Wave Life Sciences - Q3 2023

Transcript

Operator (participant)

Good morning, and welcome to Wave Life Sciences' Q3 2023 financial results conference call. At this time, all participants are in listen-only mode. As a reminder, this call is being recorded and webcast. Now I'll turn the call over to Kate Rausch, Vice President, Investor Relations and Corporate Affairs. Please go ahead.

Kate Rausch (VP of Investor Relations)

Thank you, operator. Good morning, and thank you for joining us today to discuss our recent business progress and review Wave's Q3 2023 financial results. Joining me today are Dr. Paul Bolno, President and Chief Executive Officer, Kyle Moran, Chief Financial Officer, Anne-Marie Li-Kwai-Cheung, Chief Development Officer, Dr. Ginnie Yang, SVP Translational Medicine, and Dr. Chandra Vargeese, Chief Technology Officer. The press release issued this morning is available in 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, including our annual report on Form 10-K for the year ended December 31, 2022, and our quarterly report on Form 10-Q for the quarter ended September 30, 2023. 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 (President and CEO)

Thanks, Kate. Good morning, and thank you all for joining us on today's call. I will begin with opening remarks. Next, Anne-Marie will provide an update on our clinical trials, and finally, Kyle will review our financials. We will then open up the call for questions. Chandra and Ginnie will also be available for questions. In the Q3, our team made tremendous progress advancing our pipeline of novel RNA medicine. Since our last update, we have brought our first-in-class RNA editing therapeutic program, WVE-006 for AATD, into the clinic. We outlined our strategy for growth at our annual R&D Day, including announcing a new wholly-owned siRNA program targeting Inhibin βE for metabolic disorders, including obesity, and we continue to advance our clinical trials in DMD and HD.

Looking ahead to 2024, we are approaching a transformative year for Wave, where we will deliver key data sets for all three of our clinical programs and select an Inhibin βE clinical candidate. Starting with WVE-006, today, we are announcing the approval of multiple Clinical Trial Applications, or CTAs, and the initiation of our RestorAATion program, which will investigate WVE-006, the industry's first-ever clinical RNA editing candidate for alpha-1 antitrypsin deficiency, or AATD. This is another significant milestone for Wave, patients, and the field of nucleic acids. We remain on track to begin dosing healthy volunteers this quarter, and as Anne-Marie will describe in more detail later, the RestorAATion program is designed to enable a highly efficient path to proof of mechanism. Our excitement for WVE-006 is grounded in the strong preclinical profile we have observed to date.

We have achieved remarkable potency and durability of editing with convenient subcutaneous dosing in our preclinical studies because of our unique, fully chemically modified oligonucleotides and their ability to effectively recruit ADAR enzymes. WVE-006 precisely corrects the Pi*ZZ mutation on the transcript with no bystander editing. In contrast, genome editing technologies rely on hyperactive, exogenously delivered artificial enzymes that can result in significant and irreversible collateral bystander editing of DNA, yielding not only the potential for permanent off-target edits to DNA, but isoforms of protein with differential function. WVE-006 contains a GalNAc-conjugate, a highly specific and elegant delivery tool that is well-validated through multiple approved silencing therapeutics on the market. For AATD, it is a significant advantage to have a stable and optimized candidate that can leverage GalNAc and avoid the lipid nanoparticles, which have their own challenges and require intravenous dosing.

With current therapies largely confined to treating either pulmonary or, in the future, hepatic manifestations of the disease, the unmet need in AATD remains high. Even with the limitations of available therapies, the pharmaceutical market for AATD is substantial, with augmentation therapy alone accounting for over $1 billion in sales per year. Our partner, GSK, has a long history and clear leadership in respiratory medicine, development, and commercialization, and together with WVE-006's differentiated profile, we believe this program is in a strong position, and we look forward to delivering proof-of-mechanism data next year. As a reminder, under the terms of our collaboration, Wave is also eligible to receive meaningful near-term clinical milestones starting this year, which has the potential to add substantially to our balance sheet.

Clinical proof of mechanism with WVE-006 would serve to meaningfully de-risk this novel modality and will continue to unlock value for our emerging pipeline of RNA editing programs. As we shared at our R&D Day, we are actively building a pipeline of wholly owned therapeutic candidates designed to either correct or upregulate mRNA across a range of high-impact targets. We presented both in vivo and in vitro data on several of these targets, which all offer efficient paths to clinical proof of concept and represent meaningful commercial opportunities for both rare and common disease indications. We look forward to continuing to share data on these exciting programs over the course of 2024. Beyond WVE-006, our strategic collaboration with GSK continues to make meaningful progress.

The Wave and GSK teams continue to work to advance multiple targets, and as our partner shared during our R&D Day, this work spans multiple modalities beyond RNA editing, including silencing using siRNA. As a reminder, GSK pays 100% of the costs related to target validation of these partner programs, and Wave is eligible for up to $2.8 billion in milestones, non-inclusive of 006, and additional tier royalty payments. At R&D Day, we also announced our first fully owned program to emerge from the collaboration, a GalNAc-conjugated siRNA program targeting Inhibin βE to treat metabolic disorders, including obesity. Inhibin βE is a particularly exciting target, given its strong supporting genetic evidence. Inhibin βE loss-of-function heterozygous carriers exhibit a healthy metabolic profile, including reduced hip-to-weight ratio, improved lipid profile, reduced odds of coronary artery disease, and Type 2 diabetes.

GLP-1 therapeutics have established a substantial market opportunity for weight loss therapeutics. We estimate there are more than 47 million people in the United States and Europe with metabolic disorders, including obesity. While GLP-1s are becoming standard of care for weight loss, they come with several drawbacks, including loss of muscle mass, suppression of the general reward system, and poor tolerability. With discontinuation rates as high as 70%, there is a need for more therapeutic options, including long-term maintenance. We believe a therapeutic approach for obesity that improves metabolism, increases fat loss while maintaining muscle mass, offers the potential for infrequent dosing, and does not affect the general reward system, would be ideal. This is what we aim to achieve with our Inhibin βE program. At R&D Day, we presented the first in vivo data supporting preclinical proof of concept for this target.

We achieved Inhibin βE silencing well beyond the 50% therapeutic threshold, which led to substantially lower body weight and substantial reduction of visceral fat in DIO mice as compared to control. These are the first in vivo data to demonstrate Inhibin βE silencing is consistent with the phenotypes of heterozygous loss-of-function carriers. Since R&D Day, we have identified potent and highly specific leads using our new chemistry format and are rapidly advancing towards our goal of selecting an Inhibin βE clinical candidate by the Q4 of 2024. Notably, because the levels of Inhibin βE protein and other relevant clinical biomarkers can be readily measured in serum, we believe the path to assessing target engagement and clinical efficacy can be straightforward and achieved in a relatively short period of time.

As a reminder, our collaboration allows Wave to leverage GSK's genetically validated targets to advance at least three programs, meaning we have an additional two slots open for new wholly owned programs beyond Inhibin βE. Turning to WVE-N531 and WVE-003, we continue to advance our clinical DMD and HD programs, and are on track to deliver key data from both programs in 2024. For DMD, with WVE-N531, we aim to provide a treatment option that delivers convenient, safe production of endogenous functional or vector-like dystrophin, and ultimately, meaningful clinical benefit for all patients amenable to exon 53 skipping. There remain significant questions around the functional benefit of Micro or Mini-Dystrophin, and we recognize the urgency to deliver more therapeutic options to these patients.

We look forward to evaluating the translation of our best-in-class exon skipping to functional Dystrophin protein in 2024. In Huntington's disease, we believe WVE-003 is the most promising asset in the field. To date, we have demonstrated successful translation of our compelling preclinical data to the clinic, with reduction of mutant Huntingtin and preservation of wild-type Huntingtin after a single dose in humans. We have robust evidence from multiple preclinical studies, including NHP studies, that support the ability of our oligonucleotide to achieve significant exposure levels throughout the CNS. As we look ahead to the first multi-dose data from our SELECT-HD clinical trial next year, we anticipate potent and durable knockdown of mutant Huntingtin while sparing wild-type protein, similar to what we observed in poly(GP) reduction in our WVE-004 program when we transitioned from single to multi-dose.

Anne-Marie will speak more on SELECT-HD and our other clinical development programs, and I'd now like to turn the call over to her. Anne-Marie?

Anne-Marie Li-Kwai-Cheung (Chief Development Officer)

Thank you, Paul. It's a truly exciting time to be at Wave as we are continuing to validate the translation of our platform in the clinic. I'll begin with WVE-006, our GalNAc-conjugated AIMer, or RNA editing oligonucleotide for AATD. We have now received approval for multiple Clinical Trial Applications or CTAs. This accomplishment affirms that RNA editing oligonucleotides can leverage established regulatory pathways, and WVE-006 has officially become the first RNA editing oligonucleotide to enter the clinical trial. Today, we are announcing the initiation of our RestorAATion clinical program, which is comprised of two interconnected portions: RestorAATion-1 for healthy volunteers, and RestorAATion-2 for individuals with AATD who have the homozygous Pi*ZZ mutation.

The healthy volunteer cohorts, along with our PD modeling, can inform a dose that can rapidly enable initiation in AATD patients at the level expected to engage target, thereby enabling efficient delivery of proof of mechanism, as defined by detection of edited protein in serum. In RestorAATion-2, patients will have multiple assessments of serum M-AAT throughout the low, medium, and high dose cohorts, meaning it is possible to achieve proof of mechanism before completion of the whole trial and potentially prior to completion of the first cohort. RestorAATion-1 is now underway, and we can expect to initiate dosing in healthy volunteers this quarter and delivery of proof of mechanism data in patients with AATD in 2024. Moving on to DMD. I'll start with a quick reminder of the clinical data that drives our excitement in this program.

In patient muscle biopsies collected from our proof of concept study, we observed a mean 53% exon skipping at six weeks, following three doses of WVE-N531 every other week. Since exon skipping and resultant dystrophin production improves the cellular environment to enable more skipping and dystrophin, significant nonlinear increases of dystrophin may be expected, given the amount of exon skipping we've seen. This nonlinear relationship between exon skipping and dystrophin production has been observed with other skippers. Furthermore, high tissue concentrations of WVE-N531 across five myoblasts, and especially in satellite cells, which are the progenitor cells for new myoblasts, speaks to the promise of achieving best-in-class dystrophin protein expression. We are advancing FORWARD-53, our potentially registrational phase II trial of WVE-N531.

This open-label trial is evaluating 10 milligram doses of N531, administered every other week, and is powered to assess functional endogenous dystrophin expression after 24 and 48 weeks of treatment, which will be the trial's primary endpoint. The trial will also evaluate safety and tolerability, pharmacokinetics, and digital and functional endpoints. We remain on track to deliver dystrophin protein data in 2024, which, if positive, would support our plans to file for accelerated approval in the U.S. These data would also accelerate our clinical development plan to build a wholly owned multi-exon DMD franchise beyond exon 53. We have generated in vitro dystrophin restoration data for follow-on exon skipping compounds that together would address up to 40% of the DMD population.

These follow-on compounds are all designed with PN chemistry and have demonstrated high levels of exon skipping and dystrophin production restoration in in vitro studies. Turning to WVE-003, our first-in-class allele-selective candidate for Huntington's disease, or HD. HD is a devastating disease, and WVE-003 offers an optimal treatment approach, as it reduces the toxic mutant huntingtin protein while preserving the healthy, wild-type huntingtin protein. As a reminder, this program is part of an active collaboration with Takeda. In the Q3, we achieved a milestone from this collaboration, which pertains to the positive results from a non-clinical study of WVE-003 in non-human primates.

This study showed significant tissue exposure levels of WVE-003 in the deep brain regions, including striatum, and bolstered our existing data sets that confirm the ability of our oligonucleotides to distribute to the areas of the CNS important for HD. Coupled with the already demonstrated mean mutant huntingtin CSF single-dose reduction of approximately 35% compared to placebo, these new NHP results further reinforce our confidence in this program. I'm excited to share that we've now completed enrollment for the 30-milligram multi-dose 2/8-week cohort, comprised of 24 HD patients. We have enrolled patients from the single-dose cohort and fully enrolled the multi-dose cohort, which is critical to inform further decisions on this program. We will now evaluate the completed single-dose and multi-dose cohort simultaneously. We expect to report the 30-milligram multi-dose data with extended follow-up, along with all single-dose data, in the Q2 of 2024.

We also expect these data to enable decision-making on the program and support our option package for Takeda. In summary, I'm proud of our team's accomplishments this year and truly excited for the year ahead, during which we will have high-impact data readouts across all three of our clinical trials. With that, I'd like to turn the call over to our CFO, Kyle Moran, to provide an update on our financials.

Kyle Moran (CFO)

Thanks, Anne-Marie. We recorded $7.3 million of net income for the Q3 of 2023, as compared to a net loss of $39.0 million in the prior year quarter. This year-over-year change was primarily driven by increased revenue under both our GSK and Takeda collaborations. Under the Takeda collaboration, we earned $7.0 million for the achievement of a non-clinical milestone for WVE-003. Additionally, we recognized $28.0 million from Takeda, related to the discontinuation of WVE-004, and $14.3 million under the GSK collaboration. Research and development expenses in the Q3 of 2023 were $31.6 million, as compared to $27.6 million in the prior year quarter. This increase was primarily driven by increased external expenses related to all three of our clinical programs.

G&A expenses in the Q3 were $13.1 million, as compared to $11.6 million in the prior year quarter, primarily due to increased spending on professional and consulting expenses. We ended the Q3 with $139.9 million in cash and cash equivalents. Subsequent to the end of the quarter, we received $7.0 million for the achievement of the previously discussed milestone. We expect that our cash and cash equivalents will be sufficient to fund operations into 2025. As a reminder, we do not include any future milestones in our cash runway, but we do have the potential to receive meaningful near-term milestone payments this year and beyond, including clinical development milestones related to WVE-006. I'll turn the call back over to Paul.

Paul Bolno (President and CEO)

Thank you, Kyle. With the most versatile RNA medicines platform in the industry, best-in-class chemistry, and a pipeline of transformative medicines, Wave is approaching an exciting inflection point. As we approach 2024, I'd like to recap the many near-term milestones we expect to deliver next year.

..We expect to deliver and share the first-ever clinical proof of mechanism data for RNA editing with WVE-006. We expect to deliver dystrophin data from our potentially registrational FORWARD-53 clinical trial, and we expect to deliver data from the multi-dose SELECT-HD cohort with extended follow-up, along with all single-dose data. We also expect to select a clinical candidate for Inhibin βE by the Q4 of 2024, thereby supporting our goal of selecting five new clinical candidates by year-end 2025. Together, we are reimagining what's possible for patients, and we look forward to continuing to share our progress with you. And with that, we'll turn it over to the operator for Q&A.

Operator (participant)

Certainly. Ladies and gentlemen, if you do have a question at this time, please press star one one on your telephone. If your question has been answered and you'd like to remove yourself from the queue, simply press star one one again. Our first question comes from the line of Steve Seedhouse from Raymond James. Your question, please.

Steven Seedhouse (Biotech Research Analyst)

Good morning. Thanks for taking the questions. I wanted to first ask about the satellite cell histology that you spoke about and showed at R&D Day for the 531 program, of course. I'm curious if that's something that, like, can you look for dystrophin protein as well directly in those cells by IHC or something, and is that something that you would do in the ongoing phase II clinical study? Lastly, do you think, you know, DMD experts or regulators would view that as a meaningful clinical biomarker at this point, or is it still sort of academic and speculative what the meaning of that is?

Paul Bolno (President and CEO)

So thank you for the question. So I think if we think about the importance of the satellite cell data, we do think it helps to drive dystrophin production along the whole muscle. So muscles are composed of the myoblasts, but also satellite cells, which repopulate those muscle cells. So if we do think about looking for dystrophin and in terms of assessing, immunohistochemistry staining for dystrophin, that will obviously be something we look for in the next study. However, the most important meaningful biomarker for us will be Western blot dystrophin, that we can quantitatively assess against our peers. But I think in the totality of the treatment, and I think this is what's really important around the satellite cell production, is with newborn screening growing in the U.S., we now know newborn screening is growing in Europe.

If you think about treating patients much earlier in the disease process, before the loss of ambulation, before, at the point before the disease would historically have been diagnosed, being able to treat those boys earlier and get exposure to the repopulating cells in the body, you know, we think is a critical part of the treatment paradigm. So it's. You know, I think it's an exciting piece because it demonstrates the potential of our N531 and PN chemistry distributed broadly in the muscle, not just the select cells. We think long term, it treats to the totality of the treatment of the disease, but will obviously be something that will be assessed in the subsequent study. I think it's important that it was also identified in all three boys. So this wasn't a unique finding in a particular boy on the original study.

I think it's going to be compelling as we look at it in the FORWARD-53 study.

Steven Seedhouse (Biotech Research Analyst)

Okay, that's great. And I want to ask separately also about the alpha-1 antitrypsin program. Just to preface the question, I noticed Intellia this morning just halted development of their knockout approach targeting liver phenotype. They're advancing their lung phenotype program only. And then, of course, the RNAi approach is focused on liver. So it seems like, you know, there's an opportunity here for Wave and for RNA editing to really demonstrate, you know, that you can hit two birds with one stone, so to speak, and treat both lung and liver phenotype, maybe even within the same patient. So I'm curious if that's the focus of maybe the initial patients you would enroll, if that's even possible, to sort of enrich for that.

And really, in general, thinking about the market, how many patients kind of fit into this category where they could benefit from a therapy that addresses both lung and liver phenotypes at once?

Paul Bolno (President and CEO)

No, it's a phenomenal question. Obviously, an interesting update today. I think the other interesting nuance that we're also trying to dissect from that, and then the announcement today of our regulatory filings, where we can say, "Actually, we think RNA editing is being treated very similar to other oligonucleotides with a shift from a IND filing to a CTA filing for lung." So I think there's a lot of questions still around DNA editing, and versus RNA editing. But to your point on liver versus lung, I think we agreed from the beginning, your important point, that it's about the totality of treatment for AATD. We don't want to exclude, patients. They go on, particularly the Z patients, to have both manifestations of the disease. So obviously, there's a protein expression threshold.

So again, feeding two birds with the same hand, you know, being able to elevate that restored protein function lets us, you know, protect lung. But obviously, as we've shown over time, too, that wild-type protein allows the Z protein to come out of the liver and improve liver function. The other thing we've seen, and I think this is an important point, again, for the repeat dosing that comes with RNA editing is, we have shown that cells get healthier. And so this ability, when you repeat dose, that you don't have to try to capture all of the cells on that single infusion and then watch the other hepatocytes necrose as they're injured. You get to restore healthy hepatocytes over time, which continues to make more protein and improve the production over time as well.

So I think if we think about, again, the totality of the treatment for this important disease, so the 100,000 patients in the U.S. and Europe, having a treatment that singularly treats both liver and lung, in the means that we're going after, I think is a really exciting promise for these patients.

Steven Seedhouse (Biotech Research Analyst)

Thanks so much.

Operator (participant)

Thank you. One moment for our next question. Our next question comes from the line of Salim Syed from Mizuho. Your question, please.

Salim Syed (Head of Biotechnology Research , Senior Biotechnology Analyst, and Managing Director)

Great. Good morning, Paul. Thanks for the update and the question. One for me on DMD, since we're, you know, it's an important year for you, next year, 2024, in the space. Just curious to get your views just generally on the DMD space as a whole, just given everything that we've seen lately with, you know, if you can talk about, to the extent you can talk about this Sarepta compound, Elevidys. You know, we accelerated approval, we had a controversial AdCom, then, and it failed to hit on the primary in EMBARK, and then it does $70 million in sales in, you know, quarter one, right? Just curious, any implications there or nuances to your updated thoughts on either regulatory or commercial as it relates to the space?

Paul Bolno (President and CEO)

I mean, I think, you know, I think this is an important point you bring up, which is that patients need new treatments. You know, whether or not that was gene therapy coming to market, I think over the existing skippers, I think patients need new treatments and recognize that they are underserved. We had, you know, very interesting discussions at PPMD with the patient community, and I think there is a hunger for improved functional Dystrophin. And so I think, you know, as we look at the space, I obviously can't comment on Sarepta's individual regulatory discussions. But what I can say is we are resolutely focused on driving as much functional Dystrophin protein as possible and seeing that translate to functional benefit for these boys, not just in the U.S.

I think that's another thing we routinely hear is the frustration outside the United States, where we're engaged with the patient community, who watch in the U.S. as these accelerated approvals come, medicines, as you point out, are getting onto market, but because they haven't finished the complete study, are not going to treat patients outside the United States. So as we think about the totality of our program, both a U.S. strategy, but ultimately delivering functional protein so that we can see that translation to boys globally, not just those that are amenable to 53, but again, our thesis of being able to expand that beyond 53 across, you know, 40% of DMD, I think that's our core focus. So, you know, we've seen that with the initial data.

We're excited about FORWARD-53 in terms of delivering protein data and really providing substantial opportunities for these boys with DMD.

Salim Syed (Head of Biotechnology Research , Senior Biotechnology Analyst, and Managing Director)

Got it. Thanks, Paul.

Operator (participant)

Thank you. One moment for our next question. Our next question comes from the line of Joon Lee from Truist Securities. Your question, please.

Speaker 10

Good morning. This is Austin from Jefferies. Thanks for taking the questions. I'm just wondering, do you plan to optimize the guide molecules for Cas12a or Cas9 using your platform now that you've demonstrated progress on your ASOs, RNAi and RNA editing? And then just on Inhibin βE, you know, the timeline is, you know, for Q4 2024 for the DC. I'm just wondering, you know, do you think you could have progressed faster with an ASO? Thank you.

Paul Bolno (President and CEO)

Can you repeat the second question? I just want to make sure.

Speaker 10

Oh, yeah. I'm just wondering, if you could just elaborate a little bit on, you know, if you think you could have progressed faster with an antisense oligonucleotide as opposed to an RNAi approach for the Inhibin βE program. Thank you.

Paul Bolno (President and CEO)

Oh, okay. Sorry, I'll take the last one. So I just want to make sure you, for Inhibin βE, because it was not clear it was AATD or Inhibin βE. So you're saying, could we have gone faster for an ASO? No, I think actually our experience in siRNA, and as we shared earlier in our collaboration with GSK, we've been working in double-strand siRNA for a while now with our format. So I don't think that there is any speed disadvantage by pursuing siRNA for the Inhibin βE program. In fact, I think we're quite on track and, you know, I think competitive in the field right now in siRNA. And I think, you know, as we've always said, having multiple modalities lets us really evaluate what is the best modality for treating this given disease.

I think what we've seen in not just potency, but durability, the GalNAc in hepatocyte on silencing, I think we actually have the best modality and, format, frankly, to treat this, where we can think about potential for biannual or annual dosing. I think we've got a competitive program here. I think our goal is to stay ahead of in the space, and, you know, we'll continue to watch it. As to your first question, it's an interesting one, because as we think about the power of guide strands, and we have discussions with numerous companies around our GMP manufacturing capability and process development, I do think we have the ability to work in these spaces. What I don't want that to be translated to on this call is that Wave's going to work on highly controlled guide strands for CRISPR right now.

But I think the capability we have in collaborations to apply our chemistry and apply our manufacturing know-how and our process development across multiple formats in oligonucleotides is definitely translatable. I think our focus right now is RNA editing, in the cases we shared earlier, has a lot of advantages. But, you know, the approach we're taking, our chemical modifications, again, proprietary to Wave, are definitely transferable across other oligonucleotides to the space.

Speaker 10

Thank you. And then just, just one more. So I noticed that the single-dose data was originally, you were going to get it, this quarter, and now it's going to come out with the multi-dose data in the Q2 of 2024. You see, you could just elaborate a little bit on that. Thank you.

Paul Bolno (President and CEO)

I'm happy to. I mean, you and Anne-Marie want to-

Anne-Marie Li-Kwai-Cheung (Chief Development Officer)

Yeah, sure. So the single dose, dose data are not informative for our next step. And as we've rolled over the single-dose data into the multi-dose cohort and fully enrolled multi-dose cohort, we're reading them out together because these are the important data enabling decision-making.

Paul Bolno (President and CEO)

Yeah, I mean, just to follow up on that, I mean, the study, the single dose is complete. When we cut data, and I think this has been discussed before, it is critical when you do assessments of data, particularly on studies as they go, to evaluate all patients simultaneously to avoid any discrepancies across the assay in comparison. And so with that completed, and to Anne-Marie's point, with those patients having rolled over in a fully enrolled 30 milligram repeat dose cohort, those repeat dose data, as we've shared earlier on prior calls, are going to be critical in informing the next step of the program.

Speaker 10

Thank you very much, Paul.

Operator (participant)

Thank you. One moment for our next question. Our next question comes from the line of Joseph Schwartz from Leerink Partners. Your question, please.

Joseph Schwartz (Senior Research Analyst)

Thanks very much. So given what we recently saw from EMBARK, I was wondering if we could get your opinion on the merit of NSAA as a functional assessment, and what other endpoints do you think could be more informative, if any, and what functional assessments will you be focusing on now in the FORWARD-53 study, and what is the bar for success on each? And then I have a follow-up. Thank you.

Paul Bolno (President and CEO)

I think the first, and it's a great question, Joe. I mean, I think when we look at these data at the beginning, for us, the translation between, and we think about Becker-like functional Dystrophin, is making functional Dystrophin should translate to a functional benefit. It was always a question. We remember the ad comm. It was one of the FDA's questions of: would microdystrophin actually translate to a functional benefit? And I think consensus across the reviewers was no. So I, you know, I don't think this is necessarily the application of saying, "Well, how do you make the North Star or the endpoint better?" Our focus is on how do you make the protein better, and that's through creating functional protein. So, you know, our view is we're not changing our functional endpoints.

We're going to look at North Star, we're going to look at other digital endpoints. We're going to look at a whole host of endpoints on function, but it gets back to the primary driver of the biology of the disease. The reason we're developing exon-skipping oligonucleotides for DMD is because the premise of the biology foundationally was, how can you create Becker-like functional protein that has all of the properties that are required there? So I think our goal is deliver on that protein and then look at the translation of that into function.

Joseph Schwartz (Senior Research Analyst)

When you do your muscle histology biopsy analyses, do you think there's any potential to see evidence of a differentiated profile from having more activity in the satellite cells on the muscle cell architecture, given what you said about the actual protein that could be produced as a result?

Paul Bolno (President and CEO)

It's a really interesting question. So obviously, one, we have longer duration, right, of follow-up in terms of the FORWARD-53 than the three doses at six weeks, which is a more static time point. And so there are opportunities to see the evolution of satellite cells, the evolution of where dystrophin is located. The important thing, obviously, is the quantitative functional protein and then looking at endpoints beyond that. But there are interesting discussions happening, I know, in muscle biology, thinking about population and translation of satellite cells into how that dystrophin translates onto the myoblast, and how do you actually expand dystrophin coverage of myoblast.

You know, again, a lot of that work being academic, I think the fact is, the fact that we get there actually should let us be able to look at Dystrophin architecture over time, and those are interesting continued academic experiments to really think about that translation to function. I think, again, the most important endpoints for us should be the quantity of Dystrophin that we produce and the translation to functional endpoints. But, you know, again, when you see that, you know, that opens up a lot of possibilities to then to continue to look and understand better the Dystrophin biology and ultimately the translation of that.

Joseph Schwartz (Senior Research Analyst)

Makes sense. Thanks for taking my questions.

Operator (participant)

Thank you. One moment for our next question. Our next question comes from the line of Eun Yang from Jefferies. Your question, please.

Eun Yang (Analyst)

Thank you. Another question on DMD. So when you produce dystrophin protein, and obviously, it's close to full length versus a microdystrophin. But, I mean, you mentioned there are, like, academic testing to assess functionality of a protein itself. But when you measure the protein levels, do you assume that the protein is all functional?

Paul Bolno (President and CEO)

Yeah. So when dystrophin protein is translated to the outside of the cell, at that point, that's the functional protein. That's after it's, I mean, that's why this protein takes time to both produce and then locate itself onto the external part of the cell, right? So I think that's, that's the piece over time. That is the, that is the functional protein. When I was talking about the academic work, that's more on how that distribution takes place over time. Our view, and obviously it will be important as we study this, and, you know, we have longitudinal, both the 24- and 48-week opportunities to really look at the progress, not just in the quantity, but in distribution. I think those are the points that will be interesting to assess over time.

Obviously, the key metric as we think about the potential for accelerated approval filing will be the quantitative assessment on M-AAT of the protein. But functionality of the protein is definitely something, you know, we will obviously look at the distribution of the protein in the cell.

Anne-Marie Li-Kwai-Cheung (Chief Development Officer)

I would just add, just from a logical point of view, you would expect that a protein which is as close as possible to the native Dystrophin in length, is most likely to be functional. And I think with these data, we can see, the EMBARK data, really significant questions as well as to whether microdystrophin has the ability to deliver function benefit.

Eun Yang (Analyst)

Thank you. And then, you mentioned that obviously there is, the need for new treatment for, DMD patients. So given what's out there, what we were seeing, what level of Dystrophin levels do you think you would need in order to file for approval to be differentiated, commercially?

Paul Bolno (President and CEO)

To be differentiated commercially, I think there are several, several ways to be differentiated. You know, obviously, one, for exon 53, which is the immediate commercial space we'd be entering, we, we are powering the study to ensure that we can deliver greater than 5% dystrophin. That's the commercial threshold within the exon 53. We believe, based on our levels of transcript and the time and duration we're treating that, we should be able to see that level of protein above that current threshold. As we talk to patients and physicians, there's other areas and points of differentiation, even amongst the current programs. So we're already less frequent in terms of dosing administration as we talk to these patients about impact on their life in terms of travel, transit costs.

Having weekly IV infusions versus whether it's biweekly, and as we saw in our data from Part A, 25-day half-life means the potential for monthly or less frequent treatment. That in and of itself, as we talk to families, is a huge advantage. So we see that in the profile of the stability of our drug. We have a profile in terms of safety, too, and at least in the early pieces, that tells us that we shouldn't look differently than the existing standard of care. So we can provide these patients an opportunity to switch with less frequent administration and substantially more protein, which is what we're powered to see, and the ability to get to satellite cells and the fact that we see higher levels. And I think we need to go back to remember that data. 53% transcript was seen in skeletal muscle.

We've shared data that shows that we see substantially full, higher transcript production in both our NHPs and in our double knockout mice, heart, and diaphragm. So we think about the overall profile, differentiated profile from the existing standard and what's going to be important to patients. It's high levels of cardiac distribution and muscle protein, a dystrophin protein, high levels of diaphragmatic protein expression. That, you know, treats the underlying respiratory and cardiopulmonary complications that these patients suffer from, in addition to the high levels of skeletal muscle concentration. So the totality of the profile, and I, I know people tend to think about all exon skipping as being the same.

The profile and reason we started this program after our prior experiences here is not just because of the quantity of Dystrophin, but the localization, the exposure, the profile, differentiated from the existing exon skipping therapies without the need for conjugates and other modalities that, you know, potentially impact viabilities on those molecules compared to standard of care.

Eun Yang (Analyst)

Thank you. And then last question is on AATD, RestorAATion. So when you deliver proof of mechanism data, sometime in 2024, can you kind of talk about how- the level of data we would see in terms of number of patients? What kind of data we would see in order to determine proof of mechanism? Thank you.

Paul Bolno (President and CEO)

So I'll let Anne-Marie define kind of, I think it's important that we benchmark proof of mechanism. Obviously, a lot more updates to your other questions in terms of numbers and designs as the study progresses. But do you want to talk about that?

Anne-Marie Li-Kwai-Cheung (Chief Development Officer)

Yeah, sure. Proof of mechanism is detection of edited protein in serum, and that will be a very significant milestone because it will be first evidence that ADAR editing can translate into humans. In our study, we have multiple assessments of M-AAT throughout the cohorts, low, medium, and low. We can achieve proof of mechanism as soon as we detect it, and that's, you know, before the completion of the trial and potentially before completion of the first cohort.

Eun Yang (Analyst)

Thank you.

Operator (participant)

Thank you. One moment for our next question. As a reminder, ladies and gentlemen, if you have a question at this time, please press star one one. Our next question comes from the line of Luca Issi from RBC. Your question, please.

Lisa Walter (VP of Biotech Equity Research)

Oh, great. Thanks for taking our questions. This is Lisa, on for Luca. Just a couple on A1AT. You mentioned that multiple CTAs have been accepted. Just wondering if you can share which geographies you have cleared the CTAs. And, on the SAD data, I know you're expecting to dose healthy volunteers soon. Given there's no mutation to correct in healthy volunteers, what clinical information are you hoping to gain from these subjects, and what will help inform further treatment in A1AT patients? Thanks.

Anne-Marie Li-Kwai-Cheung (Chief Development Officer)

Sure. Well, the first clinical trial sites are Australia and U.K., with more coming. And to your question about what we expect to get from the volunteer study. Well, the volunteer study has been designed to enable us to most rapidly achieve the endpoints that we would expect to see target engagement. And so it's really designed for efficiency and speed. So the healthy volunteer study will inform progress in the patient study and also, of course, safety and tolerability.

Paul Bolno (President and CEO)

If you think about it, the goal was to get very quickly to those first low-dose cohort in the patient arm, which is where we modeled to anticipate initially engaging targets. So there's a combination of how quickly can we enroll and establish both safety and PK, and tie that over to our preclinical modeling on PD, which has translated across multiple clinical programs to date. And to be able to affirm how do we get quickly to starting in a patient cohort where we would expect to anticipate engaging targets. So this idea of kind of rapidly starting as opposed to, you know, building up in patients to get to a part where you eventually engage target, I think the team's done a really elegant job of bringing those pieces together to expedite getting to that proof of mechanism inflection as quickly as possible.

Lisa Walter (VP of Biotech Equity Research)

Thanks. Thanks, Paul. One more, if I may. Just on the milestones, can you give us a sense of the cadence of the milestone payments from GSK for the AAT program? Thanks.

Paul Bolno (President and CEO)

Sure. I mean, I think obviously we can't break down as we've said publicly, you know, we, we have milestones for the program as we move through the clinic. Some of these are execution milestones, and some of these are, you know, data inflection milestones. We anticipate milestone payments in 2023 and then 2024 and beyond. So that's the most I can say. But, you know, given the progress the team's making, I think it's pretty clear to see a path to how we're going to move through that cadence of potential milestones.

Lisa Walter (VP of Biotech Equity Research)

Perfect. Thanks for taking our questions.

Operator (participant)

Thank you. This does conclude the question-and-answer session of today's program. I'd like to hand the program back to Dr. Bolno for any further remarks.

Paul Bolno (President and CEO)

Thank you all for joining the call this morning. I also want to thank our employees for their efforts towards delivering life-changing treatments for people battling devastating diseases. We have an exciting year on the horizon, and we look forward to keeping you all updated on our progress. Have a great day.

Operator (participant)

Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.