Good morning. My name is Rachel, and I will be your conference operator today. Welcome to the Intellia Therapeutics Second Quarter 2020 Financial Results Conference Call. [Operator Instructions] Please be advised that this call is being recorded at the company's request.

At this time, I would like to turn it over To Lina Li, Associate Director of Investor Relations at Intellia. Please go ahead..

Thank you, operator. Good morning, everyone, and welcome to Intellia's Second Quarter 2020 Earnings Call. Today, we are coming to you from different locations, and we ask that you please bear with us in the event that we have any audio interruptions on the call.

Earlier this morning, we issued a press release outlining our progress this quarter and the topics we plan to discuss on today's call. This release can be found on the Investors and Media section of our website at intelliatx.com. This call is being broadcast 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 filings available at sec.gov for a discussion of potential risks and uncertainties.

All information presented on this call 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 Chief Executive Officer; Dr. Laura Sepp-Lorenzino, our Chief Scientific Officer; and Glenn Goddard, our Chief Financial Officer.

Following their prepared remarks, we will be open for Q&A. 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 for the second quarter of 2020. With that, let me turn the call over to our CEO.

John?.

the joint development of genome editing treatments for hemophilia A and B, extension of the collaboration term until April 2024 with the option for Regeneron to renew for up to 2 more years and granting Regeneron rights to develop products for additional in vivo liver targets and nonexclusive ex vivo for product and development rights for defined cell types.

In exchange, Regeneron made a $100 million payment, consisting of $70 million cash and a $30 million equity investment purchased at a 100% premium or per average price for the 30 days prior. This agreement builds on our existing collaboration and the progress we've made together to permanently introduce a gene that produces a normal human protein.

We were the first to demonstrate CRISPR-mediated target transgene insertion in the liver of nonhuman primates, also showing that this approach generated normal or above-normal levels, of circulating human Factor IX, the blood clotting protein that is missing or defective in hemophilia B patients.

With our approach, the goal is to restore function where the effect is durable and lifelong, not just for adults, but also for children, a group with high unmet needs. This work, we believe, will address the limitations that typify viral-based gene therapy where the gene is not permanently integrated into the cell.

As a result, it's lost in organs where the cell division levels are significant, which is undesirable in applications requiring long term durability. Now with our targeted stable gene insertion, we believe we will address the waning of effect that occurs with traditional gene therapy.

Our approach holds great potential for treating hemophilia and various other genetic diseases, which is especially important for those that manifest in childhood. We look forward to working closely with Regeneron on our joint hemophilia programs as well as progressing Intellia's wholly-owned targeted gene insertion programs.

With the upfront payment from the collaboration expansion, along with our recent financing, we're in a strong financial position. We have the financial resources to drive our lead programs to early clinical data.

This includes NTLA-2001 for ATTR as well as our wholly-owned programs, NTLA-5001, which is our TCR T cell therapy for the treatment of acute myeloid leukemia and NTLA-2002, our in vivo knockout program for the treatment of hereditary angioedema.

For both NTLA-5001 and NTLA-2002, IND-enabling work is ongoing, and we expect to submit a regulatory application for each in 2021. And we're well positioned to continue advancing our emerging pipeline and continuing to enhance our modular platform.

Despite the challenging backdrop of COVID-19, the first half of 2020 has been incredibly productive for our team. We've made tremendous progress, which builds on years of focus and commitment, and we have much still to look forward to in the second half of the year and beyond.

I'll now pass the call over to Laura, who will take us through our program update.

Laura?.

Thank you, John, and good morning, everyone. I'm happy to share additional details on our pipeline progress. Beginning with our lead program, NTLA-2001 is in development for ATTR, a progressive and fatal disease caused by the deposition and buildup of misfolded TTR protein in multiple organs.

People living with ATTR can have either the hereditary or wild-type form of the disease, which results in diverse disease manifestations, most commonly polyneuropathy and cardiomyopathy. NTLA-2001 applies our in vivo approach to knock out the TTR gene in the liver, which is a source of circulating TTR protein.

While approved chronic therapies for ATTR have clinically invalidated the rationale for knocking down TTR, there is still unmet need for this highly underdiagnosed condition. We believe NTLA-2001 has the potential to hold and possibly reverse the disease with a single course of treatment.

Moreover, based on our preclinical data, we believe it offers a differentiated profile, along with reduced treatment burden in contrast to currently available chronic therapies. As John shared, we recently submitted our first CTA for this program to the U.K 's health authority to begin our first-in-human study.

As part of our global development strategy, we're submitting additional regulatory applications to enable enrollment in multiple countries, and we're working closely with the leading ATTR treatment physicians to conduct this global Phase I study. This CTA in the U.K. is currently under regulatory and ethics committee review.

As NTLA-2001 is an advanced therapy medicinal product, this process could take up the 90-day statutory time line. Pending CTA authorization and subject to the impact of COVID-19, we remain on track to dose the first patient by year-end.

As previously shared, the Phase I trial will be a single ascending dose study in ATTR patients to assess the safety, tolerability and pharmacokinetics of NTLA-2001. Given the readily observable serum biomarker, we will also be able to assess pharmacodynamics by monitoring the decrease in circulating TTR protein levels.

As John noted, we plan to share more details about our Phase I study design upon regulatory authorization for our pioneering first-in-human study. Now moving on to NTLA-2002, our wholly-owned in vivo therapy in development for the treatment of hereditary angioedema, or HAE.

HAE is a rare genetic disease characterized by recurring painful and unpredictable edema, which can occur in any part of the body. For example, those suffering from HAE can die of asphyxiation due to airway obstruction.

For other acute and prophylactic therapies for HAE, the treatment-burden on patients is significant, and we believe there is room for additional clinical efficacy. Today, we're pleased to share updated data from an ongoing durability study in nonhuman primates.

Following a single dose, we continue to achieve sustained reduction in [indiscernible] protein and activity levels through 10 months. If translatable to patients, these reductions of up to approximately 90% are expected to be highly efficacious and durable in preventing HAE attacks.

IND-enabling activities are ongoing, and we're on track to submit a regulatory application for NTLA-2002 in the second half of 2021. Switching now to our ex vivo efforts in immuno-oncology. Here, we're using CRISPR as a tool to create engineered cell-based therapies.

We employ a unique TCR-based approach that we believe harnesses the full therapeutic potential of T cells to attack tumor cells to address a variety of cancers.

The key elements of our approach are the identification of higher VVT in naturally occurring TCR sourced directly from a healthy donor, coupled with our proprietary engineering process that allows us to introduce multiple sequential edits with high efficiency and precision.

Notably, we're capable of engineering T cells without introducing undesirable changes to their chromosomal architecture whilst we wire them with the functionalities required for efficient and durable antitumor activity.

As we presented at the American Society of Gene & Cell Therapy in May, our sequential editing approach achieved removal of endogenous TCRs from greater than 98% of all T cells.

To generate a homogeneous potent cell product with high antitumor activity, we essentially create a blind slate for the efficient insertion of the therapeutic TCR and reduce the risk of [indiscernible] in endogenous TCR.

Further, our engineered T cells carry favorable cell attributes, which include high viability, excellent expansion potential and a large proportion of memory T cells, which is a highly desired characteristic associated with prolonged T cell persistence.

Our proprietary process has already been applied to NTLA-5001, our engineered T cell therapy candidate targeting the Wilms' Tumor 1 or WT1 antigen. It also paves a way for us to introduce more complex edited T cells, including allogeneic T cells and T cells to overcome the barriers presented by the solid tumor microenvironment.

In the second presentation at ASGCT, our research collaborators at Ospedale San Raffaele showed preclinical in vivo data demonstrating the WT1-directed TCR T cells led to decreased AML tumor burden, substantiating the therapeutic potential of our engineered TCR T cell approach and NTLA-5001.

We're initially developing NTLA-5001 for the treatment of AML as WT1 is overexpressed in over 90% of AML patients regardless of driver mutations and disease subtypes.

Although treatment developed over the past several years has led to improved response rates in AML, long-lasting responses are infrequent, with overall 5-year survival remaining below 30%. Based on our preclinical data, we believe that NTLA-5001 could deliver a well-tolerated treatment that improves long-term outcomes for AML patients.

We continue to advance NTLA-5001 toward these tenets and remain on track to submit a regulatory application in the first half of next year. Finally, we continue to make significant progress across our platform and research programs.

This includes evaluating the same WT1-targeted TCR construct for potential use in multiple solid tumors, advancing our allogeneic platform and expanding our ex vivo capabilities with our recent license and collaboration agreements with TeneoBio and GEMoaB.

Regarding our in vivo research, we continue to advance the development of CRISPR-mediated targeted transgene insertion for our wholly-owned programs and in collaboration with Regeneron for hemophilia A and B. We believe our insertion technology offers a differentiated approach to traditional gene therapy, including the ability to intervene early.

Our broad platform innovations and expanded capabilities, both in vivo and ex vivo, will drive the next wave of differentiated clinical candidates. With that, I would like to now hand over the call to Glenn, who will provide an overview of our second quarter 2020 financial results..

Thank you, Laura, and good morning. I'll begin with a brief review of the financial terms of our expanded Regeneron collaboration. As John noted, Intellia received $100 million through a $70 million upfront payment and a $30 million equity investment at $32.42 per share.

We expect the majority of these proceeds to be deferred and recognized as revenue over the extended research collaboration term.

In addition, we remain eligible to receive up to $320 million in downstream milestones and royalty payments on any in vivo targets Regeneron independently develops as well as potential royalty payments on any ex vivo products commercialized.

In early June, we also raised an additional $115 million in gross proceeds from a public offering of common stock. Overall, we had a very productive quarter from a fundraising perspective, and Intellia is in a very strong financial position.

Our cash, cash equivalents and marketable securities were $436.8 million as of June 30, 2020, compared to $284.5 million as of December 31, 2019.

The increase was mainly driven by net proceeds of $122.4 million from financing activities and $100 million from the expanded Regeneron collaboration offset in part by cash used to fund our ongoing operations of approximately $86.5 million.

Our collaboration revenue increased by $5.1 to $16.3 million during the second quarter of 2020 compared to $11.1 million during the second quarter of 2019. This increase in collaboration revenue was mainly driven by an $8.4 million onetime cumulative catch-up adjustment related to the expanded Regeneron collaboration.

Our R&D expenses increased by approximately $12.3 million to $37.8 million during the second quarter of 2020 compared to $25.5 million during the second quarter of 2019.

The increase was driven by IND-enabling activities related to our lead programs, research personnel growth to support these programs as well as the expansion of our development organization. Our G&A expenses decreased by $1.6 million to $11.5 million during the second quarter of 2020 compared to $13.1 million during the second quarter of 2019.

This decrease was mainly driven by reduced legal expenses. Finally, we expect our cash balance to fund our operating plans through at least the next 24 months. And now I will turn the call back over to John to briefly summarize our upcoming milestones and corporate updates..

Thanks, Glenn and Laura, for the updates. We continue to make rapid progress across our pipeline to develop treatments for severe genetic diseases in cancer, highlighted by our first regulatory submission for NTLA-2001.

With the expansion of our Regeneron partnership, we continue to advance our targeted insertion capabilities and are well capitalized to progress our wholly-owned and partnered programs towards the clinic. Looking ahead to the balance of 2020 and beyond, we have several milestones upcoming as we look to carry this momentum forward.

In summary, for NTLA-2001, pending regulatory authorization and subject to COVID-19 impact, we expect to dose our first ATTR patient by year-end. And for NTLA-5001 and NTLA-2002, we continue to advance IND-enabling activities and anticipate submitting a regulatory application for each program next year.

Again, I'd like to thank you all for tuning into the call today. We will now open the line to any questions.

Operator?.

[Operator Instructions]. Your first question comes from Maury Raycroft from Jefferies..

Congrats on the milestone today. Great to see that. I'm wondering if you could provide more details on plans for submitting additional regulatory applications in different countries and just anything additional on the global strategy, including the total number of sites..

Maury, it's John. Thanks for the question. Obviously, we're very excited with that beginning, and this is obviously a milestone for the company. We're beginning in the U.K., and we do have plans that are actively underway, as we speak, submitting to other countries.

We're not going to disclose which those are today, but we'll be in a position as this unfolds to give you updates.

And as we've said, when we're in a position of having a final approved protocol, we'll go through all the details of that, so people understanding exactly patient populations, how we're going to proceed in that protocol and how we would share information as we proceed.

So a lot to do yet, but we are very, very excited that we'll be in the clinic this year and should be dosing patients before the end of 2020..

Got it. Okay. And it seems like you're not providing much more on the trial plan, including patient types that you're going to go after.

But maybe around the application submission, can you say whether we should expect that to come through within 90 days? Or do you think it would be sooner than 90 days? I guess can you give any more perspective on when you submit it?.

Yes, it's hard for me to predict exactly the day that we will have approval. The U.K. has its own statutory guidelines in terms of the progression of the review. We're into the review. And there are different twists and turns that it can take, it's a little hard for me to project. It's a little different from the way things are done at the FDA.

The way we're thinking about it is there's plenty of time to complete the review and move into patients and dose them. So when we have that final information, we will go through all the questions that you and others have about patient population and so on and so forth. So it's just -- it's a little premature to do it at this point..

Got it. Understood. And I had a question on WT1 as well. Just wondering if you can provide more perspective into what you're evaluating and some of the gating factors for your decision to pursue solid tumors with WT1..

Yes. In a nutshell, I'd say it this way, there's 2 aspects to that program. And for the listeners, just to remind everybody, WT1 is an attractive target, especially for AML, but it does apply to a variety of different solid tumors. We've focused our work on AML thus far. We've been characterizing different solid tumors.

We believe that there will be a set of them that WT1 in the current format will be applicable for. But right now, the focus is to get up and running for AML and have the solid tumors progress shortly thereafter. So as we finalize our plans in terms of exactly which tumor types, we'll share that in upcoming months, Maury..

Got it. And last quick question. Just wondering if you can provide any more specifics or anything on timing for the agreements with TeneoBio and GEMoaB..

The way we think about those 2 companies is that they really expand our platform capabilities. You may know that they have some very innovative approaches with respect to targeting moieties and interchangeability of them that can be put on lymphocytes.

So as we look down the road and think about the TCR work we're doing, and then going in addition to that and beyond that and even thinking about some of the autoimmune type diseases, we think that kind of functionality is going to be really important for those efforts.

So we'll leave the deal specifics out, but it's an early research collaboration that we're quite excited about at this point..

The next question comes from Gena Wang from Barclays..

This is David Dai on for Gena. And I want to add my congrats on the current progress. My first question is on the ATTR program.

So if you're planning for a dosing by year-end this year, would it be fair to assume that you will -- we will see data early next year?.

It's hard to schedule exactly when data will come out because it's going to be tied to enrollment of patients, adequate observation and our overall philosophy of having information that's going to be meaningful and generally applicable to the work.

And I'd just remind you, David, that the trial, it's a single ascending dose study, where one begins within a therapeutic window but probably on the lower end of that, and we do some dose finding. So the particular dose that gives us the most relevant clinical information is something that will unfold during the course of the trial.

But yes, we expect to get that information and do it so as efficiently as possible. And when we have it in hand at the appropriate time, we'll disclose it most likely in a medical meeting..

Got it. Very helpful. So same questions on the collaboration with Novartis for the sickle cell disease.

Can you just provide some more color on the targets? How do you see your platform differentiate from other CRISPR-based approaches? And then when should we expect an update from the program?.

Thank you for the question. Just to remind everyone, we had a research collaboration with Novartis. Out of that work is a merchant development candidate which Novartis controls and speaks for. So in terms of updates, specifics of the targets, the clinical trial and its progression, that is for Novartis to say.

I know there's some information that's been posted on ClinicalTrials.gov, and I would direct you there for some of that early information, but Intellia is not going to be in a position to characterize that further..

The next question comes from Madhu Kumar from R.W. Baird..

So related to the CTA filing in the U.K., what have you learned from earlier gene editing in regulatory filings to the U.K.

like [indiscernible] hemophilia B trial, like what are the considerations you have for that regulatory submission to kind of make things go smoothly based on kind of previous history?.

We've interacted with a variety of regulatory agencies, Madhu. And there's a lot of enthusiasm for gene-based clinical activity, and so that's been really heartening and exciting.

In the case of the U.K., we've been really impressed for how they think about this and the integrated approach that they have across many levels of their health care system and government for trying to facilitate this work. So we were enthusiastic about working with them because we thought we could get clinical work done very, very efficiently.

We've interacted with investigators there. We've certainly interacted with the health care authorities, looking ahead to the sort of format they wanted, and we tried to characterize that for them in the best possible way. So we think we have a very strong filing, and it's under review now.

So as it unfolds, we'll react if they have questions, but they're experienced, and I think they know very clearly what they want..

And then while you obviously are going to give more details about the trial when kind of you get regulatory clearance, kind of in broad strokes, how do you guys think about kind of the ongoing COVID pandemic in the implementation of the clinical trial? Like is it really gearing towards home visits getting away from kind of hospital visits, if at all possible? Like how are you thinking of playing around that, kind of, those eventualities?.

Yes. Thanks for the question. And I think we all know COVID is a reality that we have to be mindful of.

In a first-in-human study, there's a necessary confinement period where patients needs to be in the clinic, and I think we're somewhat advantaged in that our trial is beginning after some of these approaches have been worked out by people that have gone before us and some of the local actions that need to be taken with the sites that we're working with.

We've tried to make provisions for virtual assessments and to the extent possible, distant monitoring of patients. But there is a phase where it's absolutely necessary that patients who are in the trial will have to come into the clinic, and that's unavoidable.

But I think that that's realistically not going to be an impediment to enrolling this trial. It's a small trial. It's first-in-human, and we're looking for some very intensive information early on, so we can make decisions about how to progress to Phase II and pivotal work thereafter. So I think we'll be in pretty good shape, Madhu..

Your next question comes from Steve Seedhouse from Raymond James..

This is Timur Ivannikov on for Steve Seedhouse. And our first question is to follow-up in your filing.

So John, could you talk about why you decided to file with MHRA first versus other agencies? And was that the thinking for a while or is there any recent changes due to COVID or other considerations?.

Yes. Thanks for the question. COVID really is secondary to our considerations in terms of the particular set of agencies to work with. We've invested a fair amount of time over the last couple of years getting to know regulators, especially in countries where these sorts of patients are more prevalent.

And as I said in response to one of the earlier questions, there are certain agencies that are very familiar with gene-based medicine, enthusiastic about advancing it very efficiently. Some of the countries have central referral centers with single investigators that are service catchment for an entire country.

So when you take all of the considerations together, MHRA emerged as -- MHRA in the U.K., frankly, emerged as a very attractive site to include in our trial, it's not going to be the only site. There are other agencies in countries that meet those criteria as well.

But it’s a place to get going and to collect clinical trial information very, very efficiently. We thought it was a great way to begin..

Okay. Got it. And a few questions about your Regeneron deal update. So it looks like hemophilia A and B appears to be the lead assets in the deal.

And so did you partner this asset because the field has gotten more competitive? And could you remind us whether you have animal data incurring longer term durability of gene editing versus gene therapies?.

Yes. So two parts to your question, durability and why to partner it. Remember that the Regeneron deal has two parts. The earlier stage, going back 2016, which has had a very extensive collaboration phase to it; and hemophilia B was already in that particular collaboration.

We presented data with Regeneron elsewhere showing the progress that we've made with targeted transgene insertion. And not only the extent of Factor IX levels that are produced but some of the information in durability as well.

So this seemed like a natural extension of work that we have done together where we could build on the foundation of science that we have built together by bringing Factor VIII into it.

Now it is true that there's a fair amount of competition in the hemophilia space, but our thesis starts with the notion that to prevail in the end by having the single best option for patients, it's important to have a stable transgene that's integrated and the problem somewhat declined with the time.

And when you think of what hemophilia is, a disease that begins in childhood, it really limits where gene-based therapy -- typical gene therapy gets delivered by a virus is able to go.

And so by having a stably introduced transgene and ultimately delivering it in childhood, we think that, that is the single best solution for the disease and would be superior to the other options that are available.

Now with respect to durability, other work that we've done, some of which is a provocative testing of hepatic turnover, shows that we would anticipate durability would be essentially lifelong. And we think that, that is a key advantage for our particular approach. So we think we've got a lot to offer in this space and are progressing rapidly..

Okay. And we do have one more quick question.

So have you seen -- recently, we've seen success of mRNA-based COVID-19 vaccines that use LNP encapsulation? And since you also use that in your programs, could you see yourself perhaps going into the development of RNA-based therapeutics without Cas9 or maybe even licensing out your LNP technology?.

So if I could change the verb in your question from could we see to could we imagine ourselves, it's possible to imagine that because your thesis is right. Some of the underlying technologies are the same.

However, the way we set the company up as we looked at applying that technology to the disease, we thought that others were further along and that we would not have the same sorts of advantages to offer to the public in a sufficiently rapid pace to compete.

And thus, we decided to focus on what we're best at, and that's the pipeline that we're talking about..

[Operator Instructions]. Your next question comes from Jay Olson from Oppenheimer..

Congrats on all the progress. Based on the evolving treatment landscape in ATTR, all the approved treatments and those in development, you spoke about unmet needs. So I was wondering if you could outline the key unmet needs that you hope to address specifically with your 2001 program..

Right. We think that the product offers some highly differentiated advantages for patients with TTR starting with the extent of the effect that we believe that we're going to be able to achieve if we can extrapolate the work that we've done in animals to humans, which we're on the verge of learning if that's possible on this new clinical work.

I would not underestimate the importance of a single application or a so-called one and done where a patient can avoid lifelong applications of whatever other modality that's being provided, including some of the concomitant medications that are provided.

I think that we're going to be in position where have an advantageous economic offering that lies ahead that we can compete with those agents that are out there. I think it's possible to imagine even combined deals, if that's appropriate.

So while it's clear that progress has been made in TTR, we're still waiting for medications that reverse the course of the disease and we're anxious to find out if our offering will be able to do that..

Great. That's super helpful. And then at ASGCT, you mentioned you can activate both the CD8 T cells and CD4 T cells. I was wondering for your 5001 program, if you could provide some insights into how you've achieved that type of differentiation over other T cell therapies..

I would say that that's a function of the quality of the editing that we've been able to do, the high levels of transduction that gets in all of the cell types and some of the specifics that are related to the T cell receptor itself.

It's an added advantage to the program, and it's something that we were delighted to see in our work, and we would expect that, that will only help the efficacy of the program going forward.

So I think just stepping back from what we're doing here, it's -- and we're talking about with respect to this particular program, it's a testimony to the quality of the science and the high levels of editing and gene transduction that we're able to achieve, and I think that's going to play out in many other aspects of the program as it unfolds..

I'll now hand back to Lina Li for closing remarks..

Thank you all for joining today's call and for your continued interest and support. We look forward to updating you on our progress. Hope everyone has a nice day..

Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect..