Intellia Therapeutics, Inc. (NASDAQ:NTLA) Q4 2023 Earnings Call Transcript

Intellia Therapeutics, Inc. (NASDAQ:NTLA) Q4 2023 Earnings Call Transcript February 22, 2024

Intellia Therapeutics, Inc. beats earnings expectations. Reported EPS is $-1.46, expectations were $-1.47. Intellia Therapeutics, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Good morning and welcome to the Intellia Therapeutics’ Fourth Quarter and Full Year 2023 Financial Results Conference Call. My name is Drew and I will be your conference operator today. Following formal remarks, we will open the call up for a question-and-answer session. This conference is being recorded at the Company’s request and will be available on the Company’s website following the end of the call. As a reminder, all participants are currently in a listen-only mode. [Operator Instructions]. I will now turn the conference over to Ian Karp, Senior Vice President of Investor Relations and Corporate Communications at Intellia. Please proceed.

Ian Karp: Thank you, operator and good morning, everyone. Welcome to Intellia Therapeutics fourth quarter and full year 2023 earnings call. Earlier this morning, Intellia issued a press release outlining the Company’s progress this quarter, as well as topics for discussion on today’s call. This release can be found on the Investors & Media section of Intellia’s website at intelliatx.com. This call is being broadcast live and a replay will be archived on the Company’s website. At this time, I would like to take a minute to remind listeners that during the call, Intellia management may make certain forward-looking statements and ask that you refer to our SEC filings available at sec.gov for a discussion of potential risks and uncertainties.

All information presented on this call is current as of today, and Intellia undertakes no duty to update this information unless required by law. Joining me from Intellia are John Leonard, Chief Executive Officer; David Lebwohl, Chief Medical Officer; and Laura Sepp-Lorenzino, Chief Scientific Officer; and Glenn Goddard, Chief Financial Officer. John will begin with an overview of recent business highlights. David will provide an update on our clinical pipeline progress, Laura will review our R&D updates, and Glenn will review our financials before we open up the call for questions. With that, I’ll now turn the call over to John, our Chief Executive Officer.

John Leonard: Thank you, Ian. Good morning everyone and thank you all for joining us today. 2023 was an outstanding year for Intellia and its strong momentum has carried into 2024 with our two lead programs either in or approaching Phase 3 clinical development, we are now closer than ever to the first In Vivo CRISPR based therapies reaching the market. We have made critical advances for the field of genome editing and for patients suffering from ATTR amyloidosis. Offering potentially unmatched clinical profiles would address significant patient unmet need in two large and rapidly growing commercial markets. Having clinically validated our In Vivo CRISPR gene editing technology by inactivating genetic targets in the liver, we’re now bringing forth the next wave of innovation.

This new frontier will come in two dimensions, broadening what we can do and expanding where we can go, all of which will allow us to increase the number of diseases we can pursue. The genome editing revolution is only made possible by the unique properties of CRISPR/Cas. Intellia’s expertise with CRISPR/Cas9 is unsurpassed and serves as a foundation for the diverse set of editing tools that we’ve developed and continue to advance. Whether using base editing or DNA writing tools, each of these technologies rely on the specificity and versatility of the CRISPR system. With our wide range of editing and delivering capabilities, we can apply the best tool for each therapeutic application. This allows us to address diseases where there is a meaningful opportunity to improve the standard of care.

In some cases, we may even be able to pursue diseases that would otherwise be considered untreatable, if not for the power of CRISPR. It is this expansive and modular platform coupled with our strong balance sheet that will allow us to achieve the three-year strategic priorities announced earlier this year. Our focus remains on both near-term clinical execution as well as value-creating platform innovation. With this as a backdrop, we expect the following by the end of this year. Two In Vivo knockout programs in active Phase 3 studies, two In Vivo gene insertion programs in first in human studies, and five different tissues outside the liver with active research programs. And additionally, we expect to have six or more collaborations with at least a dozen potential drug products utilizing our technology in research and development.

We’re confident in our ability to deliver on these ambitious goals. We have a proven track record of success with regulators in advancing CRISPR-based therapies and clinical trials. We’ve consistently delivered on our commitments to the scientific, patient, and investment communities. And finally, we have a world-class team of drug developers who have pioneered some of the most innovative and commercially successful medicines in history. In summary, Intellia is the company with the most advanced and expansive In Vivo and Ex Vivo pipeline in the industry. With a potential BLA submission in 2026, we’re well positioned to bring forth the first ever In Vivo CRISPR-based therapy. I’ll now hand the call over to our Chief Medical Officer, David Lebwohl, who will provide an update on our clinical programs.

David?

David Lebwohl: Thanks, John and welcome, everyone. I’ll begin with 2001, our In Vivo CRISPR candidate for the treatment of ATTR amyloidosis. In December, we initiated the Phase 3 MAGNITUDE trial for patients with cardiomyopathy. Since then we’re hitting the aggressive timelines we have set for ourselves, including multiple sites opening and regulatory approvals in geographies with large patient numbers. Notably, we have our first U.S. site actively enrolling patients and on track to dose the first patient in the first quarter. We are making great progress and expect many additional sites to ramp up throughout the year. At the same time, we are actively preparing for a global, pivotal Phase 3 study of 2001 for the treatment of patients with polyneuropathy.

We expect to provide additional information on our Phase 3 plans later this year. Finally, we plan to present new data from the ongoing Phase 1 study this year. I’ll now turn to 2002, our In Vivo CRISPR candidate for the treatment of hereditary angioedema or HAE. A few weeks ago, the New England Journal of Medicine published our landmark Phase 1 data. This marks the second consecutive Intellia In Vivo program to have initial clinical data published in this prestigious medical journal. We are continuing to follow the Phase 1 patients and plan to present additional data this year. As previously announced, high interest in 2002 allowed us to identify all patients for the Phase 2 study in only six months. We have since completed enrollment and dosing.

We look forward to presenting the initial results for the first time later this year. Importantly, these data will determine the dose selected for the pivotal Phase 3 study. We expect to initiate the Phase 3 study in the second half of this year. Of course, this is subject to regulatory feedback, but we think we’re in an excellent position. With five special regulatory designations granted to 2002, we’ve taken advantage of the opportunities for additional interactions with the FDA and other agencies to gain early alignment on our Phase 3 plan. In summary, we believe both programs could reset the standard of care for people living with ATTR amyloidosis or HAE. I’ll now hand over the call to Laura, our Chief Scientific Officer, who will provide updates on our R&D efforts.

Laura Sepp-Lorenzino: Thank you, David. Good morning, everyone. We’re continuing to advance novel gene editing and delivery technologies for both In Vivo and Ex Vivo therapeutic applications. Building on the success of our In Vivo gene inactivation programs, we’re leading the development of CRISPR-based targeted gene insertion. Here, we’re leveraging the same R&D platform using our gene knockout programs to deliver the CRISPR machinery along with an AAB to deliver a functional gene. Unlike traditional gene therapy, we expect our approach will permanently restore a missing or defective protein without a waning effect over time. Earlier this month, our collaborator Regeneron announced that the Factor-9 gene insertion program for hemophilia B has achieved IND clearance.

This milestone puts Intellia at three for three In Vivo IND clearances within 30 days of submission, a testament to our high standard for drug development. In parallel, we also expect to begin this year the Phase 1 study of our wholly owned program, NTLA-3001, for alpha-1 antitrypsin deficiency. Based on our preclinical data, NTLA-3001 could potentially achieve normal human levels of the alpha-1 protein after a single dose. Further, the potential human proof of concept of our modular gene insertion platform would open a whole new category of diseases that require restoring a missing or defective protein. This may include diseases that are not addressable by either base editing or DNA writing. Beyond our liver-directed program, our goal is to harness the full potential of gene editing by extending the reach of our industry-leading platform to other tissues.

Recently, we announced a collaboration with ReCode Therapeutics to accelerate the development of CRISPR-based treatments targeting genes in the line for cystic fibrosis. This collaboration provides yet another example of our partnering strategy to enable pipeline optionality outside our core areas of focus while retaining attractive commercialization bites. With this new collaboration, alongside our own and other partner programs, we’re actively pursuing gene editing programs across five different tissues. Finally, in the Ex Vivo setting, we’re continuing to advance multiple programs, both wholly owned and with collaborators. For example, AvenCell is now dosing patients in their first in human study of an allogeneic candidate. Kyverna is utilizing our allogeneic platform to advance a next-gen CAR-T program for autoimmune disease.

Both collaborators are using Intellia’s proprietary Allo Solution, which is designed to both T-cell and NK-cell-mediated rejection, a previously unsolved challenge for the field of cell therapy. I’ll now hand over the call to Glenn, our Chief Financial Officer, who will provide an update on our financial results as of fourth quarter 2023.

Glenn Goddard: Thank you, Laura. Good morning, everyone. Intellia continues to maintain a strong balance sheet that allows us to execute on our pipeline and platform. Our cash, cash equivalents, and marketable securities were approximately $1 billion as of December 31, 2023 compared to $1.3 billion as of December 31, 2022. The decrease was driven by cash used to fund operations of approximately $448.8 million. The decrease was offset in part by $119.8 million of net equity proceeds from the company’s market program, $49.8 million of interest income, $18.7 million of collaborator reimbursements, and $10.5 million in proceeds from employee-based stock plans. Our collaboration revenue decreased by $15.5 million to negative $1.9 million during the fourth quarter of 2023, compared to $13.6 million during the fourth quarter of 2022.

This decrease was mainly driven by a $10.3 million one-time revenue recognition adjustment related to Regeneron extending the technology collaboration to April 2026. Intellia will receive a $30 million payment due in April as part of the Regeneron extension. R&D expenses increased by $9 million to $109 million during the fourth quarter of 2023, compared to $100 million during the fourth quarter of 2022. The increase was mainly driven by the advancement of our lead programs and personnel growth to support these programs. Stock-based compensation included in R&D expenses was $21.7 million for the fourth quarter of 2023. G&A expenses increased by $5.4 million to $29 million during the fourth quarter of 2023, compared to $23.6 million during the fourth quarter of 2022.

This increase was primarily related to an increase in stock-based compensation of $4.3 million. Stock-based compensation included in G&A expenses was approximately $13.3 million for the fourth quarter of 2023. Finally, we expect our cash balance to fund our operating plans into mid-2026. 2024 will be another productive and catalyst-rich year for Intellia, and we look forward to updating you on our continued progress. With that, we will now open the call for your questions. Operator, you may now open the call for Q&A.

Operator: [Operator Instructions]. The first question comes from Maury Raycroft with Jefferies. Please go ahead.

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Q&A Session

Maury Raycroft: Hi, good morning. Congrats on the progress and thanks for taking my question. As you accumulate data from the Phase I, 2001 cardiomyopathy study, are you getting a sense of how TTR levels are tied to CV events in individual patients and how this compares to silencers, potentially as it relates to APOLLO-B and HELIOS-B and how much data and follow-up do you aim to collect before providing your update and maybe talk more about what you’ll report in the update later this year?

John Leonard: Thanks, Maury it’s John. Appreciate your question. Remember that the Phase I study is limited in size, so the amount of information you’ll provide from a clinical point of view and the ability to tie TTR levels to clinical progression is going to be inherently limited. We look to what we see other competitors doing in the space and use that as a complement to what we see with our own work. I don’t think that anything that we’ve seen thus far that’s been put out there is really changing fundamentally how we’re thinking about prosecuting the Phase 3 program, but I’m sure we’ll be talking a little bit more about that as the call progresses. I don’t know, David, if you wanted to add anything to what might be presented later this year.

David Lebwohl: Yeah, I think you’ve given the most important points. People should just recall that the dose expansion just completed towards the end of 2022, so the patients have had just a little bit over a year, and we’ve seen in other studies that even the difference between placebo and treated patients in the Phase 3s of other compounds starts to diverge at about one year, so we do need significant follow-up to see trends. Of course, we don’t, this is a single-arm trial, so we don’t have quite the right controls to compare any of our results to, but we do have the results, of course, from the other studies to look at.

Maury Raycroft: Got it. Thanks for taking my question.

Operator: The next question comes from Luca Issi with RBC. Please go ahead.

Unidentified Analyst: Oh, great. Thanks for taking our question. This is Lisa on for Luca. Just a question again on TTR cardiomyopathy. We know an HELIOS-B study is going to read out this summer, so just wondering should this read out positively, could this result in an early termination of your TTR cardiomyopathy study with NTLA 2001, any color there would be helpful? Thanks.

John Leonard: I don’t see how the HELIOS results are going to affect the early termination of our own work. I mean, just to remind you what David went through in the earlier comments, we’re actively enrolling the 2021 Phase 3 trial, which we call MAGNITUDE. We’re aggressively opening up sites. We’ve got multiple sites open and enrolling now, and we’ll communicate some more about the progress later this year. Obviously, we look to information as it’s presented, whether the HELIOS study or other studies, to think about how we conduct our own program. But based on everything we’ve seen thus far, based on our own data, the data that’s accumulated by others, we’re very confident and satisfied with the trial design that we have. I’ll remind you, it’s an endpoint study, so whatever happens from a time point of view with Helios really doesn’t relate to the work that we’re doing.

This is an events-driven study. We size the study appropriately, and we’re going to have patients that we expect to present clinical endpoints just based on the stage of their disease, which is somewhat more advanced in our study. So all things considered, we think we’re in a really good position. Of course, we’ll watch Helios as it comes out, but it doesn’t really fundamentally change anything that we’re doing.

Operator: The next question comes from Greg Harrison with Bank of America. Please go ahead.

Greg Harrison: Hey, good morning and thanks for taking the question. Could you give some color on your latest thinking on 2002’s potential place in the treatment landscape given recent competitor data updates?

John Leonard: Yeah, it’s an important question because we acknowledge there’s other drugs out there that have some activity in HAE. Certainly over the last few years, progress has been made in the pharmacopoeia for HAE patients, which is great news. The fundamental problem, the challenge for patients that we hear from doctors and from patients themselves is to make attacks go away, make them be in a position where they never have to worry about an attack and don’t have to carry on-demand therapy. So as new forms of on-demand therapy come out that fundamentally we don’t think addresses what patients are looking for, and from a prophylactic point of view, as long as those drugs need to be readministered, that is going to be a continuing burden for those patients.

So as we look at where we are with the data that we’ve seen thus far and look forward to continuing to expand, we believe that we’re going right to the heart of the matter, which is preventing attacks once and for all, which we anticipate, assuming the success we’ve seen thus far continues, the patients will be able to dispense with their therapy once and for all. And I think that’s the solution patients are looking for.

Greg Harrison: Makes sense, that’s helpful. Thanks again.

Operator: The next question comes from Gena Wang with Barclays. Please go ahead.

Unidentified Analyst: Hi, good morning. This is Harshita on for Gena. Thank you for taking our questions. I just had one on the MAGNITUDE ATTR-CM trial. For [indiscernible] your secondary outcomes included change in baseline to month 18 in serum TTR and also KCCQ. So first I wanted to confirm that these were the only secondary endpoints being measured, and if so I wanted to get your thoughts on why these were selected as the sole secondary endpoints versus some other common ones such as six-minute walk and write your class, NT-proBNP, echo parameters. So any color you could provide there would be really helpful? Thank you.

John Leonard: David, do you want to speak to how we think about secondary endpoints and why we included the ones we chose?

David Lebwohl: Yeah, those were chosen as being the most important secondary endpoints, of course, in consultation as well with regulatory agencies. The important things for patients we think are, first of all, we see in the primary endpoints reduction in cardiovascular events and mortality. Of course, that’s the most important thing. This will be associated, we think with an improvement in quality of life and of course quality of life is therefore an important endpoint for these patients. The other measures like six-minute walk have had inconsistent results in recent studies, as you’ve seen, and we don’t think is a really important part of what’s happening for patients, especially because they may have other things other than their heart disease that’s really affecting their six-minute walk, as these are older patients. Same for proBNP, it’s a biomarker that indicates something about heart function but not really getting to the heart of what’s important to patients.

Operator: The next question comes from Troy Langford with TD Cowen. Please go ahead.

Troy Langford: Hi, congrats on your progress this quarter, and thanks for taking our question. For 2002 do you all expect that you could file regulatory application in Europe at around the same time as in the U.S.? And do you see European regulators, do you think that European regulators seem mostly aligned with what the FDA wants at this point or do you see any divergences there?

John Leonard: David, do you want to address the conjugate filing of the 2002.

David Lebwohl: So this is, for 2002, the design of Phase 3s is fairly well set for this indication. You’ve seen a number of drugs going forward both with approvals or with new Phase 3 studies, and they all are really similar design. And that includes a feature that they tend to be very small studies, they could be well under 100 patients, and really looking to, in our case, the idea that we may be able to prevent any events in these patients. This is in coordination with the FDA filing, which would be sort of an end of Phase 2 meeting. In Europe they don’t have that kind of meeting, but we have other types of discussions that indicate that the designs that we have moving forward will be acceptable in Europe as well.

Operator: The next question comes from Kostas Biliouris with BMO Capital. Please go ahead.

Kostas Biliouris: Good morning, everyone. Congrats on the progress. And thanks for taking our question. Maybe one question on your recent collaboration with ReCode. Can you provide any additional color on approximately when we can see the first early data there and how are you thinking about the competitive landscape, especially other gene editing approaches that are being developed for this disease? Thank you.

John Leonard: Thanks for the question. We’re really excited about the work that we’re embarking on with ReCode. I think it’s a little early at this time to project exactly what we’re going to have and when we’re going to have it. But we’re convinced that the work that they’ve done with LNP delivery to the lung, puts us into a really interesting position where we can take the gene writing approach that we’ve developed and go and address a variety of different genetic lesions that are currently unsatisfied for patients with CF. Obviously, that’s a landing pad from which one can expand it and think more broadly about what might be possible in that space. In terms of other competitive approaches, I think there’s obviously a race to get to solving once and for all the problem that these patients suffer from. And we think we’ve chosen the best partner to be in a position to be highly competitive and ultimately prevail.

Kostas Biliouris: Thank you very helpful.

Operator: The next question comes from Dae Gon Ha with Stifel. Please go ahead.

Unidentified Analyst : Hello, this is Benazir. I’m on for Dae Gon. Maybe a couple of questions on NTLA-3001. Given the rapid like crowding of the gene therapy, gene editing approaches, and ATD, what is the ideal product profile for NTLA-3001? And can you remind us again, that the SERPINA1 gene insertion is it directional and what are some supportive pieces of evidence or tools that are available to detect the correct insertion of the gene? Thank you.

John Leonard: So we’ll turn to Laura to speak to what the insert is. And if there’s any sort of directionality to it. We think we’ve addressed it nicely. Just with respect to the product profile, our objective is to get to essentially normal human levels of wild type protein. Once one does that, which we’ve accomplished pre-clinically and non-human primates, those patients should be essentially the same as patients without the mutation in the first place, at least with respect to their lung disease. So whether or not we’ll get to bat in humans is the basis of the Phase 1 trial that we’re embarking on now as we speak. And, of course, we’re really excited about getting that information, which we think will address not only what we’re doing with 3001, but a whole plethora of other sorts of insertion programs that will be associated with that. Laura, you want to say a word about the insert and how that…

Laura Sepp-Lorenzino: Yeah sure. And this is — we are using our insertion platform where we are inserting into the Insert [ph] 1 of the albumin loggers. So the expression is driven by albumin, which is a really strong promoter. And of course, the gene is wild-type. So, this is fully functional wild-type. So, there is no issues with any errors on sequencing or bystander edits, for example, that you introduce with other editing modalities.

Unidentified Analyst : Okay, thank you very much.

Operator: The next question comes from Joon Lee with Truist Securities. Please go ahead.

Unidentified Analyst : Hi, good morning. This is Maddy on for Joon and thanks for taking our question. This one also may be for Laura on NTLA-3001. So could you please talk about the potential risk of exacerbation in the liver manifestation of patients treated with 3001 based on the hetero polymerization capacity of the normal form with the mutant [ph]? Thank you.

John Leonard: You want to address them?

Laura Sepp-Lorenzino: Yeah, we haven’t seen any in our preclinical models. We have seen cell lines where the expression of the mutant form that will lead us to a concern with regards to exacerbation of aggregation after 3001 treatment.

Unidentified Analyst : Thank you.

Operator: The next question comes from Brian Cheng with J.P. Morgan. Please go ahead.

Brian Cheng: Good morning. Thanks for taking my question. What’s the latest thought around the 3001 Phase 1 trial design specifically, how do you sequentially space out the AAV and LNP administrations? And can you touch on also the part of CMA that you’re aiming to present? Thanks.

John Leonard: David, can you summarize the essence of the Phase 1 design? I think the it was a little hard to hear. But I think part of the question was how much time elapses between AAV and LNP administration within a particular patient.

David Lebwohl: We haven’t told the exact time of clinical study, but they are both going to be — they’re not given exactly at the same time because we didn’t want to separate them a bit, but they are given sequentially. And both the CRISPR mechanism and the AAV will be present in the cells at the same time once they are administered. And that’s the key feature to be successful to get the gene insertion. Otherwise, it really is a standard Phase 1 study with a dose escalation based on the preclinical findings that we have and again, we’ll be giving more details to that once the trial is fully approved.