William Marshall - President & CEO Jason Leverone - CFO Paul Rubin - EVP of Research & Development Adam Levy - Cheif Business Officer.

Analysts:.

Good afternoon ladies and gentlemen, and welcome to the miRagen Therapeutics First Quarter 2017 Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I’d now like to turn the call over to [indiscernible], you may begin sir..

Thank you and good afternoon everyone. On the call today are miRagen’s President and Chief Executive Officer, Bill Marshall; Chief Financial Officer, Jason Leverone; Executive Vice President of Research and Development, Paul Rubin; and Chief Business Officer, Adam Levy.

Before we begin I would like to remind everyone that this conference call 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 opinion only as of the date of this call.

We will undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements in light of the new information or future events.

Factors that could cause actual results or outcomes to differ materially and those expressed in or applied by these forward-looking statements are discussed in greater detail in our most recent filings on Form 10-K and our other periodic reports on Form 10-Q and 8-K filed with the SEC.

I would now like to turn the call over to Bill Marshall, President and Chief Executive Officer of miRagen.

Bill?.

Thanks Luke. Good afternoon and thank you for joining us for our first quarter update and results conference call. This is the first quarterly conference call since our merger in public listing in February and they’re likely audience members joining us today who are new to the miRagen’s story.

For that reason I’d like to take just a few minutes to highlight the strategy and what we see as the potential value diverse of miRagen Therapeutics. miRagen is a clinical-stage focused on the discovery and development of innovative RNA-targeted therapies to address the needs of patients who lacked satisfactory treatment option.

We’ve specific focus on microRNA that are expressed that either abnormally high or abnormally low level and who dis-regulation contributes to disease. We believe that our approach to addressing regulated microRNA through inhibitors, antimiRs or synthetic replacement promiR is applicable to a variety of disease areas.

We’ve advanced our two lead programs into human clinical trials for oncology and pathological fibrosis and have several programs at pre-clinical developments. microRNAs are short RNA molecules that regulate the expression of gene networks and whose dis-regulation has been indicated in many disease phase.

Our team has made a number of scientific advancements kind of allowed us to validate the importance of pathological microRNA targets identifying characterized potentially safe and effective drug leads in pre-clinical models and then progress to first in human studies.

microRNAs have been indicated in multiple diseases and we believe that some of our drug candidates may be beneficial in multiple indications. For each of our clinical programs we’ve employed what we call a foothold progressive de-risking development strategy.

This means that we design early clinical trials that are focused on biomarker validation of the mechanism of drug action and [VAR] or genetically stratified disease. This foothold strategy is designed to potentially allow for a more rapid pathway to first approval.

Additionally, while we believe the drug candidate could provide benefit to patients with [VAR] disease proving the mechanism of action in the clinical disease phase can also provide evidence that this same product candidate may benefit patients in other expansion indication.

Well, phase-1 trials are primarily focused on assessing the safety and tolerability of the drug candidate and are understanding it’s pharmacokinetic behavior in men, we strive for much more about the drug candidate who are host to the exploratory end points.

We believe that first in human clinical studies designed to measure biomarker readouts drug action [indiscernible] the drug candidate and provide important insights that can help guide phase-2 clinical trial design and expanded indication trial.

We believe achievement of mechanism to the concept in phase-1 can help improve the probability of success in later clinical evaluation as well as providing guidance for appropriate dose ranges to the study both in the foothold indication as well as other potential expansion opportunities.

A lead to anti-cancer product candidate MRG-106 is an inhibitor of microRNA-155 and is currently in the phase-1 multiple [indiscernible] dose study in patients with Mycosis Fungoides.

Mycosis Fungoides or is the most common form of cutaneous T-cell lymphoma, a rare and sometimes deadly disease that in many cases causes painful disfiguring tumors on the skin. It is also a malady where we believe elevation of microRNA-155 may play an important role in the disease.

The primary objective to this phase-1 trial is to evaluate the safety and tolerability of MRG-106 true to our foothold strategy, there are also number of exploratory objectives in the trial based on biomarker and clinical evaluation that may offer some additional understanding of the potential clinical benefit to patient and in addition inform the design of subsequent trials.

Targeting of MF as a first indication is an example of our foothold strategy and action. MF can be a serious condition and there are no good solutions with acceptable safety profiles to offer these patients.

By gaining orphan drug designation for MRG-106 in MF we may benefit from a more efficient pass through the regulatory process and moving the product candidate into the hands of treating physicians.

We believe that the experience gained in developing MRG-106 or MF may allow us to develop MRG-106 and potentially other inhibitors microRNA-155 for additional indication. microRNA-155 over expression has been observed in other lymphomas, leukemia and solid tumors that may provide expansion indication opportunities for the product candidate.

We’re developing our other lead drug candidates MRG-201 to target pathological fibrosis. In the case of MRG-201, this is a synthetic replacement from microRNA-29 that mimics the activity of this microRNA.

MRG-201 is currently being evaluated and healthy volunteers for its ability to modulate fibrosis at the skin surface that has been induced through its surgical incision.

Again, the clinical trials primary endpoints are safety and tolerability we’ve designed the trial to measure exploratory biomarker driven endpoints that may help to validate the product candidates mechanism of actions in human because the pathway regulated by microRNA-29 is highly conserved in various forms of pathological fibrosis.

This mechanism proof of concept study in humans for MRG-201 may provide important information for the product candidate with respect to other potential indication.

Similar to MRG-106, MRG-201 is being evaluated in a phase-1 trial, if we can demonstrate the mechanism of action and safety of a synthetic analog microRNA-29 in this initial trial, we can be better informed to consider addressing pathologic by broader conditions where expression is abnormally low including coetaneous, pulmonary, [indiscernible], retinal, cardiac or renal fibrosis.

In addition to our internal clinical programs we’re developing a pipeline of pre-clinical candidates and may seek to partner some programs where it makes sense to the requirements for specialized expertise or the cost of a large outcome based clinical trials.

A great example of that effort was our strategic decision to work with [indiscernible] under a partnership that has been active for several years. Last week we announced an extension of that research collaboration which has been slated to end in October 2017 to now run through September 2019.

In addition microRNA-92 has been added to the existing collaboration as a new therapeutic target with the objective to start testing MRG-110 an inhibitor of this microRNA in human trials within a year.

MRG-110 inhibits the activity of microRNA-92 which has been shown to be a regulator of new blood vessel creation in pre-clinical models and reported in multiple peer reviewed scientific publications.

This may indicate that MRG-110 could be useful in the treatment of ischemic disease, cardiovascular disease and certain other vascular flow related diseases.

In addition although [indiscernible] has returned miRagen in the right, certain other pre-clinical programs, they have the option to add one additional microRNA target for research and development in the cardiovascular disease under this collaboration through September 2019.

Now before I hand the call to Jason for the financial update I’d like to quickly run through some of the key operational and clinical accomplishments since the beginning of the year. The first quarter and subsequent weeks were extremely active including these recent highlights.

In February we completed the merger that resulted in the listing of our stock on the NASDAC capital market. In March we announced interim results from our MRG-106 phase-1 clinical trial. MRG-106 has been generally safe and well tolerated in 18 of the 19 patients to receive the product candidate in our ongoing phase-1 clinical trial.

We observed biomarker changes that are consistent with the mechanism of drug action and early signs of clinical response in some patients. At the end of the first quarter 19 patients had enrolled in the trial and we anticipate presenting updated data from the trial at the 2017 meeting of the American Society of Clinical Oncology in June.

In April the U.S. FDA granted orphan drug designation to MRG-106 for the potential treatment of MF. We also provided interim results from our MRG-201 phase-1 clinical trial during the quarter and presented the results to the society for investigative dermatology annual meeting in April.

At the end of the first quarter 54 volunteers had enrolled in the trial, MRG201 has been generally safe and well tolerated in all volunteers who received MRG-201 with no significant injection side reaction. We’ve also observed biomarker that were consistent with the mechanism of drug action.

We expect to complete the trial in the second quarter of 2017 and present updated results at the scientific conference in the second half of this year. With that I’ll turn the call over to Jason Leverone, our Chief Financial Officer to summarize the financial results for the quarter.

Jason?.

Thanks Bill. I appreciate the opportunity to update everyone on our first quarter financial results for 2017. While I do so, I first want to comment on the merger and other financing related activities surrounding merger. As Bill mentioned we recently committed our merger with Signal Genetics.

The connection with the closing of the merger, our common stock again trading on the NASDAC capital market under the ticker symbol MGEN in February. Nearly prior to closing the merger we also completed a $40.7 million private placement with participation from both new and existing investors.

I believe this financing provided the resources necessary for us to reach important clinical milestones, we will need to raise additional capital in the future.

As such, and to further improve our financial flexibility, we file the shelf registration with the SEC minted into an aftermarket financing facility or ATM with Cowen and Company under which we may raise additional capital at some point over the next three years.

It is important to note that we have no obligation to make any sales under ATM and we have yet to make any sales under this facility. Turning now to our first quarter 2017 financial results. We ended the quarter with approximately $54.3 million in cash and cash equivalent which included net proceeds of $39.5 million from our private financing.

Our first quarter operating investing cash burn was $7 million, which included approximately $0.5 million in net recurring nonrecurring cash outflows related to the merger.

But we do not expect these one-time items in future quarters, we do anticipate that our average quarterly burn for the remainder of 2017 will be consistent with that at the first quarter as we continue to invest in our lead development program potentially expand their clinical obligation.

At this time, based on our current development activities, we believe our current resources will be sufficient to fund our planned operation through 2018. Moving now to operating expenses. Research and development expenses increased to $4.1 million for the first quarter of 2017 from $3.5 million for the first quarter of 2016.

Our research and development expenses increases and are expected to continue to increase as we continue to make investments to build out our R&D team and advance our clinical stage programs. General administrative expenses increased to $3.5 million for the first quarter of 2017 from $1 million for first quarter of 2016.

The increase in G&A expenses was due primarily to a combination of increased professional fees and expenses and higher personnel cost. Expenses related to the expansion of our team and operating as a public company are expected to continue as part of our core recurring G&A expenses.

However, merger related expenses which we estimate to be approximately $0.8 million during the first quarter of 2017 are not expected to recur. Finally, our first quarter of 2017, net loss was $7 million or $0.60 per share basic and deluded compared to $3.6 million or $5.58 per share for the first quarter of 2016.

A change in net loss for share was due the combination of an increase in our net loss during the first quarter of 2017 together with an increase in the weighted average shares used to compute net loss per share following the conversion of our preferred stock as a condition of and re prior to the merger.

Lastly, before I turn the call over, I like to comment on our partnership with Servier. As Will mentioned, we recently announced an extension of our collaboration with Servier through September 2019. Another partnership with Servier, we jointly perform research and development activities on targets of interest in cardiovascular disease.

miRagen retain all rights to product candidate to the United States and Japan. We are reimbursed for certain cost associated with research and development activity and we're eligible to receive milestone payments as well as royalties on that sales of license products commercialized by Servier.

With that, I'll ask the operator to open the call for questions.

Operator?.

Thank you. [Operator Instructions] Your first question will come from [Clutchy Gigory] with Wedbush Securities..

Yes, good afternoon. And thank you for taking my question. Just a few quick ones here.

Can you provide any additional details on the updated data that's people have been in that ASCO and also how that data or the data that you've collected so far help you design a future trials and other malignant? And lastly I guess is there any reason to believe that the state you demonstrated so far will not translate to patients with other types of cancer? Thank you..

Thanks, Clutchy. I appreciate the questions. The data that will present at ASCO will be data that we've generated now in IV dosing cohorts with the compound will be both presenting safety data as well as additional clinical response data.

In addition to that we'll be presenting some additional molecular data which really have to do with the sort of gene expression changes and drug quantities that we're observing.

As in regards to the sort of this lane basis for additional information and helping to foreshadow design and additional trials, our ability to really come back is if you remember in part A of the trial, we did some high dosing in locally in the tumor that then allowed us to really understand some nice mechanistic proof-of-concept data with the now systemic dosing and additional analysis tumors after systemic dosing.

We can really begin to zone in on the dose requirements as well as potential frequency of dosing and we believe that those would be translatable to multiple other indication. The final part about the safety profile really are I think the safety so far that we've reported is done pretty exceptional.

The primary or one of the reasons that we wanted to explore IV dosing was the ability to avoid the potential for hematomas with subcutaneous administration in other indication.

And I don’t have a real reason fact that the safety would be altered in other conditions however will be testing that obviously as we move forward into additional expansion indication. Add something to, sure? Paul, will just add something..

Just in addition, one of the things obviously you're looking at mechanistic related tolerability but you're also looking at just the general tolerability related to the fact that you're administering an hour ago. So, the fact that we've given now, dose is probably higher than any other power go has ever administrative.

We haven’t seen any of the typical pharmaco related side effects, I think that is extrapolatable to other indications. It is not mechanistic or disease-related, its --. So, I think that aspect of the safety should carry over to all the additional indications as well..

Alright, thank you..

Thank you..

[Operator Instructions] From [indiscernible]..

Hi guys, thanks for taking my question.

So, thinking about MRG-201, as you move in into keloid studies, what are the kind of endpoints you as you're looking at or are you using like POSAS or is there some other type of lesion assessment approach you guys are considering for keloids moving forward?.

Thanks Manjil, it's a great question. We're right now we're really finishing up analysis of the final cohort in the Phase 1 trial and healthy normal. So, as we induce fibrosis, we measure a variety of biomarker responses and we are also will measure histopathological effects then in a if extend both wound healing as well as reductions in fibroplasia.

I think an important part and again as we generate this data and really understand it better, we are then going to have a better view on more details around the design and what the Phase 2 keloid trial could look like.

And right now we're in discussions with a variety of KOL to really look at the type of measurement that maybe most efficient as well as design parameters that may allow for powering with a relatively efficient clinical trial.

So Paul, I don’t know if you have anything to add?.

Yes. One of the things that we will look and we spoke with a number of experts is to in our initial proof-of-concept is to find subgroups where there is a high rate of recurrence.

So, for example, if patients with frequent keloids have had revision and after revision they developed a second keloid, if you did a third revision, the chances of another recurrence are very high.

So, by increasing the potential recurrence rate that would definitely decrease the number of patients we would have to study in order to understand whether or not we had the effect.

So, there's a couple of models using that concept that we would consider and I think in any case, we'll be able to really prove the concept in the QA model without either a long or expensive or a very highly populated study..

Okay, great, thanks. And then thinking about MRG-106, I'm understanding that the federal strategy, how far do you think you go with 106 in mycosis fungoides and then if you're going like kind of full development of mycosis fungoides.

What stages and what line of treatment are you really looking at for microRNA inhibition in this setting?.

That's a great question.

We are committed to carrying forward the compounds long as we can bring benefit to the patients with the -- again in terms of the current studies have been done with a variety of patients either treatment naïve or those who have been treated with a variety of background therapies, the fact that we see some responses that don’t appear to be related to background therapies, leads us to believe that this could be an indication where we could move forward.

Then again the clinical synopsis is currently being worked on by the team here at mirage and we will be having discussions with the FDA to understand what the Phase 2 trials design would be..

Okay, great. Thanks for taking my questions..

Thank you..

[Operator Instructions] And we have no other questions at this time. I would like to turn the conference back over to management for any additional or concluding remark..

Great. Thank you, operator. I want to thank you all for your time today. I hope you gained some insight today and appreciate the exciting pace of activity in the first part of 2017. You may go without saying but the entire miRagen team is committed to consistently delivering on our commitment views investors.

And most importantly do those patients in need of new treatments. We look forward to keeping you informed as we execute against our strategic objective and timeline in the month in the year ahead. We also look forward to seeing many of you on the road and as we attend the upcoming UBS and Jefferies Investor Conferences this quarter.

In the meantime, please reach out to us if you have any additional question. Thank you and have a great afternoon..

Ladies and gentlemen, and this concludes today's presentation. We do thank everyone for your participation..