Wave Life Sciences Ltd. (NASDAQ:WVE) Q4 2023 Earnings Call Transcript
Wave Life Sciences Ltd. (NASDAQ:WVE) Q4 2023 Earnings Call Transcript March 6, 2024
Wave Life Sciences Ltd. 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 Wave Life Sciences Fourth Quarter and Full Year 2023 Financial Results Conference Call. At this time, all participants are in a listen-only mode. As a reminder, this call is being recorded and webcast. I'll now turn the call over to Kate Rausch, Vice President, Investor Relations and Corporate Affairs. Please go ahead.
Kate Rausch: Thank you, operator. Good morning, and thank you for joining us today to discuss our recent business progress and review Wave's fourth quarter and full year 2023 financial results. Joining me today with prepared remarks are Dr. Paul Bolno, President and Chief Executive Officer, Kyle Moran, Chief Financial Officer and Anne-Marie Li-Kwai-Cheung, Chief Development Officer. The press release issued this morning is available on the Investors section of our website, www.wavelifesciences.com. Before we begin, I would like to remind you that discussions during this conference call will include forward-looking statements. These statements are subject to several risks and uncertainties that could cause our actual results to differ materially from those described in these forward-looking statements.
The factors that could cause actual results to differ are discussed in the press release issued today and in our SEC filings. We undertake no obligation to update or revise any forward-looking statement for any reason. I'd now like to turn the call over to Paul.
Paul Bolno: Thanks, Kate. Good morning, and thank you all for joining us on today's call. I will open with comments on our recent progress and continued execution on our strategy. Next Anne-Marie will provide an update on our three ongoing clinical trials. Before opening up the call for questions, Kyle will review our financials. Chandra and Ginnie will also be available for questions. 2023 was a year of execution and tremendous progress for Wave. Our achievements demonstrate the far-reaching potential of our multimodal platform to reimagine what's possible for human health and pioneer medicines that truly change people's lives. We are leading the field in multiple areas. We are innovating in obesity with our INHBE program and today are announcing that we've accelerated development to initiate our INHBE clinical trial in the first quarter of 2025.
We are also leading the field in RNA editing having brought the first ever RNA editing candidate into human trials last year. In DMD, our novel chemistries have dramatically improved pharmacology of exon skipping oligonucleotides, translating to best in class muscle distribution and skipping with WVE-N531. In HD, we've pioneered allele selective silencing, another first for the field and an approach that has the potential to overcome issues experienced by pen silencing approaches. We expect meaningful catalysts throughout this year for all of these programs, setting 2024 up to be a significant year for Wave. I'll start with our ongoing clinical program of WVE-006 for Alpha-1 antitrypsin deficiency or AATD. Our RestorAATion clinical program for WVE-006 is well underway and we have a pipeline of RNA editing program being advanced behind it.
We are pioneering these first in class medicines across protein RestorAATion targets such as AATD as well as mRNA upregulation targets, which I'll discuss further in a moment. WVE-006 is the industry's first ever-clinical RNA editing candidate, which aims to correct the AATD causing Z mutation to increase circulating levels of wild type AAT protein and reduce mutant AAT protein aggregation in the liver. 006 addresses the root cause of AATD to provide a solution to patients with lung disease, liver disease or both. The current standard-of-care is weekly IV augmentation therapy, and limited to treating lung disease, while siRNA treatments and development are confined treating liver disease with potential to exacerbate lung injury. By targeting RNA, 006 differs from DNA editing technologies that rely on hyperactive exogenously delivered artificial enzymes that can result in irreversible collateral bystander edits and indels.
In fact, in preclinical studies, the majority of edits observed using DNA-based editing were bystander edits that yielded isoforms of AAT protein with lower functional activity, while indels have the potential to create loss of function variance. Our unique fully chemically modified oligonucleotides are able to effectively recruit endogenous ADAR enzymes. 006 has demonstrated potent and durable editing and preclinical studies, resulting in AAT protein levels of up to 30 micromolar, exceeding the thresholds for both MZ and healthy populations, and we confirm the functionality of this protein with neutrophil elastase inhibition assay. Additionally, we saw decreases of lobular inflammation and reduction of liver aggregates. WVE-006 also prevents an increase in mitoses or turnover of hepatocytes indicating improved hepatic survival.
006 contains a GalNAc conjugate, which is highly specific and an elegant delivery tool that is well validated with multiple approved silencing therapeutics on the market. When compared to other approaches that rely on lipid nanoparticles in IV delivery, WVE-006 offers the ease and convenience of subcutaneous dosing without sacrificing potency and durability. As Anne-Marie will speak to in further detail shortly, dose escalation is currently ongoing in healthy volunteers and I'm happy to report that safety, tolerability and PK are translating as expected. We remain on track to deliver proof of mechanism data from RestorAATion-2 in patients with AATD later this year. Success for 006 would not only meaningfully de risk our AATD program, but would also serve as proof of concept for our growing pipeline of wholly-owned editing candidates, which are designed to either correct or up-regulate mRNA.
We shared in vivo data for several of these targets across a range of both rare and prevalent diseases last year and we expect to share new preclinical data on our advancing RNA editing programs during 2024. GSK was early to recognize the potential of RNA editing and our multimodal platform more broadly. Their leadership in respiratory medicine, development and commercialization makes them an ideal partner for 006 and they continue to bring substantial value to Wave through their significant investments in deep genetic insights. With the advancement into the clinic of 006, we achieved the first milestone payment for our collaboration. Additionally, we continue to advance our GSK research collaboration programs. For these programs, Wave is eligible for potential milestone payments of up to $2.8 billion, as well as royalties on net sales.
As a reminder, GSK pays 100% of the costs related to target validation of these partner programs. This collaboration is also expanding Wave's pipeline, as we are able to leverage GSK's genetically validated targets to advance fully owned Wave programs. INHBE was the first target that we selected and we have the opportunity to advance two additional programs. As with INHBE, we are focused on high-impact targets that are based on strong clinical genetics, novel biology with meaningful measurable biomarkers and with first or best-in-class potential. Moving on to INHBE, we are rapidly advancing this program for the treatment of obesity and are excited to announce today that we have selected our lead clinical candidate well ahead of our prior expectations.
This accomplishment clearly demonstrates the speed and translational power of our siRNA capability. Our candidate is a GalNAc siRNA that utilizes Wave's next-generation siRNA format and is designed to silence the inhibiting gene through RNA knockdown. This approach would induce weight loss, preserve muscle and restore and maintain a healthy metabolic profile. There is strong human genetic evidence supporting this target. INHBE loss-of-function heterozygous carriers identified in large genetic databases have a favorable cardiometabolic profile, including reduced abdominal obesity and reduced odds of Type 2 diabetes and coronary artery disease. Our program is designed to recapitulate this protective phenotype, which would fill a large unmet need in obesity.
Currently, there are more than 174 million people in the U.S. and Europe alone with obesity and other metabolic disorders. While GLP-1s are rapidly becoming the standard-of-care for weight loss, these therapies come with several limitations, namely loss of muscle mass, poor tolerability and discontinuation rates as high as 68%. Our INHBE program has the potential to provide an optimal therapeutic approach for obesity without the limitations of GLP-1s, as well as to work complementary with this GLP-1 class. At our R&D day last year, we presented the industry's first in vivo data supporting preclinical proof-of-concept for this target. With our first-generation siRNA format, we showed that silencing and INHBE in the DIO mice model led to significantly lower body weight, substantial reduction of visceral fat as compared to control.
We also shared data on our next-generation siRNA formats, which led to significantly more potent and durable knockdown in preclinical studies. Today, we are announcing the selection of our lead clinical candidate, which utilizes this next generation siRNA format. Our INHBE program demonstrated highly potent silencing with an ED50 of less than 1 milligram per kilogram in the DIO mice model. And durable silencing follow one low-single-digit dose, which supports the potential for subcutaneous dosing intervals of every six months or annually. We also observed weight loss and reduction fat mass with a preferential effect on visceral fat. And importantly, these reductions in fat and visceral fat came with no loss of muscle mass. These data reinforce the potential both for inducing healthy weight loss as well as the potential for long-term maintenance use.
Compared with current standard-of-care, GLP-1s, which require weekly dosing, a therapeutic agent that is dosed once or twice a year and induces fat loss with muscle sparing would transform the treatment paradigm for obesity. As the inhibiting mechanism of action is distinct from GLP-1, there is an opportunity to use INHBE siRNA both in combination as well as to transition patients off of GLP-1s to maintain weight loss. With the selection of our candidate, we now expect to submit a CTA for this program as early as the end of 2024 and expect to initiate our clinical trial in the first quarter of 2025. We believe clinical proof-of-concept can be achieved with a single dose of INHBE siRNA due to its potency and long duration of effect. We expect to share more preclinical data on our INHBE program later this year.
Turning to DMD and HD, we are on track to deliver clinical data from both programs this year. In DMD, we are advancing our potentially registrational FORWARD-53 clinical trial of WVE-N531 in boys with DMD. Our goal in FORWARD-53 is to demonstrate that we can deliver endogenous functional or Becker-like dystrophin and thus provide a meaningful clinical benefit for patients amenable to exon 53 skipping. There remain significant scientific gaps on the functional benefit of micro or mini dystrophin. There is an urgent need to deliver more therapeutic options to patients including achieving better access to heart and diaphragm, two areas where we have seen substantial distribution in our preclinical studies including NHP. Clinical data thus far for N531 positions it as potentially best in class, including industry-leading exon skipping of 53%, muscle tissue concentrations of 42,000 nanograms per gram and a half-life that supports the potential for monthly dosing.
We are also the first to show evidence of uptake in myogenic stem cells, which Anne-Marie will discuss further. We remain on track to deliver 24-week dystrophin protein expression data in the third quarter of this year. In HD, we are advancing WVE-003, our first-in-class allele-selective therapeutic. 003 is designed to reduce mutant huntingtin protein, while also sparing healthy wild-type huntingtin protein, which is critical to the health and function of neurons. Having the ability to preserve this important protein is a clear advantage over pan-silencing approaches that non-selectively lower mutant and wild-type protein, especially as HD patients already start with a lower wild-type reserve. We have demonstrated the successful translation of our compelling preclinical data to the clinic with reduction of mutant huntingtin and preservation of wild type after a single dose in humans.
We anticipate building on this data with the first multi-dose data from our select HD clinical trial, which is on track for the second quarter. And so, with INHBE programs advancing towards the clinic, data readouts from DMD and HD expected in the coming quarters and RNA editing proof of mechanism data for AATD expected this year, 2024 will be a breakout year for Wave. Now to discuss the progress that we've made on our clinical programs and our expectations for data this year, I'd like to turn the call over to Anne-Marie. Anne-Marie?
Anne-Marie Li-Kwai-Cheung: Thank you, Paul. 2024 should certainly be an exciting year for Wave and I look forward to the many milestones we have on the horizon. I'll start with WAVE-006, our GalNAc conjugated AMR or RNA oligonucleotide for AATD. We're advancing WAVE-006 in our ongoing RestorAATion clinical program. The program is comprised of two interconnected portions, RestorAATion-1 for healthy volunteers and RestorAATion-2 in AATD for patients who have the homozygous PiZZ mutation. In addition to generating key safety and PK data, RestorAATion-1 is designed to rapidly establish a dose level and regimen that's expected to engage target. In the RestorAATion-2, we will be taking multiple assessments of serum M-AAT through the low, medium, and high dose cohorts, which will enable us to quickly detect the potential presence of wild-type healthy M-AAT protein in serum, representing achievement of proof of mechanism.
Remember, these easy patients have never made M-AAT protein. So, the presence of any M-AAT would demonstrate that WAVE-006 is successfully editing RNA. We are progressing well in RestorAATion-1. Dose escalation is ongoing. Pharmacokinetic data is as expected, and blinded safety data has been encouraging. We're on track to initiate the RestorAATion-2 study and deliver proof of mechanism data from RestorAATion-2 in patients with AATD this year. Turning to DMD. This week, our team attended the 2024 MDA Clinical and Scientific Conference, where we showed posters on our clinical data from Part A, including the first evidence of myogenic stem cell or satellite cell uptake. Myogenic stem cells are the progenitor cells for new myoblast, and we're not aware of any other clinical data for exon skippers or gene therapies that have been able to demonstrate myogenic stem cell uptake.
The DMD community is excited about these data and what they may mean for their boys. Our post has also highlighted our industry-leading mean 53% exon skipping, which was driven by muscle tissue concentrations of 42 micrograms per gram or 42,000 nanograms per gram, which is thousand-fold above what other exon skipping companies have reported. These data give us confidence in achieving best-in-class dystrophin protein expression in our ongoing potentially registrational phase 2 clinical trial, FORWARD-53. FORWARD-53 is an open label trial, which is currently evaluating 10 mg per kg doses of N531 administered every other week. The trial is powered to evaluate functional endogenous dystrophin expression after 24 and 48 weeks of treatment, which will be the trial's primary endpoint.
The trial will also evaluate digital and functional endpoints, pharmacokinetics, and safety and tolerability. [indiscernible] is fully enrolled with 11 boys and dosing continues. We remain on track to deliver potentially registrational 24-week expression data in the third quarter, which is positive would support our plans to file for accelerated approval in the U.S. These data would also accelerate our clinical development plans to build a wholly-owned multi-exon DMD franchise beyond exon 53. As you may recall, we've generated data on compounds that would together address up to 40% of the DMD population, all of which utilize our PN chemistry and have demonstrated high levels of skipping and protein RestorAATion in vivo studies. Moving now to HD, WAVE-003 is our first-in-class allele-selective candidate for huntingtin's disease or HD.
We believe WAVE-003 offers an optimal treatment approach for HD as it aims to reduce the toxic mutant Huntington protein while preserving the healthy wild-type Huntington protein, which is increasingly becoming an area of focus due to its critical role in neuronal function. Recently, a new manuscript by Dr. Jeff Carroll shared new preclinical data demonstrating that complete loss of Huntington in mice is associated with progressive subcortical calcification and neurodegeneration, which underlines the need for cautious approach in pan-silencing studies. Just last week, we attended the annual CHDI HD Therapeutics conference, and we heard firsthand from KOLs about their enthusiasm for WAVE-003 and its first-in-class allele-selective design. Another key theme was the growing support for shorter, more efficient development path to registration, specifically those predicated on MRI imaging, for example, cordate volume loss.
Imaging biomarkers such as these correlate well with clinical outcomes and are sensitive enough to enable highly efficient studies to allow us to establish the biological plausibility of the benefit of mutant Huntington knockdown with wild-type sparing. We were excited by the energy in the HD community and discussions around how they can advocate for accelerated registrational parts if a sponsor demonstrates supported data. Our ongoing select HD study is evaluating WAVE-003 in 24 HD patients that have received doses of 30 milligrams of 003 versus placebo every eight weeks. We are on track to report data from this multidose cohort with extended follow-up along with all single-dose data in the second quarter. With multidosing, we're looking to replicate the promising single-dose data showing durable mutant Huntington knockdown of at least 20% with preservation of wild-type protein.
These data will form the basis of decision-making for advancement of this program, including supporting an opt in page figure. We're actively planning the next steps that pending positive data would enable an efficient and accelerated path to bring WAVE-003 patients. And with that, I'd like to turn the call to our CFO, Kyle Moran, to provide an update on our financials.
Kyle Moran: Thanks, Anne-Marie. Our net loss was $16.3 million and $57.5 million for the fourth quarter and full year 2023 period respectively. Our net loss significantly improved over the prior year periods primarily due to the substantial revenue earned from our collaboration partners. During the fourth quarter, we recognized revenue of $18.9 million under our collaboration with GSK, which came effective in January 2023. We also recognized revenue of $10.1 million in the fourth quarter of 2023 under our collaboration with Takeda as compared to $1.2 million in the prior year quarter. Research and development expenses were $34.1 million in the fourth quarter of 2023 as compared to $31.1 million for the prior year quarter. This increase was primarily driven by increased external expenses related to our DMD and AATD programs as well as increases in compensation-related costs.
These increases were partially offset by the decreased spend on our discontinued C9 program. Our G&A expenses were $13.7 million essentially flat compared to the prior year quarter. We ended the fourth quarter with $200.4 million in cash and cash equivalents. Subsequent to year-end, we also received $20 million in a milestone payment for GSK and $14 million in net proceeds from the full exercise of the greenshoe option for our December 2023 financing. We expect that our current cash and cash equivalents will be sufficient to fund operations into the Q4 of 2025. As a reminder, we do not include any future milestones or opt in payments under our GSK or Takeda collaboration in our cash runway, but we do have the potential to receive meaningful near-term milestone payments in this year and beyond.
I'll now turn the call back over to Paul for closing remarks.
Paul Bolno: Thank you, Kyle. As we look to the remainder of 2024, we are at a truly exciting inflection point with the opportunity to further validate our best-in-class platform in the clinic and unlock the broad potential of our pipeline. This year, we're on track to deliver three important clinical data readouts as well as advance our INHBE program towards the clinic. And in summary, we plan to deliver the first ever clinical proof of mechanism data for RNA editing with WAVE-006 this year and share new preclinical data on our advancing RNA editing programs. Submit a CTA for our INHBE siRNA obesity program as early as the fourth quarter and initiate a clinical trial in the first quarter of 2025 deliver data including dystrophin protein from our potentially registrational FORWARD-53 clinical trial in the third quarter and deliver HD data from the multi dose select HD trial with extended follow-up along with all single dose data in the second quarter.
We look forward to sharing our progress with you along the way as we reimagine what's possible for patients and continue on our journey to building a leading RNA medicines company. And with that, I'll turn the call over to the operator for Q&A. Operator?
See also 12 Most Undervalued REIT Stocks To Buy According To Analysts and 25 Best Places to Travel in the World in 2024.
To continue reading the Q&A session, please click here.
