Welcome to the Viridian Therapeutics First Quarter 2023 Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to hand the call over to Ms. Louisa Stone, Manager of Investor Relations for Viridian. Please go ahead.

Thank you, and welcome, everyone, to our first quarter 2023 earnings conference call. The press release reporting our financial results and corporate updates is available on the Investors page of our corporate website at www.viridiantherapeutics.com. Joining me on the call this afternoon are Scott Myers, our President and Chief Executive Officer; Kristian Humer, our Chief Financial and Business Officer; Dr. Deepa Rajagopalan, our Chief Product and Strategy Officer; Dr. Thomas Ciulla, our Chief Development Officer; and Todd James, Senior Vice President, Corporate Affairs and Investor Relations. Before we begin, I would like to remind everyone that this conference call and webcast will contain forward-looking statements regarding our financial outlook in addition to regulatory, product development and commercialization plans and research activities. These statements are subject to risks and uncertainties that could cause actual results to materially differ from those forecasted. A description of these risks can be found in our most recent Form 10-Q and 10-K on file with the SEC. I would now like to turn the call over to Scott Myers, our President and CEO.

Thank you, Louisa. Good afternoon, everyone. Thanks for joining us today. We had a productive quarter, and I'm excited to report on our progress today after completing my first 3 months as Viridian's President and CEO. 2023 is an important year for Viridian, a year that includes key milestones in all of our clinical programs. I am proud of all the progress our company has made thus far and looking forward to continuing our work to bring potential best-in-class therapies to patients with thyroid eye disease and additional disease areas in the future. Our team has grown rapidly throughout the first quarter, and we made several key hires on our senior leadership team, helping to strategically position us for future success. Additional details can be found in the press release we issued earlier today, but these hires include Tony Casciano, Viridian's first Chief Commercial Officer; Dr. Tom Ciulla, Chief Development Officer; Dr. Felix Geissler, Senior Vice President of Medical Affairs; and Dr. Erik Kupperman, Vice President, Program leadership. Each of these individuals have already made valuable contributions to the organization and will be integral leaders for our company as we continue to expand our teams, mature as an organization and prepare for future success. I'll now review the progress we made in our clinical programs during the first quarter, and Kristian Humer, our CFO, will discuss our financial results before we take your questions. Let's begin with our TED programs, starting with our lead asset, VRDN-001, a humanized monoclonal antibody administered intravenously once every 3 weeks, which acts as a full antagonist of insulin-like growth factor I receptor, or IGF-1R. In the second half of 2022 and at the beginning of this year, we reported a series of positive topline clinical data announcements from 3 dose cohorts of the Phase…

Thank you, Scott. Good afternoon, everyone. I'd like to refer you to our press release issued earlier today for a detailed summary of our financial results for the first quarter 2023 and take this opportunity to review a few items. We ended the first quarter with approximately $373.9 million in cash, cash equivalents and short-term investments compared with $424.6 million as of December 31, 2022. We believe that our current cash, cash equivalents and short-term investments, excluding our $75 million credit facility will be sufficient to fund our operations into the second half of 2025. Research and development expenses were $50.7 million during the first quarter of 2023 compared with $17.7 million for the same period last year. Research and development expenses for the first quarter of 2023 include a one-time $15 million upfront payment to Enable in consideration for the rights granted to Viridian to utilize Enable Injections' enFuse on-body drug delivery system. Other drivers for the increase in research and development expenses include higher CMC expenses in preparation for the IND application for VRDN-003 as well as development activities. Higher personnel costs due to an increase in headcount, higher preclinical costs due to early-stage collaboration expenses. As of May 1, 2023, Viridian had approximately 58 million shares of common stock outstanding on an as-converted basis. With that, I'll ask the operator to open the call for questions. Operator?

[Operator Instructions] Your first question is from the line of Derek Archila with Wells Fargo.

Congrats on the progress. Maybe just two questions from us. Maybe just first, can you just talk about the variables that could lead the chronic data coming out in July versus in the second quarter? And then also, just your thinking on the TED market opportunity given what we saw from Horizon recently in their quarter results. I mean do you think anything has changed in the market? Or do you kind of chalk that up to deal-related things going -- with the ongoing Amgen deal?

This is Scott. We're expecting a real high probability that we're going to see clinical activity in chronic TED because it's been confirmed by the recent Horizon data. They were able to post a 62% and very meaningful response with a 2-millimeter reduction in proptosis. Our trial is evaluating the activity with only 2 doses of VRDN-001 to establish the proof of concept and reduction in proptosis of less than 2 millimeters, excuse me, would be -- still be very meaningful because we still plan to evaluate the longer doses in THRIVE-2. We're very pleased with what's happened in that trial. We've actually overenrolled the 3 mg per kg cohort. So once we get the process rolling where we bring in all the information from the CRO, from the sites, the MRIs, we're going to need some time to really look through that and make sure it's right. And then we'll be ready to announce either June or July. And then with regard to your second question was about what we saw in the Horizon data. We thought it was actually very good data for patients suffering from chronic TED, and there's still a very large unmet need in that population because surgical intervention is really all they have left, unless they use a systemic treatment. We look forward to seeing some more of their information when they are able to release around patient baseline characteristics, the efficacy end points and some of the safety because this was the first placebo-controlled data in this chronic population. And then we look forward to reporting our data in June or July of this year. And as a reminder, though, we were -- our study was set up slightly differently. It was for patients with proptosis of greater than or equal to 3 millimeters above normal values and then symptoms that had presented themselves after 1 year of study screening -- excuse me, prior to study screening. And just a reminder, we did not have a cash requirement whereas Horizon used a 0 or 1 for cash. We are enrolling 2 cohorts, as I mentioned before, with VRDN-001, there's a 10 mg per kg cohort and a 3 mg per kg cohort randomized at 3:1 versus placebo, and there was staggered enrollment, the 10 mg per kg arm enrolled first with the 3 to follow as I said it was overenrolled. So there's only 2 infusions in each of those at day 1 and then again at day 21, which is q.3 weekly. And then the results will be at day 42 and week 6. So good news from the Horizon data. We think that their result will play well in the marketplace with that 2-millimeter reduction and that will help them hopefully get more coverage decisions from insurance companies and with their broader label that, that will create a really nice tailwind for the market.

Derek, this is Todd. As far as things that could be potentially impacting sales or what was potentially driving a reduction from Q4 to Q1, we think as far as how Horizon was investing in the market as far as expanding their sales force the direct-to-consumer advertising as well as the patient and physician support around trying to expedite new market access and reimbursement for patients is absolutely great places to invest in. But I think to your point, around potential distraction around an M&A process as that was taking place in the public headlines, certainly not helpful when you're trying to make in-flight operational changes to impact the sales trajectory of a drug. The chronic data that Scott just described will certainly help as far as being able to have educate and aware physicians and payers to hopefully drive additional sales in the chronic marketplace. But I'd also just point out that integration isn't easy either. And so people should probably expect some additional impact over the next couple of quarters as Amgen is integrating the Horizon team. And then with chronic, those changes that were being made, I think we should be able to return to growth either later this year or early next year and see the TEPEZZA sales pick up again.

Your next question is from the line of Alex Thomson with Stifel.

I guess a couple for me. Maybe could you talk about whether the path forward with 001 subcu to bridge PK if you have successful IV trials potentially in the market faster? And then maybe as a follow-up to Derek's question, what are your current expectations around your label? Do you expect to get sort of the old TEPEZZA label? Or do you expect the path forward for you to get the new label upon approval? And if so, how that might impact the commercial opportunity?

So for the second one, both the THRIVE and the THRIVE-2 study are going to be supportive of the BLA. And so then we would expect then that to translate into a broad TED label similar to what you're seeing today with the TEPEZZA label. And sorry, could you repeat your first question?

With the 001 subcu.

So the current way that we're thinking about it is really separate programs of IV versus subcu. And so we're moving ahead with THRIVE and THRIVE-2 to set up for an approval with the IV, and then we're going to select the lead candidate in subcu, which based off of everything that we're seeing today, 003 looks like it would have the best profile from the binding affinity of 001 along with the half-life extension of 002. If there were a way for us to bridge from 001 subcu -- from IV to subcu, that's certainly something we'll evaluate in the future. But currently, no plans to update you on that right now.

Your next question is from the line of Gavin Clark-Gartner.

I had two. First, I just wanted to make sure that if you do select 003, there's nothing else that could potentially slow you down, specifically wondering about any formulation manufacturing or preclinical toxicology work. And I'll come back for my second question.

Yes. No. All three programs are right on track, and we're going to continue to evaluate them through the end of the year. And as of now, there's no issues with formulation or the preclinical work. The healthy volunteer studies will be underway and will complete by the end of the year.

And then we should be on track, Gavin -- this is Todd. We should be on track to start a Phase II/III pivotal then for what other program is selected as the lead in the middle of next year.

All right. That's super helpful. And then separately, on the partnership for the on-body system that was announced yesterday. I just wanted to clarify, was that for the next preclinical program that's going to be unveiled? Or is that for an earlier preclinical program that is still to be discussed?

That's for 1 of the 3 programs we're currently developing, and it will have nothing to do with TED whatsoever. So it will be for 1 of those 3.

Your next question is from the line of Thomas Smith with SVB Securities.

A couple on our end. I was wondering if you could provide any additional color on how the THRIVE trial is enrolling at this point and how that enrollment is tracking relative to your initial modeling? And then secondly, I understand the difference between the inclusion criteria between your study and the Horizon study, but I was just wondering if you have any visibility into the baseline characteristics of the chronic character of a concept cohort and whether this is tracking towards more of a sort of a low CAS population or kind of mid CAS patient population?

Yes. So with regard to the THRIVE study, we're really pleased that we can announce the first placement that was enrolled back in December. And we have more than 30 sites activated globally, but we're not giving any interim updates on the enrollment. And the second question was around -- that we don't -- we have not unblinded our baseline characteristics. I believe they have, but we have not.

Your next question is from the line of Laura Chico with Wedbush Securities.

I just have two. Just kind of following up on the enFuse delivery system, understanding this is for other programs outside of TED, but just kind of curious why the rationale for the program and executing on this right now. Just any advantages or criteria you were looking for in terms of selecting this particular partner? And then secondarily, on the cash runway, just any commentary or additional color there on levers to extend that. I think R&D picked up a little bit if I'm reading things correctly here. I'm just trying to understand the expectations on the burn for the remainder of the year.

Yes. So I'll take the -- this is Scott. I'll take the first question and Kristian will answer your second question. So the first one really goes around the hallmark and the philosophy of the company is if we can improve in a market that's been created around efficacy or potentially safety or mode of delivery. Those are the three criteria that we take care of near and dear and look hard to do that, and we believe this technology will help that compound that this is going to be put within our preclinical pipeline. Kristian?

So look, we've got cash a little bit under $374 million. We continue to guide cash runway into the second half of 2025, but it funds -- on a program-by-program basis, it funds basically both THRIVE and THRIVE-2, all the way through data at the end of '24 and a little bit into '25. Our subcu program is funded through to what we're calling the date of decision point at the end of this year, where we will select the program to move forward into pivotal trials. Most importantly, pivotal trial prep is funded so that we can move expeditiously at the end of '23 into pivotal trials. Our non-TED pipeline is all funded either through to candidate selection or IND filing, and you should expect us to unveil these programs one by one, and we'll let the market decide what they want to fund. We have committed to unveiling at least 1 of the 3 programs on our pipeline -- one of our non-TED programs on our pipeline chart over the course of the rest of 2023. Kind of -- our cash operating expenses in Q1 were slightly higher than they usually are mostly due to kind of the enabled payment of $15 million. You should expect slightly elevated expenses again in Q2 as we initiate kind of THRIVE-2. And after that should normalize again back to kind of a steady state of somewhere between $35 million and $45 million.

Your next question is from the line of Kalpit Patel with B. Riley Securities.

Maybe one more on the market opportunity here for thyroid eye disease. I guess, based on your conversations with KOLs in the space, is there a backlog of chronic TED patients that are waiting to be treated? And do you think that it will sort of be a rapid uptake in this setting like we saw in the acute setting? Or would it be a slow build given the lower severity of the disease?

This is Scott. I'll take the first part and maybe Tom Ciulla will add a little color because we've actually been out in the field quite a bit lately at the different conferences and visiting with our PIs and KOLs, and learning about that. I think the belief is that there was a low-hanging fruit situation with the actives. But in the words of some of the physicians I spoke with, there are lines of chronic patients. I think the recent data that's been put out there bodes well with their broad label now and that they can take forward, as I mentioned before, to get coverage decision. But I think we see there's really significant opportunity out there for market potential and to grow the market especially when we think about our 5-dose regimen that's -- as part of our THRIVE study. The physicians are really excited about that, even versus the 8-dose that's already available. And I think we really have the opportunity to grow the market with our subcu offering. So we'll have a very broad approach to treating this diseases -- disease, excuse me, with whether people want to use an IV or a subcu. And then there's also the future of a lot of physicians are telling us around it's still 8 doses with TEPEZZA, sort of an acute treatment for what appears now to be a chronic disease because the TEPEZZA data definitely showed that these chronic patients do present themselves even after having the disease and their criteria 2 to 10 years, and we've even heard longer than that, and they are getting relief. But Tom, I don't know if you want to add some color?

Sure. This is Tom Ciulla. So we -- as Scott mentioned, we've been through a variety of congresses recently. We were at the Association for Research in Vision and Ophthalmology, the North America Neuro-Ophthalmology Society and the North American Society of Academic Orbital Surgeons, where we had multiple presentations at each of these congresses. Scott actually has attended and has met with several of the investigators and KOLs. And uniformly, they're very enthusiastic about our multiple ascending dose proof-of-concept study in acute TED. I think we've gotten a lot of positive feedback about that data. We've also gotten a lot of positive feedback about Horizon's recent data in chronic TED, and we see this as a win for patients suffering from chronic TED. What the KOLs and investigators have told us is that they do indeed have a backlog of patients and they -- many of them have asked to take part in our clinical trial as investigators. So we think there is a groundswell of optimism, not only for active TED, but for chronic TED, where there's a backlog, just as you asked about.

Okay. Got it. And can you give us a little more -- maybe more color between the selection of the right subcu candidate and the timing of the start of that pivotal trial in mid-2024. What steps are remaining to start that trial?

Yes. So there are -- a couple of the 002 healthy volunteer studies is ongoing right now, and we've even reported some of that information out at one of the more recent conferences. And then the 003 and 001 healthy volunteer studies, which will be looking at bioavailability and safety. Those will be completed early enough to have by the end of the year, and then we'll wind up all that information, make the decision about which one of the candidates we would move forward with. And then based on that information, we would then seek input from the stakeholders and plan to start the trial midyear.

Your next question is from the line of Jason Butler with JMP Securities.

Scott, you pointed to before the importance of the shortened treatment duration in the THRIVE study for the IV. Can you just talk about how that thinking rolls over to your planning for the subcu pivotal program and I guess, also the chronic TED program?

Yes. So we are learning a lot about what's going on in the marketplace. And I would say the market has changed pretty dramatically over the launch of TEPEZZA and how physicians are actually using these drugs, as I mentioned before, the way that it's kind of an acute treatment paradigm today where you give 8 doses and then at least that's how the label read and you see how it goes. But what you realize is if the thyroid is not being controlled well and the pathway is uncovered and not blocked by using a TEPEZZA-like compound, the symptoms of TED return. And so one of the things -- and one of the reasons we have the 5-dose regimen in there is, one, it's quicker to enroll in the patients when they -- if they see a result or not, they'll be able to roll over after their doses on to an active as we've seen before. But the physicians just really like the idea that you maybe able to treat and induce a response with TED at a lower number of doses, and we also point to some of the side effects that show up on TEPEZZA in those higher dose numbers and the flattening of the curve. So we actually believe we will start to see a couple of people would call it a treat and retreat or it could be an induction in maintenance way and where we think we're very well positioned, both with our infused product line that will -- once it's approved, obviously, but all of the subcu, so then you put the treatment in the hands of the patient, obviously, after being diagnosed and you just have a lot more flexibility and a lot better experience for the patients who don't have to go to infusion centers to be treated. So we actually see a pretty significant paradigm shift that you could have sort of an induction phase where you get the acute signs and symptoms under control, and then you go to a real maintenance paradigm where there are potentially with our technology, you could get to a q.4 weekly or once a month dosing in the hands of the patient and not seeing the caregiver, which we think is differentiated from at least the way we understand TEPEZZA is going.

Got it. And I guess just a follow-up to that then. Are you hearing from physicians yet that there they're employing that treat and retreat with TEPEZZA. So patients are getting treatment in the acute phase and then either retreated in a chronic phase? Or is it just too early to say that?

So I think you pretty much hit it right on the head, actually. So what we start to hear anecdotally and then multiple times from physicians who were treating during the pandemic, they couldn't get their full 8 doses because TEPEZZA had been sidelined for the COVID vaccines. So they were given limited number of doses, and what they would do is give a few doses and then watch and see the result and have the patient return and then they still had a few more doses to give them or sometimes we've heard of they'll give people up to 5, basically send them home and say, stay in touch. And if you start to hear these -- excuse me, feel these results, you can come back and we can infuse you again. So no, it is almost turning into -- I heard from one physician. It's like give a few doses and then turn it into a PRN as the patient needs it. So we're picking up that intel, and we do have the benefit of foresight versus hindsight and so we can use this Intel to adjust how we go to market.

[Operator Instructions] Your next question is from the line of Rami Katkhuda with LifeSci.

Two quick ones for me. I guess, first, is there anything specific that you're looking out for in the proven concept chronic TED study that can influence the THRIVE-2 protocol? And then secondly, in your conversations with physicians and payers, have market access or reimbursement considerations changed with TEPEZZA after the chronic data?

Yes. So specific to the chronic data and how that could impact the THRIVE-2 Phase III design. So we have, of course, some preliminary thinking of what that Phase III design could look like prior to the data. We recently got some very high-level topline results from Horizon. That was kind of helpful for us to think about how we can think about clinical activity. We will then also be informed by the activity that we see in our trial and then not one specific thing that I would kind of call out today, but we'll be fully informed by that data and kind of relative to that preliminary thinking make any necessary considerations and impacts to the trial design, if it's necessary to seek either KOL and/or health authority feedback before we kick off the trial. Of course, we'll do that as well. As far as market access decisions following that chronic data from Horizon just -- now 4 weeks ago, I think it's really too early for us to be getting intelligence around that. And so that's something we'll definitely be listening to as far as for intelligence that we're getting from the marketplace and the survey work that we do. And of course, if we start to take care of things, then it would be more appropriate to give you that intel as we're hearing in real time.

Your next question is from the line of Gavin Clarke-Gartner.

I just wanted to circle back on the extended duration or retreatment dynamic that you just mentioned. Because today, a lot of the payer policies explicitly don't allow for more than 8 TEPEZZA doses. I'm wondering how you approach pricing and also what clinical data you need to show to allow for this dynamic in the future?

Yes. So this would be obviously post-approval approach we would take. But when you're going -- when you could shift out of -- from a treat to retreat to induction and the maintenance, the pricing could be very different because you have -- you might be using the subcu the whole time that way. So today, they are at 8. But with their broader label now and a retreatment, they could get -- they can resubmit for reimbursement on the next bid. And instead of going 8 and 8 is what I've been referring to and have heard from a lot of the physicians is this is a chronic disease, and the label is basically now at any time you have TED, you can be treated with the drug. So it's -- I think people are struggling with using 8 and then 8 and 8 and then also with that very high dose, you could maybe -- if you use smaller doses like with our full antagonism, we are about 1/3 at the 5-dose cohort and not quite about half of where they'll be with their 150 mg per kg. So being able to dose with different dose regimens, whether it's subcu or treat or retreat with a lower number of infusion doses seems to be a preferred approach.

At this time, we have reached the conclusion of the question-and-answer session. I would now like to turn the call back over to Viridian's President and CEO, Scott Myers, for closing remarks.

Thank you, operator, and thanks, everyone, for your time this afternoon. Please feel free to reach out to Todd or Louisa if you have any follow-up questions, and we are happy to touch base with you. Thanks again, and have a great evening.

This concludes the conference call today. You may now disconnect your lines. Thank you for participating.