Silence Therapeutics plc (SLN) Q4 2021 Earnings Report, Transcript and Summary

Good day, ladies and gentlemen, and welcome to the Silence Therapeutics Full Year 2021 Earnings Conference Call and Webcast. At this time, all participants are in a listen-only mode. [Operator Instructions] I will now hand over to Gem Hopkins, Head of IR and Corporate Communications to open the webcast. Go ahead, madam.

Good morning and good afternoon, everyone. Thank you for joining us today. My name is Gem Hopkins, Head of Investor Relations and Corporate Communications at Silence. Joining me today on the call are Craig Tooman, our President and Chief Executive Officer, who will provide an update on the business; Rhonda Hellums, our Chief Financial Officer who will review our financials; and Dr. Giles Campion, our Head of R&D, who will provide an update on our clinical programs before opening the call to your questions. For those of you participating via conference call, the accompanying slides can be accessed by going to the Investors section of our corporate website at www.silence-therapeutics.com. Turning to Slide 2. I'd like to remind you that during today's call, management will make projections or other forward-looking statements regarding anticipated future events or the future financial performance of the company, including clinical development timing and objectives, the therapeutic potential of our product candidates, our operational plans and strategies, anticipated milestone payments, anticipated operating and capital expenditures, business prospects and projected cash runway. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in our most recent annual report on file with the SEC. In addition, any forward-looking statements represent our views only as of the date of this recording that should not be relied upon as representing our views as of any subsequent date. We specifically disclaim any obligation to update such statements. With that, I'd like to turn the call over to Craig. Craig?

Thank you, Gem, and welcome, everyone. Thank you for making the time to join us today. Turning to Slide 3. 2021 was a remarkable year for Silence highlighted by the first successful clinical data from our proprietary mRNAi GOLD platform and the emergence of the company as a globally recognized peer trading on NASDAQ with top-tier investors. Silence is well positioned for long-term growth in the very dynamic siRNA space and we are very excited about our future prospects. Regarding our pipeline, the results from the SLN124 healthy volunteer study last May demonstrated proof of mechanism and showed our ability to effectively translate preclinical results into the clinic. With this backdrop, we made excellent progress during the year advancing both our wholly owned and partnered programs targeting genetic diseases in the liver. We completed enrollment in the SLN360 Phase 1 study in healthy adults with high Lp(a) setting us up for the positive data readout we just reported this quarter. We also started dosing patients in the SLN124 Phase 1 program. Giles will provide an update on both programs later in the call. On the partnering side, we secured a new collaboration with Hansoh Pharma that added three new targets to our pipeline. We also continued to advance our collaborations with AstraZeneca and Mallinckrodt. Collectively, these collaborations brought in a total of $58 million in non-dilutive cash in 2021. This really demonstrates the value of our hybrid business model to expand our pipeline and provide a steady stream of non-dilutive capital to support our internal R&D efforts. Earlier in the year, we completed a $45 million private placement that laid the groundwork for expanding our global shareholder base. We built on this in the second half of the year with our successful AIM delisting in November, a move we made to support increasing interest from new investors. Along with our exclusive NASDAQ listing, we welcomed several new U.S. health care funds as key shareholders to Silence. Turning to Slide 4. We've entered 2022 with incredible momentum. As you probably know, we just reported very encouraging clinical data for SLN360 last month. That's the second positive clinical data set from our GOLD platform. This is a real tribute to Giles and the R&D team who have strategized and led this effort, and I know he's looking forward to telling you more about this. SLN360 is a priority asset for us where we see substantial opportunity to build value. We're looking forward to the full study results being presented in a late breaker at ACC on April 3. Beyond the ACC presentation, we expect more durability data in the third quarter and remain on track to start the Phase 2 ASCVD study later this year, pending regulatory feedback. We expect to capitalize on the growing appreciation for SLN360 and are engaged in global partnership discussions to ensure we maximize this high-value program going forward. Moving to SLN124, we have now fully enrolled the thalassemia study and remain on track for top line data in the third quarter. Given enrollment challenges in the MDS study, and our commitment to prioritize investment in areas where we believe we can create the most value, we've decided to discontinue the MDS cohorts and focus on thalassemia and polycythemia vera or PV. We're very pleased that the FDA recently granted SLN124 orphan drug designation for PV last month, adding to the other designations we already have and we expect to start a Phase I study later this year. On the partnering side, we're on track to move the SLN501 program with Mallinckrodt for complement-mediated diseases into the clinic in the first half of this year. We're very pleased that the pipeline continues to progress very well both internally and with our partners. Before I turn the call over to Rhonda for an update on our financials, I just want to highlight an important point. What is particularly attractive about our GOLD platform and the GalNAc siRNA approach is its well-established modality with a track record of clinical success. In fact, historically, GalNAc siRNA programs have had a much higher success rate in moving from Phase 1 to Phase 3 compared to the pharma industry average. That's why we're so excited about our advancing clinical pipeline. Going forward, we will prioritize investments in our clinical pipeline in the areas where we believe we can generate the most value while always being careful stewards of our shareholders' capital. With that, I'd like to turn the call over to Rhonda for an update on our financial performance. Rhonda?

Thank you, Craig. Turning to Slide 7. For the period ending December 31, 2021, the company recorded £12.4 million in revenues versus £5.5 million in 2020. The increase of £6.9 million was primarily driven by the advancement of targets in our Mallinckrodt and AstraZeneca collaboration, which together delivered £11.4 million in 2021. We also recorded approximately 392,000 in royalty revenue during 2021. As a reminder, we record revenue from our collaborations based on a percentage of contract completion. Therefore, as our current collaboration programs progress such as SLN501 did in 2021 and additional programs are initiated such as those programs associated with our Hansoh agreement, which was executed in October of 2021, our revenues are also estimated to increase. The expenses related to our partner program, including the portion of our employees' time dedicated to these programs are recorded as cost of sales as they are attributed to the revenues. As expected, R&D costs rose in 2021 to £30.8 million versus £20.2 million in 2020. This increase was primarily due to advancing our proprietary SLN360 and SLN124 program and the increase in head count costs due to the addition of R&D expertise to support our innovative pipeline. General and administrative costs were £20 million in 2021 versus £14 million in 2020. The increase was primarily driven by requirements of being a public company dual listed on both the NASDAQ and AIM for most of 2021 and support the growth of our R&D program. These costs include an increase in non-cash share-based expenses related to the granting of employee share options and further enhancement of our support functions, including personnel. As Craig mentioned earlier, in late November, we delisted from the AIM and are now solely listed on the NASDAQ. The company's net loss for the full-year of 2021 was £39.4 million versus £32.5 million in 2020. The increase of £13.2 million is related primarily from the R&D and G&A expenses, but those are partially offset by the increase in gross profit from our collaboration. Turning to Slide 8, the company's cash and cash equivalents were £73.5 million or approximately $99 million at the end of December 2021. As Craig mentioned, during 2021, we received £44.4 million or $58.4 million from our collaboration partners. This includes proceeds of $40 million or £30.8 million from AstraZeneca in May and a $16 million upfront payment from Hansoh in December, which net of taxes was approximately £10.7 million. We also received proceeds of $45 million or approximately £33 million from our oversubscribed private placement of our ADSs in February of 2021. We are not providing any specific guidance on spending today, but we are committed to responsibly investing in initiatives that will advance our pipeline and in the valuable programs that offer the potential to address important diseases that impact many individuals worldwide. We estimate that our current cash balance of £73.5 million will last until early 2023. We will continue to leverage our hybrid business model and evaluate new additional non-dilutive collaboration agreements. With that, I will turn the call over to Giles for clinical updates. Giles?

Thanks, Rhonda. Turning to Slide 10. As Craig mentioned, we've now generated clinical data in two separate wholly owned programs that demonstrate the consistency of the sRNA modality and breadth of our GOLD platform. SLN360 targeting high Lp(a), a genetic risk factor for cardiovascular disease affecting up to 20% of the world's population and SLN124 targeting TMPRSS6, a gene that prevents the liver from producing hepcidin, which is a key natural regulator of iron. We're using this approach to potentially address a range of rare hematological diseases. In both Phase I studies, we saw robust knockdown of the target gene, strong durability of effect after a single dose and a good safety tolerability profile. These findings are consistent with what we've observed preclinically and why we believe the sRNA approach is so attractive. Turning to Slide 11, and our SLN360 Lp(a) lowering program, Lp(a) is an independent risk factor for cardiovascular disease affecting one in five people worldwide. Lp(a) levels are genetically determined and not modifiable through diet or lifestyle changes. There is currently no specific treatment option approved for high Lp(a) and existing cholesterol long drugs are not effective. On Slide 12, you can see that high Lp(a) significantly increases risk for serious cardiovascular events like heart attack, aortic stenosis and heart failure. Clearly, this is a major public health issue with a huge unmet need. Turning to Slide 13 and our SLN360 Phase 1 program. This program includes a single ascending dose and multiple dose part, both a randomized, double-blind, placebo-controlled studies. In February, we reported positive top-line data in the single dose cohorts that evaluated 32 healthy adults with high Lp(a) at or above 60 milligrams per deciliter. The multiple ascending dose study is ongoing, and that's looking at adults with stable atherosclerotic cardiovascular disease and high Lp(a). Turning now to Slide 14, here's a look at the SLN360 top-line data we reported. As I mentioned, SLN360 was well tolerated, and there were no clinically important safety concerns identified. SLN360 reduced Lp(a) in a dose-dependent manner from 46%, up to a maximum of 98% with an 81% reduction persisting at 150 days. Longer-term follow-up to 365 days is ongoing to further assess the duration of action. While we're limited in what we can disclose right now due to ACC embargo policy, detailed results will be presented in a late breaker at ACC on April 3 by our lead study investigator, Dr. Steve Nissen from the Cleveland Clinic. Moving now to our SLN124 hepcidin regulation program. This is a program where we see broad therapeutic potential based on SLN124 ability to regulate hepcidin, known as the master regulator of iron in the body. We've generated strong preclinical data in a number of disease models including thalassemia, polycythemia vera and hereditary hemochromatosis. We've also established proof of mechanism in healthy volunteers. SLN124 has rare pediatric disease designation for beta-thalassemia and orphan drug designations for thalassemia, MDS and now PV. As I mentioned, SLN124 targets the TMPRSS6 gene in the liver. By reducing TMPRSS6's expression, we can raise endogenous hepcidin. This in turn, lowers systemic iron levels and normalizes distribution, improving red cell production. In this preclinical thalassemia model, you can see that SLN124 increased hemoglobin by a robust 2.5 grams per deciliter. An increase of 1.5 grams per deciliter is considered clinically significant. Turning now to Slide 18 and our healthy volunteer study that we reported out last May. This was a randomized double-blind placebo-controlled single-dose study in 24 healthy adults. We presented full results at the American Society of Hematology Annual Meeting last December. Slide 19 shows you that SLN124 increased average hepcidin in a dose-dependent manner of up to approximately fourfold after a single dose with effects persisting throughout the study period. Slide 20, you can see that SLN124 induced durable reductions in serum iron. Percentage change from baseline was around 50% at day 29 with 3 milligram and 4.5 milligram per kilogram doses. Turning to Slide 21, and in summary, this was an important study because it was the first clinical study from our GOLD platform and establish proof of mechanism for SLN124. SLN124 showed durable reductions in serum iron and transferrin saturation, a strong safety profile and long duration of action. We remain encouraged by these results and expect to build on this with the ongoing study in thalassemia patients. Turning to Slide 22, here you can see the design of our ongoing Phase 1 program in thalassemia. We have now fully enrolled the single ascending dose cohorts, which includes 24 patients and expect top-line data in the third quarter of this year. As Craig mentioned, we have decided to discontinue the MDS cohorts. This study is particularly challenging to enroll due to the highly specific patient entry criteria required for Phase 1. MDS is a rare disease and very low, low-risk MDS is a small subgroup of MDS patients. While we see opportunity for SLN124 in MDS, we are prioritizing thalassemia and PV indications where we believe we can derive the most value near-term. PV is an area of high unmet need and one that we believe SLN124 is particularly well suited to address. We plan to start the Phase 1 study later this year. With that, I'll hand the call back over to Craig.

Thanks, Giles. Our accomplishments in 2021, both clinically and as a business, give us a lot of optimism for our future. We kicked off 2022 with impressive clinical data from our SLN360 program and look forward to the late breaker at ACC on April 3. We expect data from the longer-term follow-up in the SLN360 single ascending dose cohorts later this year and are well positioned to start our Phase II ASCVD study pending regulatory feedback. In the SLN124 program, we expect top-line data in thalassemia in Q3 and plan to start the PV study in the second half of this year. On the partnering side, we expect to start the Phase 1 SLN501 study for complement-mediated diseases with Mallinckrodt in the first half of this year. Along with our progress in the clinic, partnering interest also remains very strong. This is a very exciting time for Silence by all accounts. I'd like to thank everyone for listening today, and I'll pass over to the operator for your questions.

Thank you. [Operator Instructions]. Your first question today is from the line of Tom Shrader from BTIG. Please go ahead.

Good morning. Thank you for the update. I have an ACC question. Is that set in stone that we're only going to see single dose data? Or is it -- we really going to see up to some cutoff where you're sure of the data? Just can you say anything about what we might see?

Well, I think…

Giles?

Yes, I think we're pretty sure about the single ascending dose data. I mean that's what we're going to be disclosing there. As we had indicated, we have started the multiple dose session, but that won't be ready for discussion. But just to emphasize, I mean, a single dose has produced up to 98% knockdown. This persists up to 82% at some day 150. So most patients, you're just seeing a hint of efficacy in short-duration action. I mean that's just showing per effect. So I think it's a good indication of what...

Okay, sorry if I said only the single dose data. I had a little clarification on the Asian partnership. Are these new targets where you're going to get data in Asia first and then maybe go global? Or are these liable to be Asian applications of targets that we've seen anywhere -- see where you're working elsewhere? Could you just give us a little bit of -- what you can say about that?

Giles?

Yes, I mean, the nature of this relation means that these will be targets sort of applicable globally. Two of the targets we have worldwide rights and the second target is primarily in China, but we'll also have an option there as well. So these have broadly applicable targets.

And they are new targets, not things we've heard about before.

Tom, this is Gem. Just stepping in, we actually haven't disclosed specifics around whether or not their new targets. We've just said undisclosed targets at this point.

As part of the partnership agreement.

Exactly.

Got it, okay, thank you.

Thank you. The next question is from the line of Patrick Trucchio from H.C. Wainright. Please go ahead.

Hi, thanks. Good morning and afternoon. I have a few follow-up questions on both SLN360 and SLN124. So just first, in the SLN360 Phase 1 program, can you discuss the dose response you've seen so far? Do you know which dose or doses you expect to bring forward to the Phase 2 program? Or would you need some additional data from either multiple dose cohort or from the long-term follow-up to determine the dose you plan to bring forward?

Giles.

Yes, as you saw, the initial stages of development are all about establishing the dose regime that you really want to take into the pivotal study. So both Phase 1 and Phase 2 contribute to that. As we can tell a lot from our single ascending dose, we have a multiple dose study going on. The patient populations are slightly different. So in the single ascending dose, normal volunteers with elevated LP(a) with the multiple dose, these individuals with established cardiovascular disease, so it will give us some information about that population. As far as the -- what we can disclose right now, as I said in the briefing, we're limited because of the embargo you see based on this. But you will have a full disclosure in the presentation on April 3.

Yes, that's helpful. And then just regarding the SLN124 GEMINI II program, can you tell us what data that you would expect to report in the third quarter? And specifically, what you would be looking for expecting on safety and PK and PD response that would give you confidence to move this program forward to Phase 2?

Well, as you know, we reported data in healthy volunteers last year in May. Essentially, we're looking at similar endpoints in terms of response, not only in terms of hepcidin, but also in iron parameters. And of course, this will be important because we'll actually see these individuals rather than having normal line distribution will have iron overload. So we'll be able to look at the impact of this situation on the effectiveness of 124. And this is -- again, it's just a single dose study. And there is a multiple dose component which will again give us more information about the longer-term effects of this. I mean, ultimately, what we've shown in the preclinical, and the nice thing is that the rodent models translate pretty well into the human situation as we saw a really strong effect on hemoglobin. And obviously, that's what we need to see in terms of dealing with the anemia and reducing transfusion rate. And the single dose is primarily around the iron parameters. But at the moment, everything lines up pretty well with what we've seen preclinically.

Yes, that's helpful. And then just a kind of more of a broader strategic question, SLN124. I'm just wondering with the decision to kind of pursue thalassemia and PV going forward, how are you thinking about this asset in terms of longer-term potential in how many indications and where ultimately you see the potential for SLN124 in the long-term?

Well, clearly, we have a lot of shots on goal and want to prioritize for the best return on capital, but it's mechanistic. And as Giles alluded to, we see a lot of avenues for 124. Given the SLN360 recent data, clearly, that's a high priority for us right now. We're going to draw a circle around that. So we really are very pleased with both of those options in the pipeline today. So we'll continue to look for the best opportunities, larger opportunities within the 124 franchise.

Yes, that's really helpful. Thank you very much.

Thank you.

Thank you. The next question is from the line of Myles Minter from William Blair. Please go ahead.

Hey, everyone. Thanks for taking the questions. Congrats on the progress. Just in terms of the regulatory feedback that you planned to procure from the FDA. Have you scheduled that meeting or a series of correspondence yet? Are you having those currently? And I'm also wondering whether there's been any feedback from the regulators as to if they want to see the longer 365-day follow-up from APOLLO before you go ahead and start that Phase 2 study in the second-half? Thanks.

[Indiscernible].

I don't think it's anything specifically that we can comment on regulatory, but feel free, Giles.

Yes, I mean, what we've said is that our plan to start the Phase 3 is subject to regulatory approval. So clearly, the interactions that we are planning with the FDA and other authorities are sort of a key point in terms of being able to go forward. But we've not heard anything in terms of -- at the moment, we feel that the single ascending dose will be adequate to go into Phase 2. And the reason why we feel that is that it's already precedent being set by Amgen, who did just that. They went from their single ascending dose data straight into a Phase 2 program.

Yes, fair enough. And then a clarification question just on the Lp(a) knockdown that you have described out of APOLLO. Can you just put it on the record that is that the median number that you're giving there? Or is that the absolute range of values of the knockdown that you're seeing?

Well, what we've said is that we saw a range in terms of dose response, so ranging from 46% up to 98%. And I think we can clarify that that's median levels.

Cool. And then on 124, just with the discontinue of MDS. Did you enroll any low-risk MDS patients in GEMINI 2? And if you did, I guess, what's happening with that data? I'm just curious as to like you obviously discontinued enrollment, but you also haven't boosted the number of patients with thalassemia, you just cut the total enrollment by half. So I'm just wondering if we're going to see any data outside of thalassemia for 124?

Yes, we partially enrolled the first cohort and obviously, we'll be monitoring them in terms of the -- as described by the protocol. So the follow-up there will be for 104 days. I mean I think why we think that there are further options to pursue one, as Craig said, this is a mechanistic approach that we're dealing with. Both indications are characterized by having iron loading anemia. They both have -- they have different genetic causes, of course, but the fundamental effort to theology [ph] is the same. So we think there is some -- there will be lead through from what we see in the beta-thalassemia and the MDS. And I think as Craig said, this is a prioritization in terms of making sure we put our resources where we think we're going to drive most value in the short-term, but this doesn't stop us coming back at some stage once we've seen all the data and carrying on.

Fairly sensitive. And makes a lot of sense. I'll hop back in the queue. Thanks.

Thanks, Miles.

Thank you. And we have no further questions at this time. So I'll hand back to the speakers for closing remarks.

Thank you again for joining us on this call today. Extremely proud of our 2021 performance and overall results. We're looking forward to the SLN360 late-breaking oral presentation at ACC on April 3 and what we can deliver from our platform, both internally and through ongoing partnership initiatives. And we look forward to keeping you updated on our progress this year. Thank you, and have a great day, and hope to see some of you at ACC.

Thank you. That does conclude the conference for today. Thank you for participating, and you may now disconnect.