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Greetings and welcome to Viridian Therapeutics Third Quarter 2022 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, John Jordan, Vice President of Investor Relations. Please, go ahead.

Thank you, Brock. Good morning, everyone, and welcome to the Viridian conference call to discuss the positive clinical data report earlier today for VRDN-001 in patients with Thyroid Eye Disease. Before we begin, I'd like to remind everyone that this conference call and webcast will contain forward-looking statements about the company. These statements are subject to risks and uncertainties that could cause actual results to differ. Please note that these forward-looking statements reflect our opinions only as of today. Except as required by law, we specifically disclaim any obligation to update or revise these forward-looking statements in light of new information or future events. Factors that could cause actual results or outcomes to differ materially from those expressed in or implied by such forward-looking statements are discussed in greater detail in our most recent filings on Form 10-K and 10-Q and other reports on file with the SEC. I'm joined today by Dr. Jonathan Violin, President and CEO; Dr. Barrett Katz, our Chief Medical Officer; and Kristian Humer, our Chief Financial Officer and Chief Business Officer. I would now like to turn the call over to Jonathan.

Thanks, John, and good morning, everyone. Thanks for joining us. Over the last quarter, Viridian continued to execute on all pillars of our strategy, designed to deliver the most complete portfolio of products for the treatment of Thyroid Eye Disease across the world. TED, as you know, is currently a $2 billion market in just the United States and is expected to grow to over $4 billion globally, with just one product currently approved. We're advancing a portfolio of intravenous and subcutaneous programs towards this opportunity. For our IV VRDN-001 program, we're excited to share positive results from our second proof-of-concept cohort. Data will review today for 20 mg per kg confirm the profile we initially presented for 10 mg per kg a few months ago. The data compares favorably to TEPE

Thank you, John. This cohort like the 10-milligram per kilogram cohort for which we announced data in August, enrolled eight patients, six randomized to receive two infusions of VRDN-001, three weeks apart, two patients randomized to receive placebo. We measure safety, tolerability and efficacy at baseline and at six weeks. Let's start with the baseline patient characteristics and epidemiology which have been very similar across drug and placebo groups, across our trials and the Tepezza Phase 2 and Phase 3 trials, with similar levels of baseline proptosis, CAS scores and rates of diplopia. As you saw in our press release this morning, we are pleased to announce data, from our 20-milligram per kilogram cohort after the last patient's six-week visit, but last week and the data further validates the efficacy of VRDN-001 and its rapid and clinically meaningful effects. I'd like to start with an overview of the data. We'll review the data from today's 20-milligram per kilogram cohort as well as the data for all patients treated with VRDN-001 in the 10-milligram and 20-milligram per kilogram cohorts. I'm encouraged to see the reproducibility of our findings. VRDN-001 performs at least as well as Tepezza at the six-week time point, with robust and consistent results on every single measure, nearly doubling the overall response rate of Tepezza our 75%, 44% for Tepezza. We saw 75% proptosis responder rate, defined as at least a two-millimeter change from baseline proptosis versus about 56% for Tepezza. We saw a larger mean change of proptosis from baseline. We saw almost three times, the proportion of patients achieving a CAS of zero or 1 a complete or near complete therapeutic effect and double the mean change from baseline CAS 4.0 versus 2.1, similar in both cohorts. We saw more than double the rate of patients with complete resolution of their diplopia our, is 75% Tepezza 36%. These results speak for themselves. VRDN-001 is a highly active drug and compares favorably with Tepezza, the only approved drug. Let me review the data in detail. One of the key things we were seeking to learn from the 20-milligram per kilogram cohort is, if the 10-milligram per kilogram maximized activity, as we expected from the PK and PD data. And as we expected the results are highly consistent between both cohorts. When we look at the individual patient proptosis responses on the left panel, the magnitude of improvement is distributed similarly for the two doses. Majority of patients in each dose cohort had a proptosis response of at least two-millimeter reduction from baseline. Further, we observed a similar trend for individual CAS responses, shown in the middle panel. Every VRDN-001 treated patient had a CAS reduction of at least two points from baseline with the depth of the improvements again, distributed similarly between the two doses. Likewise, the IGF-1 increases, as in healthy volunteers which we presented at the American Thyroid Association Annual Meeting last month. IGF-1 increases in TED patients treated with 10 and 20-milligram of VRDN-001 and they're no different from each other. Taken together, the clinical activity data and the IGF-1 data confirm that VRDN-001 dose of 10 milligrams per kilogram achieved maximum clinical activity. This data confirms our choice of 10 milligrams per kilogram as our go-forward dose for our Phase 3 THRIVE program, which is underway. Let's review the proptosis results. We've evaluated proptosis by both PI administered Hertel exophthalmometry. We have also evaluated proptosis by a more objective orbital MRI, which is read centrally in a blinded fashion by two independent masked readers. This is important because while the Hertel is robust and reliable for studies with large sample sizes, it is a manually applied and read device prone to variability as seen in the literature. In a smaller study such as our proof-of-concept cohorts, it's useful to have a second independent and confirmatory measurement of proptosis such as MRI scans, which have been of course used to assess TED patients. Thus we set out to implement a robust MRI analysis with a centrally read blinded review. For our study, MRI readers were trained and screened for test we test reliability. Images were read independently by two masked readers who use imaging software to measure the distance between the lateral orbital rim and the anterior definition of the eyeball. As you can see on this slide, as of today we have centrally read MRI data available for all four placebo patients and nine of 12 drug-treated patients. The results are highly instructive and exciting. Here on the left, we show individual patient changes in proptosis as measured by MRI and you can see all four placebo patients had little change, actually three of the four placebo patients had slight increases in proptosis from baseline. Now if you look at the teal VRDN-001 bars, you can see the majority of VRDN-001 treated patients had proptosis reductions of two to six millimeters. Each of these were also responders by exophthalmometry. We found that two placebo patients and one VRDN-001 patients were proptosis responders by exophthalmometry, but the response was not confirmed by MRI. Shown in the middle panel in the four placebo patients, proptosis by centrally read MRI slightly worsened at week six, an average increase of 0.3 millimeters. In the nine drug-treated patients for whom we have MRI data, proptosis improved on average by a reduction of 2.75 millimeters from baseline. This is a remarkable reduction in proptosis after just two doses of VRDN-001. As shown on the right path, the proptosis changes observed by exophthalmometry when adjusted by excluding the responders who are not confirmed by MRI, showed a 0.5-millimeter reduction in the placebo arm and a 2.05 millimeter reduction for VRDN-001, reinforcing the treatment benefit of VRDN-001 by two independent measures of proptosis, exophthalmometry and MRI. To put the VRDN-001 proptosis response in context, we can compare it to the mean change from baseline proptosis for Tepezza at week six in their Phase 2 and 3 trials, which was 1.8 and 1.9 versus 2.04 millimeters for all VRDN-001 treated patients. Proptosis responder rate defined as the percentage of patients who have at least a two-millimeter change from baseline proptosis is shown on the right at week six. 75% of patients who received VRDN-001 were proptosis responders compared to 55% and 56% for Tepezza in their Phase 2 and 3 study. Let's turn now to Clinical Activity Score or CAS, which is a seven-point composite scale of assessments of patient experience pain, redness and swelling. We observed a 4.0-point improvement from baseline CAS, after VRDN-001 treatment far exceeding the placebo response. Given this rapid and sizable change in mean CAS, it's not surprising to observe so many subjects with near total reduction in inflammatory science and symptoms defined as achieving a CAS of zero or one. 58% of VRDN-001 patients met this criteria, one placebo patient did. Indeed two-third, of drug-treated patients had a four-point or greater reduction in CAS. No placebo patient did. Comparing the effects of VRDN-001 on CAS, with the data seen for Tepezza, we see that the four -point mean change we observed for VRDN-001, compares favorably to the effects reported for Tepezza. And for our subjects treated with VRDN-001, the percent achieving complete or near complete therapeutic response is 2.5 to threefold higher than that seen with Tepezza. So we've seen dramatic improvements in both proptosis and CAS. What about the combination, the overall response analysis? This is a more stringent assessment of efficacy, as it includes proptosis improvement, but also includes both signs and symptoms of TED that are most bothersome to patients. An overall responder is defined as one who has, at least a 2-millimeter reduction from baseline proptosis and at least a two-point change in Clinical Activity Score. As you can see, 75% of our subjects were overall responders, nine of 12 patients that has showed a clinically meaningful improvement in proptosis along with at least a two-point reduction of CAS, while only one of the placebo subjects exhibited this combined change. Our overall responder rate compares favorably to data for Phase 2 and Phase 3 trials of Tepezza, which demonstrated overall responder rates of 46% and 44%, respectively. Finally, let's turn to diplopia, the double vision that is perhaps the most disruptive and distressing symptom for TED patients. Similar to the Tepezza trials, about two-third of patients had diplopia at baseline. And for those that do, the most important results and the most stringent endpoint is complete resolution, the complete alleviation of that double vision. Following VRDN-001 treatment, 75% of patients with baseline diplopia, experienced complete resolution. Six of eight patients with baseline diplopia, demonstrated complete resolution of their double vision after about two infusions of VRDN-001. This is more than double the rate, observed in either Tepezza Phase 2 or Phase 3 trial. We've just shown compelling improvement in proptosis, CAS and diplopia, often with complete or near complete resolution of the signs and symptoms of TED. Now let's review, safety and tolerability. There were no reports of hearing loss, drug-related hyperglycemia or infusion reactions in the 20-milligram, per kilogram cohort and all AEs were mild or severe. Some of the known on-target IGF-1R affects were observed as expected. We saw two cases in muscle spasm both mild, did not require intervention. In fact, one was considered unrelated to drug by the masked investigator. When we look across the safety and tolerability profile of both cohorts, we're very pleased at the encouraging profile and we look forward to collecting more safety data in our Phase 3 program. I'll now turn the presentation over to Jon.

Thank you, Barrett. As you heard for every relevant measure, and in particular for the more stringent measures, we consistently observed signals, at least as strong as we reported for TEPE

Thank you, John, and good morning, everyone. I'd like to give a brief summary of our Q3 earnings. Cash, cash equivalents and short-term investments were $431 million as of September 30, 2022, compared with $197 million as of December 31, 2021. We believe that our current cash, cash equivalents and short-term investments excluding our $75 million credit facility will be sufficient to fund our operations into the second half of 2025. As of September 30, 2022, Viridian had approximately 56.2 million shares of common stock outstanding on an as converted basis, which included 40.2 million shares of common stock outstanding on an aggregate of approximately 16 million shares of common stock issuable upon the conversion of 188,000 and 51,000 shares of Series A and Series B preferred stock respectively. Please refer to our earnings press release for a more detailed Q3 financial update. With that, we can open the call up for Q&A.

Thank you. [Operator Instructions] Our first question today comes from Rami Katkhuda of LifeSci Capital. Please proceed with your question.

Hey, guys, congrats on the updates, and thanks for taking my questions. A couple of quick ones for me. First, can you provide more color on the discrepancy in the percent of patients who achieve a CAS of zero or one between the 10 and 20 mg per kg cohorts?

Sure. Thanks, Rami. Hi. So first of all, as you saw both cohorts had a percentage of patients achieving that CAS of zero or one higher than either of TEPE

Got it. Makes sense. And then, can you touch upon, if we've seen variability in proptosis change with the Hertel exophthalmometer in other studies?

Sure. Yes. So the TEPE

Makes a lot of sense. Congrats, again, guys.

Thank you.

The next question is from Gavin Clark-Gartner of Evercore ISI. Please proceed with your question.

Great. Thanks for taking my questions. So I had two. First, is there any scenario where you would consider adding a weekly dosing cohort for the subcutaneous TED proof-of-concept trial, which, I guess, can be viewed, likely end up?

So based on what we know of the performance of VRDN-001, the half-life we've seen for VRDN-002, we're really confident in the every-other-week dosing paradigm. Really the question is, can we get to even less frequent than every other week? And we'll learn about that with the upcoming three mg per kg cohort. If that shows positive data, then we'll know that lower doses, lower exposures are required and hence we can spread out the dosing paradigm. So really we're looking at already in hand having every other week. And the question is, can we get to every four weeks.

Yes. I got it. And then, one on the commercial side. Do you know roughly what percent of covered lives have site of care restrictions for TEPE

We actually don't have that information now, as you can imagine, we're ramping up a large amount of commercial work, given the very strong data we reported in August and now again today. So you'll be hearing a lot more from us on the commercial front going forward.

Sounds great. Thanks.

The next question is from Thomas Smith of SVB Securities. Please proceed with your question.

Hey, guys. Good morning. Congrats on the data. And thanks for taking our questions. And I guess, just first on the 20 mg per kg data for clarification. I know, it's a small number of patients, but can you clarify what the mean proptosis reduction was in the placebo patients with this updated data set?

So the mean proptosis, when we exclude the patients that we couldn't confirm by MRI, the mean change was an improvement of 0.5 millimeter, very consistent with what was seen in the TEPE

Okay. And then thinking forward here to the 3mg/kg data set, can you talk about I guess your expectations for efficacy there? Are you expecting roughly equivalent efficacy based on what you've seen on the PD effect in healthy volunteers, or should we be expecting a moderation in efficacy with the lower dosing?

Yes. So the pharmacodynamic measurements, the increases in plasma IGF-1 that we reported for healthy volunteers in August does suggest that there's a full receptor engagement systemically. So while we can't draw a direct line between systemic target engagement and efficacy, I'd say it's a strong hypothesis that we will see robust efficacy at 3mg/kg. The question is what does it mean for us, right? The -- where we think the 10mg/kg dose for VRDN-001 is the right dose to carry forward in Phase 3, depth balances perspective, potential benefit and risk. So that's why we're moving that forward in Phase 3. What the 10mg/kg data will do again is really inform what we think we'll be able to achieve with a subcutaneous product. Is it going to be every two weeks, which would be commercially compelling or even better at once a month or maybe even longer.

Okay. Got it. And then just maybe lastly, I know when you have the 10mg/kg top-line data you were able to give a little bit of color on the safety and tolerability you were seeing in the 20mg cohort. I guess, what can you say about the ongoing 3mg/kg cohort at this point? Any color on safety or tolerability?

We haven't seen any data from that cohort safety otherwise. The only thing I can say is that there have been no SAEs reported. That's all we know so far.

Okay. Got it. Thanks guys. Appreciate you taking the questions and congrats on the data.

Thanks, Tom.

The next question is from Laura Chico of Wedbush Securities. Please proceed with your question.

Hi. Good morning, guys. Thanks for taking my questions. I guess, I had one on safety and then one related to the Phase 3 study. So first could you offer any additional color on the hyperglycemia event in the 20mg/kg cohort? And just -- was this exacerbated in response to treatment? Maybe how high did glucose levels increase? Apologies if I missed that earlier.

Sure. I'll ask Barrett to comment on that kg.

Thanks, Laura. Because we wanted to study the same population, the Horizon study, we allowed for the enrollment of patients with known diabetes and known glucose intolerance. In this cohort, we actually enrolled a patient with known by diabetes and let's just say less than elegant diabetes management. The patient came in with known hyperglycemia on an oral agent for their control. Back for a minute there what's the hallmark of diabetes? The hallmark of diabetes is glycemic variability. This patient during their time with us showed some variability of their glucose measures. The investigator who was masked was following and taken care of this patient and felt that that variability was entirely consistent with the underlying disease of the diabetes and the expected variability of glucose levels, which as you know are influenced by what the patient eats when they eat it times between meals. And so the PI made the decision that any change in this variability and bouncing around of glucose in this known diabetic was in fact due to the disease itself and not drug related.

That's super helpful. Thank you, Barrett. Maybe one follow-up question then. I think Jonathan you mentioned you completed the Type C meeting with FDA around the Phase 3 design. I just wanted to confirm then no comparison to active drug would be required. And then related to the current THRIVE design where you've got the five cycle and the eight cycle course arms would you anticipate the potential for hearing impairment might diminish over a shorter infusion cycle? Thanks, guys.

Sure. Thanks, Laura. So correct the dosing -- the arms of the study that I described are what we're moving forward with and of course were discussed with the agency. So two active arms one placebo arm. With respect to the potential of this shorter course of treatment the answer is, yes. One of the reasons we're excited about this is not just that it's more convenient for patients and prescribers. There's potential that by limiting the duration of exposure to drug you might limit the incidence of adverse events. Now we don't know that. The adverse event profile that we've seen so far is extremely encouraging and we're excited to collect more safety data as we move in Phase III.

Thanks very much, guys.

The next question is from Kalpit Patel of B. Riley Securities. Please proceed with your question.

Yes, hey. Good morning. Thanks for taking the questions. On Slide 7, I guess John, do you have any thoughts on why the IGF-1 increases were lower for the 20-milligram per kilogram versus the 10? And also I think there's five patients worth of data instead of six. Was there anything about that one patient that was reported? Yes.

Great. Yes. So we have data from five patients because the IGF-1 data just takes a little while to come in. As you heard the last patient six-week visit was just last week. So we just don't have the IGF-1 data for that last patient yet. In terms of the levels of IGF-1 across the two cohorts, honestly we think they're quite similar. And you're right numerically they're a little lower. We've seen that before. But mechanistically, there's no basis for thinking there's anything different between these two cohorts. Once you get to full receptor occupancy, it should be maximizing the effects of the drug. And so that's why we think the conservative approach, the right way to look at this is to consider these two doses equivalent. And that's why we're discussing the data for all 12 patients.

Okay. Okay. And then I think you guided to choose either 002 or 003 for Phase III development by early 2024. Based on your timelines, I don't think you'll have any patient data for 003 by then. So I guess what gives you the confidence for selecting either of these candidates by early 2024?

Yes. Thank you. So keep in mind that VRDN-003 is the exact same antibody as 001 except for the half-life extension technology. And the way these antibodies work the variable domain drives target engagements and then these half-life extending modifications are in the Fc domain the other end of the antibody and they do not affect the antigen binding function of the antibody, which we've proven that with 001, 003. They bind the same affinity, drive the same receptor antagonism. So what that means is that 003 works just like 001 just with much better PK in nonhuman primates. And again, we're expecting a similar PK to VRDN-002 in humans. So the cool thing about that is that we can take the exposure response data from VRDN-001 and use that for VRDN-003. When we have PK from healthy volunteers, we'll have everything we need to know based on the 001-exposure response to pick doses for Phase III. So that's why this bake-off between 002 and 003 works so well. We'll have 002 proof-of-concept, we'll have its own PK/PD and then in parallel the healthy volunteer data for 003, which can leverage the 001-patient data set us up to make a very robust choice of which molecule was forward into Phase III and we'll be Phase III ready and ready to kick off pivotal studies early 2024.

Okay. Very helpful. Thanks for taking the question.

The next question is from Jason Butler of JMP Securities. Please proceed with your question.

Hi, thanks for taking the questions and let me add my congratulations on the data as well. I guess first, if you get to greater than every two weeks, i.e. every four weeks with 001, can you just talk about the overall product portfolio thinking about 002 and 003, and how commercially they would all fit together?

Sure. So, we're moving 001 forward as the IV product offering. When we talk about every two-week dosing, that's what we know we have in-hand already for 002 and 003. 001 might also work as a subcu. We'll learn about that with the three mg per kg cohort. But honestly, we want to bring the best product forward and the half-life extension is working so well that our subcu offering will be either 002 or 003, again as we just talked about, we'll take at the end of next year, which molecule moves forward. So that the portfolio we bring forward is 001 IV and then either 002 or 003 subcu. And because 002 and 003 are the only half-life extended antibodies in development and really seem to deliver an optimal profile for an IGF-1R antibody, we think those -- either one of those will be a best-in-class that's very hard to beat.

Great. And then, I think the answer is largely mechanistic. But, can you talk about now you have a larger sample size, the non-responders and if there's anything in -- about the baseline characteristics of those patients or anything that could help you target patients in the future?

Honestly, the results are so consistent. When we have a patient who doesn't reach responder status for proptosis, they're usually showing substantial changes in CAS or diplopia. So, we don't -- we haven't identified a true non-responder population. This drug works very well across the population of the smaller things are like about it.

Great. Thanks for taking the questions.

Thanks, Jason.

There are no additional questions at this time. I would like to turn the call back to Jonathan Violin for closing remarks.

Thank you. I'd like to thank the investigators, patients and Viridian employees, who have contributed to our programs. Our data provides an incredibly strong foundation to advance our programs rapidly and with purpose to create valuable new therapeutics for thyroid eye disease. And with that, we'll close the call. Thanks for joining us.