Intellia Therapeutics, Inc. (NASDAQ:NTLA) Q2 2019 Results Earnings Conference Call August 1, 2019 8:00 AM ET
Lina Li - Senior Manager, Investor Relations
John Leonard - Chief Executive Officer
Laura Sepp-Lorenzino - Executive Vice President and Chief Scientific Officer
Glenn Goddard - Executive Vice President and Chief Financial Officer
José Rivera - Executive Vice President, General Counsel and Corporate Secretary
Conference Call Participants
Maury Raycroft - Jefferies
Gena Wang - Barclays
Geulah Livshits - Chardan Capital Markets
Steven Seedhouse - Raymond James
Madhu Kumar - Robert W. Baird & Co.
Tashdid Hasan - Roth Capital Partners
Good morning. My name is John, and I will be your conference operator today. Welcome to the Intellia Therapeutics’ Second Quarter 2019 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Following the formal remarks, we will open the call up for your questions. Please be advised that this call is being recorded at the company's request.
At this time, I would like to turn the call over to Lina Li, Associate Director of Intellia. Please proceed.
Thank you, operator. Good morning and thank you all for joining us today to discuss Intellia’s second quarter 2019 operational highlights and financial results. Earlier this morning, we issued a press release outlining our progress this quarter and the topic we plan to discuss on today’s call. This release can be found on the Investor section of our website at www.intelliatx.com. This call is being broadcasted live and a replay will also be archived on our website.
Before we get started, I would like to remind you that during this call, we may make certain forward-looking statements and ask that you refer to our SEC filing available both at sec.gov and our website for a discussion of potential risks and uncertainties. All information in this presentation is current as of today and Intellia undertakes no duty to update this information unless required by law.
Joining me on today's call from Intellia are, Dr. John Leonard, our President and Chief Executive Officer; Dr. Laura Sepp-Lorenzino, our Executive Vice President and Chief Scientific Officer; Glenn Goddard, our Executive Vice President and Chief Financial Officer; and José Rivera, our Executive Vice President and General Counsel. For today's call, John will begin by discussing the company's highlights, Laura will provide an update on our R&D progress, and Glenn will review our financial results from the second quarter of 2019. Then following our prepared remarks we will all be available for your questions.
With that, let me turn the call over to John.
Thanks, Lina, and thank you all for joining us today. Here at Intellia we are pursuing a full spectrum genome editing strategy to rapidly develop a diverse pipeline of life saving therapies for patients. Our in vivo approach delivers CRISPR/Cas9 components as a therapy and our ex vivo approach uses CRISPR/Cas9 as an essential tool to create engineered cell based therapies.
With our CRISPR based platform, we have the potential to cure genetic diseases with a single administration, and to create novel engineered cell therapies that target various cancers and autoimmune diseases. We are proud of our innovative science and strong platform capabilities at Intellia and we believe that the extent of our efforts as well as our progress across both these areas position us well to deliver on our mission.
Today, we've built a robust set of preclinical data that demonstrates we can use systemic delivery of our CRISPR/Cas9 lipid nanoparticle or LNP to either selectively knockout a disease causing DNA sequence, an important approach in treating autosomal dominant genetic disorders or introduce targeted insertion of DNA to make therapeutic proteins normalizing levels which we believe is a breakthrough approach to treating autosomal recessive genetic disorders.
With these in vivo capabilities in a knocking out disease causing genes or targeted insertion of normal gene, we believe we have unlocked the treatment of genetic disorders that have their origin in the liver. Furthermore, we believe that these achievements serve as a foundation for targeting genetic diseases and other tissues.
In addition to our in vivo effort, our ex vivo effort focuses on engineering lymphocytes that retain normal cell physiology by targeting various metapoliatic [ph] and solid tissue cancers. Our approach to engineering lymphocytes is designed to overcome the limitations most currently available cell based therapies.
Moving to our pipeline, we've made substantial progress in advancing our lead programs towards the clinic for transthyretin amyloidosis doses in acute myeloid leukemia which we will highlight on today's call. Additionally, we have expanded R&D leadership with two key appointments to our management team. We are excited to welcome Dr. Walid Awni, who joins us as Senior Vice President, Preclinical and Clinical Sciences. He brings with him over two decades of highly relevant drug development experience that is especially rich in early stage work, mostly recently as Vice President of Clinical Pharmacology and pharmacometrics at AbbVie.
During his tenure at AbbVie he was instrumental in multiple drug approvals including in biologics and small molecules, such as Humira, Kaletra, and [indiscernible] to name a few. He also advises the FDA on new medicines serving on two of their Advisory Committees. Walid will oversee all aspects of early development and will continue to build out our clinical development capabilities.
And, as we announced in May, Dr. Laura Sepp-Lorenzino has joined us as Executive Vice President and Chief Scientific Officer. Laura brings decades of experience in research and development, most recently as Vice President and Head of Nucleic Acid Therapies, and as a member of the External Innovation team at Vertex Pharmaceuticals.
Earlier, during her tenure at Alnylam and at Merck, Laura was a champion of nucleic acid therapies and a pioneer in advancing RNAi as a novel therapeutic modality. She will be leading our platform and drug research organization and we are already benefiting greatly from her leadership. I am pleased to have this opportunity to introduce her today.
Thank you, John and good morning. Intellia is positioned to advance multiple programs from research to clinical development. This is a very exciting time for us as we evaluate our novel therapeutic modality and progress our initial programs into the clinic. I was drawn to Intellia by the breadth of the modular platform which we are using to build a robust pipeline. The decision to pursue a chemical LNP based delivery system has established Intellia as the leader in systemic genome editing.
Similarly, the application of our editing capabilities in ex vivo setting positions us to bring forth differentiated, engineered cell based therapies. As I got in to work with the team and had the opportunity to deal into the science, I've been impressed with the talent of the team and the quality of the science. My enthusiasm has only grown and my expectations exceeded. Today, I'll be updating you on our R&D progress and pipeline beginning on the in vivo side.
As you know, our first in vivo candidate, NTLA-2001 is in development for the treatment of transthyretin amyloidosis or ATTR, a disease caused by the deposition of TTR protein fibro in peripheral nerve, heart, and other organs leading to diverse disease manifestations including peripheral neuropathy and/or cardiomyopathy. The goal of NTLA-2001 is to reduce expression of TTR protein by knocking out the TTR gene. For reference, a delay in the clinical progression of the disease is seen with a TTR reduction of 60% or more from baseline level.
As you may recall, we demonstrated an average reduction of greater than 95% of circulating TTR in nonhuman primates at 100 days post a single administration of our lead LNP formulation targeting [indiscernible] TTR. Today, we're pleased to present additional durability data showing sustained circulating TTR protein reductions through six months of observation in ongoing study. We are very encouraged by these results as they show that we can achieve significant levels of TTR protein reduction expected to be clinically efficacious.
As anticipated by genome editing with CRISPR/Cas9, once we reach these levels of protein knockdown, the effect is sustained. This data continues to underscore the power of CRISPR/Cas9 to develop single administration, curative treatment for patients. The most recent data is consistent with earlier NHP studies in which we observed durable liver editing and concomitant TTR reduction through 10 months of observation following a single dose. We are of course eager to move this program to the clinic as soon as possible. To that end, as John mentioned, we have taken several important steps towards the clinical evaluation of NTLA-2001.
Most recently, we conducted our pre-IND meeting with the FDA and shortly thereafter initiated IND enabling toxicology studies, both of which will form our IND package and the design of our Phase 1 study. In addition, we established supply chain operations to support manufacturing Phase 1 material expected to commence by the end of the year. All together, this enables us to refine our prior guidance as we now expect to submit our IND application for NTLA-2001 in mid 2020. As a reminder, we are the lead party for the development and commercialization of this program for which we have a 50-50 co-development and co-commercialization agreement with Regeneron.
Let's now turn to our targeted insertion efforts in the liver. You may recall, as presented at ASGCT in April, and as discussed on last quarter's call, we demonstrated the first CRISPR/Cas9 mediated targeted transgene insertion in the liver of nonhuman primates using Factor IX inserted into the albumin locus. As a reminder, Factor IX [indiscernible] the blood clotting protein that's missing or defective in hemophilia B patients. The study used our proprietary hybrid delivery vehicle which combines our CRISPR LNP delivery system with an A B vector including the Factor IX gene.
In a nice demonstration of the modularity of our platform, the CRISPR LNP delivery system is the same as the one used in our ATTR program with the sole change being the guide RNA. We believe our targeted insertion approach provides clear advantages in both safety and efficacy. Targeted insertion should reduce the risk of mutagenesis due to random integration of retroviral vectors. In addition, targeted insertion should provide durable efficacy with a single course of treatment and potentially cure the disease.
Today, we are pleased to share results from the now complete single administration NHP study showing that the circulating human Factor IX protein levels observed at day 14 were durable through the two months of the study period. Importantly, these protein levels were within the reported range of normal circulating Factor IX protein levels in humans. [Indiscernible] in NHPs is consistent with the rodent study in which circulating Factor IX protein levels were sustained throughout 12 months of observation.
Our targeted knockout and insertion approaches continue to evaluate Intellia’s CRISPR/Cas9 platform in the in vivo setting significantly expanding the scope of addressable genetic diseases well beyond our initial indications. We're actively working with Regeneron to progress the Factor IX program.
In parallel, we're also independently evaluating several other transgenes of interest as part of our wholly-owned in vivo therapeutic development efforts. We look forward to updating you on our progress and we expect to present additional data on targeted insertion at upcoming scientific conferences.
Let's move to our engineered cell therapy strategy. Here, we are similarly leveraging a modular platform based approach to design engineered cells to treat a range of hematological and solid tumors. Our focus today will be on our T cell receptor or TCR replacement approach for our wholly owned acute myeloid leukemia or AML program.
As a reminder, Intellia’s TCR replacement approach knocks out the endogenous TCR by eliminating the alpha and beta genes and inserts the therapeutic TCR in locus. We believe our TCR replacement approach should provide key advantages over CAR-T in both safety and efficacy. First, by preserving normal T cell physiology, second by enhancing and stabilizing the expression of the inserted therapeutic TCR, and third, by reducing the [indiscernible] versus [indiscernible] that could result from miss [indiscernible] between endogenous and inserted TCRs.
Further, TCRs broaden the range of addressable tumor type because they can recognize [indiscernible] tumor antigens and CAR-T. This TCR replacement approach is the basis for our initial engineered cell therapy program for AML. AML is cancer of blood and bone marrow with significant unmet medical need. The disease is rapidly fatal without immediate treatment with less than 30% five-year overall survival rate. In 2018 there were approximately 20,000 new cases in the U.S. alone.
Over the past two to three decades there only have been limited advances in the treatment options for AML patients. For our lead TCR based therapy for AML we are targeting Wilms Tumor 1 or WT1. WT1 is overexpressed in greater than 90% of AML blast as well as in numerous other hematological and solid tumor types. As outlined on last quarter's call, we identified multiple lead WT1 TCR candidates that recognize the primary WT1 epitope of interest.
We also have generated in vitro data showing successful and simultaneous knockout of endogenous TCR with insertion of various WT1 TCR candidates. Every 14 engineered cells were fully functional and capable of specifically and efficiently killing a panel of patient derived AML blast. Today we are pleased to announce that we have initiated functional testing of these lead TCRs in patient derived xenograft models including studies with our collaborators at Ospedale San Raffaele. These studies will inform the nomination of our first engineered cell therapy development candidate, which we previously guided will be by the end of this year and for which we remain on track.
In addition, we are establishing contractor relationships for manufacturing capabilities to support clinical evaluation. As WT1 is overexpressed in numerous other tumor types, we believe our AML program will be the foundation to pursuing a broad array of cultures [ph] including solid tumors. Furthermore, if we evaluate our TCR replacement approach, we expect to unlock significant immuno-oncology opportunities will further enhance our guidelines.
With that, I would like to turn the call over to Glenn, who will go through the second quarter's financial statement. Glenn?
Thank you, Laura, and hello everyone. Intellia remains in a strong financial position as we advance multiple programs into development. Our cash, cash equivalents, and marketable securities as of June 30, 2019 were approximately $276 million compared to $314 million as of December 31, 2018. The decrease was mainly due to cash used to fund operations of approximately $59 million, which was offset in part by approximately $8 million of net proceeds raised from the company's at the market offering, $7 million of fund received under our Novartis collaboration, $4 million of ATTR cost reimbursements made by Regeneron, approximately $2 million proceeds from employee based stock plan.
Our collaboration revenue was $11 million for the second quarter of 2019 compared to $8 million for the same period in 2018. As a reminder, our collaboration revenue is related to our partnership agreements with Novartis and Regeneron. Once again Regeneron is obligated to fund approximately 50% of the development cost for the ATTR program. Our R&D expenses were $26 million for the second quarter of 2019 compared to $24 million for the same period in 2018.
As we continue to expand both our in vivo and engineered cell therapy efforts to advanced our pipeline programs. Our G&A expenses were $13 million for the quarter compared to $8 million for the same period in 2018 largely due to an increase in legal and intellectual property cost. Finally today, we are updating our previous guidance that we expect our cash balance as of the end of the second quarter of 2019 to fund our current operating plans into the second half of 2021.
And now, I'll turn the call back over to John to briefly summarize our upcoming milestones and corporate updates.
Thanks Glenn. In closing, this is an exciting time at Intellia, based on the significant progress we've made on our platform capabilities. With the knockout of disease causing DNA sequence with high levels of protein reduction we can introduce a targeted insertion of DNA with effectively normalized protein levels and we can design engineered lymphocytes to preserve normal cell physiology. These platform capabilities, along with our world class team will enable us to deliver on our mission and advance our lead programs for ATTR and AML towards the clinic.
Looking ahead, we anticipate several important milestones, including the presentation of additional data from our in vivo and engineered cell therapy programs at upcoming scientific conferences by the end of 2019. Additionally, from our ATTR program, we plan to begin manufacturing of Phase 1 materials for NTLA-2001 this year in support of filing an IND in mid next year. And for our AML program we are on track to nominate a development candidate by year end.
With that, I'd like to thank you all for tuning in today. We will now open up the lines for any questions. Operator?
Thank you. [Operator Instructions] We will now take our first question from Maury Raycroft of Jefferies. Please go ahead, your line is now open.
Hi everyone. Good morning and congrats on the progress. Thanks for taking my questions. First question is just if you can provide any additional details on the pre-IND meeting that you had with FDA? And also if you can provide any guidance as to when we could expect data disclosures from the IND enabling studies that you’re currently working on?
Good morning, Maury, it’s John. Thanks for the question. First, with respect to the pre-IND meeting, as you know, these meetings are about making sure you’re putting in place the right assays, the plans, materials, et cetera to put together an IND and we went through that in great detail with the FDA, they were very thoughtful, responsive. It was a very informative meeting and what we took away was that we have the right tools and the right materials for doing the right tests. So, we felt very enthusiastic about the plan that we put in place. We think that you know, again they were very thoughtful about what we put in front of them, so onward to the IND full speed ahead.
With respect to IND enabling study data, I think we’ll see that as it plays out. What I think is most relevant right now is just looking ahead to some of the durability data that we've accumulated with either knockout or the insertion data of Factor IX and as Laura said in her comments the appropriate venue is probably later this year we’ll be in a position to share some of that. So, as other information becomes available, we will look at that, and if we think it's important to share it, we absolutely will.
Got it, that's helpful. And then I had a question on manufacturing for the Phase 1 materials that you're going to be using, just wondering if that’s going to be done in-house or with the CMO and any other perspectives you could provide on manufacturing?
Yes, we don't give many details, but for the purposes of the tax work and getting in the clinical, it’s a collection of different suppliers. We do have some material coming from outside the company and some of it we’re assembling ourselves. Again, going back to the pre-IND meeting, the important thing is having the right material, qualifying it correctly, doing it at the high levels of quality, so that you are meeting the requirements for these studies and we’re checking all these boxes.
Got it, okay. And last question is just on the Novartis collaboration and with the research collaboration ending in December 2019, how should we think about that and how should we think about potential opting decisions from Novartis?
As you pointed out, the collaboration is scheduled to come to a close at the end of this year. They do have certain decision rights at the end and that is yet to play out, so we’re waiting to see some of the things that Novartis expects to carry forward from that program. Remember, along the way they have expanded the relationship with the work in the [indiscernible], so we’re enthusiastic about that playing out.
And we’re looking forward to some of the other targets that they work on moving to the clinic at some point here. Obviously, we can't characterize that work, but we know they’ve been very diligently advancing some of the targets that they’ve been working on. So, as we have more clarity Maury, in terms of what their plans are, we will share them, but that’s information that lies ahead.
Got it, okay. Thank you very much for taking my questions.
Sure, my pleasure.
We will now move on to our next question from Martin Auster of Credit Suisse. Please go ahead, your line is open.
Good morning everyone. This is Ekay [ph] speaking for Marty. I just had one quick question in terms of the recently interference proceeding that was initiated between UC and [indiscernible] I understand that it’s rather early at this point, but could you walk through the expected time lines for the proceedings and the range of potential outcomes?
I’ll give you a short answer to the entire process and then if you want more details, maybe José Rivera can walk us through some of the timeline things. The bigger picture is, this is part of a process which began some time ago and this is actually the pace where the inventorship [ph] will be determined.
Remember earlier, the earlier proceeding addressed a different related question which was whether or not eukaryotic cells were separately [indiscernible] really had no bearing on exactly what we’re doing. So, what's happening now really is, it has no effect on the programs we’re doing, the work that we’re carrying forward, the rate at which we do it, et cetera, but maybe Jose if you want to expand a little bit in terms of some of the time points that we can look forward to as the process unfolds.
Sure, hi, good morning. Generally these proceedings take about two years from beginning to end. We would expect that this proceeding would take a similar timeframe. They are divided into two phases, the first phase will take about a year, second phase will take about another year.
In the first phase it’s all about motions, then sort of trying to set the framework for the interference and the second phase is where the Board will decide who actually invent it first and that is the party that will be entitled to the patents. So ultimately, when it comes to range of options, the Board will make a decision as to who was the first inventor of the use of the technology in eukaryotic cells and that party will be entitled to the patents.
Ekay [ph] it’s John again. I might direct you to our website where we’ve laid out in greater detail, more about the process and in fact those particular patents that have been pulled into it. I think the important takeaway is that UC has a number of established patents that have been issued are not affected by the process. There is a substantial number of the patents in the broad patent state [ph] that had been pulled into the interference that are at stake. So, we view this situation essentially as almost upside for UC where there's little to lose and much to gain and I think it's the opposite for the other side.
Okay, thank you.
We will now move on to our next question from Gena Wang of Barclays. Please go ahead your line is open.
Thank you for taking my questions. John, just wondering for the insertion, could you please remind us the Factor IX level and which methodology was used to measure, was it chromogenic assay or stage assay for nonhuman primates?
The insertion data are - we’re measuring milligrams per mil, I mean actually, yes, micrograms per mil, I’m sorry, I misspoke, and the normal human range falls between usually 3 to 5 micrograms per mil. I believe the assay that was used is [indiscernible] and this is actually - the important thing here Gena is not the activity of the enzyme, but we’re actually measuring the amount of material that’s produced in the blood.
So, we think that's the important takeaway here, and we also think it sets the foundation for the other insertion work that we're doing which is - if one can normalize protein levels and not just enzymatic levels, it raises opportunities for a variety of different genes that one would want to insert including structural proteins. So we think that for the purposes of this experiment, the really exciting results are not activity so much, but actual amount of the material that’s produced.
Thank you, that's very helpful. And then, for the same insertion program or the insertion approach, what would be other candidates for this, LNP AAV delivery approach on your top list?
Well, there’s a series of transgenes that we’re considering. Remember, that in the liver this is work that we collaborate with Regeneron with, so some of this is part of that collaboration and we’re working very diligently with them to line up a series of different candidates. We do have our own reserved set of transgenes. We've talked a little bit about alpha-1 antitrypsin in the past, that’s certainly a candidate here and we have presented data on that. The full range of candidates is not something we’ve gone through yet, but I would say stay tuned as several of these are moving into the in life NHP phase and we’re looking for the overall generalizability of these results, and as we collect that information we'll share it and that will certainly bear on our decisions for moving forward.
Okay, great. And then lastly a question regarding manufacturing, I think following Maury's question, so could you remind us for those you in-house produced is that research grade or economical grade? And also any request from the FDA regarding the GNP manufacturing since you have a quite different modality or you have ALMP [ph] and in the future will be AAV, any thoughts there also for the future through the CDMO or you wanted to set up some in-house manufacturing capability? Sorry, basically, several layers of a question.
So thank you for your question and questions. Yes, it's true, it kept going. But the important ones and I think it goes all the way back to the beginning for us in terms of the actual modality that we were going to choose. And we put a lot of thought into how we were going to deliver CRISPR/Cas9-based line into the body. And as we've shared in other venues, the chemical approach and specifically lipid nanoparticles, we've felt from the beginning bring multiple different advantages, one of which is manufacturability. And we'll get to that your question here.
But remember that the ease of use, you don't have to wait in line for two years to get to neurological [ph] manufacturing capabilities. The cost of goods has some influence in this, trans and expression, all of those things related to the lipid nanoparticle choice that we made.
Going to the FDA, at the pre-IND meeting as you point out, it's very important to make sure that the various implements that are going to come together into an LNP are the right ones and that they're qualified appropriately, whether it's the nucleic acids, the lipids, and then the overall way that they're tested and characterized.
That was a very important part of the meeting. And it's essential to establish that those materials are properly qualified for research testing, but importantly for toxicological and ultimately clinical use. And that's what we discussed at the FDA and we've got a sound plan in place. They saw all of the things we want to do, all the assays. And we think that we're now well positioned to take clinical grade material forward, that we will manufacture in part ourselves and in collaboration with CMOs on time into the clinic. So we feel very, very good about where we are.
Thank you very much.
We will now move on to our next question from Mani Foroohar of SVB Leerink. Please go ahead. Your line is open.
Hi good morning. This is actually Rick on the line for Mani. Thank you for taking our questions. So first, I was hoping to get a little bit more visibility into the submission of the IND for 2001. Besides the ongoing non-human primate toxicology studies, are there any other major rate limiting steps that must be completed before the filing of the IND?
Rick, thanks for the question. Much of this is the time that's associated with following the animals after they've been tested, most studies have all begun, and then the manufacturing and qualifying of the material that ultimately will go into patients.
So, I think that there are few opportunities for missteps. I mean, the work's got to be done and obviously we have to do it well, but we think that we're in a good position to do that, but we're not running a steeplechase here. This is well tried territory and we've started the process. So, we feel pretty good about that IND guidance that we've given based on what we know today.
Thanks, that's helpful. And the second question, that's a bit more high level. So given some of the developments in the TTR market over the past year, such as a approval of [indiscernible] and TTR cardiomyopathy and other competitors entering the clinic, I was just wondering, could we have your most recent thoughts on the market opportunity for TTR for gene editing, and which patients do you think could be best served by NTLA-2001?
Yes, I think that it's early days for the TTR market, and the modalities that have come into play are new ones for physicians. So, I think there is going to be a lot of physician education that takes place. This is a market as you know that will be developed over time. I think this is one of those instances where it may be good to come in a little after the market's been developed and not do all the hard work that I think some of the early innovators are encountering here.
But our view is that there is a large number of patients out there who will benefit from the approach. And the clinical program that we intend to put in place will address both polyneuropathy as well as cardiomyopathy, and it's our belief. And I think that it's the belief of the physicians we talked to and the other innovators that are out there, that as physicians think differently about heart failure in particular and start looking for those patients, there will be a substantial number of those patients that have been looked passed or not identified up until now.
So, we'll see. And obviously we follow this, but I wouldn't conclude anything from these early days other than there's more to learn. Just with respect to what the approach is good for with respect to patients, it's our belief that this is equally beneficial to patients with neuropathy or cardiomyopathy, because the ultimate therapeutic objective is to lower the protein levels and I think that's been well established by those that have gone before us.
So our clinical program is intended to study both those populations from the get go. And just to remind you, I think this is important to think about gene editing in general and the approach that we're taking. One advantage that I think will be life-long for these patients is that this is potentially curative therapy, certainly for some conditions and it's certainly the case that some patients may be treated with a single dose.
And over the course of years of therapy but other approaches, life-long steroids, the economics associate with that, we think that, there is an abiding advantage that will stand the test of time.
All right, great, thanks for taking our questions.
We will now move on to our next question from Geulah Livshits of Chardan. Please go ahead. Your line is open.
Good morning and thanks for taking my questions. So for the ATTR program, you touched a bit just now on the physician sentiment, can you give a little more color on any interactions you may have had with clinicians and potential study investigators in terms of what they are thinking and expectations for the potential trial? Then I have another followup.
Sure. Thanks, Geulah. We obviously talked to physicians. We want to understand what the unmet medical need is to make sure that we're designing a product that can address it. We started with that in mind. We've interacted with physicians, who are very familiar with the current modalities. We've talked to patients -- I'm sorry, physicians, who take care of patients with the conditions. We met the patients themselves in many cases.
And uniformly what we hear is that there's opportunity to improve on the existing therapy, that patients have a strong interest in participating in clinical trials. And don't forget, this is - one thing I've learned from talking to some of the patients is that it is a genetic disease in some cases, patients are very interested and motivated in finding therapies that they believe could be potentially curative for other family members. So, we're not concerned that we're not going to be able to do a clinical trial or find patients. And as I said in my earlier comments with respect to the market, I think we're in the very early days of this developing.
Thanks for that. And then on the WT1 program, again, congrats on starting the PDX [ph] studies. So are these with a targeted insertion of the TCR into the track locus or are these with viral insertion? Again [indiscernible] last time also and will we see any data on the targeted insertion before the nomination of the clinical candidate or kind of what are the timelines around that? Thanks.
Geulah, I missed the first part of your -- I didn't hear the first part of your question. If you could just repeat it? I'm sorry. It was a little tough to hear.
No, Sorry about that. So the PDX studies that are now ongoing in the WT1 program, are these with targeted insertion of the TCR into the track locus or is this viral insertion of the TCR in line with the data that's been presented in the past?
I am not going to be able to answer for you today that question, because I want to make sure I have the correct information, so we can get a follow up to you. The important takeaway is that the ultimate development candidate will have targeted insertion in locus. It's this notion of essentially removing, what was the endogenous T cell receptor and then replacing it with a wild type T cell receptor that's been unmodified. There's no [indiscernible] enhancement. It's inserted in locus so that one can reconstitute all the physiology. AAV is certainly a way to do that and we've done that in our laboratories many times with high degrees of fidelity. There are other alternatives as well and when we get to the point of talking a little bit more about the characteristics of that development candidate we will go through all that data with you.
Okay, great. Thanks.
We will now move on to our next question from Steve Seedhouse of Raymond James. Please go ahead. Your line is open.
Good morning, thank you. I appreciate that the ongoing interference has no bearing on the R&D, until it is doing. Just given you are sufficiently capitalized right now and John, you mentioned it's basically all upside for your side in terms of the outcome of the case, but there is a pretty good increase in G&A this quarter, up 25% sequentially. So that's three small related questions. One, how much is the increase sequentially directly related to legal fees? Two, what percent of your current total G&A is related to legal fees or prosecution of IP? And three, regarding your guidance indicating cash to fund operations in the two half 21 [ph] how much is budgeted for legal fees in that guidance? Thanks.
Glenn, do you want to address…
Sure, yes. So, if you look at the quarter-over-quarter increase in G&A, we did indicate in the press release that a large majority of that was due to legal fees. We do have obviously the interference process going on. As you know, we also have, arbitration going on with Caribou, so those are things that are driving the expenses up this quarter.
In terms of the longer term view, we don't typically guide on the details of legal expenses, but we could go off line. We could discuss some of the - kind of the long range plans and what goes into the runway that we've got it to.
Okay, I'll follow up offline. Thanks.
We will now move on to our next question from Madhu Kumar of R.W Baird. Please go ahead. Your line is open.
Hey, guys, thanks for taking my questions, so I'll keep it pretty simple. How are you thinking about a clinical trial for NTLA-2001 in either ATTR polyneuropathy or cardiomyopathy? Like what are the kind of key considerations about patient population, trial design, that kind of thing?
Well, thanks Madhu.. The earliest consideration obviously is getting into the clinic and all of the focus is to do that. And we discussed with the FDA our initial clinical plans and that was part of our pre-IND meeting. So the program would begin with a fairly typical single ascending dose design. And then we're discussing options to come back and either re-dose or multi-dose to understand a little bit more about the best ways to administer the drug.
It's likely that the program would bifurcate into two parts or two separate indications, cardiomyopathy and polyneuropathy. And what's driving that in the FDA's mind is that the endpoints measured are not just protein levels, but the physical measurements that come with manifestations of the disease. So the details of how exactly we will carry out those studies lie ahead and that's work that we're doing with investigators that we talked to. Obviously, it's influenced by the regulatory input that we've gotten recently.
But I think that we're in a good position to be able to carry that out. One of the things that is attractive to us about TTR is that we know what the targets are physiologically with respect to TTR circulating proteins, and that will give us a very good read of where we are where we stand competitively. We've set the bar high. We want to represent a significant therapeutic advance for patients in addition to single dose and advantages that come with that, but we'd like to knock down TTR at least as far as the knockdown and hopefully somewhat more. We'll know that very early on. So, we'll make judgments based on how we prosecute the program based on some of that early Phase 1 data that starts to come in, so more to follow.
So then to follow up that, what do we know from, do you believe that the unpatrolled [ph] kind of preclinical and then kind of clinical program gives you a fair way to translate preclinical LNP based drug delivery to a clinical program such that, for example, your Phase 1 trial, year lowest dose and a dose escalation could be therapeutic?
I think that the preclinical work gives us a lot of information. Until we get into the clinic, we're not going to know exactly how valid all that information is, that's just the nature of the beast here. There's limitations until one starts to accumulate a database, but looking at what the competition has done, looking at what we've learned, going across cell types and across different species, we think we're going to have a pretty good idea of where we need to be.
And then obviously in a Phase 1 study, one begins at sub therapeutic levels. And that's part of the interesting design challenges here. How far away from therapeutic does one begin within the therapeutic index that we will establish with our tox work. So there are some choices that lie ahead, but our feeling right now and the work that we've done with advisors suggest that we'll have pretty good information to begin and of course, we'll see once the Phase 1 one trial begins.
Okay, thanks so much, John.
Yes, thanks for the question.
And moving on to our next question from [indiscernible] of BTIG. Please go ahead. Your line is open.
Hi, thanks for taking my questions. Just a, kind of high level one from me here, can you give an update around the status of the PH1 program? I think, when we talked last quarter, you presented data around two separate knockout targets, so I just wanted to see if any decision had been made there and what we could expect in terms of timing moving forward?
Yes. Thanks for the question and thanks for watching that work. We did present work at a scientific meeting showing that two different targets when knocked out individually produced reductions in oxide levels that would be expected to be therapeutic. And that work was done first as validation of the overall modular approach that we're taking. Remember that it goes back to why LNPs and how do we think about them. What we showed was that we could take essentially the same formulation, swap out a guy that's directed in a different target and with no additional manipulation, treat an animal and get a therapeutic effect.
So, we thought we showed that as we've shown with other targets that we've gone after. So that was important aspect of that. PH1 itself as a therapeutic target sits in the mix of choices that we have and it relates to a question that, we were asked earlier today. Where we go next is very much a function of the work we're doing with Regeneron. Obviously, there have been partners with Factor IX and have been deeply involved with that program. Their choices that they're going through as we further analyze that data and do additional experiments.
And then there's a whole set of different targets that lie between the knockouts that we've gotten reproducibility and across a variety of different targets, and now gene insertion on the other end. So, I think of those as the bookends of different genetic diseases in the liver. So, we've not made a final decision on PH1, but there are other choices that are competing with it and as we get the data to make that next choice, we expect to share that.
Great, thank you. And in a similar kind of manner here, just I think last quarter you talked about a 50/50 split between your in vivo program and your engineered cell therapy program. And going back to your point around all the considerations that go into how you think about prioritizing those programs. I guess what you see in terms of competition, especially within some of these hematological malignancies and how our competitors and other companies moving in their clinic, how is that informing your actions in terms of prioritizing these programs?
Yes, that is a very important question and one that we've been thinking about since the very beginning and it relates to the collaborations we struck and the choices we've made with collaborators as well as the modalities that we pursued. I mentioned earlier on the in vivo side that we didn't want to pursue a viral delivery approach because we thought the long-term sustainable advantages that come with a chemical delivery lipid nanoparticles were just too substantial to ignore. And so, we took that on as our challenge and have built an in vivo program around that.
Likewise, on the ex vivo side, we made the determination that CAR-T lymphocytes, although a lot of activity going on in that space four years ago when we were thinking about what to do, it was our belief and I think this is being borne out, that it's a very crowded, somewhat poorly differentiated space with a mortality that can address only a limited number of tumor types.
If one needs to have large proteins that mark cells on their surfaces, the set of tumors that one can go after with CAR-Ts is naturally limited and we see that. I mean, just look at the different antigens that people are pursuing. So, we set out and what we think is a much broader platform, which is TCRs and the decision we made was to use naturally occurring TCRs that were selected against proteins that are over expressed in different tumor types.
And that demonstrating activity in humans with that approach would open up a vast array of not only blood bone tumors, but solid tumors in any number of different epitopes that one could go after. So if we go back to the beginning here, in vivo, ex vivo, that's our full spectrum approach and this is about having lots of choices that we retain under our control. And secondly, designing programs so that there's nodes where we get a lot of data that determine what our next moves are.
We see those choices mounting here with excellent, excellent choices behind the doors that we're about to pass through. So, as this unfolds, obviously, we'll be talking about the paths that we're going to be doubling and tripling down on.
Perfect, thank you.
We will now take our final question from Tash Hasan of Roth Capital. Please go ahead, your line is open.
Hi, good morning, filling in for Tony Butler here. In light of your comment about Factor IX expression on nonhuman primates, when can we expect some detailed data if you -- I mean if you are able to speak about this, for example, which conference, that will be very helpful? Thanks.
Thanks for the question. I can't tell you yet which conference that will be, only because we don't have those plans in hand today. But there is a body of work that we're going through with Regeneron with respect to Factor IX. We first of all want to determine the levels and that they were sustainable. And as we've shared today, we've shown that now through two months of observation and in life [ph] phase, normal human levels were maintained.
We think that is very important, very exciting data. Further analysis of the animals themselves as a result of that insertion are underway, analysis of the protein, its behavior, et cetera is underway. And as we get that collected body of data in a more fulsome story, we intend to share it because we think it's state of the art and very, very exciting.
Thank you for taking my question.
At this time, it appears there are no further questions. I would like to turn the conference back to Lina, for any closing or additional remarks.
Thanks, John. And thank you all for joining today's call and for your continued interest in Intellia. We are excited by what's still to come in 2019 and look forward to updating you on our progress. Have a great day.
Ladies and gentlemen, this concludes today's conference call. Thanks for your participation, you may now disconnect.