the question of the translational science like specificity, like pharmacology, like immunogenicity, et cetera, we are working on all of those and are very confident on each of those fronts. So, that is something that is perhaps a bit unique to this field, those sorts of elements of the science getting the level of attention if they do. Do you want to talk about the PAM question?

Yes, sure. So, you were referring to the recent published at a David Liu’s lab and it’s certainly a nice piece of work and we’re always cognizant of these innovations as they happen on the outside. And we always take a look at them and of course keep up with the literature. I would say, one of the great things about Cpf1 and the family of PAM variance that we already in-licensed over a year ago is when we add up all of their PAM recognition capabilities, it allows us to actually cut at almost every base in the entirety human genome. So, the way we’ve tackled the problem of flexibility of targeting is by bringing in and reducing the practice, so that a large suite of enzymes that gives us a very diverse portfolio of size that we can target within the human genome. So that’s sort of how we’ve addressed that question. Overall, we think it’s great that there are lot of people working on CRISPR. There is a ton of brilliant minds and energy going into further advancing the platform. And for us, we see that as actually a great opportunity.

And Charlie, would you like to add some comments with regard to the immunogenicity questions, just kind of repricing, what we’ve done and our views on that?

Sure. And so, as mentioned and I mentioned earlier, we’ve been working on this for quite some time. And there is a well-established guidance on how to develop assays or proteins that you’re going to use as therapeutics. And these types of assays are developed every time a novel biologic such as antibodies put into human. So, we use that guidance in paradigm if you will, to develop assays. It would allow us to look at for preexisting and eventually induced antibodies, the Cas9 proteins in humans and our preclinical species. And at this point, we don’t see a high rate of preexisting antibodies. And it’s unclear what the impact of those antibodies will be. Certainly in the case of ex vivo therapies, we expect the editing machinery to be gone long before those therapies go back in the human, and in the case of the ocular therapies, our Cas9 proteins are intracellular, and we don’t expect them to induce new antibodies.

Charlie, is there something specific in the Proteous [ph] paper that you might point to that would be expected to induce a higher level of antibody reaction than you guys have seen in your work?

I think, the main difference is between the two pieces of work or the assays that were used to come to the conclusions that were drawn. And so, if you look at the bio-archive paper, western blotting without a competing control to adjust specificity was used as the assay to measure the level of preexisting antibodies. And furthermore, the number of humans that were tested were small. And so, we developed a validated, specific and sensitive assay that we then tested first on a test set of 50 samples to validate that was working as we thought it would, and then on 200 new samples. And we come to obviously a very different numerical conclusion that was in that paper.

And the one thing I might add, it’s sort of funny, but in an odd way, we do kind of -- we are kind of glad when these questions get raised, because it gives us an opportunity to talk about the importance of this work, whether specificity or immunogenicity or what have you, because oftentimes, folks aren’t actually interested in it. They just assume all these things are happening. And it’s actually a really important part of developing medicines. And so, it’s actually nice opportunity for us to talk about how you do this work, where are we in it, have we met the kinds of requirements that the FDA and other regulators would expect. And it’s a way hopefully you can get more insight into a lot of the important translational that Vic and Charlie and the team are doing.

Great. I appreciate your candor and additional color on that. And then, maybe just one follow-up question for you on the Juno collaboration. I know, you expressed in your formal remarks your enthusiasm for your expectations. But, it’s also natural for a company that’s required to go through some kind of strategic review prior to closing or upon closing. And I just wonder if there’s anything that we need to be aware of on the lookout for in the near-term that might impact the Juno relationship, even if it’s going to continue to move along smoothly here.

Well, recall that Juno and Celgene had a well-established relationship long before the acquisition, including for example a board seat on Juno and such. And so, they had a good long window into all of the work that Juno is doing, obviously including our relationship with them because our relationship -- and we established this relationship with Juno almost three years ago. So, we and they both could see a long time ago that putting these sorts of editing -- editing together with the CAR T and antigen T cells was a really good direction to take. So, we’ve been at this for some time with them. And Celgene could obviously see that and through their relationship with Juno. And so, I think that our confidence obviously comes from the strength of our relationship with Juno and the great work we think they are doing. Obviously, I’ve known Celgene folks myself for a long time, and I think that they have a real clear vision of where they want to go with this. It’s important way that they’re building a company that they’ve been able to have a great window into how the Editas relationship fits into bigger Juno picture for a long time already.

Next question comes from Cory Kasimov with J.P. Morgan. Your line is now open.

Hey. This is Matthew on for Cory. And thanks for taking my questions. I just wanted to go back to the immunogenicity data you presented, real quick. I’m curious if you’ve been able to identify the specific immunogenetic regions and either the Cas9 enzymes, and if any of these epitopes are conserved among CRISPR associated nucleases?

So, Charlie, do you want to talk a little bit about where we are in the work overall and what some of the next steps are? Actually, Charlie is at a remote location, so let me just give one more chance to Charlie. Are you still on the line? While we’re checking on that, so, he mentioned this briefly in his -- in the prepared comments. But, with any immunogenicity assessment, be it Cas9 or it’s any antibody or anything else, there is sort of a couple of steps. So, one is can you identify any kind of preexisting immunogenicity or immune response. Then, the second question is, does it mean anything? And frequently, what you find is that even -- and all we’re detecting actually quite low levels, even to begin with. And so, then the question is do those very low levels even mean anything. That’s some of the next work that we’re engaged in. And we’ll have to see if we do think there is any consequence. But, when you start with such a low level to begin with, that actually puts you in a position where even if any of those were to have meaning, it would only be for very, very small percentage of patients. And I think, there are also number of ways that can be managed. Look, we asked this question because we thought it was important and it’s important that we follow up on any potential direction if we go. But, where we sit today, we’re in a position where we feel very confident that immunogenicity is not going to be a significant issue for making CRISPR-based medicines. Charlie, were you able to get back online?

Yes, I got back online, apologies. So, it sounded like I missed an interesting discussion. But, I had trouble getting back on.

So, I think it’s just a question with regard to immunogenicity, and what our next steps are to follow up on the work that we’re in the middle of.

Yes. And so, we will continue to expand the sample size and we will look at the response on our preclinical model. So, we built assays that work in non-human primates, which are probably the most relevant place for us to look. And we’ll obviously look for the induction of antibodies I humans as we enter into clinical trials. But what we’ve seen to date that even in animals and some of our non-human primates had preexisting antibodies, there was no effect either on the efficacy or safety of the editing in the small datasets that we have.

And then, I have one question for your cellular therapy program. I’m just curious on your thoughts on the relative ease or difficulty to adapt current autologous cell manufacturing approaches to include a gene editing step?

Vic, could you talk to that question?

Yes. So, we haven’t disclosed our unit operations for cell therapy but suffice it to say that we don’t see it as a large change in the autologous cell manufacturing process as it stands today.

[Operator Instructions] Our next question comes from Youngrin Kim with CLSA. Your line is now open.

I just had one question on recent deal that happened in the field. So, Sangamo landed a deal with Gilead Sciences on gene editing on cancer treatment. But, it makes me wonder why Gilead made such choices when CRISPR is supposed to be superior technology to zinc finger nucleases. So, I was just wondering if I could get some comments from you guys on that.

We established our relationship with Juno Therapeutics three years ago and that has been very productive relationship for us that clearly we were not available to partner with others, given the important scope of relationship we have with Juno. You of course can ask to others why they might have made the choices we -- they might have made. But, we were already committed and making excellent progress with Juno. I think it really does reflect the vision they’ve had from very early on in their days as a company about where the field is going. So, we have been working together with them on a lot of stuff for a long time.

Just to follow up on that, so I get that Editas was not available. But so, what I’m trying to understand is from Gilead’s perspective, is it a function of maturity of technology where zinc finger nuclease was here for a longer time than CRISPR and they thought going with zinc finger nuclease would be a safer bet on creating cancer treatment? Because I guess they could have went with CRISPR Therapeutics on their partnership. So, I’m just trying to get some color on what are your thoughts on why they made that decision.

Yes. I mean, obviously, you should talk to them about why they made the choices they may have made. From our perspective, we have always believed that editing really helped with improve and expand what’s possible, with the sorts of the T cells for oncology CAR Ts and antigen T cells and such. We’ve demonstrated that I think through all -- we have published a lot of work that we have done together with Juno. And we have not published everything we have done together. So, there is a lot to stay tuned for there that we are very excited about. And we are continuing to be excited to work with Juno, now Celgene.

Thank you. And I’m showing no further questions in the queue at this time. I’d like to turn the call back over to CEO, Katrine Bosley.

Thank you so much. And with that, thanks to everybody for participating in today’s call, as well as for your support as we work to bring transformative new medicines to patients. Have a great evening. Thanks.

Ladies and gentlemen, this is the operator once more. This concludes your call and you may all disconnect. Everyone have a great day.