U.S. Markets open in 6 hrs 47 mins

Edited Transcript of ORTX.OQ earnings conference call or presentation 6-Nov-19 9:30pm GMT

Full Year 2019 Orchard Therapeutics PLC Earnings Call

Nov 7, 2019 (Thomson StreetEvents) -- Edited Transcript of Orchard Therapeutics PLC earnings conference call or presentation Wednesday, November 6, 2019 at 9:30:00pm GMT

TEXT version of Transcript

================================================================================

Corporate Participants

================================================================================

* Bobby Gaspar

Orchard Therapeutics plc - MD, Chief Scientific Officer, Member of Scientific Advisory Board & Director

* Frank E. Thomas

Orchard Therapeutics plc - CFO & Chief Business Officer

* Mark A. Rothera

Orchard Therapeutics plc - CEO, President & Director

* Renee Leck

Orchard Therapeutics plc - Director of IR

================================================================================

Conference Call Participants

================================================================================

* Anvita Gupta

Guggenheim Securities, LLC, Research Division - Associate

* David Matthew Nierengarten

Wedbush Securities Inc., Research Division - MD & Head of Healthcare of Equity Research

* Esther P. Rajavelu

Oppenheimer & Co. Inc., Research Division - Executive Director & Senior Analyst

* Graig Suvannavejh

Goldman Sachs Group Inc., Research Division - Executive Director & Senior Equity Research Analyst

* Huidong Wang

Barclays Bank PLC, Research Division - Research Analyst

* Tessa Thomas Romero

JP Morgan Chase & Co, Research Division - Associate

* Yaron Benjamin Werber

Cowen and Company, LLC, Research Division - MD & Senior Biotechnology Analyst

================================================================================

Presentation

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

Ladies and gentlemen, thank you for standing by, and welcome to the Orchard Therapeutics Third Quarter 2019 Investor Update Conference Call. (Operator Instructions) Please be advised that today's conference is being recorded. (Operator Instructions)

I would now like to hand the conference over to your speaker today, Renee Leck, Director of Investor Relations. Please go ahead, madam.

--------------------------------------------------------------------------------

Renee Leck, Orchard Therapeutics plc - Director of IR [2]

--------------------------------------------------------------------------------

Thanks, operator. Good afternoon, everyone, and welcome to Orchard's Third Quarter 2019 Investor Update. You can access slides for today's call by going to the Investors section of our website, orchard-tx.com.

Before we get started, I'd like to remind everyone that statements we make on this call will include forward-looking statements. Actual events and results could differ materially from those expressed or implied by any forward-looking statements as a result of various risk factors and uncertainties, including those set forth in the most recent Form 20-F filed with the SEC and any other filings that we may make.

In addition, any forward-looking statements made on this call represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. We specifically disclaim any obligation to update or revise any forward-looking statements.

With that, I'll turn the call over to our President and CEO, Mark Rothera.

--------------------------------------------------------------------------------

Mark A. Rothera, Orchard Therapeutics plc - CEO, President & Director [3]

--------------------------------------------------------------------------------

Thanks, Renee. Good afternoon, and welcome. I hope you're all enjoying the annual excitement with the release of the ASH abstracts this morning, which included several from Orchard's gene therapy portfolio.

The purpose for today's call is twofold. Firstly, we'd like to bring you up to date on our progress executing against our corporate priorities while reviewing some recent business highlights. And secondly, we'll set the stage for the data releases from our registrational programs in ADA-SCID and Wiskott-Aldrich Syndrome that have been accepted at ASH in December.

Our CSO, Bobby Gaspar, will cover the second topic in more detail after my opening remarks. Then Frank Thomas, Orchard's CFO, will spend some time reviewing the third quarter financial results and outlook. I'll return to close with a discussion of our commercial strategy as we prepare for multiple filings, potential approvals and product launches in 2020 and beyond.

Before I highlight the datasets coming up at ASH, I'd like to take a step back to remind those of you who are newer to the story who we are and to recap the tremendous progress we've made this year.

Orchard is a pure-play gene therapy company with a focused approach and singular mission to deliver transformative and potentially curative therapies to patients, often children, suffering from life-threatening rare genetic diseases around the world. Our expertise lies in developing ex vivo autologous hematopoietic stem cell or HSC gene therapies, a platform approach that has demonstrated clinical proof of concept in 5 different diseases in our portfolio so far.

As a company, we view the term "patient" as a temporary label and see the opportunity for lifelong benefit, including the potential for our therapies to be curative. With over 150 patients treated across our portfolio and follow-up showing durability of response going out to 8 years or more, we believe we have one of the most robust and comprehensive clinical datasets in the field of gene therapy.

Now turning to the progress we've made. 2019 has been a standout year for Orchard. Let's first focus on our lead 3 programs: in metachromatic leukodystrophy, the OTL-200 program; ADA-SCID, the OTL-101 program; and WAS, the OTL-103 program.

For all 3 lead programs, we have published, presented or had an abstract accepted for the complete registrational datasets. These include clinical measures of efficacy and safety data generated with a fresh gene-corrected stem cell formulation. For MLD and ADA-SCID, we have also presented results from 2 cryopreservation studies that were conducted to evaluate the performance of cryo versus the fresh cells as part of the bridging work for our upcoming regulatory filings. We believe a cryopreserved formulation will provide a much more convenient and beneficial experience for patients around the globe by enabling them to be treated nearer their homes while their cells travel to and from our manufacturing facilities.

We are well on our way towards delivering on our mission for patients with 2 upcoming regulatory filings for ADA-SCID and MLD.

Accordingly, Orchard has grown its commercial capabilities in the U.S. and Europe as we build an organization dedicated to delivering HSC gene therapies to patients worldwide. I'll say more about this later.

The neurometabolic disorders franchise in particular has had a wealth of news flow this year, creating additional momentum for these programs. This is a therapeutic area where we are especially excited by the potential application of our HSC approach. Most patients with these conditions do not have effective treatment options, as is the case for our most advanced neurometabolic program MLD. Not only has OTL-200 made tremendous progress, but a promising pipeline of earlier-stage assets in this franchise is also advancing.

In May, we licensed in an exciting new program from our partners SR-Tiget in Milan for MPS-I and have seen encouraging preliminary data in the ongoing clinical proof-of-concept study presented at SSIEM in September. Furthermore, this morning, we announced the acceptance of the clinical trial application for our first study in MPS-IIIA or Sanfilippo syndrome Type A, and we expect to begin enrolling patients by year-end. This will be the seventh clinical-stage HSC gene therapy program in the Orchard pipeline.

The MPS-IIIA study is being conducted by the Royal Manchester Children's Hospital, which treated a patient under a special license outside of a clinical trial earlier this year. The patient continues to do well with favorable enzyme and biomarker data at 6 months, indicating the treatment is taking effect.

Now turning to our ASH news. The data in this morning's abstracts marked the achievement of 2 important clinical and corporate milestones for the ADA-SCID and WAS programs. For ADA-SCID, we are presenting for the first time the data from 10 patients treated using the cryopreserved gene-modified stem cell formulation of OTL-101. As Bobby will review, we now have 2 supportive datasets, one in ADA-SCID and one in MLD that was presented at ESGCT a few weeks ago that demonstrate that cryopreserved formulations are engrafting in the bone marrow and performing like the fresh cell formulations.

For WAS, the data in this morning's abstract confirm that the 8-patient registrational trial has met its primary and secondary endpoints at the 3-year follow-up time point as per the protocol.

The median life expectancy today of a WAS patient is approximately 15 years with supportive treatment. And there are around 3,000 to 5,000 patients living with the disease in countries around the world that typically reimburse orphan drugs, so the pool of prevalent patients with this condition is quite substantial. We expect to submit regulatory filings in the U.S. and Europe for this indication in 2021.

With the results from this morning's abstracts, Orchard has achieved each of the clinical data milestones we laid out for 2019. I'd like to congratulate the tremendous cross-functional efforts within Orchard and among our collaborators, including SR-Tiget, the Ospedale San Raffaele, UCL, UCLA, Boston Children's Hospital, the University of Manchester and others that have made these achievements possible.

Let me now hand it over to Bobby to dig into the ASH abstracts in more detail. Bobby?

--------------------------------------------------------------------------------

Bobby Gaspar, Orchard Therapeutics plc - MD, Chief Scientific Officer, Member of Scientific Advisory Board & Director [4]

--------------------------------------------------------------------------------

Thanks, Mark. I'm delighted to review all of the compelling clinical data highlighted in this morning's abstracts. With 3 clinical presentations featuring data on dozens of patients, the data in ASH will showcase the breadth, depth and durability of Orchard's diverse pipeline in hematopoietic stem cell gene therapy. The data in ADA-SCID and WAS are the culmination of longstanding pioneering work in gene therapy for these life-threatening diseases, where I believe we have the potential to establish a new standard of care.

I'll start by reviewing the OTL-103 abstract for patients with WAS in greater detail. Wiskott-Aldrich Syndrome is a life-threatening hematological condition that presents with severe platelet and immune system abnormalities. So the 2 major clinical aspects of the disease and, consequently, the highest cause of mortality are severe bleeding episodes and severe infections.

The abstract includes results from an integrated analysis of 17 WAS patients, including the complete dataset for the 8 patients from the registrational study and an additional 9 patients who received OTL-103 as part of an expanded access program. Patients were followed for a median of 3 years in the integrated dataset, with the first patient treated 8 years ago, making this the longest published follow-up of HSC gene therapy durability to date using lentiviral vector transduction. There were no adverse events considered to be related to OTL-103 and no reports of insertional oncogenesis. This is a testament to both the durability of effect and also the long-term safety that is possible using this approach.

16 of 17, 94% of patients were alive at the time of the analysis. One patient in the expanded access cohort died as a result of an existing neurodegenerative condition that was considered by the investigator to be unrelated to OTL-103. All of the surviving patients successfully engrafted within 3 months, leading to an increase in vector copy number and in WAS protein expression in different cell lineages that has been maintained for up to 8 years. 9 months post treatment, all patients were able to stop receiving platelet transfusions, and there were no severe bleeding episodes recorded. Patients' immune function also improved with all patients discontinuing immunoglobulin supplementation post treatment over time and experiencing a reduction in severe infection rates, all suggestive of effective immune reconstitution.

In summary, these data show correction of the 2 major life-threatening aspects of the disease. More complete analysis will be presented in a poster at ASH in December.

Now let's turn to the abstract for ADA-SCID. We are presenting data from 30 patients, that is the 20 patients from the fresh formulation registrational study and supportive data from an additional 10 patients treated with the cryopreserved formulation. The objectives for this dataset were twofold. The first was to show that the cryo formulation performed similarly to the fresh. Analysis of both the vector copy number in granulocytes, a measure of engraftment; and CD3 T-cell reconstitution, a relevant measure of immune recovery, showed a consistent performance across the fresh and cryopreserved treated patients. Overall results showed engraftment of genetically modified HSCs in 29 of 30 OTL-101 patients within approximately 6 months of treatment, which persisted through the follow-up period in both datasets.

One of the patients receiving the cryopreserved formulation failed to engraft and subsequently received a rescue allogeneic hematopoietic stem cell transplant or HSCT. We have looked into this engraftment failure and have no reason to believe it was related to the formulation of OTL-101 that the patient received.

This data is consistent with the MLD cryo dataset presented at ESGCT last month. We and our partners have now treated over 40 patients with cryopreserved gene therapies and are consistently seeing similar engraftment results between the cryo and fresh formulations across the portfolio.

The second broader objective was to evaluate the 30 OTL-101 patients' clinical outcomes versus historical control of 26 ADA-SCID patients receiving allogeneic HSCT. OTL-101's compelling clinical profile remains in place with 100% overall survival versus 88% overall survival for patients receiving HSCT. Event-free survival was 97% for OTL-101, whereas in the historical HSCT control population, over 40% of patients required a second rescue HSCT or returned to ERT or passed away.

In addition, 8 patients or 31% receiving HSCT had acute or chronic graft versus host disease.

In the longest available follow-up for patients treated with the cryopreserved formulation, which was 18 months, 5 of 7 patients or 71%, reaching that time point has stopped immunoglobulin replacement therapy. This is comparable to the data at 18 months for patients treated with the fresh formulation and, coupled with previously presented findings on B cell function, illustrates the completeness of immune reconstitution we are seeing with patients receiving OTL-101 gene therapy. Again, more data from this analysis will be featured in a poster at ASH.

Finally, I'll touch on the MPS-I OTL-203 program, where an abstract was accepted as an oral presentation at ASH. Data from the ongoing proof-of-concept study was presented at SSIEM and demonstrated successful engraftment in all 6 patients treated. We've since enrolled a seventh patient into the study. A preliminary clinical evaluation 1 year following treatment in the first patient showed signs of resumed growth, improved motor skills and a stable cognitive score as well as evidence of metabolic correction. This trial is close to completing enrollment of 8 patients, and proof-of-concept data is expected in 2021.

Now that wraps up my section. We are looking forward to seeing many of you at ASH and keeping you updated on all the exciting developments at Orchard. I'll now turn the call over to Frank. Frank?

--------------------------------------------------------------------------------

Frank E. Thomas, Orchard Therapeutics plc - CFO & Chief Business Officer [5]

--------------------------------------------------------------------------------

Thanks, Bobby, and let me add my welcome. You can find the full financial results for the third quarter in this afternoon's press release, which I will briefly highlight here.

We ended the third quarter with $366 million in cash and investments and up to an additional $50 million available under our credit facility. This strong balance sheet will allow us to execute on several key milestones without the need to access the capital markets, including regulatory filings, potential approvals and commercial preparations for multiple global launches.

Consistent with past guidance, we expect that our existing cash and investments will fund our anticipated operating and capital expenditures into the second half of 2021. This runway does not include the capital available under our credit facility or proceeds from monetizing any priority review vouchers we may receive upon the U.S. approval for our programs.

For the third quarter of 2019, R&D expenses were approximately $28 million, which are up only slightly from the R&D expenditures for the same period in 2018. We expect R&D expenses to generally increase in future periods as our programs advance through development, though there may be some lumpiness in particular quarters.

SG&A expenses were approximately $14 million for the third quarter of 2019 compared to $8 million in the same period last year. The increase was primarily due to higher investments to prepare for the commercialization of our late-stage programs as well as higher cost to support public company operations.

During the third quarter, we recognized $1.9 million in revenue related to sales of Strimvelis. As the first ex vivo gene therapy approved by the European Medicines Agency, Strimvelis is an important source of learning for our commercial organization. And in a minute, Mark will talk more specifically about how we are leveraging that product to build our capabilities ahead of the next wave of launches.

We used about $53 million of cash to fund operations in the third quarter of 2019, which included about $17 million in cash payments related to the licensing of our MPS-I program in May. Excluding this onetime payment, we expect our quarterly run rate to grow in subsequent quarters to prepare for multiple potential product launches in the next few years and begin the build-out of our own manufacturing facility in Fremont, California. In addition to our investment in the facility, we are also investing in multiple strategies to make our manufacturing platform and processes more efficient in a commercial setting. Some of those investments are focused on new technologies such as transduction enhancers or a stable cell line, which could both have a long-term benefit of reducing the amount of vector usage per patient.

Our investment in our own manufacturing facility will enhance overall capacity and provide a source of additional supply, along with our manufacturing partners. In addition to manufacturing, we are always looking for opportunities to enhance our portfolio and capabilities through focused investments in research or licensing deals. This leaves us with several levers in the P&L to manage our burn rate depending on the macro environment in which we operate.

With 2019 coming rapidly to a close, we're pleased with the fundamentals of our business, and we'll continue to deploy capital in a focused way. I'll now hand the call back over to Mark to close.

--------------------------------------------------------------------------------

Mark A. Rothera, Orchard Therapeutics plc - CEO, President & Director [6]

--------------------------------------------------------------------------------

Thanks, Frank. Preparing to commercialize on a global scale is crucial to the success of our launches in MLD and ADA-SCID and our future gene therapies. As Frank said, marketing Strimvelis, the first ex vivo HSC gene therapy approved by the European Medicines Agency, has enabled us to produce commercial supply and treat patients in a real-world setting. This involves a number of activities, including patient identification, understanding the logistics and support required for patients and families along their treatment journey, securing reimbursement for cross-border health care delivery within the EU and completing the manufacturing and release process scheduled and tailored for each individual patient.

We treated multiple patients over the past quarter, demonstrating our ability to scale and deliver these therapies at one center. This is preparing us for the time when our investigational therapies, if approved, will be made available at multiple centers around the world.

To this end, we have increased our global footprint with operations now established in North America; a growing presence in Europe, including the U.K., France, Italy and Germany; and plans to establish Orchard in Latin America, Turkey, the Middle East and Asia over the next few years. We've hired leaders in key global commercial and medical functions such as market access, diagnostics, medical affairs, medical information and patient advocacy to facilitate knowledge of and access to our therapies.

Finally, we have begun establishing qualified treatment centers in the first countries where we expect to launch and are putting in place a well-controlled supply chain. This includes a high-touch patient support program.

Some of our gene therapies represent the first potential treatments for the diseases they are targeting. This is driving new impetus in patient communities and with health care professionals to ensure effective diagnostic pathways for these diseases are in place. For example, Orchard is working with multiple stakeholders to expedite pilots in MLD newborn screening in both the U.S. and Europe.

With multiple potential one-of-a-kind approvals on the horizon, Orchard could look like a different company by this time next year. At our core, we will always maintain our commitment to putting the patient first and to be innovative across the entire company as we bring these novel gene therapy medicines to the world.

Thank you for your time and attention. Operator, you may now open the line for questions.

================================================================================

Questions and Answers

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

(Operator Instructions) Our first question comes from Whitney Ijem from Guggenheim.

--------------------------------------------------------------------------------

Anvita Gupta, Guggenheim Securities, LLC, Research Division - Associate [2]

--------------------------------------------------------------------------------

This is Anvita on for Whitney. So 2 questions actually. With the cryo data now in hand, are there any other rate-limiting steps to filing for MLD in the EU other than just getting the data and the application? And then remind us -- can you please remind us on what is left to do for the U.S. filing?

--------------------------------------------------------------------------------

Mark A. Rothera, Orchard Therapeutics plc - CEO, President & Director [3]

--------------------------------------------------------------------------------

Yes. Thank you very much for that question. I think we're in a great place with the MLD file. We've obviously got compelling data that's come through from the integrated analysis that you saw earlier this year as well as the recent cryo data. And so really, our job now is to expedite the submission, and we're obviously, working diligently to do that, balancing both speed and quality. And we appreciate that in such a devastating condition, the patients are waiting and every day does count. And we'll keep you posted. This is clearly an important program for us.

--------------------------------------------------------------------------------

Operator [4]

--------------------------------------------------------------------------------

Our next question comes from Gena Wang from Barclays.

--------------------------------------------------------------------------------

Huidong Wang, Barclays Bank PLC, Research Division - Research Analyst [5]

--------------------------------------------------------------------------------

Congrats on the data update. So I have 2 questions. The first one is regarding the 101 in ADA-SCID. So you did mention one patient from the cryo data did not engraft, and that was not related to drug product. Just wondering, what was the reason for the patient -- the engraftment did not happen? And what was the drug product VCN?

--------------------------------------------------------------------------------

Mark A. Rothera, Orchard Therapeutics plc - CEO, President & Director [6]

--------------------------------------------------------------------------------

Yes. Maybe, Bobby, would you like to answer that one?

--------------------------------------------------------------------------------

Bobby Gaspar, Orchard Therapeutics plc - MD, Chief Scientific Officer, Member of Scientific Advisory Board & Director [7]

--------------------------------------------------------------------------------

Yes. So thank you for that question. Just to kind of set the context of this. So this is -- the cryo study here is supportive data and will accompany a package that includes in vitro comparability between cryopreserved and fresh formulations of the OTL-101 drug product. So it is supportive to that.

Having said that, there will be engraftment failures, and we do see even in fresh formulations engraftment, for example, in the context of allogeneic transplantation. With regards to this particular patient, we have looked in detail at the drug product, the process and patient characteristics, and we can't find reasons for failure in this individual. And it may be related to patient-specific factors.

And again, just for context, we've now treated over 60 patients with OTL-101. And across those 60 patients, we've just had -- just a very small number, just 3 failures, and one of those failures was in a patient receiving a fresh cell formulation. So these non-engraftments can occur either in fresh or in cryopreserved formulations. And as I say, at the moment, we don't know what those reasons are, and it's only happening in a very small minority of patients.

--------------------------------------------------------------------------------

Huidong Wang, Barclays Bank PLC, Research Division - Research Analyst [8]

--------------------------------------------------------------------------------

Okay. Great. And my next question is regarding the 103 in WAS. So there was one death in EAP cohort, and you said it was due to neuro degeneration -- neurodegenerative disease. So just wondering if you can give a little bit more color. When did that happen? And another related question on WAS is for the cryo formulation trial. Just wondering if you can give us the status of the enrollment.

--------------------------------------------------------------------------------

Mark A. Rothera, Orchard Therapeutics plc - CEO, President & Director [9]

--------------------------------------------------------------------------------

Bobby, would you like to handle those?

--------------------------------------------------------------------------------

Bobby Gaspar, Orchard Therapeutics plc - MD, Chief Scientific Officer, Member of Scientific Advisory Board & Director [10]

--------------------------------------------------------------------------------

Yes, sure. So just with regard to the patient who was treated -- sorry, who died in the study unfortunately, in fact, that patient was an expanded access program patient. And he died 4.5 months post gene therapy and came into the gene therapy procedure with an underlying neurodegenerative condition, which, unfortunately, he succumbed to. And it was an early death after the procedure. So that's with regard to that patient.

And sorry, the second part of your question was -- the cryo study has -- yes. The cryo study has started and has started to enroll patients successfully.

--------------------------------------------------------------------------------

Huidong Wang, Barclays Bank PLC, Research Division - Research Analyst [11]

--------------------------------------------------------------------------------

Okay. I'm just wondering if you can give additional color. I think that the guidance is a complete enrollment in first half '20. And just wondering if you can give additional color. Like how many patients already enrolled?

--------------------------------------------------------------------------------

Mark A. Rothera, Orchard Therapeutics plc - CEO, President & Director [12]

--------------------------------------------------------------------------------

So we've had...

--------------------------------------------------------------------------------

Bobby Gaspar, Orchard Therapeutics plc - MD, Chief Scientific Officer, Member of Scientific Advisory Board & Director [13]

--------------------------------------------------------------------------------

I mean patients...

--------------------------------------------------------------------------------

Mark A. Rothera, Orchard Therapeutics plc - CEO, President & Director [14]

--------------------------------------------------------------------------------

Go ahead.

--------------------------------------------------------------------------------

Bobby Gaspar, Orchard Therapeutics plc - MD, Chief Scientific Officer, Member of Scientific Advisory Board & Director [15]

--------------------------------------------------------------------------------

Yes. So we've had 4 patients that have been treated so far, and we're pleased with the progress of that and the recruitment that's ongoing.

--------------------------------------------------------------------------------

Mark A. Rothera, Orchard Therapeutics plc - CEO, President & Director [16]

--------------------------------------------------------------------------------

Yes. And maybe just to put that all in context, just recall that we've had both now the ADA-SCID cryo data and the MLD cryo data, and they're both showing that they're functioning in a similar way to fresh. And on top of that, if you think about the transfusion-dependent beta-thalassemia or the MPS-I program, these are just already initiated using cryos because we don't think there's anything that's different. It's just that we're proving for these first 3 programs, which happen to be initiated with fresh, that cryo is working in the same way. So there's a large body of evidence now with, I think, around 40 patients just in our portfolio that have been treated using cryo so far.

--------------------------------------------------------------------------------

Operator [17]

--------------------------------------------------------------------------------

Our next question comes from Anupam Rama from JPMorgan.

--------------------------------------------------------------------------------

Tessa Thomas Romero, JP Morgan Chase & Co, Research Division - Associate [18]

--------------------------------------------------------------------------------

This is Tessa on the call tonight for Anupam. Congratulations from us on all the progress. Perhaps 2 from us, if I may. Number one, on the 101 and 103 program, thanks for the summaries of the ASH abstracts this morning. But as we think about the presentations next month, are there any specific key new analyses that we should be looking out for, specifically in each of these presentations within the complete datasets? And then I think there was a question on WAS related to this, but for 101 in SCID, can you remind us of time lines for the rolling BLA submission. Are you still tracking towards the first half of next year? And are there any gating factors to complete before you submit?

--------------------------------------------------------------------------------

Mark A. Rothera, Orchard Therapeutics plc - CEO, President & Director [19]

--------------------------------------------------------------------------------

So I'll ask Bobby to address the first part of your question, then I'll take the second part.

--------------------------------------------------------------------------------

Bobby Gaspar, Orchard Therapeutics plc - MD, Chief Scientific Officer, Member of Scientific Advisory Board & Director [20]

--------------------------------------------------------------------------------

Okay. So as far as the data at ASH is concerned. What you'll see there is just more detail on these 2 studies. So remember, these studies have finished enrollment, so you won't see data on any further patients, but you will see more detail on the drug product, the patient characteristics, the follow-up in terms of vector copy number and other functional assays for both the Wiskott and the ADA study. But there won't be any further patients.

--------------------------------------------------------------------------------

Mark A. Rothera, Orchard Therapeutics plc - CEO, President & Director [21]

--------------------------------------------------------------------------------

And with regard to your second -- yes. With regard to your second question, one of the key steps was the cryo work, which we're presenting at WAS. So -- at ASH. So I think that that's an important step in the whole BLA preparation. But the other one, which we have mentioned before, as per FDA guidance, we are working on process validation runs of the drug product using patient material, and that's another requirement from the FDA before we initiate the rolling BLA, which we're guiding to, as we've already said, for the first half of next year.

--------------------------------------------------------------------------------

Operator [22]

--------------------------------------------------------------------------------

Our next question comes from Esther Rajavelu from Oppenheimer.

--------------------------------------------------------------------------------

Esther P. Rajavelu, Oppenheimer & Co. Inc., Research Division - Executive Director & Senior Analyst [23]

--------------------------------------------------------------------------------

I just had a couple of quick ones on Strimvelis. How many patients did you treat this quarter? And have there been any specific changes to Strimvelis pricing or reimbursement this quarter versus earlier in the year?

--------------------------------------------------------------------------------

Mark A. Rothera, Orchard Therapeutics plc - CEO, President & Director [24]

--------------------------------------------------------------------------------

Thank you for the question. Perhaps I can ask Frank to take that one.

--------------------------------------------------------------------------------

Frank E. Thomas, Orchard Therapeutics plc - CFO & Chief Business Officer [25]

--------------------------------------------------------------------------------

Sure. I think the number of patients treated in this quarter was a total of 3. And with respect to your second question, the price of Strimvelis has remained the same since its launch, and there's no plans for any changes there.

--------------------------------------------------------------------------------

Esther P. Rajavelu, Oppenheimer & Co. Inc., Research Division - Executive Director & Senior Analyst [26]

--------------------------------------------------------------------------------

Okay. Got you. And then maybe taking -- looking a little bit into the future. Can you -- you mentioned commercial preparation. Can you help us understand some of the details around that and the timing for the spend over the next several quarters as you're completing 2 filings and may be in a position to launch in some markets in 2021?

--------------------------------------------------------------------------------

Mark A. Rothera, Orchard Therapeutics plc - CEO, President & Director [27]

--------------------------------------------------------------------------------

Yes. I'm -- so as we prepare for commercialization, there are a number of things that we're doing. The first is establishing the commercial footprint. So geographically, we're here in the U.S. We are in Europe in key markets, as I mentioned, like the U.K., France, Germany, Italy, and progressively, we will continue to expand our footprint in advance of launch not just this year but also over the next couple of years.

As I said before, our goal is to have a global commercial footprint because these are rare diseases and patients need these treatments all over the world. With our footprint comes a number of activities that we're undertaking to prepare for launch. So patient identification work is key. And I think, in the call earlier, I alluded to the importance of some of the types of work we're doing, such as helping expedite pilots for newborn screening for MLD, also expanding the ADA-SCID newborn screening that already exists as well as disease awareness generally, which is, I think, another important aspect of dealing with rare diseases.

The other area we're focusing on is there are centers that we would like to become centers of excellence for the treatment of patients. And so we've identified centers that are good at transplants but also good at the disease areas specifically that we are launching into. So we know which ones those are, and we're working to qualify those centers in advance of launch.

And then I think the final area, just to call out, is market access. And I think here, there's a great deal of important work to be done with a whole range of stakeholders in advance of launch because we are talking about extraordinary medicines that have the ability to transform a life in one single intervention. And so we're really looking at the value proposition of each of our programs and what that represents to the health care system and to these patients and to society, and we'll be able to articulate that very clearly before launch.

So we're also looking at flexible payment models in terms of how these can be paid for according to different payers' needs. So I think there's a lot of different areas we're working in, and I think we're very confident that we can prepare a successful launch for our programs.

--------------------------------------------------------------------------------

Esther P. Rajavelu, Oppenheimer & Co. Inc., Research Division - Executive Director & Senior Analyst [28]

--------------------------------------------------------------------------------

And how would this spend sort of trend over the course of the next several quarters?

--------------------------------------------------------------------------------

Frank E. Thomas, Orchard Therapeutics plc - CFO & Chief Business Officer [29]

--------------------------------------------------------------------------------

Yes. I think we ended the -- ended the quarter with $366 million, which gives us runway into the second half of 2021. I think there's going to be growth in R&D, SG&A and, of course, in capital expenditures related to the manufacturing build-out. So all 3, I think, will generally trend upwards leading into the filings and potential launches. So to answer your question specifically, I think SG&A will trend upward as we get closer to launches.

--------------------------------------------------------------------------------

Operator [30]

--------------------------------------------------------------------------------

Our next question comes from David Nierengarten from Wedbush.

--------------------------------------------------------------------------------

David Matthew Nierengarten, Wedbush Securities Inc., Research Division - MD & Head of Healthcare of Equity Research [31]

--------------------------------------------------------------------------------

Just a question as we look at your commercialization plans. Have you talked with payers and talked with other folks on the durability and the long-term follow-up that you've had on your studies and how that would relate to some of the installment-based pricing that we've seen instituted or planned for with other launches, typically for 5 years? But obviously, you have longer follow-ups in your study, so is that potential upside? Or do you think this 5-year model is getting to be set in payers' minds?

--------------------------------------------------------------------------------

Mark A. Rothera, Orchard Therapeutics plc - CEO, President & Director [32]

--------------------------------------------------------------------------------

Well, firstly, thank you, David, for just pointing out and underlining the very important fact that we do have such long durability data. And therefore, you can argue that the uncertainty around the duration of the effect with ex vivo hematopoietic stem cell gene therapy is lower compared to maybe other modalities. So I think it is a real benefit of the way that we're approaching gene therapy.

I think there isn't just a one-size-fits-all answer to your question. It may well be that for some payers, they feel very good about that data that they feel it is unnecessary to put in place a sort of burdensome follow-up requirement of patients over an extended period. But as I said, I don't think that is a one size fits all. I think it will depend. There are many different types of payers that we're going to deal with. And I think the key point is that we're flexible and are willing to operate a variety of different models. It's really the value that's the important thing for us to align on. And then I think it's a question of how do we best get it paid for.

--------------------------------------------------------------------------------

Operator [33]

--------------------------------------------------------------------------------

Our next question comes from Yaron Werber from Cowen.

--------------------------------------------------------------------------------

Yaron Benjamin Werber, Cowen and Company, LLC, Research Division - MD & Senior Biotechnology Analyst [34]

--------------------------------------------------------------------------------

So maybe I have a couple of questions on ADA-SCID. And maybe the first one, just give us a sense to -- I think we have a good visibility now into filing in the U.S. and certainly, Strimvelis is on the market in Europe. But what do you need to do to then be able to file with EMA for your program? And then secondly, maybe one of the things we've noticed is the new patients coming on therapy is a bit lumpy. So I guess the question is how much visibility do you have to when patient's coming onboard? And are the numbers so small because it's so selective bioavailability in different centers?

--------------------------------------------------------------------------------

Mark A. Rothera, Orchard Therapeutics plc - CEO, President & Director [35]

--------------------------------------------------------------------------------

Yes. Thank you for that question. I think -- as I've mentioned previously, that when it comes to prioritizing our regulatory work, we're really focused initially on countries around the world where there is no gene therapy for ADA-SCID. So our priority has been the United States. And then we're also focusing on other geographies in other parts of the world where we think it's important to bring a first gene therapy medicine for ADA-SCID patients as a priority. But in parallel to that, obviously, we have a huge amount of clinical and regulatory effort behind MLD and WAS and so on. So I think, in time, we will look to bring OTL-101 to the European market as well, but it's not at the top of our priority list at this time. And to the forward visibility, Frank, do you want to speak to that?

--------------------------------------------------------------------------------

Frank E. Thomas, Orchard Therapeutics plc - CFO & Chief Business Officer [36]

--------------------------------------------------------------------------------

Yes. Just -- I mean in terms of Strimvelis patients, you're right that it has been a bit lumpy. And remember, there's been ongoing studies for OTL-101 during some of the time that Strimvelis has been available. But candidly, there are some limitations with Strimvelis because you have to go to one center in Milan, and sometimes that does represent some reimbursement challenges. It is the only commercially available ex vivo gene therapy for ADA-SCID. And so we are continuing to put support behind the product, and we think it is a great option for patients in need.

So I think the results that we've seen recently, I think, speak to our ability to deliver products commercially and the learnings that we get from that because it is about identifying patients, it is about securing reimbursement for those patients and then importantly, about manufacturing and releasing the product. And we did that multiple times this past quarter successfully. So I think those learnings that we get from Strimvelis are going to serve us well as we move into launches for MLD and OTL-101 here in the U.S.

--------------------------------------------------------------------------------

Operator [37]

--------------------------------------------------------------------------------

Our next question comes from Graig Suvannavejh from Goldman Sachs.

--------------------------------------------------------------------------------

Graig Suvannavejh, Goldman Sachs Group Inc., Research Division - Executive Director & Senior Equity Research Analyst [38]

--------------------------------------------------------------------------------

Congrats on the quarter. I've got 4 questions actually. I hope you can tick them off somewhat quick. My first has to do with -- Mark, is there any update on perhaps hiring a new chief commercialization officer. I know that you've taken on some of the responsibilities, and so I was just curious as to what was happening there.

My second question just has to do with business development activities. And I know you recently in-licensed the 203 program, and just wondering what the appetite is to bring in either additional programs or perhaps look to partner programs. I don't think partnering is part of what you're looking to do, so if you could just talk about that.

The follow-up to that has to do with your -- the company's capacity to handle all of your programs. You've got a lot of clinical programs, and you've got some preclinical ones as well. So I was wondering if you could just talk about kind of maybe the scalability of how you can handle all of this.

And then lastly, the data around your cryopreserved formulation looks quite compelling in terms of the comparability with the fresh cell preparations. And so I'm wondering if you could just give us some color on what's happening, perhaps like behind the scenes to generate the necessary data to convince FDA in terms of that bioequivalence, if that's the right term, between the cryopreserved and the fresh cell preparation.

--------------------------------------------------------------------------------

Mark A. Rothera, Orchard Therapeutics plc - CEO, President & Director [39]

--------------------------------------------------------------------------------

Great questions. So I'm going to do my best to remember all 4. So the first about the chief commercial officer, clearly, for me personally, it's actually rather a nice moment to get even closer to the commercial side of the business, having spent a lot of my career in the commercial side and having launched 7 orphan drugs. So I'm really delighted by the team we have in place. I'm working closely with the team here in the U.S. as well as our European team in advance of these launches. But with regard to the search, as you can imagine, we're getting a lot of interest in that role because there probably aren't many gene therapy companies with 3 filings in the next 2.5 years and launches. So the search is going well. We have some great candidates. But in the meantime, my focus is to make sure that we maintain momentum on launch preparations on both sides of the pond.

With regard to BD and capacity, perhaps, Frank, do you want to address those points?

--------------------------------------------------------------------------------

Frank E. Thomas, Orchard Therapeutics plc - CFO & Chief Business Officer [40]

--------------------------------------------------------------------------------

Yes, sure. So on business development, we've had a lot of success over the last couple of years bringing in programs into these 3 franchises that we now have today. So we have an embarrassment of riches at some level. We have now soon-to-be 7 programs in the clinic. And so the bar continues to get higher with respect to any future in-licensing opportunities. We've got a lot on our plate, and we're excited about that. And we've been executing well based on the achievement of all the milestones this past year. But if there are programs out there that can leverage our franchises and some of the diseases where we are today, we will continue to be opportunistic about those but make sure that we remain focused on delivering, especially in the near term, on our lead programs.

With respect to the point about capacity, obviously, we've built the organization to manage the various programs that we have, and they're at various stages of development. So as you can imagine, depending on the stage of development, different resources get pulled in to move the programs through development. We have a team assigned to each program, we have a program lead for each program, and they're doing a great job advancing the program. So I feel like from a resource and capacity perspective, we're in a good place. And again, that's one of the bars that we set for ourselves when we look at new programs, is how much additional resource will it need and will it leverage the platform that we've already built.

--------------------------------------------------------------------------------

Mark A. Rothera, Orchard Therapeutics plc - CEO, President & Director [41]

--------------------------------------------------------------------------------

And then, Bobby, would you like to take the question about the cryo formulation data and also our regulatory sort steps to meet the regulator needs in this domain?

--------------------------------------------------------------------------------

Bobby Gaspar, Orchard Therapeutics plc - MD, Chief Scientific Officer, Member of Scientific Advisory Board & Director [42]

--------------------------------------------------------------------------------

Yes. So thanks. So on that, we have engaged with the regulators in quite some significant detail to understand what they would like as far as the comparability between fresh and cryo is concerned. And really, there are 2 elements to that. One is an in vitro CMC comparability package, which is looking at the 2 products, the fresh and the formulation, and then looking at a number of different parameters between the 2. And so those parameters include the total number of CD34+ cells, the purity, the viability of those cells, the vector copy number, the ADA activity within those transduced cells in the case of OTL-101. So those parameters, are they equivalent between the 2?

And then this would be supported by data from some patients that have received the cryopreserved formulation. And that's the data that we've shown you in OTL-101, it's the data that we've shown you in MLD already. And that data suggest that the cryopreserved formulation is working in the same way as the fresh cell formulation. So it's a combination of patient supportive data with the in vitro CMC comparability.

--------------------------------------------------------------------------------

Operator [43]

--------------------------------------------------------------------------------

I show no further questions in the queue. At this time, I'd like to turn the call back over to Mark Rothera, President and CEO, for closing remarks. Please go ahead.

--------------------------------------------------------------------------------

Mark A. Rothera, Orchard Therapeutics plc - CEO, President & Director [44]

--------------------------------------------------------------------------------

Well, thank you all for joining the call today. As I hope we've demonstrated, our momentum continues to build as we approach our first 2 regulatory filings whilst we're also advancing a rich portfolio of clinical and preclinical programs. I'm really proud of what the team has accomplished this year. We're making great progress towards our mission of bringing potentially curative therapies to patients around the world. And if approved, we believe these therapies have the potential to provide a lifetime benefit to patients in a single administration, which is a remarkable thing in the world of medicine.

Thanks again, and we are looking forward to seeing many of you next month at ASH. Thank you.

--------------------------------------------------------------------------------

Operator [45]

--------------------------------------------------------------------------------

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect. Good day.