Greetings, and welcome to the Viridian Therapeutics Fourth Quarter and Full Year 2021 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 call over to John Jordan, Vice President of Investor Relations and Corporate Communications. Thank you. You may begin..

Thank you, Daryl. Good morning, everyone, and welcome to our fourth quarter and full year conference call. Today, after the market closed, we issued a press release providing our fourth quarter and full year financial results and business updates.

A replay of today’s call will be available on the Investor Relations section of our website, one hour after the completion. After our prepared remarks, we will open the call for Q&A. Before we begin, I would 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 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 Jonathan Violin, President and CEO of Viridian..

The Phase 2 trial, the randomized portion of the Phase 3 trial and the open-label extension of the Phase 3 trial, in which placebo patients were crossed over to Tepezza.

In those three data sets, the mean change from baseline in proptosis at week six range from approximately 1.7 millimeters to 1.9 millimeters with a 95% confidence interval of approximately 1.4 to 2.3.

The data will also be complemented by diplopia assessments and clinical activity score, which like proptosis, reproducibly showed benefit at six weeks in the three Tepezza data sets.

We’ll also have top line safety and tolerability data and would anticipate sharing full data, including PK, PD and further measures of efficacy at a future medical meeting. Demonstrating that we have transformative efficacy similar to Tepezza would be significantly derisking for Viridian and put us in a position to be second to market.

The next goal will be to rapidly evaluate lower doses, potentially different dosing intervals to understand how much we can differentiate on 001 from Tepezza. And so as a reminder, this trial is designed to be flexible.

The protocol allows for enrolling additional TED patient cohorts in which we can evaluate different doses, dose intervals and a number of infusions. If we see positive results in the proof-of-concept cohorts, we’ll exposure efficacy at the lower dose.

This is an opportunity to differentiate 001 from Tepezza by dose and also could support our ability to achieve a low volume, subcutaneous injection. In parallel, we’re already preparing 001 for pivotal trials, including manufacturing material with commercial process. Pending positive proof-of-concept data, we anticipate advancing our program rapidly.

We intend to sprint to market with a differentiated 001 product profile. We think lower dose, fewer infusions and potentially different routes of administration will be a welcome advancement in treating TED. Let’s now turn to VRDN-002, our next-generation IGF-1R targeted program.

002 is a humanized monoclonal antibody that incorporates half-life extension technology and was designed by our scientists to support administration of the convenient low-volume subcutaneous injection for the treatment of TED.

This product presentation would maximize the settings of care, either at home, by patients via self-administration, or in the prescribing physician’s office. Data from preclinical and oncology studies showed us that across the IGF-1R class, while increasing target affinity may help lower dose, PK becomes limiting at low doses.

The 002 half-life extension works as we expect, it should be very hard for any antibody lacking half-life extension to get to a more convenient subcutaneous product. At the end of January, we announced the FDA acceptance of our IND application for VRDN-002.

We’re currently proceeding with our first-in-human Phase 1 clinical trial of 002, which is a single ascending dose study to explore safety, tolerability, pharmacokinetics and pharmacodynamics of intravenously administered VRDN-002 in healthy volunteers. We expect to announce data from this trial midyear.

The key outcome from this trial is to demonstrate how well the half-life extension technology improves PK, and these data will inform the feasibility of a low-volume subcu product.

Should we see positive results? We expect to have everything we need, including our high-concentration subcutaneous formulation of 150 mg per ml to rapidly advance to a subcutaneous proof-of-concept trial in TED patients.

With our 001 and 002 programs, we believe Viridian has an extremely compelling test pipeline with two differentiated shots on goal, both with the ability to move quickly into registration-enabling studies.

In addition to our efforts to create best in TED products in TED, we’re also expanding our pipeline by applying our strategy of discovering and developing more convenient, better-performing antibody products for indications in which proof of concept for a targeted mechanism of action already exists.

VRDN-004 targets a proven mechanism of action in a rare disease where we see opportunity to advance patient care and evolve the market with a new best-in-class entrant. Our antibody discovery and engineering team has generated and optimized promising lead antibodies, and we’re excited about this program.

We’ll disclose the target and indication when the time is right from a competitive perspective. VRDN-005 is a new discovery stage program, again, targeting opportunity we’ve identified to advance a new best-in-class therapeutic.

As part of this effort, we’ve licensed antibody libraries from Xencor, which we believe provide a high-quality starting point for our program. Like VRDN-004, we’ll disclose the targets and indications for this program when we think the time is right along with our broader pipeline strategy.

But for now, we’re committed and focused on the importance and sizable opportunity we have with our TED programs. Operationally, we’re very pleased with our progress over the last year.

We’re executing on the strategy we laid out when we became a publicly traded company and are grateful to our excellent and growing team and also to our external partners, the contract research organizations, key opinion leaders, advisers and, of course, volunteers and patients in our clinical studies, all who help us advance our mission to provide new and better antibody therapeutics to patients who deserve new options.

We look forward to another transformative year ahead for Viridian in 2022. I’ll now turn the call over to Kristian, who will discuss our financial results for the fourth quarter and full year ending 2021.

Kristian?.

Thank you, Jonathan. Good afternoon, everyone. We entered 2022 in a strong financial position. This year, we look to advance multiple programs in TED while expanding our discovery pipeline. We closed out 2021 with approximately $197 million in cash, cash equivalents and short-term investments as of December 31, 2021.

Our current cash, cash equivalents and short-term investments will be sufficient to fund operations into 2024. Turning to expenses, which we also summarized in the press release issued after market today.

We reported research and development expenses of $22.4 million for the quarter ended December 31, 2021 and $56.9 million for the year ended December 31, 2021, compared with $15.3 million and $28.3 million for the comparable periods in 2020.

The increase in research and development expenses was primarily driven by the advancement of our lead programs, including expenses related to manufacturing and IND-enabling studies.

General and administrative expenses were $6.9 million for the quarter ended December 31, 2021 and $25.8 million for the year ended December 31, 2021 compared with $5.5 million and $13.3 million for the comparable period in 2020.

The increase in G&A expenses last year was primarily due to increases in personnel-related costs, including severance, share-based compensation charges and consulting expenses.

Net loss was $28.9 million for the fourth quarter of 2021 and $79.4 million for the year ended December 31, 2021 compared to $90.7 million and $110.7 million for the comparable period last year.

As of December 31, 2021, Viridian had approximately 42.8 million shares of common stock outstanding on an as-converted basis, which included 23.9 million shares of common stock outstanding and approximately 18.9 million shares of common stock issuable upon the conversion of shares of Series A and Series B preferred stock.

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

Thank you. [Operator Instructions] Our first questions come from the line of Chris Howerton with Jefferies. Please proceed with your questions..

Great. Thank you so much for taking the questions and appreciate all the progress. So I guess maybe for me, a few questions.

One would be in the context of IV formulations what would be some of the differentiations that you think could be made in that setting for 001 relative to Tepezza? And for example, would less frequent IV infusions be important in that type of setting? Second question I would have would be, is the 002 data from the midyear going to be gating in any way to opening up new cohorts for the Phase 2 study with 001? And then the final question, if I may, was just if maybe without asking specifics, if there would be anything that would happen from competition, let’s say, from Horizon that would accelerate your strategy to go towards 002 versus no longer trying to evaluate 001?.

Thanks, Chris. Thanks. So with respect to the IV product now that fits against a subcu product, we actually see – having done a lot of market research and commercial forecasting, our revenue has been maximized by having both the IV and subcu. This is a big market. We believe it’s going to segment.

There are patients and prescribers who are going to prefer IV. Although in the long run, we do think that low volume subcu would be the biggest category in the market. And so we see a lot of value when we build through these programs forward. So with respect to the IV product, there are a number of ways that this could be interesting.

And keep in mind that the great majority of the market right now is like acute patients treated by the IV route, right? So this is a proven market now with we think room to grow as we segment it by bringing different products forward.

So with respect to IV, things like a lower dose, fewer infusions can really reduce what we think of as the overall burden of care on patients, right? Each trip to an infusion center adds to the total cost of care. It’s a hassle for patients.

And we also know that every infusion, particularly at a high dose is adding a lot of drug burden, right? And so if we can get to lower doses, there’s always the upside that maybe we’ll start to see better safety and tolerability. We don’t know. It’s something that we’re interested in, and we’ll collect data as we go. But this drug is always better.

And so if we can do that, we can have fewer infusions. We think there’s room for a compelling IV entrants. With respect to your question of is 002 data gating for what we’re going to do with 001. No, we’re going to move 001 forward as quickly as we can. And we don’t need to see the 002 data to make 001 decisions.

And the third question then, would we accelerate the VRDN-002. The 002 program should be able to move forward quite quickly.

Once we have this first-in-human data, understanding how well the half-life extension technologies improve the PK, once we have that half-life, we’ll be able to construct the dosing paradigm that we want to test in a subcu trial in TED patients. So 002 can move forward quite quickly on its own. So we’re really excited about both of these programs..

Yes. Maybe I set up a false choice there to some degree. Yes. Okay. That’s very clear. I appreciate it, Jonathan. And thanks for taking the questions..

Thank you. Our next questions come from the line of Thomas Smith with SVB Leerink. Please proceed with your questions..

Good afternoon. Thanks for taking the questions and congrats on all the progress. Just on the upcoming 001 proof-of-concept data.

Can you just remind us regionally where you’re enrolling the study? And then can you provide any additional color on where you are in terms of enrolling the first two cohorts?.

Yes. So as you heard, we reiterated our guidance for data in the second quarter. The study is enrolling in North America, to the U.S.

and Canada where we’re looking at a large number of sites, many of whom have experience in this space that have enrolled in thyroid eye disease, some of the top sites, some of the Tepezza studies and including, obviously, KOLs and investigators who know how to run these studies well and recruit patients.

So we’ve been very pleased, particularly as Barrett, our Chief Medical Officer, has been sharing our vision for both 001 and 002. We’ve seen a lot of enthusiasm for what we’re trying to do here. So we’ve been very pleased about how all that’s going..

Okay. And – maybe just a follow-up. On the competitive front, it sounds like Horizon is evaluating both Halozyme and non-Halozyme subcu formulations for Tepezza.

How are you thinking about competitive time lines, I guess, competitive profiles? And what are your current expectations in terms of when you think you’ll get your subcu to market versus Horizon?.

Right. So we’ve heard that Tepezza now is being formulated in high concentration. But let’s think about what that might mean, right? So Horizon’s published data suggesting that concentrations that necessitate 20 mg per kg dose and in the average-sized patient, that’s 1.5 grams for each dose.

So a good high concentration formulation would be, but what we’ve been able to do the 150 mg per mL. So that’s 10 mLs, right? So we’ll see what they’re planning. We’ve heard some comments from them about kind of middle of this decade having a BLA for a Halozyme-enabled subcu, which again would be a large volume.

We have not given guidance yet for late-stage development. But as you’ve heard, we’re designing both 001 and 002 programs to move very quickly and efficiently towards registration.

And given the opportunity we think we have with these molecules with higher affinity with hopefully better PK, we think we can get to a low volume, and that’s something pretty special on a compelling time line..

Okay. That makes sense. All right, guys, thanks for taking the questions. Appreciate it..

Thanks, Tom..

Thank you. Our next questions come from the line of Maneka Mirchandaney with Evercore ISI. Please proceed with your questions..

This is JP Solomon on for Maneka.

Just on 001, what would be a win for you in terms of the proptosis response to 12 weeks just since you’re not dosing all the way until then?.

So the question on a 12-week follow-up, right? So as we described, we’re mimicking the timing of Tepezza dosing through weeks dose on day zero, dose on day 21 and then measure efficacy at week six and day 42. We do have a six week follow-up point at week 12 without continuing the dosing giving those first two infusions.

So to do cross-trial comparisons, we can really only look at week six. The follow-up for week 12 is an interesting question, and we’ll start to inform the capacity that our drugs have to a lower dose or reduce infusion interval.

So what’s going to happen between week six and week 12, does that efficacy could be rebound, does it plateau? Or does it continue to improve? So that’s going to be really informative for us.

But it’s really the week six data that will through the cross trial comparison hopefully tell us, yes, we’ve got a highly active drug, immensely derisking for the company and put us in a really good place to move forward quickly..

Got it. Thank you so much..

Thank you. Our next questions come from the line of Rami Katkhuda with LifeSci Capital. Please proceed with your questions..

Hey, guys. Thanks for taking my questions. Two quick ones for me.

First, is there any additional guidance that you can provide as to when in Q2, we can expect the data from the proof-of-concept study with 001?.

Sure. Well, so as you heard, we did reiterate second quarter, as we’ve been saying for a while now. But look, it’s not going to be early in the second quarter. We just started the study in December. So everything is on track, but we would expect data more like in the second half of the second quarter.

So that we’re quite pleased with our progress is going..

Got you.

And then can you remind us of 001 and 002, kind of bind the same epitope of IGF-1R and if there’s any potential learnings from this proof of concept to 002 development?.

Yes. So when we look at tepro, the 001 and 002, the molecular pharmacology, the mechanism of action is highly concerned. So obviously, the same target. They all share an epitope. They all caused, for example, similar amounts of receptor internalization. They similarly block receptor autophosphorylation.

And we say similar mechanism of action that’s best of preclinical data that we refer to. So that gives us high confidence in 001 that it should deliver efficacy like Tepezza but we need to prove that, right? That’s why we’re running the proof-of-concept cohorts for 001 the way we are.

To very quickly answer that question, can we see strong robust efficacy in the hallmark of Tepezza with 001. If that data was positive, I would argue that we’ve proven that the benefits of Tepezza are generalizable. And I think that should read through to some extent to 002.

Now 002 is a different molecule so we’re not going to argue anything from a regulatory perspective, but it would certainly increase our confidence..

Makes a lot of sense. Thanks guys..

Thank you. Our next questions come from the line of Laura Chico with Wedbush. Please proceed with your questions..

Hey, good afternoon, guys. Thanks for making the time. I’ve got three for you. First, Jon, you mentioned the differentiation on the affinity between Tepezza and 001.

I’m wondering, could you clarify how you think about the differences in half-life between 001 and Tepezza?.

Sure. Well, if we look at non-human primates and oncology studies, the PK is very similar for 001 and Tepezza and that makes sense. They’re both unmodified IgG-1s. And so our expectation would be that in TED patients, likewise, that have a similar PK and so the difference for 001 is both the higher affinity and how we’re going to study it..

Okay. Great. One follow-up then, I guess I wanted to ask on the potential to demonstrate any separation from Tepezza on the adverse event profile in this first proof-of-concept study.

I guess, what duration of treatment would you need to see potentially to tease out differences on AEs and what areas would seem the most logical to see differentiation on? I guess there was a recent publication that detailed hearing dysfunction among tepro patients.

In a case studies report, this was still demonstrating about 10% continuing to have hearing loss at a longer-term follow-up..

Right. So keep in mind that we’re starting with small cohorts at Tepezza-like doses. And so our baseline expectation would be similar levels that they need. In fact, as we said, we’re sort of bracketing the Tepezza dose, right. The ultimate goal of the program is to get to lower doses.

So if we see Tepezza – the similar frequency AEs of TEPEZZA at 10 mg per kg, if they were a little higher at that 20 mg per kg dose, that’s fine, right. The goal is not to be commercialized at those doses. The goal of these proof-of-concept cohorts is as quickly as we can, prove to be a highly active drug entering.

From there, then the extension cohorts, we will be able to look at different doses, different dosing regimens to see if there’s an opportunity to have a – we’re describing as a less burdensome treatment paradigm, right, lower dose, lower number of fusions.

But the kind of differences in adverse event profiles that we’re interested in that we’re actually quite excited about. They’re only going to emerge over the long run. So the baseline we should expect similar rate of AEs with an upside over time as we collect data, maybe we’ll be able to see a lower rate or low severity of AEs..

Okay. That’s very helpful. And maybe last question for Kristian. How reflective of the forward spend or 4Q levels? I guess should we presume these are reasonable run rate to build off of in 2022 in terms of R&D and SG&A spend? Or were there any kind of onetime costs in the 4Q numbers that we should consider as we’re modeling forward estimates? Thanks..

No, these are reasonable rates to assume going forward. So as I mentioned, the spend would get us into 2024..

Thanks guys..

Thank you. Our next questions come from the line of Jason Butler with JMP Securities. Please proceed with your questions..

Hi, thanks for taking the question. Congrats on the progress. Just one on potential path to market for a subcu formulation of 001, is there a potential for a parallel path here and both in IV and subcu being included in the first BLA or is it more likely that if you advance to subcu 001, it would be a subsequent filing. Thanks..

Yes. Thanks, Jason. So we’ve not given any guidance at sort of later stage development. Honestly, we don’t want to tip our hand too soon. But between the high affinity of 001 and as we’ve said, we see a lot of value in IV, there’s an upside opportunity possibly for subcu.

But then with 002, with a half-life extension that we think should really differentiate the molecule’s performance from everything else in the class right now. That’s sort of the long-term win for subcu but exactly how we build out our portfolio, we’re excited about what we’re working on, so stay tuned..

Great.

And then how predictive were the preclinical PK data for TEPEZZA and for 001? And I guess, just how does that speak your confidence in the ultimate PK profile you’ll see for 002 based on the preclinical data you’ve already generated?.

Yes. So both tepro and 001 and really all the first-generation IGF-1R antibodies had very typical half-lives for an IgG-1 antibody, nothing stood out about them. So we don’t expect any strange finding.

With 002 and with half-life extension, there have been a number of examples now of these Fc modifications that increase antibody recycling, so they’re dumped back into the bloodstream rather than destroy it. Very reproducibly, module primate PK has translated to better PK in humans.

In fact, many of the precedent clinical programs showed a bigger increase in humans than they did in nonhuman primates. So it’s a highly validated technology. We’ve seen about a twofold improvement in half-life for 002 in nonhuman primates compared to 001 or tepro.

And we’d be looking to see that or better as a differentiated profile in our first-in-human study..

Great, thanks. Thanks for taking the questions..

Thank you. Our next questions come from the line of Michael Higgins with Ladenburg Thalmann. Please proceed with your questions..

Thanks guys for taking the questions. Just a follow-up on your comments. I think in your prepared remarks, Jonathan, about the market research on the IV and subcu, it’s intriguing that you’re finding the value for the IV, if you could expand on that a bit. Is that related to reimbursement? Is that related to the setting of the patients, I’m curious.

Thanks..

Yes, thanks Michael. Look, I think this market is bigger than people realized a few years ago. There are certainly other markets quite different in their own way, but that’s durably support different routes of administration, think about the multiple sclerosis market, right.

It’s just not the case that markets turned over fully from one dosing route to another. So IV obviously, is growing quickly. It’s going to be established treatment paradigm.

And while we do think that a low volume subcu better, it’s going to be easier for prescribers and the patients that the IV market is never going to go away even it is big enough, we think that there are interesting things to do there as well as bringing forward 001 to subcu..

Interesting. And then another question on the data we’re looking forward here in the back half of Q2. It sounds like we’re getting six and 12-week data from the first cohort. Just curious if you think we can get that 12-week data from the second quarter. Thanks..

Yes. I don’t know. That depends on timing and of course, what we want to hold back for a medical meeting. So we just don’t know yet. Obviously, we’re focused on the six-week endpoint.

That’s where I think everyone will do cross trial comparisons to ask is this delivering Tepezza like efficacy where – and again, we’ll have the proptosis measurement, but combining that with the clinical activity score, with diplopia double vision, we should have a very rich sense of how the drug is performing.

And so that six-week end point for us is really the key. And then as we talked about a few minutes ago, the 12-week follow-up, I think, is really interesting in terms of informing us what might be possible as we go into..

That’s helpful. And then just one last one, if I could here. It looks like the back half of the year, you’ve got a lot of data that’s come through and coming through. Just curious how – at this stage here in March, how much value you put on additional cohorts from 002 since it’s kind of a sequential or at least a delayed start from 001, of course.

If you continue to wait or you just simply pursue advancing 001? Thanks..

So the question is, would we wait for 002 data to continue advancing 001? Is that a question?.

Yes.

Basically, just wondering how far deep in the 002 cohorts do you go before deciding what to do with 001?.

Yes. As we talked about earlier, we think 001 has a lot of value quickly being the second entrant, we think we can do with [indiscernible] it’s really – so we’ll be moving 001 forward, assuming we have positive data as quickly as we can into demonstration. That’s not really dependent on 002.

The healthy volunteer data on 002 really is going to help define how we develop 002, right. Once we have the halfway, we understand how well the half-way technology is working, then we can construct subcu dosing paradigms that makes sense patients based on the data we already have PK models.

They’re going to continue to evolve as we have clinical data. And we’ll have everything else we need from a nonclinical CMC perspective to move into subcu proof-of-concept for 002. So we really see 001 and 002, moving forward in parallel..

That’s great. Super helpful. Thanks Jonathan..

Thanks Mike..

Thank you. There are no further questions at this time. I would now like to turn the call back over to Jonathan Violin for any closing comments..

Thank you, and thanks, everyone, for joining us today. As I hope you’ve heard, we are very excited about the ongoing progress we’re making across the pipeline and our upcoming milestones this year. So we will look forward to updating you as the programs advanced. And with that, we’ll close the call..

Thank you. This does conclude today’s teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day..