Viridian Therapeutics Inc

NASDAQ:VRDN

Earnings Call Transcript 2017-Q4

[Operator]

Good afternoon, and welcome to the miRagen Therapeutics Fourth Quarter and Full Year 2017 Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded.

I would now like to turn the call over to Luke Heagle from W2O Pure. You may begin.

[Luke Heagle, executive]

Thank you, and good afternoon, everyone. On the call today are miRagen's President and Chief Executive Officer, Bill Marshall; Chief Financial Officer, Jason Leverone; Executive Vice President of Research and Development, Paul Rubin; and Chief Business Officer, Adam Levy.

Before we begin, I would like to remind everyone that this conference call and webcast will contain forward-looking statements about the company. These statements are subject to risks and uncertainties that could cause actual results to differ. Please note that these forward-looking statements reflect our opinions only as of the date of this call. We will undertake no obligation to revise or publicly release the results of any revisions to these forward-looking statements in light of new information or future events. Factors that could cause actual results or outcomes to differ materially from those expressed and/or implied by such forward-looking statements are discussed in greater detail in our most recent filings on Form 10-K and our other periodic reports on Forms 10-Q and 8-K filed with the SEC.

I would now like to turn the call over to Bill Marshall, President and Chief Executive Officer of miRagen. Bill?

[William Marshall, executive]

Thanks, Luke. Good afternoon and thank you for joining us for our fourth quarter and full year 2017 results conference call. At miRagen, we are dedicated to improving patient's lives through the discovery and development of innovative RNA-based therapies with the specific expertise and focus on microRNA and their role in influencing pathways responsible for many disease processes. In the past year, we made great progress in each of our clinical programs. We released positive safety and efficacy data from our Phase I clinical trial, evaluating MRG-106, now known as cobomarsen in patients with mycosis fungoides. Additionally, we expanded the Phase I trial to include patients with 3 additional hematological malignancies. We also completed the MRG-201 Phase I trial in induced cutaneous fibrosis, which demonstrated a statistically significant reduction in fibroplasia or scar tissue deposition without adversely impacting wound healing. Furthermore, our partners, Servier, filed a clinical trial authorization to initiate the first of 2 Phase I trials planned for MRG-110 in the first half of this year for development in ischemic diseases, including heart failure. Entry clinical development is an important milestone in our partnership with Servier.

The company's success in 2017 has encouraged and fueled our outlook across all the programs, and in 2018, we plan to accelerate clinical activity across each of our 3 clinical programs. We plan to rapidly advance our pipeline in the year ahead, with the initiation of 4 clinical trials. These include a Phase II potentially registrational trial of cobomarsen in cutaneous T-cell lymphoma or CTCL, a Phase II trial of MRG-201 in cutaneous fibrosis, and 2 Phase I trials in collaboration with Servier for MRG-110. Additionally, in 2018, we expect to report longer-term duration of treatment data from MF patients in our ongoing Phase I cobomarsen trial, as well as initial data in at least one of the expansion indications for cobomarsen. As we review our accomplishments over the past year, we hope you share our sense of the strong momentum with which we've entered 2018. Let me begin with a more detailed update on cobomarsen, which we are currently evaluating in a Phase I multiple ascending dose trial in patients with mycosis fungoides or MF, the most common form of CTCL. We were pleased to present new interim data from the ongoing trial at the Annual T-cell Lymphoma Forum last month. The results included observations from additional patients, as well as longer-term dosing data for existing patients who have continued on the trial. 26 of 29 patients or 90% treated systemically showed improvement in total skin disease, as measured by the maximal change in each patient's modified Severity Weighted Assessment Tool or mSWAT score, which assesses the severity of skin disease over a patient's entire body.

Improvement in mSWAT scores were observed as early as 17 days after a patient's first dose, and greatest improvement in mSWAT scores were seen after 1 or more months of dosing. Importantly, 4 of 5 patients or 80% who are treated with 300 milligrams intravenous infusion achieved a 50% or greater mSWAT reduction, which we believe represents an important clinical benefit. Additionally, cobomarsen has been generally well tolerated to date at the range of doses tested. We recently discussed the Phase I trial interim results and Phase II trial design with the FDA and look forward to initiating a Phase II trial for cobomarsen in patients with CTCL in the second half of 2018. We anticipate the Phase II clinical trial, called SOLAR, will employ an open-label parallel group randomized design to evaluate the safety and efficacy of 300 milligrams of cobomarsen given by intravenous infusion versus an active control. We expect to enroll approximately 65 patients per treatment group. The trial is designed to compare responders in each treatment group, with a response rate defined as a 50% or greater improvement in the patient's mSWAT score, maintained for at least 4 consecutive months or ORR 4 with no evidence of disease progression in the blood, lymph nodes or viscera. The ORR 4 will be designated as the primary endpoint. Secondary endpoints will include progression-free survival and patient-reported outcomes measuring improvements in symptoms, such as pain and itching.

Based on discussions with the FDA, we believe a successful outcome for the primary endpoint could potentially support accelerated approval. As a reminder, MF is a disease that in many cases causes painful, disfiguring tumors on the skin, and is in some cases, deadly. MF is estimated to affect between 16,000 to 20,000 people in the United States alone, and we believe there's a strong need for treatment that is efficacious and can be tolerated with long-term doses. Additionally, due to the safety profile and early efficacy signals, we are currently evaluating cobomarsen in 3 other oncology indications within the current Phase I trial. These additional indications include adult T-cell leukemia/lymphoma, chronic lymphocytic leukemia and diffused large B-cell lymphoma. In each of these 3 expansion indications, the disease process appears to correlate with an increase in microRNA-155 levels. We began dosing subjects in these expansion indications in the second half of 2017. We plan to release interim Phase I data from at least one of these expansion indications during the second half of 2018.

Turning to MRG-201. We completed our Phase I trial, which evaluated MRG-201 in induced cutaneous fibrosis. A total of 54 volunteers participated in this clinical trial. In addition to MRG-201 being considered generally safe and well tolerated, we observed a statistically significant reduction in fibroplasia or scar tissue deposition with no adverse effects on incisional wound healing when MRG-201 was given. Based on this data, we now plan to initiate a double-blinded randomized Phase II trial to evaluate MRG-201 in subjects with a predisposition for keloid formation in the first half of 2018. Keloids are a common condition that is disfiguring and can be painful, itchy and emotionally troubling to those that experienced them. They are typically smooth, hard, benign growth that form when scar tissue grows excessively. We believe that the pathological underexpression of microRNA-29 can contribute to several other fibrotic conditions, and we are also looking forward to reporting preclinical in vivo data from lung and ocular fibrosis studies in 2018. Turning now to MRG-110, the lead product candidate under our collaboration with Servier, which is anticipated to be our third product candidate to enter human clinical trials. MRG-110 is designed to inhibit the activity of microRNA-92, which has been shown in miRagen's preclinical studies and reported in multiple peer-reviewed scientific publications to be a regulator of new blood vessel creation. For example, in preclinical studies, treatment with MRG-110 after cardiac tissue injury resulted in an increased blood vessel growth in the heart and improved heart function. Improvement in new blood vessel formation, as well as accelerated healing rates were observed in models of artificially created skin wounds. These data has supported our plans to advance MRG-110 into clinical studies with Servier. In the fourth quarter, Servier filed a clinical trial authorization to initiate the first of 2 Phase I trials planned for MRG-110. Servier plans to initiate dosing in the first Phase I trial, designed to evaluate the safety, tolerability and pharmacokinetics of MRG-110 in a systemic dosing protocol in the first half of 2018. This trial may allow us to establish the recommended Phase II trial dose for the treatment of patients with heart failure. The Phase I trial is planned to enroll 49 male subjects, aged 18 to 45, and the trial results will be analyzed for biomarkers that may provide mechanistic proof of concept and support further potential clinical trials of MRG-110 in the treatment of cardiovascular disease and certain other conditions where vascular flow is compromised. There's a significant need for medical advances in the treatment of heart failure, as over 1/3 of the U.S. -- of the adult U.S. population suffers from at least one form of cardiovascular disease. In addition to demonstrating benefit in models of heart dysfunction, we've shown in preclinical studies that treatment with MRG-110 after artificially created skin wounds led to a significant increase in new blood vessel formation, as well as a significant increase in tissue regrowth, leading to more rapid and complete wound closure. This benefit in new blood vessel creation, leading to more rapid wound healing, presents an opportunity to potentially enhance the healing of surgical incisions in patients with high risk of complications.

During the first half of 2018, miRagen plans to sponsor a separate Phase I trial in the United States, assessing the safety and tolerability of MRG-110 after intradermal administration in healthy volunteers. This clinical trial will also examine several exploratory endpoints that are intended to provide mechanistic proof of concept and biomarker validation to support potential use in patients at high risk for complications after surgical incisions or chronic wounds. We look forward to the continued development of MRG-110 to explore how this product candidate may potentially be used as an innovative therapy. As we reflect on 2017, we are energized by the early clinical results for cobomarsen and MRG-201, and we look forward to advancing our product candidates in 2018. We believe in microRNAs and that our rapidly advancing pipeline of microRNA-targeted therapeutic candidates will provide near and long-term solutions for patients in need.

Lastly, I'm also delighted to welcome Arlene Morris to our Board of Directors. Arlene has a strong track record leading companies through strategic market developments and brings more than 25 years of exceptional leadership experience in the biotech industry to our board.

With that, I will now turn the call over to Jason Leverone, our Chief Financial Officer, to review the financial results we reported earlier today. Jason?

[Jason Leverone, executive]

Thank you, Bill, and good afternoon, everyone. I appreciate the opportunity to provide our fourth quarter and full year 2017 financial results.

We ended 2017 with approximately $47.4 million in cash and cash equivalents, and in February of this year, we completed a public offering of our common stock, under which gross proceeds were $40.8 million. As a result of this recent financing, we believe our current resources will be sufficient to fund our planned operations into early 2020. Turning to the income statement. We recognized $1.2 million in total revenue during the fourth quarter of 2017, compared to $0.5 million during the fourth quarter of 2016. For the full year of 2017, total revenue increased to $4 million compared to $3.5 million recognized in 2016. Revenue increased in 2017 due primarily to increases in research and development activity, reimbursable under our agreement with Servier, as we prepared to advance MRG-110 into clinical trials with Servier in the first half of 2018. Moving now to operating expenses. Research and development expenses for the fourth quarter of 2017 increased to $5 million from $3.9 million for the fourth quarter of 2016. For the full year 2017, R&D expenses grew to $19.6 million from $13.7 million in 2016. The increase in R&D expenses in 2017 was due primarily to higher clinical trial and related outsourced manufacturing costs to support our expanding development stage programs. We also incurred increased personnel cost as we added to our R&D team in 2017. General and administrative expenses were $2.5 million for both the fourth quarter of 2017 as well as the fourth quarter of 2016. For the full year of 2017, G&A expenses increased to $10.9 million compared to $6.8 million in 2016. The increase in G&A expenses in 2017 was due primarily to increases in insurance, consulting, professional fees and board compensation related to our expanded operations since becoming a public company in February 2017. We also incurred higher personnel-related cost due mostly to higher share-based compensation charges, as well as an increase in general and administrative employees during 2017. Finally, our fourth quarter 2017 net loss available to common stockholders was $6.4 million compared to $6 million for the fourth quarter of 2016. For the full year of 2017, our net loss available to common stockholders was $26.5 million compared to $17.1 million in 2016.

With that, I will ask the operator to open the call for questions. Operator?

[Operator]

[Operator Instructions] And we'll take our first question from Jonathan Miller with Evercore.

[Jonathan Miller, analyst]

I had a question about the MRG-110 trials you're starting this half. So you say 2 Phase I trial starting, one in health and one in wound, are both of those going to be reimbursable by Servier? You mentioned specifically that the wound healing one is miRagen sponsored.

[William Marshall, executive]

Jonathan, thanks for the question. So both of the trials will be funded by Servier under the terms of our collaboration and licensing agreement. miRagen will be sponsoring the study in the United States for the intradermal program, and Servier will be sponsoring the trial in Europe for the systemic dosing.

[Jonathan Miller, analyst]

All right. One other thing on 106. You mentioned that you're going to show interim results for only 1 of the expansion indications this year. I seem to recall you saying it was possible you might show all of them. Why the delay?

[William Marshall, executive]

Great question, Jonathan. It really -- it's just intended to indicate that we will show results in at least one. We have ongoing dosing occurring. Our goal is to gather a data set that has been well vetted and validated prior to releasing information, so we feel it's appropriate to guide towards at least one indication.

[Operator]

[Operator Instructions] We'll take our next question from Eun Yang with Jefferies.

[Suji Jeong, analyst]

This is Suji calling in for Eun. I have a question about 106. So you said the Phase I study is still going on. And would you just please tell us about how many patients has been dosed so far for 106, the patients with MF?

[William Marshall, executive]

What we've guided publicly, thus far, is that 29 patients have been dosed with 106, as we continue to dose in the trial, our primary objectives are really to gain additional durability data on the responses that we're seeing and to continue to grow the safety database with longer term dosing and also understand the effects in the most recently dosed patients that have entered the study. Paul, any additional comments in that regard?

[Paul Rubin, executive]

Yes. We're still keeping the trial to expand a little bit the cohorts that we intend to dose in our Phase II trial. So in wound, also, we have additional patients at the 300 milligrams IV infusion dose, as well as the 600 milligram IV infusion dose. And those, we also will report on in the second half.

[Suji Jeong, analyst]

I see. And for the expansion indications, has any patients have been dosed for those indications?

[William Marshall, executive]

Yes. So we have -- we began dosing patients in the expansion indications in the second half of 2017, and we continue to dose patients. And as we mentioned, we feel that we'll have a quality control data set available for release of additional data in the second half of 2018.

[Operator]

[Operator Instructions] And it appears we have a follow-up from Jonathan Miller with Evercore.

[Jonathan Miller, analyst]

I might as well hop back in here. I have -- I specifically have a question about the 106 trials of the ongoing Phase I following up from the prior question. I was wondering about the non-IV infusion cohort. So it looks to me like there's a significant effect of the number of doses gotten on the, obviously, on the efficacy here. And I noticed, for instance, that you were looking at IV bolus as a potentially helpful mechanism or mode of administration, but the number of doses got narrowed significantly lower than the number of doses given to the IV infusion cohort. How confident are you in going forward with the IV infusion, and why not hold out hope, I guess, for the IV bolus cohort?

[William Marshall, executive]

Thanks, Jonathan. It's a great question. So our goal in exploring various routes of administration was really to have the ability to understand if a particular route of administration and a particular dose appeared to give the greatest rate of responsiveness. Based on the data to date, we've seen what we believe the best rate of responsiveness in the IV infusion cohort. We do continue to dose patients in the IV bolus dosing cohort. The simplest reason for the lower number of doses is really that, that dose cohort started latest in the trial. What we want to do is continue to dose with subcutaneous IV infusion and IV bolus dosing, so that we can potentially, in clinical practice, use the compound in a mode of operation, whereby, we would do induction dosing with IV infusion and then may follow up with less frequent maintenance dosing with either subcutaneous or IV bolus dosing. The reason that we selected the IV infusion is really based on the, as I said, the rate of responsiveness and sort of optimizing the trial for demonstrating the potential of cobomarsen in the indication.

[Jonathan Miller, analyst]

All right. Following up there on one thing you said, and I've heard you say before that you're looking at potential maintenance options that aren't IV infusion or less frequently dosed. It seems like the Phase II, the potentially registrational Phase II that you discussed with the FDA is settled on a 300 mg IV. It seems like you've got a dosing schedule there. How will you plan to update the clinical development to include maintenance options?

[Jason Leverone, executive]

That's a great question. As you know, we saw in the early stages of Phase I trial, we had a several drug holidays that occurred, which indicated preliminarily to us that less frequent dosing may be available to patients in a maintenance dosing mode. The use of the IV infusion during the clinical trial itself during the measurement of the primary endpoint, which is again the ORR 4, has stable reduction in the mSWAT scores for at least 4 months will be employed in the Phase II study. However, our intent would be in an open-label expansion to then explore both less frequent dosing as well as alternative routes of administration, such as subcutaneous and bolus IV administration build the amount of data that would support alternative routes of administration at less frequent dosing eventually in clinical practice for the compound.

[Operator]

That does conclude today's question-and-answer session. At this time, I will turn the conference back to Bill Marshall for any additional remarks.

[William Marshall, executive]

Thank you for your time today and for continuing to track our progress. We are proud of our achievements in 2017, and we look forward to keeping you informed as we advance our pipeline of microRNA-targeted therapeutic candidates. Please feel free to reach out to us if you have any additional questions. Thank you and have a great afternoon.

[Operator]

This does conclude today's conference. Thank you for your participation. You may now disconnect.