SLDB - NASDAQ

Ladies and gentlemen, thank you for standing by, and welcome to the Solid Biosciences Strategic Business Update and Financial Results Conference Call. [Operator Instructions] I would now like to hand the conference over to Caitlin Lowie, Vice President of Communications and Investor Relations at Solid Biosciences. Ms. Lowie, you may begin.

Good morning. Thank you, operator. Before we get started, I would like to remind everyone that during today’s conference call, we may make forward-looking statements, including statements about the company’s financial results, financial guidance, future business strategies and operations and product development and regulatory progress, including statements about the company’s IGNITE DMD clinical trial. Actual results could differ materially from those discussed in these forward-looking statements due to a number of important factors, including uncertainty inherent in the clinical development and regulatory process. The extent and duration of the impact of the COVID-19 pandemic and other risks described in the Risk Factors section of our most recently filed annual report on Form 10-K and other periodic reports filed with the SEC. We undertake no obligation to update any forward-looking statements after the date of this call. With me on today’s call are Ilan Ganot, Co-Founder, President and Chief Executive Officer of Solid Biosciences; Dr. Joel Schneider, our Chief Operating Officer; Dr. Carl Morris, our Chief Scientific Officer; and Dr. Roxana Donisa Dreghici, Senior Vice President and Head of Clinical Development. During today’s call; we will share details of the strategic update the company announced this morning. We’ll begin with opening remarks from Ilan, followed by Joel, who will share details of an intended change we’ll be making to the manufacturing approach for SGT-001. Carl will then review new preclinical data related to SGT-003. Finally, Ilan will provide an overview of the organizational strategy that aligns behind these 2 programs before opening the call to questions. Before I turn the call over to Ilan, I want to acknowledge that our first quarter financial results have been reported and can also be found on our Form 10-Q, which was filed with the SEC this morning. For opening remarks, I’d like to turn the call over to Solid’s CEO, Ilan Ganot. Ilan?

Thank you, Caitlin, and thanks to all of you for joining us this morning. Solid’s ongoing focus in Duchenne has produced 2 potential therapies for this devastating disease. And today, we will outline our strategy to continue development of our lead program, SGT-001, and for the potential benefit of SGT-003’s novel capsid to deliver our differentiated microdystrophin. This is all supported by a cash position of approximately $180 million at the end of the first quarter of 2022. The Board and Solid’s leadership team remain committed to the progress of both programs, and I’ll now summarize our path forward. First, following a thorough assessment of currently available alternatives for the manufacturing the SGT-001, where they decide a process that we believe will produce high-quality drug products while narrowing the organization’s focus to a single production platform and streamlining our operating structure to a more efficient model. Joel will discuss our refined strategy to advance SGT-001 into late-stage clinical development with transient transfection-based manufacturing. We believe this transition has minimal impact to our time lines for further development through to the potential BLA filing and improve our potential to make a difference for those living with Duchenne. Second, our next-generation capsid used in SGT-003 has the potential to offer significant advantages for Duchenne gene therapy as well as for the broader gene therapy field for muscle disorders. We will continue to advance towards an IND submission early 2023 and further derisk this program and the novel capsid. We expect the clinical proof of concept for SGT-003 in 2023 will provide further support of our next-generation capsid platform. As a result of the focused approach on these programs and Solid’s cash runway through Q2 2024, the company will be able to progress through important clinical milestones for both gene therapy programs. I will now hand it over to Joel to go through our SGT-001 update in more detail.

Thanks, Ilan. In March, we released an interim analysis, a functional and durability data from the first 3 patients dosed in the high-dose cohort 2 years after treatment with SGT-001 as part of the IGNITE DMD Phase I/II study. Across all measures, including motor function, pulmonary function and patient-reported outcome measures, patients are showing consistent durable improvements after dosing compared to expected declines in untreated patients. We also shared that patients recently dosed in the high-dose cohort demonstrated microdystrophin expression and localization at 90 days within the range of earlier patients in the high-dose cohort at the same period of time. And finally, all IGNITE DMD patients continue to do well with no long-term safety events. These data are important as they continue to support the potential that Solid’s nNOS-containing microdystrophin is providing durable benefits to patients and warrants further clinical development. We are now focusing on finalizing late-stage clinical and regulatory strategies, supported by a commercial scale manufacturing process. As part of our platform development efforts, we undertook a comprehensive analysis comparing transient and HSV-based manufacturing processes across a number of factors. We collected multiple data sets from different scales of manufacturing to help us compare the processes and to assess how they would scale for production. Overall, our analysis concluded that by developing SGT-001 and SGT-003 using transient production platforms, we believe we can achieve a high-quality and highly potent product demonstrating high levels of microdystrophin expression in both our in vitro and in vivo expression assays. We can improve our consistency in product supply yields and have access to a broader supply chain which is reflective of the adoption of this more commonly utilized manufacturing platform. The turnkey commercially scaled solution will allow us to ease our sole reliance on internal development and manufacturing operations. Organizationally, transitioning SGT-001 to a transient-based process will bring Solid under a single manufacturing methodology, allowing us to streamline our operations. Now I will walk through the next 12 months for SGT-001 as we look to resume dosing in the first half of 2023. Importantly, activities to transition to the new manufacturing process have already begun, with products expected to be available in early 2023, aligning well with our regulatory and clinical activities to support dosing patients. The transition to the new manufacturing process was a natural opportunity for us to pause and consider how to proceed with clinical development. As part of our strategy, we have decided to conclude enrollment in IGNITE DMD and moving forward, patients will be dosed using material from the new process, and we have already begun conversations with the FDA to determine the design of a future clinical study. In addition, we will be initiating a natural history study that will support future clinical activities, both for SGT-001 and SGT-003, helping us establish the risk benefit of our programs. There are a number of milestones over the next 12 months that we aim to communicate such as updates on our discussions with the FDA and additional data coming out of IGNITE DMD, including 1-year biopsy and functional analysis of all patients dosing the program as well as 3-year follow-up on functional data from patients 4 to 6. Now, I will turn the call over to Carl. Carl?

Thanks, Joel, and good morning, everyone. I’m pleased to be able to share new data coming out of our novel capsid library development program. Let me briefly review our SGT-003 program. This program utilizes a novel, rationally-designed capsid that has demonstrated improved muscle tropism compared to AAV9 and packages Solid’s differentiated nNOS binding domain-containing microdystrophin. This microdystrophin is the same that is used in SGT-001. And as Joel shared earlier, it has been shared to deliver durable and promising benefits to patients in the IGNITE DMD study. Over the last couple of years, we have shared a variety of data on SGT-003 and as summarized on this slide. After observing promising data in mouse and human Duchenne muscle cells. As shown on the left, we compare by distribution and microdystrophin expression in dystrophic mice of the novel capsid versus AAV9. Improved muscle tropism was observed within novel capsid that also resulted in [indiscernible] significant reduction in circulating creatine kinase levels for AAV9 as shown in the center of the slide. Additionally, we ran an in vivo study in wild-type mice to determine if we would see similar changes in the level of expression as seen in the MDX mice. For this study, we used reporter CMV luciferase construct. As you can see on the right-hand side of this page, we did observe increased expression in the wild type mice as well. And when analyzed, we found more target expression to the muscles with lower biodistribution and expression in the liver when compared to AAV9. After the promising results seen in human cells and the mouse studies, we wanted to flavor test the translatability of the increased muscle tropism in nonhuman primates as well as have an exploratory look at safety in larger animals. So earlier this year, we initiated the study using CMV luciferase [indiscernible] and dosed 8 cynomolgus monkeys. 4 of them, 2 male and 2 female, were dosed with reported construct using AAV9 while the other 4 were dosed with novel capsid being used in SGT-003. Our goal for the novel capsid program has been to see at least twofold improvement compared to AAV9 in biodistribution to skeletal and cardiac muscle. What we are highlighting here today is an increase in biodistribution greater than the goal of twofold improvement for both skeletal and cardiac tissue. We also see a promising twofold reduction in biodistribution to the liver. On the next slide, we similarly observed an increase in the luciferase expression as measured using the activity assay in both skeletal muscle and cardiac muscle with greater than tenfold improvements seen in both tissues. And consistent with the biodistribution results, we see decreased expression in the liver with the novel capsid. So overall, these results suggest we may be able to reduce the dose while maintaining expression when compared to AAV9. As we look to next steps for the program, we will continue R&D efforts on both the novel capsid and SGT-003 program for Duchenne using learnings and the promising clinical data from the SGT-001 program. For SGT-003, we are working closely with our manufacturing partner to have product [indiscernible] patient dosing. We are looking to engage with the FDA later this year regarding an IND submission we planned for early 2023. We are very optimistic about the potential that SGT-003 holds for patients. The preclinical data continues to suggest that we may be able to improve expression at a lower dose, therefore, reducing viral loads. We will continue to develop this next-generation capsid to the Duchenne patients with the SGT-003 program as well as potentially engage with companies developing gene therapies and other muscle-related disorders. With that, I will hand it back to Ilan.

Thank you, Carl, and thanks, Joel. We have a lot of work ahead of us, but we have focused our operations to support these 2 programs, which utilize a single manufacturing approach. That has allowed us to streamline our organization structure and reduce our headcount by approximately 35%, which enables us to extend our run rate into Q2 of 2024 and achieve important clinical milestones. And over the next 12 months, we will be sharing further data from long-term patient follow-ups an update on our regulatory interactions for both SGT-001 and SGT-003 and potential updates on SGT-001 CMC and clinical plans as well as SGT-003 IND filing, clinical trial and dosing plans. I also want to mention that as you may have seen in this morning’s press release, Joel will be leaving Solid. He has accepted an opportunity to become a CEO of an early-stage privately held gene therapy company. Joel will be staying on through the end of May. Before we open for questions, I want to take a moment to say thank you. First, I want to say thank you to all of some employees for their tireless efforts to bring our treatments to patients. To those who were unfortunately impacted by the strategic reorganization we announced today, I hope you know that your work has made a meaningful contribution to improving the lives of patients living with Duchenne. And for that, I’m deeply grateful. I also want to thank Joel for 8 years of service and commitment to service. Joel has been instrumental in building the company, the teams and the treatments that are being developed at Solid. I’m now speaking on behalf of everyone at Solid, when I thank Joel for his leadership, partnership and friendship and wish him success with this new chapter. Finally, I would like to extend a special thank you to the patients, families and physicians involved in IGNITE DMD, thanks to whom we are now in a position to move to the next phases of development. Thank you, again, for dialing in. We’ll take some questions now.

[Operator Instructions] We’ll take our first question from Gena Wang of Barclays.

Joel, congrats on your next journey, and we will certainly miss you. So I have 2 sets of questions. Maybe the first one is regarding the SGT-003, so you did show luciferase reporter gene data. Did you test the microdystrophin transgene in the new capsid? And based on the current data, what would be your initial thoughts regarding the Phase I dose range? Like will you be able to go down to the E12 range? My second question -- second set of questions is regarding the SGT-001. So now with the new trends in transaction-based outsourced manufacturing process. So do you need to do additional CMC or comparability study before you move forward to a pivotal study?

Great questions, Gena. I’ll have Carl take on the -003 and Joel will respond to the -001.

Yes. Thanks, Gena. It would be great to get down to E12, but I don’t think that’s possible. We are looking at doing it. We need -- still need to do a dose selection study. And so we hope to get drop the dose and so maybe get down by at least twofold. And that is what the goal of the program was always was to get a twofold difference versus AAV9. And so it appears that we’ve done that both in mice and monkeys. The second part of your question was around luciferase and first microdystrophin. We didn’t dose nonhuman primates with microdystrophin. We dosed them with luciferase but we did do mice and compared the luciferase and the microdystrophin. As luciferase has a little bit higher signal, but the microdystrophin in the mice was about threefold while the luciferase mice was tenfold. So we think we’re sort of in the right ballpark for the microdystrophin as well. Going into wild-type animals that already have dystrophin, it’s a bit problematic trying to administer the microdystrophin and evaluate levels, but this is good. We did it in wild-type mice as well with luciferase and it showed quite promising results there as well. So as a platform, we think this is sort of a really good first step for us.

I would just add, Gena, that we had a bunch of internal bars that we needed to cross to get excited about -003, and we crossed them and we are excited and we’re taking it into the clinic. And we think there’s a lot more potential outside of Duchenne, too. And hopefully, very soon, we will see them in patients and see how good it really is. Joel, do you want to cover the one?

Sure. Thanks, Gena, for the question. On comparability, of course, we have a lot of experience in demonstrating comparability between different manufacturing methods. In fact, we just recently accomplished that when we transitioned to our second-generation based HSV manufacturing approach. We’ve already begun to engage with regulators about the path towards dosing of patients with new process, and believe that the comparability will need to be demonstrated but that can be accomplished through analytical methods and perhaps some in vivo dosing to demonstrate comparability overall. But obviously, a lot of experience internally with how to demonstrate that comparability and feel confident that we can have a seamless transition between manufacturing methodologies.

Maybe I’ll add to this too that in the process of switching. We did a lot of analytical work. And so we are pretty confident that the new materials will qualify as good, if not better.

Your next question comes from Joseph Schwartz with SVB Securities.

And I’d like to also add my best wishes to Joel and his next endeavors. It sounds like you are satisfied that you understand how to best administer SGT-001 in a safe and effective manner now that you’ve wrapped up IGNITE. So I was wondering if you could summarize what the key features of the risk mitigation protocol are for ensuring that patients who receive SGT-001 can tolerate it optimally.

Joe, thank you for the question. Obviously, we completed enrollment. We have not wrapped up the study because we continue to monitor patients out to 5 years at least from dosing and with those 9 and have a number of other patients in the study. But I’ll have Roxana jump in a little bit on risk benefit and how we feel about moving forward in those things.

Thank you, Ilan. Yes, very good question. Thank you. We feel very confident in the risk-benefit profile of SGT-001 based on the 9 dose subjects to-date. Our 2-year results show that the patients are experiencing a sustained benefit across all the functional outcomes in terms of motor function, pulmonary and patient-reported outcomes. In terms of the risk mitigation strategy, we feel very confident that this is the right way forward. We are thinking about finalizing that risk mitigation strategy for the new material, so not maybe everything is going to say in place as it is right now. But as you know with previous updates, we’ve shared that we’ve optimized our eculizumab regimen, and we’ve definitely optimized our follow-up of the patients previous to infusion and after the infusion in the first couple of weeks to very close monitoring. So we’re, of course, assessing that, once again, to make sure that everything is still applicable for the new material.

Okay. And then what are the next steps for SGT-001 and when do you expect to get back in the clinic and what types of patients will you be focusing on enrolling in the next in the next study for -- 001? And have you scheduled an end of Phase II meeting with the FDA yet? Are you thinking about undertaking a Phase 3 at this juncture? Can you help us understand your strategy there?

Sure, Joe. I’ll take this. It’s a quick one. We’ve already started engaging with the regulators around the switch. We intend to have material ready to those patients with SGT-001 early in 2023, and all the aspects of the clinical trial design as well as the number of patients, [indiscernible] inclusion are being finalized.

Your next question comes Maury Raycroft with Jefferies.

For the new process besides the scaling and the streamlined process and transient transfection, are there any other fundamental changes we should be aware of?

Thanks, Maury. I’ll take this one. One key aspect this solution that we’ve identified for late-stage development of -001 is that it’s already at a -- what we would consider a Phase III appropriate and commercial scale. We’ve done extensive work internally on scaling agency process. And as we performed our comprehensive analysis between our internal process and external options, we did seek a process that was already sufficiently optimized for late-stage clinical entry and ultimately commercialization. And so we’re excited to be able to access that. A couple of other key aspects of this is that, of course, transient production is a very widely adopted manufacturing platform. And we think that this will enable us to have broader access to a much wider net of supply chain efforts or supply chain networks. It will also allow us to, we think, overall, improve our manufacturability of clinical supply. And so really, fundamentally, it’s the streamlining of our manufacturing [Technical Difficulty] unified behind a single platform for both gene therapy programs.

Got it. That’s helpful. And then just wondering if you can clarify what you mean by a new outsource process. I guess are there going to be new manufacturing collaborations on the horizon? And how much of a contribution does Forge Biologics have in the new process?

So we’re really excited about the work that Forge is doing for us on SGT-003, but simply for diversification purposes as well as the opportunity to work with a commercially scaled process, we are building a new relationship with a new vendor for the production of SGT-001 at those scales. On the aspect of -- sorry, actually, I’m blanking on the first part of the question.

Just -- I mean, you basically answered it. Just -- additional.

Yes, the differentiator there for us is that the HSV process is something that we’ve worked on extensively internally for the last for 6 or 7 years, we are excited to be leveraging external expertise and capabilities to rapidly integrate their expertise into our own around transient production. And so it’s really a notion of recognizing the incredible work that our internal teams have done to scale and optimize the HSV process, but recognizing that we can now relieve some of those bandwidth constraints by working with external parties, leveraging their proprietary manufacturing platforms, and really focus on bringing our therapy to patients.

[Operator Instructions] Your next question is from Allison Bratzel with Piper Sandler.

So first, just a couple of clarifications for me on IGNITE DMD. And apologies if you’ve covered these, I just want to make sure I’m clear. I guess how many total patients were -- did end up being dosed at IGNITE DMD? I think we know 9 were dosed as of November. So just confirming that that’s the total number of patients dosed. And then could you also clarify the cadence for data updates from those patients? I think the prior guidance was to disclose 12-month functional data from patient [indiscernible] by year-end ‘22. So I just want to make sure we should still be looking for that. And then just lastly for me, a clarification on -- just on the cash runway. I think the guidance is that you’ll have a runway through Q2 ‘24 through important clinical milestones. Could you just kind of outline the important clinical milestones we should be expecting between now and Q2 ‘24? And just what does that new cash run rate guidance assume for the start of pivotal work?

Let me try to wrap it all up in a quick answer. With these 9 patients, we were always going to adopt couple more. And with this switch, we decided to stop enrollment, evaluate the data and move to transfection starting early next year. We obviously continue to monitor all the patients that have been dosed. And yes, we will continue to provide additional clinical and biomarker data as it comes in during this year and probably in the future. We are very excited about the durability of the data that we’re seeing. We have biopsies out 2 years that are stable or actually increasing, and we have functional outcomes, especially looking at some of the physical measurements, respiratory measurement. There’s some pretty interesting observations there, but we continue to monitor and evaluate and measure and report. The runway will get us for the next 2 years, and a lot of clinical milestones on both programs.

Our next question comes from Anupam Rama with JP Morgan.

I have maybe just a broader strategic question in terms of you started dosing for -001 in 2023 and theoretically, your IND going for -003 early next year, and maybe you start dosing patients soon too. Like why not just prioritize one and maybe extend the cash way a little bit longer?

Good question, Anup, I mean I wouldn’t be surprised if it came up internally, too. We’re not in the business of shooting down things that work. We think -001 has got great data that supports continued development. I can tell you as somebody with some first-hand experience of this disease. I would love to see that -- touch more patients if possible. If -003 active in patients does show the same effect that we’ve seen in mice, that we’ve seen in monkeys now, certainly the expression levels and the biodistribution levels of the vector, then that’s a great finding. It’s a really exciting moment for not just Solid, but I think science and muscle diseases. And at that point, we can make different decisions than we do today. Right now, we are confident that both these programs deserve a day in the sun.