Good morning, and welcome to the Wave Life Sciences’ Third Quarter 2022 Financial Results Conference Call. At this time, all participants are in a listen-only mode. As a reminder, this call is being recorded and webcast. I will now turn the call over to Kate Rausch, VP of Investor Relations and Corporate Affairs at Wave Life Sciences. Please go ahead.

Thank you, operator. Good morning and thank you for joining us today to discuss our recent business progress and review Wave's third quarter 2022 financial results. Joining me on the room today are Dr. Paul Bolno, President and Chief Executive Officer; Anne-Marie Li-Kwai-Cheung, Chief Development Officer; and Kyle Moran, Chief Financial Officer. The press release issued this morning and slide presentation to accompany this webcast are available in the Investors Section of our website www.wavelifesciences.com. Before we begin, I would like to remind you that discussions during this conference call will include forward-looking statements. These statements are subject to several risks and uncertainties that could cause our actual results to differ materially from those described in the forward- looking statements. The factors that could cause actual results to differ are discussed in the press release issued today, and in our SEC filings, including our annual report on Form 10-k for the year ended December 31, 2021. And our quarterly report on Form 10-Q for the quarter ended September 30, 2022. We undertake no obligation to update or revise any forward-looking statements for any reason. And now I’d like to turn the call over to Paul. Paul?

Thanks, Kate. Good morning. And thank you all for joining us. I will start today's call with some recent highlights and then introduce our Chief Development Officer, Anne-Marie Li-Kwai-Cheung. Ann-Marie will provide updates on our most advanced therapeutic program. And finally, Kyle will discuss our financials. 2022 has been a pivotal year for Wave. At the start of this year, we said, we would deliver data updates from three separate clinical trials as well as advance an entirely new modality through candidate nomination. To date, we have delivered the first two clinical data updates, including results from our ongoing C9-ALS FTD study showing potent and durable target engagement with WVE-004 and most recently, the first clinical data from our SELECT-HD trial for Huntington's disease, indicating allele selective target engagement with WVE-003. Both these data sets validated our novelty and chemistry and supported the clinical translation of our discovery and development platform. We are on track to deliver clinical data from our Duchenne Muscular Dystrophy open-label clinical trial later this quarter. By designing oligonucleotide to efficiently harness ADAR enzymes, we have unlocked entirely new biology with our platform. In the third quarter, we selected our first RNA editing or AIMers development candidate, WVE-006 for Alpha-1 antitrypsin deficiency or AATD. In September, we held a virtual event spotlighting the biology of this disease, our RNA editing therapeutic approach and the existing unmet need that we hope to address with WVE-006. We were joined by a well-known clinical expert in the treatment of AATD, Dr. Kyle Hobart, who shared perspective on the current treatment landscape and the benefit of having one therapy, such as 006 to address both liver and lung manifestations of AATD without permanent genetic filtration. I invite you to tune into the replay on our website if you missed the…

Thanks, Paul. I'm pleased to be speaking with you all this morning and to share exciting progress that we made across our development program. My decision to join Wave at the start of this year was founded on three things. First, the promise of the company's novel oligonucleotide platform, second, the robust pipeline focused on areas of significant unmet need and third, the innovative approach to drug development. Successfully advancing each of our three ongoing clinical trials, sharing data at key points and adapting our studies to refine dose level and frequency along the way, we shape data from both our ALS and FTD and HD trials shown in dark blue on this slide, and we are on track to deliver data from yet another clinical trial, our DMD study in this quarter. In addition, we have successfully advanced WVE-006, our development candidate for AATD, initiating IND-enabling preclinical studies and positioning us Wave to begin clinical development next year. I'll describe the progress in each program in the slides that follow. I'd like to start by focusing on page three. I've been deeply involved in the therapeutic development for this devastating disease for the past several years and prior to joining Wave and through that experience, I've come to appreciate the criticality of preserving wild-type huntingtin protein as past the therapeutic approach to HD. Huntington's disease is a monogenic autosomal dominant and fully Penetrance genetic disease, which affects the entire brain. And overtime, the accumulation of toxic mutant Huntington protein overcomes the beneficial effects of the wild-type protein leading to disease progression. So it's understood that the mutant Huntington protein is toxic and at the wild-type huntingtin protein is essential and placed several critical roles in the central nervous system, and these include regulation of synaptic and protein transport, promoting…

Thanks, Anne-Marie. Net loss for the three months ended September 30, 2022, was $39 million, compared to $6.2 million in the same period in 2021. We reported approximately $300,000 in revenue for the third quarter of 2022, as compared to $36.4 million in the same period in 2021. The decrease in revenue and increase in net loss year-over-year was primarily driven by the amendment of the Takeda collaboration in the prior year quarter. R&D expenses were $27.6 million for the third quarter of 2022, as compared to $31.1 million for the same period of 2021. This was primarily due to decreased external expenses related to our HD program and decreases in other research and development expenses, partially offset by increased external expenses related to C9 and our other clinical and preclinical programs. General and administrative expenses declined to $11.6 million for the third quarter of 2022, as compared to $12.9 million last year, primarily due to a decrease in share-based compensation expense as well as decreases in other external general and administrative expenses. We ended the quarter -- we ended the third quarter with $122 million in cash, cash equivalents and short-term investments. Our cash runway remains unchanged from previous guidance. We continue to expect that our existing cash, cash equivalents and short-term investments will enable us to fund our operating and capital expenditure requirements by end of 2023. As a reminder, we do not include any potential milestones or opt-in payments under our Takeda collaboration in our cash runway. I'll now turn the call back over to Paul.

Thanks, Kyle. We're excited about all the progress and clinical data generated to date for our pipeline. With AIMer’s, we are unlocking new biology to diversify the applications of our platform and WVE-006 is the first demonstration of the potential of RNA editing. Our discovery team is actively evaluating new RNA editing programs in multiple disease areas, including CNS,, hepatic and renal diseases. As a reminder, our AIMer’s do not require LMPs or AAV, which have unique delivery challenges in the tissue types. We expect to deliver more updates in 2023 on our discovery pipeline. We have a disruptive oligonucleotide platform with unique multimodal guide strength, enabling us to target diverse biology. We are delivering clinical translation of our initial program and diversifying our pipeline with editing. Partnerships remain a key priority to maximize the value of our platform, support expansion of our pipeline and unlock value in GMP manufacturing. We intend to collaborate with partners who share our broad and ambitious vision for our platform. We have also begun to deliver on initial manufacturing proof-of-concept work, including process development for potential GMP customers. We are well positioned to expand these efforts. We set out to deliver three clinical updates this year and are on track to accomplish this goal with the expected DMD data this quarter. Looking into 2023, we are positioned to deliver a continuous flow of data updates, including additional data from our HD and nine ALS and nine FTD trials. We will also move WVE-006 into clinical development, which is positioned to be the first-ever RNA editing therapeutic in the clinic. We are also well capitalized to execute on these milestones. And with that, we'll open up the call for questions. Operator?

[Operator instructions] And our first question comes from Salim Syed from Mizuho. Your line is now open.

Great. Good morning, guys. Thanks so much for the color and congrats on the progress. A couple for me. As we head into the DMD readout possible, Paul, just obviously, you've had some good data this year, both in FTD, ALS and in Huntington's with the New York chemistry. Just sort of thinking about conceptually speaking, are there any risks in your mind as to what could derail the thesis into DMD, whether it's biology or otherwise, as we translate from preclinical to clinical, just again, given that we've had target engagement for both FTD ALS and the HD data sets. And then just related to that, the open label, are obviously getting close. I would just love to hear a quantitative bogey, is something like 3% that people should be thinking about here is that a good number for you guys, I mean we have the dose data today, or is it higher or lower? Just would love to get a quantitative bogey, if that's possible. Thank you.

I'll start with your first question, and thank you, Salim. Because we have made extraordinary progress, but any time we develop a medicine, there's always a potential risk. So I agree we’re not identifying that. What was important to us, particularly in the setting of advancing N531 behind our previous experience with Suvodirsen, was to extensively model it in animal models with phenotype and attempt to predict dose. I think as you referred to, we've seen consistent modeling as we looked at silencing across C9 HD in terms of thinking about how we establish our starting dose for those clinical studies. And as we shared today, with doses now up to 10 mgs per kg, I think we've established the parity of a dosing paradigm that's aligned with our preclinical model. So that has optimistic. I think it's important to remember, and this transition goes into your second question around a numerical target is that we are dosing this with three subsequent doses after establishing that. So the dosing period is a lot smaller than where other studies have gone. And therefore, we haven't laid out an exact target other than to say, we'd like to see the translation of the concentrations in the muscle tissue. We'd like to see the distribution different. If you recall, we shared at the Muscular Dystrophy Association meeting following Suvodirsen that we weren't getting exposure of those muscle cells to drugs. So we'd like to see that translate and we'll be showing that in the study. And then looking at exon skipping as well as dystrophin, are going to be important. I think the numbers, as you pointed out, would be exceedingly positive in a setting where we have this short time frame to evaluate dystrophin being produced. I think back, if we see those numbers, that would be extraordinarily encouraging to then do what Ann-Marie alluded from the call, which is really to expand both the number of patients to significantly power a study for superiority to other exon 53 skipping oligonucleotide as well as driver path forward. So, I think that's the target to-date, and I hope I answered your question.

Super helpful. Thanks so much, Paul.

And thank you. And one moment for our next question. And our next question comes from Paul Matteis from Stifel. Your line is now open.

Hi. This is James [ph] on for Paul. Thanks for taking our question. I just had one on ADAR actually. And maybe it's a little bit more theoretical, but on the safety side, I guess, what makes you comfortable there with the downside of recruiting ADAR away from its endogenous functions. It would be great just to hear any color or thoughts you have on what we know about those endogenous functions and any risks associated with leveraging it away from it? Thanks so much.

Yeah. It's a great question, because it's obviously something we spend a lot of time both on the platform aspect as well as ultimately in running the preclinical candidate nomination for 006. Speaking to the platform aspect, and we have shared these data at meetings, ADAR does have an endogenous function on editing a transcript. And so one of the studies that we had done early on was looking at applying multiple aimers within a cell to look at whether or not you exhaust the enzyme from a function. And what we were able to show is we can add multiple transcripts within the cell, and therefore, realize that we're not capturing ADAR inside itself from preventing it from doing its normal function. So I think your point is spot on and something we kind of spent the early portion of our platform development of the ADAR capability, really studying and making sure we understood well. As we've then translated that into 006, it was important that, obviously, we've done a lot of non-GLP safety studies as part of our candidate nomination. That's an important part of just how a lot of companies define candidate nomination in different ways, but we embed safety tolerability into that. And again, have seen good translation from our platform development into our program development. And at this point, our confidence in the safety and the program are moving forward. Next steps, obviously, we're engaged now in GLP tox studies to advance the program into a CTA submission next year.

Great. Thanks so much.

Thank you. And one moment for our next question. And our next question comes from Joon Lee from Truist Securities. Your line is now open.

Hi, thanks for taking our questions. I'd love to hear Anne-Marie's given her experience with tominersen at Roche. What percent knockdown of mutant allele will be sufficient for clinical benefit in our view? And for what duration of follow-up, like the duration of follow-up that will be needed to show a clinical benefit? And I have a follow-up.

Thanks. As we reported today from the initial data we've already seen that we're in the range of about 20% to 30% knockdown with allele selectivity. And this is what we would be aiming to replicate as we move into the multi-dose phase of the study.

With that magnitude of knockdown, how long do you think you need to follow the patients to see a separation from placebo?

So, obviously, HD is a fairly slowly progressive disease, but you would expect to see something within six months to a year of follow-up. So probably we'll see what regimen we’re following based on the multi-dose phase.

Great. And the next question for AATD, are you looking to focus more on the liver or the lung aspects? And how does that impact your decision for the types of patients you want to know in the trial? Thank you.

Yeah. I'll be happy to hand it back to Ann-Marie. But I think ultimately, in developing the program from the very beginning and really thinking about it as the first opportunity to develop editing we are looking at both. And it's important to us in the development plan to obviously measure the plasma levels of Alpha-1 interest protein, and we can relate that to the IV protein infusion. We will also be embedding into that study liver biopsy to be able to look at the decrease, hopefully, and liver aggregate. And so we'll be building the compendium that program together as we advance it. The ZZ patients as we think about, the enrollment as we get into the patient aspect of the study, those patients that tend to progress starting with pulmonary disease and then progress the liver. So the important piece for us in the initial period of that study is less about functional outcomes and early on, more about biomarker-driven outcome. That will answer two important questions. Obviously, one, from a platform perspective, the significance of editing and the ability to see the translation from preclinical models to human models. And then secondly, being able to continue to follow those patients forward in terms of we expect.

Thank you.

Thank you.

And thank you. And one moment for our next question. One moment, please. And our next question comes from Yun Yang [ph] from Jefferies. Your line is now open.

Thank you. So you mentioned the current cash is enough through 2023 without any potential milestone from Takeda. So question number one is, are you expecting milestone payments based on your development in Huntington disease from Takeda in 2023? And if now, what would be the event that you could receive a milestone? And second question is, given the limited cash, are you thinking about prioritizing your programs? Because you have been quite excited about RNA editing. So why not prioritizing the program and kind of a conservative cash? Thank you.

Great question. And the two are not unrelated. So obviously, we have a productive collaboration that's ongoing with Takeda that involves our C9-ALS FTD program and our Huntington's program. So we are continuing to advance that. And exactly to your point, those drivers have the potential for opt-in, that opt-in triggers a 50-50 profit split R&D split, which decreases our expenses and also has a series of milestones associated with that. We look at that collaboration and those programs advancement as being very. So that's how we're thinking about that. To Kyle's point earlier on the call, we don't forecast that into our runway statement. However, progress on any clinical success in those programs would be tied into those potential often payments and central milestone payments. So we look at that as balance in those programs. Secondly, we're continuing to do really important meaningful work, as we said, on building out and expanding our central manufacturing capabilities. And so we've been doing that work internally that helps support and bring in potential additional resources. As it relates to AATD, we are excited about that. And as you've seen over this past year, we've prioritized and placed the investment in it. And along with the hard work of the team at Wave have now developed a clinical candidate that we anticipate bringing into the clinic next year. So I think as we look forward, yes, there are potential sources of cash inflows coming from manufacturing, coming from milestone payments with our existing partner. And as we've said on prior calls, our work and focus on additional business development activities to bring in non-dilutive capital to fund the platform engine to continue to build on this editing capability and other experience we've built in.

Can I ask you one follow-up question? Regarding Takeda's opt-in, is there any data point event that the partner has to opt-in?

There are drivers around proof of mechanism. And I think as Anne-Marie alluded to the data sets that are upcoming, we think those data are consequential in having that discussion with Takeda.

Thank you.

And thank you. And our next question comes from Luca Issi from RBC. Your line is now open.

Thanks for taking our questions. This is Lisa on for Luca. And congrats on the progress this quarter. Just a couple on A1AT. I know you are flagging a CTA filing in 2023. But just wondering, can you remind us what your regulatory strategy is for the US? Have you had a pre-IND meeting with the FDA? And what do you think are the main areas where the FDA will probe given the novelty of the ADAR editing technology? Are they looking for off-target editing, longer GLP tox, more bio-distribution experiment? Any color there would be much appreciated. And I have a follow-up. Thanks.

I'll start with the last part and then hand it to Anne-Marie because I think she's best suited to answer the question. But I think in light of a number of the news flow within the editing space, particularly editing on DNA, I think it's really reflective of why we chose RNA editing with a capability that reversibly edit the transcript. And so I think that coupled with the benefits of manufacturing of AMRs are both very important as we think about progressing into our regular discussions. But I'll let Anne-Marie take the regulatory conversation.

We're just in progress with our GLP tox study that we have not yet initiated our interactions with the regulatory authorities. And as you've alluded to, of course, the outcome of the GLP tox studies will be instrumental in the discussion of what the regulators we want to see. But based on the non-GLP tox data we have already in hand, we are assured that we have a concert with a profile, which makes it suitable for continuing development.

I think it's also important just to go back to that original theme again that when we're going to regulators to have a conversation RNA editing, we're still talking about an oligonucleotide approach. Much in the same way when I think about these RNA guide trends that we're developing are very analogous to the endogenous mechanisms we're talking about using an RNA therapeutic with silence with RNA stage or increase sRNA with 02 or splicing. This is just another oligonucleotide mechanism that we're using now to engage in Dodge events like ADAR. So, very different from other approaches where you're inserting both the protein to edit coupled with guides that then target DNA permanently. So, it is a different path.

That's helpful, Paul, and Anne-Marie. And just maybe one more question on A1AT. We have seen recently in Hiberix announced that they can get approved on a serum biomarker. Just wondering what was your reaction to that news? And maybe how are you thinking about implications for your own program?

I mean I think like everybody else, we were anticipating and watching that data very carefully. I think it was affirmative to us that indeed the plasma concentrations of this protein are important. I think as we watch that, it does open up a potential path. I think that that's only one side to remember of our program. So that aspect is how we think about replacement and helping the lung, but these patients also have potential liver complications. And so I think as we said earlier, our clinical path will really be driven to address both so that we can set liver aggregates in addition to protein level, they really giving ourselves a single therapy that's comprehensive, but obviously, encouraged by that data. With the realization that the protein we're generating is endogenous protein. So there is a way we're looking at this to measure, not just having the protein expressed and having to be a steady state. The infusion remember, you give a protein and then you watch the degradation of that protein. What we're really establishing this increasing baseline levels for patients to the DV patients to end phenotypes and allowing them when the body needs the manufacturers that they're synthesizing wild-type protein. So, interesting to follow and obviously encouraging as we watch.

Yes. And I would just say that this kind of regulatory precedent is great for the field, great for patients, and we support any action taken by regulators that will help expedite therapies to patients with rare diseases.

Great. Thanks for taking our questions.

Thank you.

Anne, thank you. And one moment for our next question. And our last question comes from Mani Foroohar from SVB Securities. Your line is now open.

Hey, guys. Thanks for let me in. Just a quick clarification. On your DMD program, you talked about you're more speculated about possibly moving to a larger study that is adequately powered to show differentiation versus existing agents in exon skipping? Does that -- should I interpret that as you guys plan to do a head-to-head study with superiority endpoint? And if not, how should I interpret that?

Yes. Thank you for the clarifying question, Mani. So no, we are not planning on having -- we don't have to do, and we're not planning on running a head-to-head study with programs that had thought on approval. I think the key for us is we do know where the bars have been set from other programs, and we want to assure that, that study is substantially powered both to deliver on superior dystrophin to those programs as well as have potential in terms of design to support AIMer discussions with regulators around accelerated approval pathways.

Okay. So you mean kind of a cross-trial comparison sort of sense?

Exactly.

Okay.

Yes. I think we're really referring to the fact that there is still a significant unmet need in this space.

Okay. Thanks. That was really helpful. Thanks guys.

Thank you.

And thank you. I will now turn the call back over to Dr. Paul Bolno for closing remarks.

Thank you, everyone, for joining the call this morning. This is an exciting time for our organization, and I am grateful to every Wave employee for their dedication and unrelenting focus on our mission and on the patients and families we serve. Have a great day.

I would now like -- this concludes today's conference call. Thank you for participating. You may now disconnect.