CAMBRIDGE Nov 11, 2019 (Thomson StreetEvents) -- Edited Transcript of Voyager Therapeutics Inc earnings conference call or presentation Wednesday, November 6, 2019 at 1:00:00pm GMT

* G. Andre Turenne

Voyager Therapeutics, Inc. - CEO, President & Director

* Matthew P. Ottmer

Voyager Therapeutics, Inc. - COO

Voyager Therapeutics, Inc. - Chief Medical Officer and Head of Research & Development

H.C. Wainwright & Co, LLC, Research Division - Analyst

Wells Fargo Securities, LLC, Research Division - MD and Senior Biotechnology Analyst

* Philip M. Nadeau

Good morning, and welcome to the Voyager Therapeutics Third Quarter 2019 Financial Results and Corporate Highlights Conference Call. (Operator Instructions) Please be advised that this call is being recorded. At this time, I'd like to turn the call over to Vasilis Kariolis, Voyager's Assistant Controller. Please proceed.

Thank you. Good morning, and thank you for joining us. With me on the call today are Andre Turenne, our President and Chief Executive Officer; Omar Khwaja, Chief Medical Officer and Head of R&D; and Matt Ottmer, Chief Operating Officer.

Earlier today, we issued a press release, which outlines the financial results and corporate highlights for the third quarter of 2019. The release is available at voyagertherapeutics.com.

Before we begin, just a reminder that the forward-looking statements included in this call represent the company's view as of today, November 6, 2019. Voyager disclaims any obligation to update these statements to reflect future events or circumstances, except as required by law. Please refer to today's press release as well as Voyager's filings with the SEC for information concerning risk factors that could cause actual results to differ materially from those expressed or implied by such statements.

With that, I'll pass the call over to Andre.

G. Andre Turenne, Voyager Therapeutics, Inc. - CEO, President & Director [3]

Thank you, Vasilis, and good morning, everyone. Welcome to our Q3 earnings and corporate highlights call. Our CFO, Allison Dorval, is unable to participate in the call this morning due to a death in her immediate family, which sadly occurred on Sunday. Our heartfelt thoughts are with Allison and her family. I thank Vasilis, our Assistant Controller, for stepping in and covering our financial highlights.

I'll begin today by walking you through some of our recent corporate developments. Omar will then provide a pipeline update, and Vasilis will wrap up with the financial results. Once we've concluded our remarks, we'll have some time to take your questions.

We've had another productive quarter in Q3 at Voyager, building on a transformative first half of the year during which we entered into 2 important collaborations and a restructured one. It's an exciting time at Voyager as we gain momentum and expand on our foundation. Voyager sits squarely at the intersection of gene therapy and neuroscience. This dual focus on AAV gene therapy and neurological diseases provides us with several advantages. For one, as we've continued to hire key talent, we've been able to add colleagues with specialized expertise precisely in our chosen area. Their experience is already proving to add significant value to our efforts.

Another benefit of our focus as we keep advancing our pipeline is that we're finding invaluable learnings translating from program to program. We're seeing this, for example, as we've begun planning for the rapid transition from IND to first patient treated in our Huntington's disease program. Given the similar nature of the neurosurgical procedure involved for the onetime HD treatment and the onetime PD treatment, we expect to more rapidly enable sites to enroll study participants than what have otherwise been possible without our prior experience.

The benefits of our focused experience also apply to our earlier-stage programs. Our work on a vectorized antibody against pathological species of alpha-synuclein with our partner, AbbVie, is progressing faster than expected in light of the early learnings from our anti-tau vectorized antibody efforts. These learnings in turn are now being applied to our own additional efforts in vectorized antibodies. Moving forward, we'll continue to rigorously apply our learnings and those from others working in the space as we further advance our pipeline and platform.

Regarding our lead program, VY-AADC for Parkinson's disease, which is partnered with Neurocrine, we expect to present final 3-year data from all 3 cohorts of the 1101 Phase I trial at a medical conference in 2020.

2020 is also expected to be an important year for our Huntington's program as we anticipate filing an IND application and beginning screening and enrollment into the clinical trial. As we announced in a press release this morning, we presented some positive data on VY-HTT01 at ESGCT last month. Omar will share more details on this shortly.

Finally, we're pleased to announce today that Allen Nunnally has been promoted to the position of Chief Business Officer, from his previous role as VP of Corporate and Business Development. Allen has been a key collaborator in my first year at Voyager, and I look forward to his continued success in his new role.

I'll now turn the call over to Omar to provide more detail on our pipeline programs.

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Omar Khwaja, Voyager Therapeutics, Inc. - Chief Medical Officer and Head of Research & Development [4]

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Thank you, Andre. First, I'll go through recent updates on our Parkinson's disease program. As Andre mentioned, the collaboration with Neurocrine, which we entered earlier this year, is off to a good start. We've agreed to the proposed statistical analysis plan for RESTORE-1 and are requesting feedback from the FDA before year-end. Steady progress continues to be made towards enrollment of the RESTORE-1 trial. We'll provide a more detailed update on RESTORE-1 after we receive feedback from the agency.

As a reminder, our approach to Parkinson's disease with the VY-AADC program is highly differentiated. It consists of the targeted delivery of a small volume of gene therapy to the region of the brain where it is needed for motor function. The result is a regulatable system, controllable by the standard-of-care oral medication. This ability to regulate the transient activity is highly desirable and a rather unique feature for AAV gene therapy. By creating a reservoir of AADC, the enzyme needed to convert levodopa to dopamine in the putamen, we're bypassing dying presynaptic neurons and introducing AADC into healthy postsynaptic neurons, where it can then be used to produce dopamine. AADC delivered into the putamen will do nothing on its own. But AADC in combination with levodopa will produce dopamine. Our approach gives the patient the exogenous control as to the amount of dose they needed to manage their motor function and the ability to avoid the negative impacts of too much dopamine in brain regions where it is not needed.

The Phase Ib trial was initiated in 2014. So we're now starting to see longer-term results that may speak to both the durability of effect and in the context of a progressive degenerative disease, contrast against the predicted course of disease progression. We expect to present 36 months data from all 3 cohorts in PD 1101 as well as 2-year data from PD 1102 at scientific meetings in 2020. The patients completing the 3-year protocol on PD 1101 and PD 1102 are now enrolling in our longer-term extension study. This will eventually provide us with over 5 years of data in addition to the placebo-controlled data at the time of the BLA filing and payer discussions.

Our Huntington's disease program is also progressing well. We've held advisory meetings with both neurologists and neurosurgeons and have received positive feedback on our delivery approach as well as our proposed clinical trial design and biomarker assessment. Our delivery approach leverages our learnings from the Parkinson's program, with local delivery of VY-HTT01 into the putamen. For Huntington's disease, we're also delivering directly into the thalamus. We chose this delivery approach based on our understanding of the disease pathology and the importance of delivering vector to the striatum as well as to the cortex. Pathological changes of Huntington's disease are evident earliest in the striatum, with changes in the cortex becoming noticeable as the disease progresses.

In fact, certain areas of the brain of a patient with Huntington's disease are deteriorating well before symptoms appear. The thalamus, in contrast, is a largely preserved structure in the early stages of Huntington's disease. Delivery of our gene therapy to the thalamus as well as to the putamen should allow us to deliver enough vector to impact the striatum as well as leverage the rich connections between the thalamus and the cortex to reach the outer brain.

Last month, at the European Society of Gene and Cell Therapy Meeting in Barcelona, we presented an update on our VY-HTT01 program during an oral platform presentation. We've previously presented data on dose-dependent vector biodistribution as well as HTT mRNA knockdown in the brains of nonhuman primates. In our recent presentation, we provided new evidence that VY-HTT01 also efficiently lowers huntingtin protein, and that huntingtin protein reduction is commensurate with the mRNA lowering and vector genome distribution in the NHP brain regions analyzed. These findings provide further evidence that our gene therapy, delivered to the thalamus and putamen, results in significant reductions in HTT, mRNA and in huntingtin protein to levels that are predicted to be clinically efficacious.

We now expect filing an IND for VY-HTT01 for Huntington's disease during the first half of 2020. As the kinetics of Huntington knockdown appear to be different in nonhuman primates than in rodents, we plan on submitting an IND application with final 1-year data from our preclinical studies instead of the previously planned interim 6 months data. Our goal is to minimize the amount of time between IND acceptance and first patient dose. We will be leveraging our related clinical experience in Parkinson's disease to achieve this.

Activities towards site selection engagement have already begun and will continue to take place in the fourth quarter and the beginning of 2020. We continue to expect screening and dosing of the first patient planned clinical study during 2020.

Our other pipeline programs, including the Friedreich's ataxia program with Neurocrine, and our 2 vectorized antibody programs with AbbVie, continue to progress. We are working on studies to support lead candidate selection for Friedreich's ataxia and continue to deliver on or ahead of schedule against our work plans on the AbbVie collaborations. Additionally, we've agreed on the 2 discovery sets with Neurocrine and are working on our own discovery efforts against new targets.

With our focus and expertise in neurological disease, we're pursuing several opportunities that are compelling targets for AAV gene therapy. We expect to provide more information on new programs during 2020.

I'll now pass the call on to Vasilis with the financial update.

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Vasilis Kariolis, [5]

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Thank you, Omar. Voyager reported net loss of $15 million or $0.41 per share for the third quarter ended September 30, 2019 compared to net loss of $20.3 million or $0.63 per share for the third quarter of 2018. Collaboration revenues of $20.4 million for the third quarter ended September 30, 2019, compared to collaboration revenues of $2.1 million for the third quarter of 2018. These 2019 revenues reflect the recognition of noncash amounts for research services that were performed for various programs under the Abbvie and Neurocrine collaboration agreements, in addition to amounts expected to be reimbursed by Neurocrine as per that collaboration agreement. Amounts can vary based on quarterly assessments of our efforts under each of these collaborations.

The increase in collaboration revenue during the third quarter of 2019 compared to the same period in 2018 primarily relates to the recognition of amounts from the Neurocrine and AbbVie alpha-synuclein collaborations, both of which were entered into in Q1 2019. Additionally, revenue related to the Abbvie tau collaboration increased year-over-year as our efforts continue to increase. These increases were offset by a reduction in collaboration revenue from our collaboration with Sanofi Genzyme, which was restructured in June 2019.

R&D expenses of $29.8 million for the third quarter ended September 30, 2019, compared to $16.6 million for the third quarter of 2018. These expenses include costs incurred under the Neurocrine collaboration, which are expected to be reimbursed. The increase in R&D expenses in the third quarter of 2019 related primarily to external research and development costs and increased employee-related and facility costs to support the advancement of our pipeline programs, including our RESTORE-1 Phase II clinical trial for VY-AADC.

General and administrative expenses of $8.5 million for the third quarter ended September 30, 2019, compared to $6.6 million for the third quarter of 2018. The increase in G&A expenses in the third quarter of 2019 is primarily due to an increase in employee-related and facility costs to support the advancement of our pipeline programs and growing operations.

As of September 30, 2019, we had $307.4 million in cash, cash equivalents and marketable debt securities compared to $155.8 million at December 31, 2018. Operating expenses are anticipated to be $150 million to $155 million, exceeding our previously forecasted range of $140 million to $150 million, largely as a result of higher-than-planned noncash expenses. Nevertheless, we continue to project year-end cash, cash equivalents and marketable debt securities to be in the previously forecasted range of $280 million to $290 million. Based on our current operating plans, we expect these amounts to be sufficient to meet our operating needs and capital expenditure requirements into mid-2022.

With that, we would like to now open the call up for questions. Operator?

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Questions and Answers

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Operator [1]

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(Operator Instructions) And our first question comes from Phil Nadeau with Cowen and Company.

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Philip M. Nadeau, Cowen and Company, LLC, Research Division - MD & Senior Research Analyst [2]

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My question's on the Huntington's program. You mentioned in your prepared remarks that, I think, 1-year data is necessary for the IND, given the difference in kinetics in the knockdown between rodents and nonhuman primates. Can you talk a little bit more about the difference? What exactly are you seeing? And why is 1-year data more informative than 6 months in?

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G. Andre Turenne, Voyager Therapeutics, Inc. - CEO, President & Director [3]

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Yes. Thanks, Phil, for the question. I'll ask Omar to address it.

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Omar Khwaja, Voyager Therapeutics, Inc. - Chief Medical Officer and Head of Research & Development [4]

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Yes. So in -- back in 2017, Voyager had a pre-IND meeting with the FDA. And in the discussions around the definitive toxicology and biodistribution study that was planned, the feedback from the FDA was that the selected time points for assessment of toxicology should match the kinetics of transient expression and the specific request was that the time points would co-onset with the onset peak and plateaued expression of the transgene. At 26 weeks, the -- in terms of the bioanalytics we have, we don't yet -- aren't yet confident that we can say that the transgene expression has plateaued, and that their knockdown impact is also at its plateau as well. So that's why -- that's the reason that we've decided to not submit with interim 26-week data, but to continue the study to 53 weeks and submit with a full data set.

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Philip M. Nadeau, Cowen and Company, LLC, Research Division - MD & Senior Research Analyst [5]

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That's helpful. And I guess, when you say hasn't plateaued, is the level of knockdown continuing to increase? Or is it decreasing towards a plateau? And what are the implications for the human data? When -- at what time point do you think human proof-of-concept data, therefore would be available? Is it going to take 52 weeks to follow-up for that as well?

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Omar Khwaja, Voyager Therapeutics, Inc. - Chief Medical Officer and Head of Research & Development [6]

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Yes. That's a great question. I mean, I think it's not so much that the knockdown in protein levels haven't plateaued, but we really need another data time point to ensure that, that is a true plateau rather than, that's just 2 time points that we're saying that we've got knocked down and it's stable. I think we need to have a third one to be certain for that.

I think we'll probably have to directly extrapolate that to the human situation until we actually conduct the human study. It's going to be difficult to know how that extrapolates, but it certainly implies, based on what we've observed so far, that on the profile that we see so far, it means that it's likely that it's going to be at least 3 months in the human that we would see the maximum expression of the transgene.

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G. Andre Turenne, Voyager Therapeutics, Inc. - CEO, President & Director [7]

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To -- just to add to the clarification, Phil, what we're seeing is a continued reduction in the -- or increase in the knockdown over time. So that's the direction. So if that could be a positive clinically, that you have the peak lowering that is higher than what we've observed at the 5 weeks in the earlier studies, what -- as Omar said, what we're looking to have is just the comfort that we have an understanding of how low it goes and at what point that is achieved.

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Operator [8]

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And our next question comes from Charles Duncan with Cantor Fitzgerald.

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Charles Cliff Duncan, Cantor Fitzgerald & Co., Research Division - Senior Analyst [9]

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Condolences to Allison. Had a question on the PD program and then a follow-up on the HD program. Regarding the PD program, I'm wondering, you said that you have agreed to the staff plan with Neurocrine for RESTORE. And I'm just kind of wondering if you can provide additional color now that you're thinking about what to do there. In terms of the patient population, sizing and timing for RESTORE-1, can you provide any additional color on that?

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G. Andre Turenne, Voyager Therapeutics, Inc. - CEO, President & Director [10]

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Yes. Thanks, Chaz, for the question. So at this stage, we're not ready yet to give the further guidance as to the exact size of the study. We anticipate, as we've said previously, that it will be in the range that we've guided, 75 to 100 patients. And the work that we've done is just to determine with our new partner what the precise target is going to be within that range and then to get that same alignment with the agency. So when we have that in alignment with the agency, we're going to be able to provide that update, along with an update on -- given the number of patients and where we're at in the enrollment, some new targets for when we expect to be able to complete the enrollment to the full enrollment of the study.

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Charles Cliff Duncan, Cantor Fitzgerald & Co., Research Division - Senior Analyst [11]

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Okay. It sounds consistent with your previous thinking. And then, if I can ask a follow-up on that. There are other AADC gene therapy programs for neuro indications, and Omar did a great job in terms of talking about your differentiation with regard to where the drug is really administered. But I guess, if you look across AADC programs, how do you see you being differentiated from others in terms of, say, vector use or basic construct?

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G. Andre Turenne, Voyager Therapeutics, Inc. - CEO, President & Director [12]

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Yes. No, thanks for that question, and Omar can add to it. But I think in his prepared remarks, he touched on a key differentiation, which is this activity to modulate the response with the control of the exogenous levodopa. So that, I think, is in contrast with the alternative approach that's in development, which provides a more direct production of dopamine.

Our approach is, one, again, as highlighted, that allows for the dialing of the amount of dopamine to be produced, like in our delivery in the putamen is in common. And that's a good target, to have a stable reservoir of that enzyme, as it's a structure that is not too impacted in Parkinson's disease. And we've been able to observe in our experience to date, in our preclinical experience that a very durable expression of the enzyme production in the -- after administration in the putamen. I don't know if Omar, you want to highlight any additional points?

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Edited Transcript of VYGR earnings conference call or presentation 6-Nov-19 1:00pm GMT - Yahoo Finance

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