Good morning, and welcome to the Wave Life Sciences Second Quarter 2023 Financial Results Conference Call. [Operator Instructions] As a reminder, this call is being recorded and webcast. I'll now turn the call over to Kate Rausch, Vice President of Investor Relations and Corporate Affairs. Please go ahead.

Thank you, Haley. Good morning, and thank you for joining us today to discuss our recent business progress and review Wave's second quarter 2023 financial results. Joining me today are: Dr. Paul Bolno, President and Chief Executive Officer; Anne-Marie Li-Kwai-Cheung, Chief Development Officer; Kyle Moran, Chief Financial Officer; and Dr. Chandra Vargeese, Chief Technology Officer. The press release issued this morning is available on 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 these 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, 2022, and our quarterly report on Form 10-Q for the quarter ended June 30, 2023. We undertake no obligation to update or revise any forward-looking statements for any reason. I'd now like to turn the call over to Paul.

Thanks, Kate. Good morning, and thank you all for joining us on today's call. Today, I'll share a highlight on our progress during the second quarter and then turn the call to Kyle to review our financials. Then we'll open up the call for questions. Ann-Marie and Chandra are on the line today and will be available for Q&A. In the second quarter, we continued to execute on our vision of pioneering transformational RNA medicines using our multimodal platform. We remain on track to submit CTAs for our AATD program, and the first RNA editing medicine to enter human clinical trials. We're accelerating work on a number of compelling targets in our collaboration with GSK, and we continue to advance our clinical programs in DMD and HD. Today, I'll begin with AATD and RNA editing, then review our progress with GSK in building a sustainable pipeline. And finally, we'll end with an update on our clinical trial. As I speak with you today, we are preparing for the imminent submission of our first clinical trial applications or CTAs for WVE-006, the first RNA editing clinical candidate for the treatment of AATD. This milestone is important on multiple fronts. First, WVE-006 signifies an entirely new modality moving into the clinic. We are incredibly excited about this milestone, which is an important advancement for the nucleic acid field and for all patients who stand to benefit from RNA editing therapeutics. With AATD, our ability to utilize validated biomarkers in the clinic is expected to enable rapid delivery of proof-of-concept data for 006. This early clinical data set would increase the probability of success with Wave's future RNA editing programs in the liver and beyond. Second, our path from target to the clinic with 006 reflects the translational speed of our platform. Upon…

Thanks, Paul. Turning to the financials. Our net loss for the second quarter of 2023 was $21.1 million as compared to $41.3 million in the prior year quarter. The decrease in net loss was primarily driven by revenue recognized under our collaboration with GSK -- under the GSK and Takeda collaborations in the second quarter of 2023 was $22.1 million. In the prior year quarter, revenue of $0.4 million was recognized under the Takeda collaboration. Research and development expenses were $33.3 million for the second quarter of 2023 as compared to $29.7 million in the prior year quarter. This increase in R&D expenses was primarily due to increased external expenses related to our clinical program. GSK expenses slightly declined in the second quarter -- sorry, G&A expenses slightly declined in the second quarter to $12.3 million as compared to $12.8 million in the prior year quarter, primarily due to a decrease in share-based compensation. We ended the second quarter with $173 million in cash and cash equivalents as compared to $88.5 million as of December 31, 2022. The increase is primarily attributable to the upfront cash and equity investment of $170 million received in the first quarter from our strategic collaboration with GSK. We expect that our cash and cash equivalents will be sufficient to fund operations into 2025. As a reminder, we do not include future milestones or opt-in payments under our GSK and Takeda collaboration in our cash runway. As Paul stated earlier, we have the potential to receive meaningful near-term milestone payments in 2023 and beyond, including clinical development milestones related to WVE-006, our RNA editing candidate in the treatment of AATD. I'll now turn the call back over to Paul. Paul?

Thanks, Kyle. We are well positioned to execute on multiple upcoming milestones across our pipeline in 2023 and beyond. I look forward to seeing many of you at upcoming investor conferences and to speaking with you at our R&D Day event in September. And with that, I'll turn it over to the operator for Q&A. Operator?

[Operator Instructions] Our first question comes from the line of Steven Seedhouse from Raymond James.

Yes, god morning, thanks so much for taking the questions and broad update. Paul, you mentioned rapid delivery of proof-of-concept data from the AATD study. I was hoping if you could just expand on that comment on sort of the initial doses you'll be in the clinic with when gene editing went into the clinic in vivo, there were pretty profound editing rates already even at the lowest doses. Just curious, if that's the type of thing you're expecting to sort of manifest here at the early doses in the study? And what other, other than editing -- what other sort of proof-of-concept features do you think you can generate pretty quickly?

Wonderful. I'll take the question, Steven, and then hand the call to Anne-Marie. But I think when we talk about rapid proof-of-concept, our goal is, as stated, as quickly as possible to get to a measurement of protein both through, as we stated before, the study's rapid healthy human volunteer section and then treatment section. But the goal here is you bring up measuring editing efficiency. I think, what's unique and really special about the Alpha-1 antitrypsin indication is that we can measure the most important contribution of editing, which is protein formation. And so, the biomarker we'll be able to measure in that study is the Alpha-1 antitrypsin protein, and we'll also be able to characterize how much of it is fixed/corrected protein. So I think it gives us a really unique way of confirming preclinical studies in the clinic, both in the magnitude of production but also the quality of production. Anne-Marie, I don't know if you have other comments you want to make to the clinical trial design here.

No. Well, I would perhaps add that in the final stages before submitting ready -- almost ready to submit the CTAs and we'll comment further on the design once we're locked and loaded there.

Okay. And just when you think about assessing off-target RNA editing, can you just describe -- is this much different than you would do for an siRNA, -- for instance, is it any more onerous? What's your understanding of the sort of regulatory landscape for establishing an off-target margin for RNA editing therapeutics?

Yes. I mean I think what's exciting about RNA editing as we think about a standardized oligonucleotide approach and looking at our experience in siRNA and antisense is the ability to assess normal -- what are their potential off targets in the same way we would do that for others. As you know and as we've shared previously, we've done the characterization to look for bystander edits and others on the transcript come with a highly specific editing, and therefore, we didn't see bystander edits. So in preparation for the submission, we obviously did a lot of that work to preempt that in terms of demonstrating a new modality that we don't see bystander edits as highly specific and behaves the same way as other oligonucleotides. And so, I think we're excited about the prospect of thinking about this like others as opposed to, as you alluded to, kind of as the more onerous work that needs to be done on DNA editing. I mean, I think to the other point is, I think it really reflects the ability and the importance of reversible editing. The idea that we're working on the transcript and not inducing permanent genetic mutations on DNA. And so, I think as we approach this, particularly as we think about prevalent diseases. We think it's an important contribution that we get to make to the space of really thinking about how do you go after not just devastating rare diseases, but actually apply these technologies to broad chronic diseases, which is important, obviously, to ourselves and to our partner, GSK.

Yes. And just lastly for me, I appreciate that. This is maybe thinking a little bit ahead. But as you think about initial patient selection for AATD, how broad is that demographic going to be? And like will you be looking for patients with lung and liver involvement, right away, to sort of show the power of this approach and specific genotypes that would be early targets? Any comments there would be appreciated.

Yes. I mean, I'll hand it over to Anne-Marie in a second on the clinical side, but I think it is important as we think about the application initially where we're pursuing, which is -- if you think about the homozygous ZZ patients, it's both liver and lung. And so, as we think less about where the manifestation is, the actual driver of that disease is in the underlying genetics. And therefore, it's about correcting those ZZ patients to MZ patients, and therefore, following the protein relative to that. So it's much more about collecting for the genotype and demonstrating -- evaluating the protein and the constitution of that protein in this initial period. Later, we can then say, look, we can just drive that to the lung and think about where protein infusions have been developed and thinking about achieving threshold levels of Alpha-1 antitrypsin protein and looking at liver demographics. But I think initially, the proof-of-concept really is focused on demonstrating that translational potential of both for AATD with this particular medicine, but even the RNA editing deal more broadly and what the impact is, we think, through other hepatic targets and beyond. Anne-Marie, I don't know if there's anything else you want to add to that in terms of the clinical trial demographics?

No. I mean, I think you hit it. We're focusing on ZZ patients, phenotype patients for now, and there'll be more details about the study once we're in full agreement with regulators.

I think the other piece is, if we think about the ZZ population, the ZZ population by itself is about 100,000 patients in the U.S. So as we think about that, there is a consequential patient population to study. So we're not concerned that we'll be able to find the patients for the study.

Our next question comes from the line of Paul Matteis from Stifel.

Hi. This is Julian on for Paul. Thanks so much for taking our questions. On AATD, I know you said for 006, you're not constrained by therapeutic area. Just curious regardless, is there anywhere else in particular that you find compelling beyond AATD to where you may be interested in establishing proof-of-concept moving forward? And then, any other color also you could just provide in the GSK collaboration. I know you mentioned that you're currently working with them on numerous targets, but any other color you could provide on how that's coming along? And how you plan on allocating your resources for joint programs versus your own moving forward would be super helpful.

Thank you, Julian. I'll take it from the beginning, and I think you set up a really important context at the very beginning, which is I think you said AATD is not concerned by therapeutic area. I mean AATD, you're right, liver-lung, but we're treating the liver to ultimately create the protein that protects the lung. So I think it's important in the context of AATD optimizes in a POC of GalNAc-conjugation and what it can do across functions. What we've done, and I think these are important data sets that we've previously shown. And again, as we said earlier that we plan to do the update on September 28 that our R&D Day, as we have shown data extra-hepatic, meaning absent GalNAc, the chemical modifications that we have distribute to a number of issues: CNS, lung, kidney and others. So I think as we think about those therapeutic areas and what each of the potential within those tissues unlock, I think, what we're seeing is an expansion of indication. On a previous call, and we'll obviously share more on R&D Day, I think we're also excited, as we talk about not just as we said, rare and prevalent, but really thinking about mechanism. So in AATD, here, we're talking about the ability of a correction that actually changes a protein from a mutated form to a wild-type or healthy point. There are applications in a number of tissues in therapeutic areas where we can apply that in developing meaningful therapeutics. With this -- been exciting and what we've shared previously from in vivo data on, and we'll continue to share more on that is, the ability to do upregulation. So to think about areas where you're under expressing a protein and then rather than trying to augment that by trying to deliver an mRNA therapeutic or other technology, which could be constrained even by mechanism of delivery. The ability to actually stabilize a transcript increase its expression and therefore, increase the protein that's produced, lets us think about other applications beyond just the base correction fixing of protein. And as we think about that area, we think that universe is really broad. And it gives us a lot of opportunities to think about multiple therapeutic areas for us. So we are excited about sharing more data on programs in those areas and data that supports the growth of the RNA editing field and what it can do beyond Alpha-1 antitrypsin.

Excellent.

Sorry, last question, with the GSK component. So as much as I'd love to be able to speak for a partner. I think, we -- as we shared today, I think it's safe to say there is an extraordinary amount of momentum. It was evident. Anybody who attended bio, we were on -- we were the participants with GSK as they were sharing kind of where they see the translational potential of their genetics investment and have really been highlighted by them as the opportunity that we provide with a multimodal platform. I think, editing is one. Importantly, as GSK looks across their universe, it's not just constrained to loss of function and editing. There are a lot of really prominent programs in silencing and we are partnering with them across silencing using siRNA and the data -- some of that basement for that data we shared last year as well as on the editing approach. And so really being able to think about diseases holistically where we're not constrained to either an upregulation, gain of function disease or loss of function that can really pick the best tool for the right job. So I think there's a lot of momentum on the collaboration across programs, and we're excited to continue to provide updates where we can.

Our next call comes from the line of Eun Yang from Jefferies.

Thank you. I have a couple of questions on RNA editing. So obviously, you have the most advanced program in RNA editing, but others are doing as well. So could you comment on your technology, how you are better positioned for RNA editing compared to others, although there is not a lot of data out there from others? So that's question number one. And second question is on AATD program. And obviously, you're going to be talking more about this at the R&D Day. But as you are very close to filing a CTA, when do you think we will be able to see the data? And in terms of serum AAT protein levels, you have shown remarkable increases in rodents. But how should we think about in humans? And how many fold of increase would be your objective?

Great. We'll unpack that a lot. I think, if we -- we'll start with the front and then I'll move to your final question, which is really the translation of why are we leading AATD -- in editing, how that translate into AATD and ultimately, what do we expect to see in the translation in human? I think, you said a lot at the beginning when you said why are we ahead of others? And I think you really brought up the important piece, which is there's not a lot of data out there from others. And I think, what I'd like to say is this doesn't come from an immediacy of saying, well, we're interested in RNA editing. It comes from over a decade of investments in building an oligonucleotide chemistry engine. And what we are poised to do when we entered in the editing space was really bring together this convergence of best-in-class nucleic acid chemistry. The how? How do you create guidance trends that better interact with enzymes? How do we design that to more specifically and enhance the opportunity set that we have with ADAR? And ultimately, how does that translate both in our non-human primate studies in the liver using GalNAc, in the liver not using GalNAc and in other tissues beyond the liver? And I think, if we get to the root of really how we approach things, it is a chemistry-driven exercise. And I think in doing so, we've been able to get to short oligonucleotides that are long that don't require a delivery vehicle. So we're not constrained to lipid nanoparticles that I do think ultimately complicate delivery and accessibility. That's important because I think a lot of times for those not familiar with LNP, the chemistry that one would use to…

Great. Can I have a follow-up question. So you have about $225 million in development milestones from GSK on this AATD program. So starting Phase 1/2 this year, how much of a milestone would you be expecting from that?

Great question, Eun, in terms of -- as we alluded to before, that we've got a number of development milestones beyond commercial milestones from GSK that come in over time. What we can do, obviously, is break out those payments at various points. Obviously, as we receive them, there are opportunities where those are disposed, obviously, in our financial statements. But the key is delivering this program into the clinic and beyond, which contributes milestone payments. Importantly, beyond AATD, and I think that was another important feature is, there are a whole host of programs that are moving collectively with GSK beyond AATD. And it's important to note, not only do we have those programs where GSK pays 100% of the R&D expenses as we're advancing them. But those also have milestones, both preclinical and clinical and commercial milestones. So, as we think about the magnitude across the collaboration, there are multiple potential inflows coming from execution. And I think it's important, as you said, that those are not counted in our runway statement. So those would be accretive to our current cash position.

Our next call comes from the line of Asim Rana of Truist Securities.

Good morning. This is Osman for Joon. My first question is, given that you've improved upon RNase mediated degradation, splice blocking ASOs, RNAi, RNA editing, all with your AMR platform. I'm just wondering if you have any plan to design guide RNAs with enhanced properties like stability and low off-target cutting, basically to improve upon the high-rate DNA/RNA guide similar to those being used by Caribou. And as a follow-up question, just wondering, maybe could you comment on the potential to use patients who've already received microdystrophin gene therapy from a competitor for your N531 program, and I'm specifically referring to Sarepta's program.

Thank you. I mean, I think if we take the first question, as you pointed out, and I think it parallels Eun's question earlier, which is we have made a substantial investment in building what we would view as best-in-class kind strength. We think about all of these opportunities and you elegantly laid them out, all of them involve kind of this mechanism with RNA protein interaction, right? It's all about a guide RNA interacting with a protein and exerting a biological obnoxious effect, whether that's cutting via RNAse H4 [ ao2 ], whether that's exercising and utilizing the splicing machinery to generate and up protein correction or generate protein or RNA editing using ADAR. I think the opportunity set that's in front of us are a multitude. I think we're going to be focused on portfolio construction and translation right now with this toolbox into meaningful medicine. However, as you've known in our history, we've always had through various collaborations and internal research exercises collaborations that have pushed us into new areas. So whether that's editing beyond data eye, whether or not that's editing, including, as you said, highly specific editing around other mechanisms, whether its DNA, but that's not our core capability. There are always opportunities that we have in being approached too by others and saying, what is the opportunity set that our proprietary chemistry can bring to other modalities. So, we're not close minded to say, this is all we do. We recognize that you can't always predict what's coming behind. But I think the key is, and I think it's very important to say that we are focused on building out a therapeutic portfolio in the area that we've outlined, particularly using our RNA editing capability. And that's where we're going to put our internal…

Our next call comes from the line of Salim Syed from Mizuho.

Great. Thanks for the questions, guys. Paul, just a few quick ones from us. Just more clarification than anything here. So with the CTAs now being imminent, I'm sure you have some idea when we're getting data, and I think folks have tried to ask it on the call, but I'll try to ask it maybe differently. Is the baseline thinking here that we'll be able to get data in 2024? And also just curious when you'll be able to -- is the Phase 1 trial design being shared this year or are we getting that also in '24? On DMD, the functional endpoints that you've mentioned, do those have any bearing on whether this Phase 2 is registrational? Or is it just going to be solely dependent on dystrophin levels? And then on 003, the wording in the press release, it seems like it changed a little bit versus the first quarter. So I'm just curious, I think this time you guys added the word available multi-dose data versus last press release, the word available wasn't in the press release. This press release was additional single dose and any available multi-dose, last press release was additional single and multi-dose, so curious what exactly has changed there in the multidose side?

Excellent. All right. So if we start, and thanks for the question, Salim. So we think about, let me just start write down in order AATD, DMD, HD. So as it relates to AATD time lines, as we said, the CTA submissions are imminent. Once we begin the trial, we can give a further update in terms of the expectations for data. I think it's always important to see that trial kick-off. I think, it's obviously safe to assume that data won't be in 2023 for that study. But looking forward, I think when and what data we'll have as we move into 2024 is something that we can provide updates on once that trial initiates. As it relates to DMD, you brought up a question on differentiation of filing based on dystrophin and what functional data we have. I think, first and foremost, as we've seen from others, dystrophin will be a very important trigger for us in central filing, so getting that data is critical to us. What we have is the benefit, and I'll let Anne-Marie comment on as we think about function is the availability as we follow these boys not just from where the biopsies are, but really continue that study, as we said, for about 24 weeks and 48 weeks. We have an opportunity to measure a number of different functional endpoints. And those don't only include the ambulatory, they include ability to look at respiratory function and others. So Anne-Marie, I'll pause and let you answer any additional questions on potential filing around DMD data. And then I'll come back to HD.

Thanks, Paul. So as you know, there is a well-trodden regulatory pathway for filing with dystrophin data. So, we would expect that to be adequate. But of course, as Paul said, we're running the study through 48 weeks. So we'll, of course, be providing any of the functional data available for that filing. Back to you, Paul.

Great. And so on HD, on the call, we mentioned available data. I mean, the key is there's no change. Actually, we're excited that the multi-dose -- I think that's the update, is that the multi-dose is underway in HD. So I think our update is being able to have available multi-dose data while we have single-dose data would be the update. I think it's very safe to say, we got initiated that we would not expect full multi-dose data in 2023, that's going to be available, despite the muti-dose data is for human study.

Got it. Just quickly, the Phase 1 trial -- my question was on the Phase 1 trial design. Are we getting that this year for 006 -- or is that something you also plan to share in '24?

No, I mean, we'll share the trial design once the study is initiated. So that -- that will be 2023. So I think that if you think about imminent filing and new updates. I think, we'll be able to share the clinical trial plan, which to your question, we'll provide a lot more clarity as to the timing of data as that study initiates.

The next call comes from the line of Joe Schwartz from Leerink Partners.

Hi. This is Joori on for Joe. I was just wondering if you guys have commented on the stoichiometry of the AIMers or RNA editing and how that compares to your other legos for exon skipping or splicing, et cetera. I guess what I'm really trying to get at is, do you expect dosing to be in a similar range or higher, lower? And how does that influence? How you guys are thinking about therapeutic index and any likelihood of potential dose-limited toxicity?

Yes, I'll take the beginning, and then I can turn some of that over to Anne-Marie. We'll see how -- I think as you mentioned, as we think about the stoichiometry, we just think about the pharmacology. I think is the better way of translational pharmacology of AIMer editing. It is a catalytic pathway, so that we are able to harness the catalytic mechanism within the enzymes. So to your point, we do see the advantages that come with that, both on being able to give smaller amounts of drug that then be able to stay. And that's where stability becomes such an important component of the drug staying stable, not being degraded staying in the cell and able to exert its effect. So it is catalytic as are a number of the mechanisms that we're utilizing. I think, the other advantage as we think about AATD is by leveraging GalNAc, we're getting -- we think that there's a lot like other potential siRNAs and approaches where you're using GalNAc-conjugated oligonucleotide human hepatocytes for the catalytic machinery. So I think we're seeing an act very similar to other catalytic oligonucleotides in development. So this wouldn't be kind of -- we like stoichiometric dose was you have to give more and more drug to try to exert an effect. So I think the catalytic efficiency of the enzyme is a huge advantage as we think about AIMers and we think about a lot like we do RNAi very much under this -- other behavioral enzymatic features that you think about winning versus others, but --.

No, this is a foundational technology benefits, right, looking at how you can use these catalytic machineries to work to enable fast turnover kinetics. So that's really the basis. And to Paul's point, all these are looking at catalytic machinery non-stoichiometric.

And I think it's important, too, as we think about extra-hepatic that we're not having to give large volumes to drug, particularly as we think to about being able to dose subcu and other routes as we think about other tissues. So I mean I do think that ultimately, as we think about the AIMer platform, we should be thinking a lot like other silencing capabilities like RNAi.

All right. I'm showing no further questions at this time. I would now like to turn the conference back to Dr. Paul Bolno for our closing remarks.

Thank you, everyone, for joining the call this morning. We have made significant progress advancing our pipeline and driving forward our leadership position in RNA medicines in the second quarter. I am grateful to every Wave employee for their dedication and focus on our mission and on the patients and families we serve. Have a great day.

This concludes today's conference call. Thank you for participating. You may now disconnect.