Viridian Therapeutics, Inc. (VRDN) Q2 2018 Earnings Report, Transcript and Summary

Good afternoon, and welcome to the miRagen Therapeutics Second Quarter 2018 Earnings Conference call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to Mr. Daniel Ferry from LifeSci Advisors.

Thank you, and good afternoon, everyone. On the call today are miRagen's President and Chief Executive Officer, Bill Marshall; Chief Financial Officer, Jason Leverone; Executive Vice President of Research and Development, Paul Rubin; and Chief Business Officer, Adam Levy. Before we begin, I would like to remind everyone that this conference call and webcast will contain forward-looking statements about the company. These statements are subject to risks and uncertainties that could cause actual results to differ. Please note that these forward-looking statements reflect our opinions only as of the date of this call. We will undertake no obligation to revise or publicly release the results of any revisions to these forward-looking statements in light of new information or future events. Factors that could cause actual results or outcomes to differ materially from those expressed in or implied by such forward-looking statements are discussed in greater detail in our most recent filings on Form 10-K and our other periodic reports on Forms 10-Q and 8-K filed with the SEC. I would now like to turn the call over to Bill Marshall, President and Chief Executive Officer of miRagen. Bill?

Thanks, Dan. Good afternoon, and thank you for joining us for our corporate update call for the second quarter 2018. We will begin today's call with an update on our clinical programs and a brief review of our financials for the quarter before opening up the call for questions. We are excited and proud of what the team at miRagen has accomplished. We are developing a suite of microRNA-based product candidates for patients in need across several indications. In the second quarter, we made important advancements in each of our 3 clinical stage programs. We released new data from our lead product candidate, cobomarsen, in cutaneous T-cell lymphoma, or CTCL, and also, initial observations in the first expansion indication for cobomarsen adult T-cell leukemia/lymphoma or ATLL. Additionally, we announced the initiation of 2 new clinical trials, the first being a Phase I trial for MRG-110, followed more recently by the initiation of a Phase II trial for remlarsen, also known as MRG-201. Let me start with our first potential expansion indication for cobomarsen, ATLL. ATLL is a highly morbid T-cell malignancy seen in patients previously infected with the human T-lymphotropic virus type 1. Patients with the aggressive form of the disease have previously had a poor prognosis, with mean survival times of 4 to 10 months after diagnosis. At this year's ASCO meeting, we reported encouraging first observations from our Phase I clinical trial on the safety and efficacy of cobomarsen in ATLL patients. These observations were for 2 patients considered to have aggressive disease at baseline, who have been treated with cobomarsen, including one leukemic patient and one with lymphomatous disease. As of our update at ASCO, both patients have remained stable on cobomarsen for more than 5 months and continue to receive doses of the product candidate. The patients continued to feel well and did not develop new signs or symptoms of ATLL. Cell activation markers and markers of malignant cell proliferation improved, and the improvements were maintained while on treatment with cobomarsen. In the leukemic patient, malignant cell counts decreased with chemotherapy and remained stable for more than 6 months during treatment with cobomarsen alone; while in the lymphomatous patient, who received cobomarsen alone, no evidence of recurrent nodal disease was observed for more than 5 months. Cobomarsen was generally safe and well tolerated in ATLL patients. We are pleased with these results and anticipate announcing additional data from the trial at this year's American Society of Hematology Meeting, or ASH, in December. I also think it is important to remember that the ATLL subtypes of these initial patients are associated with extremely poor prognosis, and novel therapies are essential to improve patient outcomes in this devastating disease. At ASCO this year, we also released new data from our Phase I clinical trial of cobomarsen in patients with the mycosis fungoides, or MF, form of CTCL. The data include efficacy, safety and tolerability observations from long-term dosing of cobomarsen via various routes of administration in patients who have been enrolled in the study for up to 17 months. Cobomarsen appeared to demonstrate durable responses in tumor reduction, as measured by mSWAT scores, and quality of life improvement, as measured by Skindex-29 scores. Of the patients treated systemically with cobomarsen, 29 of the 32 subjects have shown mSWAT score improvement. And of the patients who showed improvements in mSWAT scores, these were observed regardless of whether the patient was receiving stable background medications for CTCL or cobomarsen alone. Also, of the patients receiving greater than 1 month of cobomarsen, 11 of 21 achieved a partial response, which is represented by a greater than 50% reduction in mSWAT. The main duration of partial response was 213 days, and 8 patients achieved a partial response lasting for more than 4 months. Here again, cobomarsen continued to be generally well tolerated at all dose levels evaluated with no serious adverse events attributed to the product candidate. We plan to present final data from this trial at ASH in December. During the fourth quarter of the year, we plan to initiate the global Phase II SOLAR clinical trial in CTCL. As a reminder, we expect the SOLAR trial to evaluate the safety and efficacy of 300 milligrams of cobomarsen, given by intravenous infusion in an active control comparison study versus ZOLINZA, also known as vorinostat. We plan to enroll approximately 65 patients per treatment group. The primary endpoint of the SOLAR study is an overall response rate of 50% or greater improvement in the severity of a patient's skin disease over the entire body, or mSWAT, maintained for at least 4 consecutive months, known as ORR4, with no evidence of disease progression in the blood, lymph nodes or viscera. Progression-free survival will be a secondary endpoint, and we plan to use patient-reported outcomes as an exploratory endpoint to monitor quality of life improvements. Based on discussions with the U.S. Food and Drug Administration, we believe the results from this study could potentially allow us to apply for accelerated approval of cobomarsen in the United States. At this point, I would like to thank the Leukemia and Lymphoma Society, or LLS, for their support. This week, we announced that we have joined forces with the LLS in our efforts to advance cobomarsen as a novel potential blood cancer therapy. Through this new relationship, we believe LLS will provide invaluable support to our upcoming SOLAR trial, including providing up to $5 million in the form of a series of potential investments in miRagen. We are very pleased to be working closely with the LLS to deliver new therapies to patients in need. Turning to remlarsen, also known as MRG-201, we recently initiated a double-blinded randomized Phase II clinical trial to evaluate remlarsen in subjects with a predisposition for keloid formation. We believe that this is an exciting opportunity to build on the Phase I data in induced cutaneous fibrosis, where remlarsen reduced scar tissue deposition in healthy human volunteers. We expect to enroll 12 subjects in the study across multiple clinical sites in the United States. Participants in the trial are receiving small, matching excisional wounds that are sutured and then injected with either remlarsen or placebo. Thus, patients will serve as their own control, which increases the statistical powering of the trial. The lesions will be observed for up to 12 months to assess the effects of remlarsen treatment on keloid formation. We were also very encouraged to report preclinical data demonstrating the potential of remlarsen to prevent both corneal and retinal fibrosis earlier this year. We announced results from this preclinical work at the Association for Research in Vision and Ophthalmology Annual Meeting. Patients suffering from ocular fibrosis have limited treatment options, and this data demonstrates the possible utility of remlarsen to provide therapeutic benefit to these patients in need. We are also pleased with the progress on our third clinical stage product candidate, MRG-110, which we are developing in collaboration with Servier. MRG-110 is an inhibitor of microRNA-92, which has been shown to be important in the regulation of new blood vessel growth and healing. As a reminder, the first MRG-110 trial was initiated in March 2018 by Servier, which is evaluating the use of MRG-110 administered intravenously. This study is intended to support additional clinical studies that could allow for its potential use in the treatment of multiple indications, including heart failure. During the second quarter, we initiated a second Phase I clinical trial for MRG-110. This study is designed to evaluate the safety, tolerability and pharmacokinetics of MRG-110 after intradermal injection in healthy volunteers receiving induced wounds through biopsy. In addition to supporting the use of MRG-110 to improve healing in both acute and chronic incisions, ulcers and lacerations, the second trial will also aid in determining dose selection and pharmacodynamic endpoints for all potential indications. In summary, we believe this is an exciting time for miRagen as we build out our team, move our clinical-stage programs to more advanced trials and continue to demonstrate the safety and efficacy of our microRNA-based therapeutic platform. As of today, we have 3 product candidates in human studies, each of which may be applicable across several indications. With these clinical programs and a pipeline of promising preclinical microRNA therapeutic candidates, we are focused on building a sustainable company with the potential to deliver multiple product candidates for patients in need. During the remainder of 2018, we will be focused on supporting each of our 4 ongoing clinical trials and successfully initiating the global Phase II SOLAR trial for cobomarsen in CTCL. With that, I will now turn the call over to Jason Leverone, our Chief Financial Officer, to review the financial results we reported earlier today. Jason?

Thank you, Bill. Good afternoon, everyone. I appreciate the opportunity to provide our second quarter 2018 financial results. Before I do so, I want to add on to what Bill said regarding the LLS. Patient advocacy groups have become increasingly important in many aspects of drug development over the years. We've helped -- and helped to ensure that patients have access to treatments. The LLS is at the forefront of the fight against blood cancers. And at miRagen, we very much look forward to working with them in the development of cobomarsen. Turning to our financial results. We ended the quarter with approximately $76 million in cash, cash equivalents and short-term investments and believe that our current resources will be sufficient to fund our operations into early 2020. Net cash used in operations was $4.5 million for the quarter and $11.9 million for the first half of the year. During second quarter, we received a $3.7 million development milestone payment from Servier for the initiation of our first clinical trial of MRG-110, which occurred in the first quarter of this year. In terms of revenue, we primarily generated revenue from our collaboration agreement with Servier and also from grants we have received. We recognized $2.2 million in revenue during the quarter and $7 million during the first half of this year. This compares to $0.7 million and $1.2 million recognized in the comparable periods in 2017. The year-over-year increase in our total revenue is primarily attributable to the achievement of our first development milestone under our collaboration with Servier as well as a related increase in development activity reimbursable to us under this agreement as we advanced MRG-110 into clinical development this year. Research and development expenses totaled $8.4 million for the second quarter of 2018 and $14.8 million for the first half of the year, while G&A expenses were $2.7 million for the quarter and $5.7 million for the first half of 2018. Overall, our operating expenses have increased over the last 3 quarters as we have initiated new clinical trials and added to our team at miRagen. We expect this trend to continue with the planned initiation of our global Phase II SOLAR trial later this year as well as from the continued investment in all 3 of our clinical-stage programs. Before we open the call to questions, I want to echo what Bill said at the beginning of the call. Over the years, we've worked to build a sustainable company, focused on developing drugs for patients in need. The milestones that we have achieved in development have come in large part from the strong foundation of knowledge that the team has built over many years. With that, I'd like to ask the operator to open the call for questions. Operator?

[Operator Instructions] And we'll take our first question from Jonathan Miller with Evercore.

I had a few questions; I'll limit myself to give time for everybody to ask. I know you've presented ATLL data from cobomarsen at ASCO, and you did previously say at least one indication of the expansion indication was presented this year. Do you have plans to release additional expansion indications, especially DLBCL?

Thanks, Jonathan. Thanks for joining the call today. So we continue to recruit patients with both CLL and DLBCL into the trial. We have been, I would say, principally focused in the area of CTCL and ATLL. ATLL is the first expansion on indication. Based on the fact that this is a cancer where, essentially, all of the patients have elevated miR-155, so from a strategic perspective, it puts us in a position to test our hypothesis in a patient population with high probability of having high miR-155. We continue to work on the recruitment of patients with both DLBCL and CLL. As you know, we are treating patients that have failed 2 therapies. We, at the same time, are looking at potentially stratifying patients for their likelihood to have high 155 based on the diagnosis of the patients. So in other words, particular subtypes within DLBCL and in the relapsed refractory population in patients receiving IMBRUVICA with CLL.

Great. And I suppose the other question I wanted to ask was on SOLAR. I noticed that the PRO endpoint is now exploratory. Why -- previously, you'd mentioned that it was going to be a secondary endpoint. You'd mentioned that possibly getting positive results there in conjunction with positive ORR4 might be a potential registrational combination. Is there a reason PROs are now exploratory endpoints and not secondary?

So thanks for the question. The -- we had a follow-on discussion with the FDA to specifically discuss patient-reported outcomes. After that meeting, we determined based on advice from the FDA that we would be looking at several different patient-reported outcomes. Given the nature of the trial design being open-label, the potential of confounding effects on patient-reported outcomes can be heightened. So we've agreed to use the patient-reported outcomes as an exploratory endpoint to not only sort of bolster the improvements of quality of life that patients are achieving with cobomarsen, but also in sort of the development of some additional PRO metrics that may be useful in future studies. So the study remains with a primarily endpoint of ORR4 and then a key secondary endpoint of progression-free survival. And we have -- we will be looking at the patient-reported outcomes. As you may remember, we also presented data at both the T-cell Lymphoma Forum and ASCO that showed in the Phase I setting that we were seeing correlations between improvements in Skindex and reductions in mSWAT scores.

We'll hear now from Liana Moussatos with Wedbush Securities.

Congratulations on your progress. It's pretty amazing, all the different programs. And my question is -- or questions, what kind of preclinical lung fibrosis data are we going to see in the second half? And does the Phase I data for 110 trigger another milestone from Servier? And for remlarsen, can you talk about how it could be used potentially in ocular fibrosis?

Absolutely. Thanks, Liana. I appreciate your joining the call and with the great questions, as usual. So in the first question, the lung fibrosis data, what we have been assessing is the -- we have reported already that remlarsen is stable to nebulization. It can be inhaled with its chemical structure intact. You get high deposition in the lung. And we had evidence for biomarker changes in an animal model, bleomycin model of pulmonary fibrosis. What we've been endeavoring to do over additional preclinical studies is really optimize both the dose and the schedule. So at this point in time, we're assessing in the same bleomycin pulmonary fibrosis model various doses of the compound as well as frequency of administration. This is going to be really important as we think about an inhaled therapy moving forward in terms of planning for the necessary toxicology studies as well as the downstream clinical studies. And then we have also been focused on additional molecules, sort of back-up or next-generation molecules of microRNA-29 mimics. These are -- have alterations in the chemical structures, novel ligands attached to them, which may allow for parenteral administration of the compound rather than inhaled. And it really will be the culmination of data on viability of the inhaled approach as well as the parenteral approach that will drive us in decision-making moving forward on the development of remlarsen or miR-29 mimics in IPF. In terms of 110 treat -- treatments in terms of the interaction with Servier, we will likely be anticipating a milestone at another initiation of a clinical event rather than after the completion of this particular clinical trial. And then -- so remlarsen in ocular fibrosis. So we were at the American -- the ARVO meeting, where we really had the first presentations of this data. Remlarsen, in the intact eye, it can be injected intravitreally. And it shows very good biodistribution and pharmacodynamics in the setting of retinal fibrosis. So this is one area that is of heightened -- a heightened problem in the diabetic population and proliferative retinopathy and also in the setting of certain treatments for AMD. So we view this as an interesting opportunity. At the same time, we have been spending a fair amount of time understanding the availability of remlarsen with various routes of administration in the eye. What we presented at ARVO, in the setting of corneal fibrosis, was that in the alkaline-burned model of ocular lesions, we saw very nice uptake in biodistribution of remlarsen when administered topically. So we are currently -- and the indications for that would be in things like keratitis, so corneal fibrosis that can lead to hazing of vision. So at this point, we're really doing additional preclinical studies to assess formulation for the molecule as well as dose optimization. And we'll be discussing this further as time goes on and giving additional guidance. Paul wanted to add a couple of points.

Yes. So the alkaline-burned model serves as a good surrogate for all potential ulcerating defects in the cornea, including things like keratitis. So there's still a common issue as it pertains to bacterial keratitis after injury from contact lenses as well as herpes ocular infection in the eye resulting in keratitis. Both are very common and have virtually no therapies that could prevent the fibrosis that occurs, which occurs in virtually all patients that develop an ulcer. So there's still a big need with no potential therapies. And I think our preclinical data, at least, kind of proves the concept in a rodent model that we can prevent the scarring from occurring in these particular diseases.

We'll take our next question from Eun Yang with Jefferies.

So I have quick questions on the SOLAR trial. How many sites would you have opened? And how long do you think it's going to take to enroll 130 patients? And what data do you need to show when you go back to FDA and apply for the accelerated approval?

Sure. So our plan, at this point, is to open 40 centers globally. We are actively in the process of getting sites up and site initiation visits completed. We are on track to initiate the study in the fourth quarter of this year. The -- it will be a global study comparison with vorinostat. We anticipate being able to recruit the study in approximately 18 months, and then we would initiate having a data set in hand in the second half of 2020. And then we will obviously use that dataset for discussions with the U.S. Food and Drug Administration, where we've been told that the potential for accelerated approval would, of course, be based on review of the data. So we anticipate reading that out in second half of 2020.

Through ORR4.

ORR4.

Yes. The data that's required for theoretical accelerated approval is solely based on the ORR4. So that's kind of it's -- yes, that's the first endpoint that we'll read out. And we'll simultaneously be looking at progression-free survivals. So theoretically, we'd be able to see from this trial both an improvement compared to vorinostat in ORR4 as well as PFS, which obviously, provides an opportunity not only for applying for accelerated approval, but if PFS were also to show a significant difference, we'd be able to apply for complete approval as well.

We will now take our next question from Madhu Kumar with B. Riley FBR.

This is [ Hoshira ] on for Madhu. So 3 questions. First, based on today's information, could you please remind us of the powering assumptions for the SOLAR trial? Second, can you please compare SOLAR to the recent Adcetris trial in mycosis fungoides? And third, to what extent does your first recent agreement with LLS affect your recruitment rate assumptions for SOLAR?

Great. Well, thank you very much. It's -- appreciate the questions. So the power assumptions in SOLAR, what we did in powering a study at 65 patients per group, we have the ability with 90% confidence to detect the 25% difference between the control arm of the study and the cobomarsen-treated arm of the study. So in our assumptions, we assume the vorinostat would demonstrate an ORR4 of roughly 10%. Meaning, we would have a 90% confidence of being able to detect a 35% ORR4 for cobomarsen in the study. So the -- comparing the SOLAR trial to the Adcetris trial, there are really several significant differences. The SOLAR trial is primarily focused on stage Ib/III patients with mycosis fungoides. We -- they need to have failed at least 1 therapy or progress from 1 therapy, as opposed to the Adcetris study, which was really focused on 2 primary factors, CD30 positivity. So they -- the patients had to demonstrate CD30 positive. They also had to have failed 1 previous radiation therapy attempt. So what that does in practice, you will find mycosis fungoides, typically, towards the later stage, so stage III, and most certainly, in stage IV, which is more commonly known as Sezary syndrome. That's the primarily population with elevated CD30 that would be kind of appropriate for treatment with Adcetris. So the other, I think, key difference would be the comparators that we'll put in use. So the comparator for the Adcetris study was a dealer's choice between methotrexate and bexarotene, and that -- in the -- obviously, in our study, we're going to be looking at the comparator of vorinostat. And then how will the LLS collaboration impact the SOLAR time frame? We're not really giving any altered guidance. We are really excited to have the opportunity to work with such a well-known patient advocacy group and hope that they will provide benefits to us on multiple levels, including some important investments in miRagen.

[Operator Instructions] With no additional questions in the queue, I'd now like to turn the conference back over to Mr. Bill Marshall for any additional or closing remarks.

Thank you very much, and thanks to you all for taking some time this afternoon to catch up on the latest progress at miRagen. We're energized by the clinical results we've obtained to date and committed to building on these results to hopefully bring life-changing medicines to patients in need. We look forward to seeing many of you at the upcoming Wedbush PacGrow Healthcare Conference. As always, please feel free to reach out to us anytime with questions. I hope you have a great afternoon.

And that does conclude today's conference. Thank you all for your participation. You may now disconnect.