Viridian Therapeutics, Inc. (VRDN) Q3 2018 Earnings Report, Transcript and Summary

Welcome to the miRagen Therapeutics, Inc. Third Quarter 2018 Conference Call. [Operator Instructions] And the conference is being recorded. [Operator Instructions]. I would now like to turn the conference over to Daniel Ferry, LifeSci Advisors. Please go ahead.

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 third 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 had a productive third quarter in which we advanced preparations necessary to launch our global Phase II SOLAR clinical trial of cobomarsen in cutaneous T-cell lymphoma or CTCL. A significant amount of planning and preparation activities occur in the months and quarters leading up to the launch of a clinical trial such as SOLAR, and I would like to thank all of our employees and advisers for their tireless efforts as we prepare to begin enrolling patients in the SOLAR trial in the fourth quarter of 2018. With the anticipated initiation of the SOLAR trial, we expect to close out 2018 having advanced the development of each of our 3 clinical stage microRNA-targeted product candidates for patients in need across several indications. In the SOLAR trial, we will be evaluating the safety, efficacy of cobomarsen in an active control comparison study versus ZOLINZA, also known as vorinostat. The study is expected to enroll approximately 65 patients per treatment group. The primary endpoint of the SOLAR study is the rate of objective response, which is defined as 50% or greater improvement in the severity of a patient's skin disease over the entire body with no evidence of disease progression in the blood, lymph nodes or viscera, maintained for at least 4 consecutive months, also known as ORR4. Progression-free survival will be a secondary endpoint, and we plan to use patient-reported outcomes as additional endpoints 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 allow us to apply for accelerated approval of cobomarsen in the United States. As previously disclosed, we are pleased to be conducting the SOLAR trial in association with the Leukemia and Lymphoma Society, which is providing invaluable support, including up to $5 million in funding. We believe data from our Phase I trial of cobomarsen in CTCL supports our decision to advance the program into the Phase II SOLAR trial. As previously reported in our Phase I trial, cobomarsen appeared to demonstrate durable responses measured by improvement in the total skin tumor burden scoring and quality-of-life improvement in patients with mycosis fungoides, the most common form of CTCL. Cobomarsen also appeared to be generally well tolerated at all dose levels evaluated. We plan to present complete data from this Phase I trial at the 2018 American Society of Hematology Annual Meeting in December. The data includes efficacy, safety and tolerability observations from long-term dosing of cobomarsen via various routes of administration in 43 patients who have been enrolled in the study for up to 22 months. Our second potential indication for cobomarsen is adult T-cell leukemia lymphoma or 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 this disease have previously had a poor prognosis with mean survival times of 4 to 10 months after diagnosis. We believe it is important to remember that the ATLL subtypes seen in these initial patients are associated with extremely poor prognosis despite existing treatments, and new therapies are essential to improve patient outcomes in this devastating disease. Earlier this year, we released initial clinical data from our ongoing Phase I trial of cobomarsen in patients with ATLL. We anticipate announcing additional data from this trial in the first half of 2019. Turning to remlarsen. We are currently conducting a double-blinded randomized Phase II clinical trial for remlarsen, assessing the safety, tolerability and activity in the prevention or reduction of keloid formation in subjects with a history of keloid scars, a persistent form of hypertrophic scarring. We expect the trial will enroll an initial 12-subject cohort, consisting of subjects that are predisposed to keloid formation after trauma at multiple clinical sites in the U.S. Subjects will receive small matching excisional wounds that will be sutured and then injected with either remlarsen or placebo. Thus, patients are serving as their own control, which increases the statistical power of the clinical trial with a relatively small number of patients. The lesions will be observed for up to 12 months to determine presence or absence of keloid formation. We expect to report data from this trial in the second half of 2019. We believe the results of the trial may help us establish the dose, dosing frequency and number of patients necessary for enrollment in a potential Phase III clinical trial of remlarsen in keloid revision. We believe this is an exciting opportunity to build on the Phase I data in induced cutaneous fibrosis, where remlarsen appeared to reduce scar tissue deposition in healthy human volunteers without affecting observable healing. We also recently announced preclinical data from our study investigating the anti-fibrotic effects of remlarsen in studies of corneal ulceration. We believe this data supports our belief that topical application of remlarsen may be an effective treatment to inhibit corneal fibrosis and scarring and improve vision in patients suffering from corneal ulcers and other indications. Patients suffering from corneal fibrosis presently have no pharmacological treatment options available, and corneal scarring remains one of the leading causes of blindness worldwide. Turning to MRG-110. We are developing MRG-110 in collaboration with the 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, MRG-110 is being evaluated in 2 separate Phase I trials intended to support additional clinical studies that could allow for its potential use in the treatment of multiple indications, including heart failure and other conditions benefiting from increased new blood vessel growth and better oxygenation, including both acute and chronic incisions, ulcers and lacerations. We expect to announce data from these trials in 2019. In summary, we are excited by the advancement of our 3 clinical stage programs. Each of these programs is addressing high need indications, where patients have little to no effective therapeutic options available. We believe our 3 clinical stage microRNA-based product candidates will provide further evidence supporting the potential of microRNA-based therapeutics to become an important new class of targeted therapies for patients in need. With that, I will now turn the call over to Jason Leverone, our Chief Financial Officer, to review the financial results we have reported earlier today. Jason?

Thank you, Bill, and good afternoon, everyone. I appreciate the opportunity to provide our third quarter 2018 financial results. We ended the quarter with approximately $70.5 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 $6.8 million for the third quarter of 2018 and $18.7 million for the first 9 months of 2018. Research and development expenses totaled $7.4 million for the third quarter of 2018 compared to $5 million for the third quarter of 2017. This reflects an increase in clinical development activities primarily associated with the Phase II SOLAR clinical trial of cobomarsen, together with an increase in personnel-related costs as we have expanded our research and development team. General and administrative expenses totaled $2.7 million for the third quarter of 2018. This compared to $2.5 million for the third quarter of 2017. In 2018, we incurred increased personnel-related costs as we added to our general and administrative team. These increases were partially offset by lower legal fees related to intellectual property in the third quarter of 2018. Before we open the call for questions, I want to echo what Bill said earlier and thank all of our employees for their continued dedication and commitment, helping miRagen lead the way in developing microRNA-targeted therapies for patients who are in need of new innovative medicines. With that, I'll ask the operator to open the call for questions. Operator?

[Operator Instructions] Our first question comes from Jonathan Miller with Evercore.

Let's start on keloids, please. It seems like the data for remlarsen has gotten pushed out a little bit. Now you're saying second half '19. And I understand those patients are getting followed for 12 months, but I seem to remember that you previously said we could get some preliminary data in the early part of the year. So I just wanted to get a sense of what the time line is like there and how enrollment is going with these initial 12 patients.

Sure. Thanks, Jonathan. So the keloid trial remains on track. The kind of general guidance that we had provided was, I believe, sort of 2019. The studies will be -- those patients will be monitored for 12 months. However, we're hopeful that, based on earlier points of analysis, we may be able to read out some of the results we're seeing. So we still feel in good -- in a good position with the remlarsen trial in keloids and expect that we would really focus on opportunities for presentation at appropriate meetings, which was one of the drivers, probably to get more detail around that point in time as the opportunity at major medical meetings.

That makes sense. And on enrollment there, it's -- obviously, it's only a 12-person trial, and you're talking about multiple medical centers being involved. Do you expect enrollment here to be pretty fast?

Well, we are -- actively, we're looking at 4 sites in the United States, and we do our leveraging of database of people with a high propensity for keloid formation. We are hopeful that, because it is 12 patients, we will be able to recruit quite effectively. We're still -- we'll be updating as we get a greater kind of picture on that, but so far, the recruitment has been sort of to our expectations.

On CTCL, you mentioned and we saw, obviously, the ASH abstract show up last week. It looks like a continued incremental positive update there. Your PR says that the complete data from that Phase I will be at ASH. Should I take that to mean that there's not going to be more updates on those patients with even longer follow-up? And if that's the case, based on the current length of follow-up, can we get an estimate of ORR4 in Phase I and taking, of course, as read, that this is a very different set of dosing and administration than we'd expect for SOLAR?

Yes. Thanks, Jon. So the -- we are really focused on getting our efforts rolling in the SOLAR trial, so a lot of the real efforts are going to be focused on this. We do have several patients that remain on drug, and we will continue to dose them. So we'll gain kind of additional benefit, but we've not recruited any new patients into the study. So we should be able to produce additional longevity data that, again, is going to contribute to our ability to make an estimate around the ORR4. And again, as you know, there's -- we used the Phase I to really do a lot of dose range finding and assess whether different routes of administration were important. So as we now flip into the controlled SOLAR trial, we'll now normalize to single route of administration, single-dose level and really be focused on longer-term monitoring of the patients.

Right, that make sense. I guess, then on the secondary indication for cobomarsen, we'll see some more ATLL data in early '19. I'm excited to see that but still no word on seeing any CLL or DLBCL patients?

So we have -- and thanks for the question, the -- as the opportunities have arisen, we've really kind of gravitated towards the patient population where we've been able to see some initial promising results. The patient populations in the additional indications, quite frankly, there is a relatively competitive landscape in terms of those patients and what we generally find is that when we go into a new indication, once we're able to get a little bit of leverage with some preliminary promising data, we find, obviously, that the enrollment ticks up. So we are actively looking at additional patients, trying to focus in on the ones most likely to be good candidates, providing additional information to the treating physicians in terms of the types of patients that would be best suited to it to make them additionally comfortable in getting patients in. At the same time, we are, like I said, intensely focused on executing to the SOLAR plan; and with ATLL showing some promising results and given that it is a -- an area of very high mortality and with really no treatment options available, we have been focused on identifying and treating patients there. We have -- we will -- like I said, we'll continue to look for additional patients in the expansion indications. And I think we're hopeful that the responses that we see in the 2 treatments, where we've got a larger patient population with response, and this will give the treating physicians confidence to put people in those other -- with those other diseases on cobomarsen.

Our next question comes from Eun Yang with Jefferies.

First question is on SOLAR trial. I understand that there is a futility analysis at about 40 patients ORR4 data. When do you expect that analysis to take place?

So Eun, nice to talk to you, and thanks for the question. The -- I don't think we want to give any kind of firm dates on that. What we want to really get into is the -- really understanding better what the true recruitment rate is. And then with that, there are also certain variables around -- as you know, our intent to treat is for 6 months. Any time during that treatment period, if a patient obtains or is able to achieve a partial response, we'll then monitor that for the 4 months, which then allows us to be able to measure the ORR4. So at this point in time, there are just too many kind of moving parts for us to go give a good estimate on that. But as we get additional experience in the trial, we'll give additional guidance on when we would anticipate that, that would occur.

Okay. And then next question is on remlarsen. I think, previously, you mentioned that the preclinical data in IPF could be coming out in second half of this year. So could you give us an update on that? And also, keloid, I think you also mentioned that, that's a kind of a potential for partnership opportunities. So when you look into partnership opportunity for remlarsen, will that be for all the indications of keloid, IPF and arterial fibrosis?

Absolutely. So the -- in terms of the potential for partnering the indication, we're going to be open to opportunities for partnering around remlarsen in a variety of indications. As you know, the Phase II trial was really designed for us to be able to analyze in a very well controlled manner that -- the dose, dose frequency and effect size that we're seeing so that this could give a better feeling around what the likely powering would be necessary in the Phase III trial. I think with information in hand showing that we can effect a pathologic fibrotic condition in humans, that gives us additional validation in terms of partnering opportunities. And the response size there is -- or the effect size is also important in terms of looking at the sizing of the Phase III, I think both of which would be playing into not only partnering the interest from partners but also sort of our sort of thesis on whether we would want to attempt to take it forward. On the IPF front, we will continue to report out additional data there. We were at a meeting earlier in the fall, where we gave an update, and we will be looking for additional medical meetings at which to really talk about where we've gone in terms of additional inhaled studies as well as some of the interesting next-generation compounds that we hope to report that may open the door here to additional indications. And then I would say, generally, in terms of partnering opportunities, if we think about IPF, what we tend to want to look for in partnerships is well-experienced folks that are committed to the therapeutic area and that have the capability to help us carry out the larger outcomes-based analysis that would be necessary in phase -- in late-stage clinical developments. So again, I think we're fairly open to partnerships in the fibrosis asset. There are many different opportunities afforded us, and I think we spend a lot of time moving from -- continuing to understand where remlarsen could most appropriately be applied therapeutically but also looking for the next generation of compounds that might go into additional indications where miR-29 has been implicated.

[Operator Instructions] Our next question comes from Liana Moussatos with Wedbush Securities.

You mentioned earlier this year, we had ATLL initial data and additional data would be released in the first half. What kind of endpoints and -- do you expect in the first half? Anything different? And is it too early to see a survival benefit?

Thanks, Liana. Great question as usual. So the things we're looking at here are really the ability to maintain the -- this is a very specialized cancer type that -- where we look at the flow and also some more broad symptoms. We released data from 2 patients at ASCO. Both of them had what would be considered a -- the aggressive form of a disease that one of them was lymphatomous (sic) [ lymphomatous ] and the other one was leukemic in nature. Once we presented that data, there was a fair amount of excitement in the community. So we have been able to recruit additional patients. One of the things that we're quite interested in is understanding the differences between the different subtypes of this tumor. There are the aggressive leukemic and lymphomatous forms. There's a skin involvement only form. So because it is a Phase I, we are bringing in additional patients up to, again, build the safety base and then also be able to analyze what the effects of cobomarsen are in these different patients subtypes. So what I can tell you is -- and what we're really doing is building up a bigger set of patients and with a longer-term experience in hand so that when we present the dataset, we can begin to draw some conclusions that should push us in a direction for the most appropriate patients within the disease to treat and the responses that we're seeing. We are in constant sort of efforts right now to understand what the best trial design would be in the area, and as we see more data come back from the Phase I studies in ATLL, it'll help us drive decisions and also drive us towards discussions with the FDA that would allow us to answer questions about trial design and likely endpoints that would be acceptable from a regulatory perspective. The drug or the condition in the U.S. to my -- I believe, there's not been a trial done in the U.S. There was one done in Japan. And so we're looking at the precedents, but we'll also be determining if those precedents can be applied with the U.S. FDA.

Our next question comes from Madhu Kumar with B. Riley FBR.

This is [ Jennifer ] on for Madhu. Just briefly, I'm wondering if you can shed a little bit more information on what you feel the most representative ORR4 rates in CTCL for cobomarsen in that Phase Ib study might be.

Thanks, [ Jennifer ]. So the -- this is a -- it's a question we get a fair amount, the study in Phase I was really designed to answer a lot of questions around dose ranging, route of administration, and what we're able to do is find that the -- it appeared in the regimen that we employed that a 300-milligram dose that was given the IV infusion gave the most consistent rate of response. If you just look overall at everyone that went into the study, independent of route of administration or dose and independent of amount of time on drug, you see about 30% ORR because some people we started this study as -- with 4 weeks of tox, so we had to remove them from study. There were many of the patients that didn't hit or have not yet hit the 4-month level. If we begin to kind of zone this down and say what about everyone who is on for more than a month, the data at hand suggests somewhere in the 50% range. Again, we didn't have the durability to answer that confidently that it was ORR4 but ORR. And then if we dug in on this a little bit more and said, for the patients who had achieved a partial response and then were on drug long enough to measure the form of durability, we've seen a very high rate there. So we believe that ORR, on its own, is at least a reasonable proxy. The durability does appear to be there. And what now -- we've essentially taken lessons from the first trial. I think the most important, obviously, the dose, the route of administration but also the vital importance of keeping the patient on the drug. So in the protocol, we're really focused on mechanisms to ensure that the patients stay on drug. And these are principally sort of convenience mechanisms so that we would provide infusion centers close to home or even home infusions so that the patient is not -- is able to stay on the drug. So the rate is -- in overall terms, what we believe is going to be most important in the overall equation is the ORR4 is obviously the primary endpoint. Progression-free survival will be another important endpoint. And then we've worked extensively with the FDA on patient-reported outcomes. So improvements in itching and pain in the tumors is one of the most important things for the patients from a clinical perspective. And in our discussions with the FDA, it's been really a discussion of how do these factors line up, the ORR4, the PFS; and then are you improving the patients' outcomes; and importantly, what sort of side effects are you seeing from the drug. And this is one area where we've seen that the tolerability of cobomarsen has been quite good in the study. And I believe it is differentiating from other medications that are used in the area. So we think we have powered the study in a way that we should be able to detect a 25% delta between the ORR4 between cobomarsen and the comparator. We have some pretty good ideas around that. So we think we can pick up the number, but the response rate that would be sufficient for accelerated approval is one that the FDA has guided would be a review item, and it would also involve the other things that we talked about, in other words, PFS and patient-reported outcomes and safety.

Our next question comes from Jonathan Miller with Evercore.

Just a quick follow-up on financials. Maybe you could give Adam a chance to talk. Your burn still seems pretty manageable, and obviously, that's going to accelerate with the SOLAR initiation and getting ramped up. Do you have any guidance for what you expect in R&D numbers as we go through '19?

So I'll hand that one over to Jason if he wants to comment on that.

Or Jason. Jason can talk, too.

Thanks, Jon. So our R&D burn over the last few quarters has roughly been around $10 million or so, and I would expect that to increase as we initiate the global SOLAR study through 2019.

So it increased from about $10 million a quarter, you're saying?

That's right.

This concludes the question-and-answer session. I would now like to turn the conference back over to Bill Marshall for any closing remarks.

Thank you, operator. Thank you all for taking some time this afternoon to catch up on the latest progress at miRagen. We are 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. As always, please feel free to reach out to us at any time with questions. I hope you have a great afternoon.

This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.