Silence Therapeutics plc (NASDAQ:SLN) Q4 2022 Earnings Call Transcript

Silence Therapeutics plc (NASDAQ:SLN) Q4 2022 Earnings Call Transcript March 15, 2023

Operator: Good day and thank you for standing by. Welcome to the Silence Therapeutics 2022 Annual Results Conference Call and Webcast. Please be advised that today’s conference is being recorded. I will hand over to Gem Hopkins, Head of IR and Corporate Communications, to open the webcast. Please go ahead.

Gem Hopkins: Good morning and good afternoon, everyone. Thank you for joining us today. My name is Gem Hopkins, Head of Investor Relations and Corporate Communications at Silence. Joining me today on the call are Craig Tooman, our President and CEO, who will provide an update on the business; Rhonda Hellums, our CFO, who will review our financial performance; and Giles Campion, our Head of R&D, who will provide an update on our clinical program. For those of you participating via conference call, the accompanying slides can be accessed by going to the Investors section of our corporate website at www.silence-therapeutics.com. Turning to Slide 2, I’d like to remind you that during today’s call, management will make projections or other forward-looking statements regarding anticipated future events or the future financial performance of the company, including clinical development timing and objectives, the therapeutic potential of our product candidates, our operational plans and strategies, anticipated milestone payments, anticipated operating and capital expenditures, business prospects and projected cash runway.

Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in our most recent annual report on file with the SEC. In addition, any forward-looking statements represent our views only as of the date of this recording and should not be relied upon as representing our views as of any subsequent date. We specifically disclaim any obligation to update such statements. With that, I’d like to turn the call over to Craig. Craig?

Craig Tooman: Thank you, Gem and welcome, everyone. Thank you for joining us today. 2022 was an exceptional year at Silence, where we delivered impressive clinical data with SLN360, now known as Zerlasiran for high Lp(a) and made important advancements across our broader pipeline of siRNA therapeutics. With Zerlasiran which is a wholly-owned program, we reported up to 98% efficacy in the APOLLO study with strong durability after a single dose. These results were simultaneously presented at the ACC 2022 Annual Meeting and published in JAMA, a rare achievement, particularly for a Phase I study. This speaks to how impressive these data were and the growing recognition that Lp(a) is a major cardiovascular risk factor that needs to be addressed.

We are very pleased with the overall enthusiasm for this program and believe we have opportunities to differentiate in the category. We also continue to progress our second wholly-owned program, SLN124, in the clinic and reported encouraging preliminary safety results in the GEMINI II Phase I thalassemia study. The SLN360, Zerlasiran and SLN124 programs are great examples of how we can use our proprietary mRNAi GOLD platform to address a broad range of genetic diseases. We made tremendous progress advancing our platform in the clinic in 2022 and expect to build on that positive momentum in 2023 and beyond. With our partnered programs, we started working on the second target under our Hansoh Pharma collaboration in December, moved SLN501 into the clinic with Mallinckrodt and advanced work with AstraZeneca on multiple targets.

While we are limited in what we can disclose with our partnered programs, I can tell you, I’m very encouraged by the continued progress across our collaborations and we expect to communicate more updates this year. In January, we announced that we initiated both the SLN360 Zerlasiran Phase II ASCVD study and the SLN124 PV study. Looking forward to the rest of 2023, we have several important milestones, including top line data from the multiple dose portion of the APOLLO study in high Lp(a) and top line data from the multiple dose portion of the GEMINI II study in thalassemia. We also expect to complete enrollment in the Zerlasiran Phase II ASCVD study by the end of the year. We look forward to another year of strong execution in 2023. As we continue to advance our clinical programs across both our proprietary and partner programs, our technology is increasingly being acknowledged as a platform.

We look forward to fully harnessing this technology. With that, I’ll now turn the call over to Rhonda. Rhonda?

Rhonda Hellums: Thank you, Craig. For the year ended December 31, 2022, the company recorded £17.5 million in revenues versus £12.4 million in 2021. The increase of £5.1 million was primarily driven by the advancement of targets in our partnered programs, Mallinckrodt, AstraZeneca and Hansoh. We also recorded approximately £578,000 in royalty revenue from Alnylam during 2022. As a reminder, we record revenue from our collaborations based on percentage of contract completion. Therefore, as our current collaboration programs progress and additional programs are initiated, our revenue is estimated to increase. The expenses related to our partnered programs, including the portion of our employees’ time dedicated to these programs are recorded as cost of sales as they are attributable to the revenues.

These expenses were £10.9 million in 2022. As expected, R&D costs rose in 2022 to £35.6 million versus £30.8 million in 2021. This increase was primarily due to advancing our proprietary SLN360 and SLN124 program which Craig has previously mentioned. We also continue to develop our platform and identify new targets for both internal programs as well as partnered programs. General and administrative expenses were £19.6 million in 2022 versus £20 million in 2021. These costs include noncash share-based expenses related to granting of employee share options and requirements of being a public company. We continue to be prudent in our spending. The company’s net loss for the full year 2022 was £40.5 million versus a net loss of £39.4 million in 2021.

The small increase in our net loss is due to the increase in R&D as a result of advancing our programs in clinical development. The company’s cash and cash equivalents were £71.1 million or approximately US$86 million at the end of December 2022. As a reminder, we received proceeds of US$56.5 million from our registered direct offering of our ADSs in August 2022. We estimate that our current cash balance will last through the first quarter of 2024. We are committed to responsibly investing in initiatives that will advance our pipeline and expanding our platform into new targets. Our cooperations continue to advance and we anticipate that we will achieve additional milestones in 2023 which can further extend our cash runway. We also continue to evaluate collaborations that could provide additional non-dilutive funding opportunities.

With that, I’ll turn the call over to Giles for a clinical update. Giles?

Giles Campion: Thanks, Rhonda. I want to start off by saying how pleased we are at the growing recognition of Lp(a) as a key cardiovascular risk factor. Awareness grew substantially in 2022 and we’ve seen that trend continue into 2023. At the American College of Cardiology Meeting last April, the idea of Lp(a) testing as a component of assessment of total cardiovascular risk was just starting to be discussed. At the ADC meeting earlier this month, people were queuing up to get their Lp(a) tested. Major societies are now including Lp(a) in their testing guidelines, a lot of progress in 12 months and we expect that to continue. It is important to remember that elevated risk to Lp(a) is considered to affect up to 1.4 billion people worldwide or around 20% of the world’s population.

And due to its genetic cause, it is not amenable to lifestyle changes such as diet and exercise. As such, this risk factor represents a significant unaddressed health policy issue. As Craig mentioned last year, we reported incredible results from the APOLLO single-dose study in healthy volunteers with high Lp(a). This chart is showing you a median reduction in Lp(a) levels after a single dose of SLN360 or Zerlasiran, we saw up to 98% of the 600 milligrams dose and 96% at 300 milligrams or half that dose. You can also see that we still saw meaningful effects lasting 150 days later. We presented an analysis at the American Heart Association Meeting last November that showed participants who received a single dose of Zerlasiran maintained median reductions over 80% over a 5-month period.

That is what is so attractive about the siRNA platform. It’s a combination of a well-tolerated safety profile with great efficacy that is long-lasting, facilitating infrequent dosing. We have the multiple dose portion of the APOLLO study ongoing. In this study, we’re looking at individuals with high Lp(a) and stable ASCVD. We started dosing the last subject and remain on track to report top line data in Q4 this year. What we’re looking for in the multiple dose data is to add to our understanding of drug safety and gain further insights into dose level and dosing frequency. The Zerlasiran Phase II study in patients with high Lp(a) at high risk of ASCVD events is also underway. In this study, we are evaluating 2 different dose levels and dosing frequencies.

We’re also looking at patients with Lp(a) levels greater or equal to 125 nmol per liter, a slightly lower threshold than in the Phase I study. It’s now well recognized that the risk of CV events increases at these levels. We expect to complete enrollment by the end of the year. Turning now to our SLN124 program for rare hematological conditions. What we really like about this program is that we’re working with a central mechanism, hepcidin which is the body’s master iron regulator. SLN124 works by silencing TMPRSS6 to modulate endogenous hepcidin. This has a range of potential therapeutic benefits. We’ve demonstrated proof of mechanism in a healthy volunteer study and are currently focused on polycythemia and thalassemia. As a reminder, SLN124 has FDA fast track and orphan drug designation for polycythemia and orphan drug and rare pediatric disease designation for beta-thalassemia.

EMA has also granted SLN124 orphan disease designation for beta-thalassemia. As Craig mentioned, we were pleased to kick off the Phase I/II polycythemia vera study in January, this is a 2-part study. The first part is an open-label dose finding study. The study has up to 3 cohorts and will enroll up to 8 patients per cohort. If we find our active dose in the first 2 cohorts, we can then proceed to the Phase II portion of the study. Phase II is a randomized, double-blind, placebo-controlled study. Polycythemia vera is a disease of unregulated production of red blood cells, leading to increased risk of thrombosis as well as significant quality of life issues. By limiting the availability of iron at the bone marrow, we expect SLN124 will be able to control red cell mass and improve disease outcomes.

The primary endpoints for Phase I is safety and tolerability but we will also be assessing the number of phlebotomies at different doses. Phase II will evaluate the number of patients who are phlebotomy-free after treatment. While we are very excited about the potential for SLN124 in polycythemia vera, we recognize this as a rare disease population and this study will take some time to enroll. We will monitor enrollment over the next few months and provide guidance for data at the appropriate time. We also have the multiple dose portion of the GEMINI II Phase I study in thalassemia patients ongoing. We’ve now dosed the last subject on track for top line data in Q4 of this year. Last September, we reported encouraging safety and tolerability data from the single-dose portion of the study as a follow-up to positive data from our healthy volunteer study.

In the multiple dose readout, we’ll also be assessing changes in hepcidin iron parameters and hematinic such as hemoglobin. If we can deliver an increase in hemoglobin levels around 1 gram per deciliter with 3 doses that would be meaningful, although the length of treatment required for consistent effect will be more a function of the Phase II program. With that, I’ll turn the call back over to Craig. Craig?

Craig Tooman: Thanks, Giles. We continue to make excellent headway across both our wholly-owned and partnered pipelines. With 3 programs now advancing in the clinic SLN360, now Zerlasiran and SLN124 and SLN501 partnered with Mallinckrodt. 2023 is set to be an exciting year for Silence. We see substantial potential for our mRNAi GOLD platform across a range of genetic diseases and look forward to communicating more as we move ahead. I’d like to thank everyone for listening today and I’ll pass back over to the operator for your questions.

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Q&A Session

Operator: Your first question comes from the line of Tom Shrader from BTIG Research.

Tom Shrader: Congratulations on all of the progress. I’ve kind of a global Lp(a) question. I think we’re all digesting the incredible negative response to the Esperion Result. And 15% MACE doesn’t seem to be enough for investors. We don’t know if it’s enough for physicians. But as you do work in Lp(a), what kind of MACE reduction do you think you need and if we assume it’s about 20% for people to get excited and based on your data so far that you’re going to have something like a 95% reduction, where do you have to start in terms of target population and is that what some of the lower dose stuff is all about to kind of understand what reductions you’ll need for a MACE effect that people will be excited about?

Craig Tooman: Giles.

Giles Campion: Yes. I mean there are a number of elements to your question. I think the guidance is that generally, we’ll need to see about a 70% reduction in Lp(a) to have a therapeutic benefit. And as we saw in the Phase I study, we’re getting substantially higher than that. I think the other aspect regarding Lp(a) because I think people tend to compare it with — you talked about Esperion talking about cholesterol and other lipids. Just to bear in mind that there is no pharmacotherapy at the moment that can reduce Lp(a) and that it is a genetic risk factor and that other approaches to reducing risk such as diet and exercise won’t work. So I think it’s important to bear that in mind. I mean standard risk reduction looks to at affect rate, well — affect reduction of 20% or so.

That’s how some of the studies that are ongoing at the moment are designed and obviously, hitting that is a feature in terms of the population you choose. And I think the interesting thing about some Lp(a), again, compared with LDL’s cholesterol, is that there is a different phenotype not only affecting the cardiovascular system that we’re used to in terms of MACE but also affecting the aortic valve. So I think it is a different biology and the reason why Craig said that one of the important things in our development is looking for differentiation. And we think there’s a real opportunity to differentiate in this area. So I don’t know if that helps in terms of your question.

Tom Shrader: I guess just to be more specific, where do you need to start such that your current belief about lowering Lp(a) leads to a 20% MACE number. And I appreciate that there may be other factors that would make that look even better. Is that a fair question?

Giles Campion: Well, I think people are looking at different levels in terms of inclusion criteria. So we’ve seen with Novartis study in terms of their Phase II study, they’re looking at 60 milligrams per deciliter. We know that Amgen CVOT has gone for expressing in the nmol per liter, 200 to substantially higher. So I think it’s a question of what effect size you want to see, it’s also related to the study, how long you want to study for how many subjects. So, I think it’s sort of a complicated question. But what we do know from more recent data is that there is a linear effect and the threshold seems to that — without a definite threshold. I mean, originally, the threshold was around about 50 milligrams per deciliter but that is clearly if there is a threshold, it’s less than that. So that’s why in our Phase II, we’re actually having a threshold in enrollment there of 125 nmol per liter.

Operator: Your next question comes from the line of Patrick Trucchio from H.C. Wainwright and Co. Research.