CRISPR Therapeutics' (CRSP) CEO Samarth Kulkarni on 4th Annual Evercore ISI HealthCONx Conference
CRISPR Therapeutics (NASDAQ:CRSP) 4th Annual Evercore ISI HealthCONx Conference December 1, 2021 12:35 PM ET
Company Participants
Samarth Kulkarni – Chief Executive Officer
Conference Call Participants
Liisa Bayko – Evercore ISI
Liisa Bayko
Hi, good afternoon. This is Liisa Bayko, biotech analyst at Evercore ISI. I’m very pleased to be joined today by one of the leading CRISPR companies, CRISPR. Today, we have CEO, Sam joining me to discuss the company’s suite of products. Sam, I just want start off by a broad question, CRISPR technology takes many forms and you’ve sort of chosen to start with sort of the CAR-T, and ex vivo sort of approaches. And then moving on to some other interesting sort of cell therapies, other people have gone different routes, like in vivo, for example. Can you discuss, why you decided to start in the way you did? And what’s your strategy in bringing CRISPR to market?
Samarth Kulkarni
Yeah, thanks for having us Liisa, and it’s always fun to be at this conference, which we’ve been doing for the last four years. I think it’s a space that’s evolving quite rapidly with CRISPR. I think when you back in the early 80s, when you saw companies go after antibodies, you had many different strategies that each company is spouse. And that was one of the big differences between success and failure is the way you build and shape your portfolio. Broadly early on, there was this question of ex vivo versus in vivo, and the two different approaches to use CRISPR. And we decided we wanted to play in both areas. The question was, how do you prioritize? And how do you move things first versus second?
And in terms of our strategy, what we want to do is, we operate in franchises and we want to actually make businesses that actually it becomes self-sustaining. We don’t want to be a company that’s constantly diluting, and raising funds. And with that sort of notion, what we’ve done is picked sickle cell and thalassemia where there’s tremendous data so far could be transformative for patients suffering from those diseases. And that’s something that we could file on our goal is to file end of next year.
So that becomes its own standalone franchise, where we continue to obviously make improvements, and develop next-gen versions of it. But there’s that one sort of thematic bet, which is sickle is the oldest known rare disease based on a single mutation in the world. We can cure it ex vivo using CRISPR. And that made sense to us. I think the next two bets, the other remaining three franchises for us, one is smart cells in oncology. Regenerative medicine, basically engineered cells for regenerating organs and in vivo approaches where we go on it for rare and common diseases by delivering CRISPR into the body directly.
And each of those have their different merits and demerits, and risks, but it makes sense from a company perspective to expand quite a bit of resources, and build competency in smart cells in cancer. If you ask me the big picture question, 60 years after we’ve declared the modern bone cancer, what is the most promising way of getting rid of cancers or curing cancers? I would argue with smart cells. People will say, well not there yet. There’s – right now, there’s a generally a market sort of view that’s of smart cells where it’s not as favorable as it was a year ago or maybe two years ago, but it’s, these things turn around and they go in cycles and there’s always ups and downs, but fundamental bet is smart engineered cells versus cancer. And I think we’re going to get there and that’s going to the best way to cure cancers.
And then the next bet is, there are several common diseases like diabetes. We can cure by essentially recreating organs. We’ve lived in the world where organ transplantation mainly has been based on pig organs or organs from cadavers, which are very difficult to obtain. Obviously there’s live donors like kidney donors and stuff like that. But if you can create organs, whether it’s kidneys, liver, pancreas, there’s a whole swath of diseases we can cure. And that’s a very powerful platform.
And then finally in vivo, CRISPR is working and that’s something that’s a big focus for us. And there’s at least half a dozen indications we’re working on there with both AAV and LMP approaches. So, if everything goes well for us I think, we’ve just this year activated our third franchise, which is Type 1 diabetes, and that’s in the clinic now. We’ve taken the first one to a point of maturity where we can file a BLA, the second franchise is starting pivotal trials. The third franchise is going into the clinic, and we’ll soon be in the clinic with in vivo approaches. I think that sort of continuum made sense to us from a de-risking standpoint to the platform, but also made sense from a business standpoint, in terms of our investments and thinking about the return on invested capital over the long run with the goal of becoming, a $75 billion, $100 billion company in the next five to seven years assuming these bets play out.
Liisa Bayko
So just I go through the portfolio was starting at the beginning with ex vivo, but just a couple questions here and there. How suddenly you’re going file at the end of next year? I know you’re trying to file as soon as possible, and I’m not quite sure exactly what FDA wants in terms of like number of patients and duration of follow up and all that kind of stuff. Is it still a moving target or has this been solidified?
Samarth Kulkarni
Yeah, I mean, both Vertex and us have said our goal is to file by the end of next year. And with the regulators, given the RMAT designation, we have a continuous set of meetings with them. They’ve been very supportive. We are converging on all the requirements, whether it’s clinical or nonclinical. See on the clinical side, really the big, the final piece of convergence is around exactly laying out the amount of follow up that we need for the patients. And how many patients are in the safety cohort.
On the nonclinical side. I think there’s, a whole host of requirements on the CMC front, which we feel confident we can get to. And I think we’re getting very close to getting to that sort of convergence point with the regulators, but our goal is to try and follow the end of next year.
Liisa Bayko
Okay, great. I have a couple commercial questions. So, I’ll just try to frame it up in one, like, first of all, is access. By access, I mean, like what’s the capacity in the system. This is a very involved procedure, as I look at stem cell transplant, there’s like 21,000 done per year in the U.S. So, how big is the capacity, and what’s the – are you concerned about patient access at all? Clearly it looks like it’s going to be a relatively expensive medicine. There’s no denying the medical benefit is huge, but I wonder about access and capacity on one hand.
And then on the other hand there’s a lot of competition coming behind you. Are there barriers there that are natural? I mean, this is a hostile based product. Should we think about that being a key barriers, your first to market? How do you kind of see the competitive landscape evolving? So sort of two questions there, but it really circles around this.
Samarth Kulkarni
Absolutely. I think the, the way this, the commercial side of this, the way sell a drug or bring this to market is different from pills or antibodies. You’re essentially bringing a procedure to patients, it’s more on the medical device realm to a certain extent of how you bring to market? How you ensure the sort of experience for the patient and the physician as they go through this procedure? And obviously the outcomes are the most important.
But as we think about it, there is capacity in the systems. I think, I don’t think we’re saying that we’re going to have 20,000 procedures in the year we launch, right. I think this is much smaller numbers initially, but you’ll have a lot of growth over time. Because as people see more, get more and more experience with procedures, you’ll see more physicians wanting to do it, and more patient to want to take the procedure. Similar to some of the more complicated medical procedures like the mitral valves or the valves that you insert through the portal vein or through hepatic arteries. Right?
So, I think you have non-invasive procedures for complicated procedure is like the heart procedures. And it took a while for the growth for every physician to accept that once they’re trained in that you saw a lot more volume. And there’s also second factor there was a great sense of loyalty to what they trained on. And I think once you start getting used to working with Vertex and us from a hospital and from a provider standpoint, I think it just becomes easier to stick with what you have, especially given the data that we have.
I think access, is always of consideration, I think for a therapy like this, it’s going to be high price at the beginning because, it’s very expensive to make these cells. There’s lots of supply chain involved. But the pharmacoeconomics case is very clear for not to mention the value you bring to these, especially patients that have been sort of ignored and a patient population that hasn’t been that’s mainly underserved. And when you think about the last 50 years of drug discovery and drug development. And I think the both sides of the aisle are going come together, I think to enable this from a government’s standpoint and the system will support something as revolutionary transformative as this.
So, we’re quite confident, obviously Vertex have a lot of experience in bringing these medicines to market. And we think this is something that the street probably under appreciates, the kind of value that this therapy can bring to patients and the value that can accrue to the companies that are commercializing it.
Last piece around the competition, I think obviously, I think they’re, once you see the data and you see good results, you end up with a lot of fast follower type concepts, but I think it’s very difficult. You saw that with biologics in general. I think it’s not that easy, especially with the bar that we’ve set to be a fast follower given that this is not a pill that’s dispensed to the pharmacy. So, I think, you’re going to see market share split. That’s similar to, again, medical devices where if you have an early mover advantage, I think it’s well, Bluebird and us will have that advantage in the mark around the market shares.
Liisa Bayko
Let’s turn to smart cells in cancer. You had a great sort of first allogeneic CAR-T against CD19, which is awesome. But the market seemed a bit disappointed. I feel like, maybe people wanted to see a little efficacy, I guess based on kind of what you’re seeing, where do you see a product like this fitting in? And again kind of the question about, where it fits in over the long-term, because we did count about a 100 programs, kind of looking, working on CD19. It’s just incredible the proliferation. So, when you see this kind of like fitting in?
Samarth Kulkarni
Yes, I think the market has a different way of looking at some of these data. And I think depending on the sentiment out there, you end up with rose color glasses or glasses that say that all data is bad. I think there’s, for me, what was really interesting was that a couple weeks after data disclosure, two, three weeks after data disclosure, we got the RMAT designation from the FDA. The FDA looking at all the data holistically in making their decisions and they don’t take the RMAT designation lightly. Similarly we’ve gotten a lot of support from the European regulators around our program.
And the issue is, I think right now a lot of the investors are looking at allogeneic data with the same lens that they used to look at autologous cell therapies and data. And that’s not the right lens. I think if you, one of the patients that were in our study who achieved a durable benefit was saying, gosh, I came into this study thinking, I have cancer, I’ve gone through all these therapies. I’m going to lose my hair. It’s going to be awful with GI effects and skin rashes and everything else I have to deal with, and that came in and this was a relatively benign therapy and my cancer’s gone.
And, I think that kind of profile where you have a very safe drug. And it’s very clear that if you have a reasonable tumor burden, but where it’s not very high and it’s not going, it’s not in progression mode that you can achieve cures. People kind of forget in the moment what’s been achieved here for the last 25 years. And I was at the University of Washington where there’s a lot of work being done 20 years ago around achieving universal cells and with a single dose of an allogeneic CAR-T, we’ve achieved a complete remission, durable complete remission in a patient.
And that’s a huge achievement for the fields, which in the moment is kind of lost, because you’re seeing, with complicated Excel models, comparing data X and data Y and, again, it, three years ago when we started the program, I was sitting having a cup of coffee at JPMorgan with the former CEO who said, if you get durable responses in allogeneic CAR-T that’s a Nobel prize winning endeavor, or you may take a couple Nobel prizes in fact, to get to that point. And here we are, we’ve shown that we can get durable, complete remissions with a single dose with allogeneic CAR-T, but I recognize what questions are coming up, which is there’s a lot of competition.
There are many different cell therapies out there. There are other modalities like biospecifics that are improving those autologous that continues to have, good data. And we recognize that, but if you can establish a safe, easy to dose convenient drug and get it approved, it’s only going to grow. And, when Tagrisso first got approved the market, what did the market do? Market was underestimated by an order of magnitude. And I think that’s, the way we see this, we see tremendous promise in the CD19 therapy in spite of the competition, because we’re ahead and we continue to make improvements and grow it into a drug that can be more than $1 billion drug.
And so we’re continue to invest in our smart cell, engineered cells thesis. We have our own manufacturing facility now. We’re going to make these CAR-Ts. And I think you’re going to continue to see good data, and improving data over time, as you put more of these therapies into clinical trials.
Liisa Bayko
Is that – is it read through from CTX110 to 120 with a BCMA CAR-T be curious on your thoughts have read through from this program to the next, what’s kind of value of a platform in a way?
Samarth Kulkarni
Yes. The main takeaway or lesson for us is you can redose safely and a consolidation dose can make the data better. I think, if you there’s ratio of E to T effector to tumor ratio, if you have more effector cells or more CAR-Ts compared the tumor surprise, the tumor is taken out and if there’s more tumor than the CAR-Ts can take out and the CAR-Ts get exhausted then they’re not completely eliminated. So they’re – with that notion in mind, if you have the first dose and you reduce the tumor burden significantly, and then you have come up with a second consolidation dose, I think you are going to get more patients into complete remission and durable, complete remission, hopefully.
So that’s the, the key carryover for us. There are a lot of other lessons, we have GEN2 and GEN3 versions of our CAR-Ts that we’re already working on. I think in those, in those GEN2, GEN3 versions, we have several more edits. We have edits against exhaustion, edits against for persistence and they’re bound to, more, very likely to be better in the first-gen. So, I think it’s only going to get better over time as we learn from the first trials.
Liisa Bayko
Cool. And what do you think about, how this to say kind of CAR NK in a way?
Samarth Kulkarni
Yes, I mean, CAR NKs are promising, obviously we have our Nkarta collaboration where we talk where we’re doing NK cells, CAR NK cells. And I think, our immune system uses all these redundant mechanisms to kill pathogens, right? If you got an infection, we have T cells, antibodies, NK cells all come into play. So, why not use more than one modality and especially if they’re safe. So, I think with our, the safety we’ve established with our allogeneic CAR-T and the fact that NK cells can be relatively safe, it lends itself to a combination essentially. And I think over time, I think you’re going to see both CAR-Ts and CAR NKs coming into play relative to as a better combination than say CAR NKs plus antibodies and other complicated regimens.
Liisa Bayko
We don’t have much time to talk about your CD70. But that’s coming soon and look forward to updates there on solid tumors that’ll be really interesting to see. Type 1 diabetes, I’m excited about that. And what you just started, clinical development, kind of, what should we expect to see as this kind of first patch of data unfold from this program? What are you hoping to learn?
Samarth Kulkarni
Yes, we’re very excited. I think, our goal was to get into the clinic this year. We’ve successfully done that with the Health Canada approval. We want to start dosing patients soon. And the key test for me is, I think looking at the cells a few months out to see what the edits we’ve done for making them stealth? What is the contribution of that? Are these cells truly stealth? Are they protected from the post immune system? As you know, in these trials, that we’re not immunosuppressing the patients. So, if we can get to insulin production, but make sure that the cells are stealth that is a big win.
And I think the latter part is more important for us, because the insulin production in response to glucose, we can tune, if it’s, we can always change how much insulin production there is with engineering. But I think with the stealth aspect, we’ve made a bet with the four edits that we have and making stealth, how much does that protect these cells from the immune system. And I think that would be a really good touch. I think if it, we already see some proof-of-concept with the vertex data in one patient of this notion of engineered cell. And I think this field is going to start burgeoning soon.
Liisa Bayko
It’s awesome. What – where are you putting the cells by the way?
Samarth Kulkarni
So the cells are put in a device, and the device is implanted typically in the flanks – of the patient. But depending on the patient, I think you put in different places, but typically in the flank, because you then want some vasculature and you want some perfusion of those devices.
Liisa Bayko
Okay. So just as we wrap here Sam, can you just walk us through 2022 from business perspective? What are kind of the, some of the key, kind of value inflection points from your perspective for the company?
Samarth Kulkarni
We’re very excited about 2022. I think we’ve achieved quite a bit in 2021, I think, stock market aside and share price. That’s one dimension, but I think from a fundamental standpoint, if you ask me standing – sitting here today versus last November, or last December, we’ve achieved quite a bit. We brought our Type 1 diabetes program to the clinic. We’re ready to kick off our pivotal trial with CD19. We’re getting that much closer to our BLA filing with 001. And we have a number of in vivo programs that have moved closer not to mention all the platform improvements we’ve done. We have our own base editors, our own insertion editors, new donor templates, small Cas9. We’ve made all this progress in all those fronts. And for 2022, I think it’ll be continuing set of catalysts.
I think we have our CD19 data, our 001 data, which is a continuation of the data we’ve shown you. But then, if CAR-T start working in solid tumors, that’s an incredible advance. I think in Type 1 diabetes, obviously, I think the it’s a pretty significant value driver for us if that starts working not to mention bringing some in vivo programs to the clinic at some point. So lots to look forward to. We feel very good about where we are and both from a capabilities standpoint and a programmatic standpoint, and we look forward to continue to give you updates.
Liisa Bayko
Awesome. Thanks so much Sam. Thanks everyone for joining. And have a good rest of your day. Bye-bye.
Question-and-Answer Session
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