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Editas Medicine, Inc. (NASDAQ:EDIT)
Q3 2020 Earnings Call
Nov 5, 2020, 5:00 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good afternoon and welcome to Editas Medicine's third Quarter 2020 Conference Call. [Operator Instructions] There will be a question-and-answer session at the end of this call. [Operator Instructions]

I would now like to turn the call over to Mark Mullikin, Vice President of Finance and Investor Relations at Editas Medicine.

Mark J. Mullikin -- Vice President of Finance and Investor Relations

Thank you, operator. Good afternoon everyone and welcome to our 3rd quarter 2020 conference call. Earlier this afternoon, we issued a press release providing our financial results and corporate updates for the third quarter of 2020. A replay of today's call will be available on the Investors section of our website approximately two hours after its completion. After our prepared remarks, we will open the call for Q&A. As a reminder, various remarks that we make during this call about the Company's future expectatinos, plans, and prospects constitute forward-looking statements for purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995.

Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the Risk Factors section of our most recent quarterly report on Form 10-Q, which is on file with the SEC. In addition, any forward-looking statements represent our views only as of today, and should not be relied upon as representing our views as of any subsequent date. Except as required by law, we specifically disclaim any obligation to update or revise any forward-looking statements, even if our views change.

Now, I will turn the call over to our Chief Executive Officer, Cindy Collins.

Cynthia Collins -- President and Chief Executive Officer

Thank you, Mark. Good afternoon and thank you everyone for joining us for our corporate update call for the third quarter of 2020. In addition to Mark, I am joined by Charles Albright, our Chief Scientific Officer; and Michelle Robertson, our Chief Financial Officer. Our progress during the third quarter has laid an important foundation for the advancement of our best-in-class in vivo and ex vivo CRISPR medicine pipeline. We resumed dosing in the BRILLIANCE Phase 1/2 trial, the first clinical trial of an in vivo CRISPR medicine, while advancing our engineered cell medicines to treat sickle cell disease and cancer toward the clinic. Starting with our in vivo programs, regaining full operating control of our ocular programs through our new agreement with AbbVie, provides us with valuable flexibility as we work to strategically advance our pipeline. We have transferred the CRO contracts and the IND for the Phase 1/2 BRILLIANCE trial of EDIT-101 for LCA10 back to Editas, and we plan to finish transferring CMC activities in the fourth quarter. We are pleased to report that we have completed dosing of the first cohort in BRILLIANCE and enrollment remains active. However, we are experiencing delays due to the ongoing COVID-19 pandemic, which has made the logistics of screening and dosing patients more challenging, particularly patients residing outside the United States. We are making every effort to accelerate enrollment in this landmark trial that holds the potential to make blind people see again.

Turning to our ex vivo CRISPR cell medicines, we remain on track for an IND filing for EDIT-301 in the fourth quarter and are proud to be one step closer toward bringing a potential best-in-class medicine to patients with sickle cell disease. We will present new EDIT-301 data as well as our progress in building a robust, scalable manufacturing platform for the program at the upcoming American Society of Hematology or ASH meeting in December. On the regulatory front, we were pleased to announce that we received Rare Pediatric Disease Designation from the US FDA for EDIT-301. This designation is a significant milestone that highlights the serious and life-threatening nature of sickle cell disease. In oncology, we are advancing EDIT-201, our allogeneic NK cell medicine to treat solid tumors. We will present the preclinical data at ASH, which show increased effector function of EDIT-201 as compared to non-edited NK cells, and will also show data at the upcoming Society for Immunotherapy of Cancer or SITC Annual Meeting. Before handing the call over to Charlie for more detailed updates across our pipeline, I would like to touch upon some corporate highlights from the quarter. Our manufacturing agreements with Azzur Group and Catalent provide us with capacity and flexibility as we advance our programs into the clinic. These agreements support the preclinical and clinical development of our pipeline including EDIT-101, EDIT-301, and EDIT-201.

We are proud to have established a strong manufacturing program to support the development of our programs, particularly given the importance of having scalable, clinic-ready manufacturing in place to support the delivery of AAV and cell-based therapies. On the intellectual property front, we were pleased with the US Patent and Trademark Office's recent decision granting the Broad Institute motion for priority benefit in the ongoing interference proceedings regarding certain Broad CRISPR/Cas9 patents exclusively licensed by Editas Medicine. As a result of this decision, Broad enters into the priority phase of the interference as the Senior Party while the opposition remains the Junior Party for purposes of determining which entity was the first to invent the use of CRISPR/Cas9 for gene editing and eukaryotic cells. As a reminder, the Junior Party carries the burden of proof in the proceedings. The proceedings remain ongoing with motions requests and observations expected to be filed by both parties over the next six months in preparation for another round of oral arguments. We look forward to the resolution of these proceedings and remain confident that the outcome will be a positive for the Broad Institute and by extension Editas Medicine.

With that overview, I would now like to turn the call over to our Chief Scientific Officer, Charlie Albright, to discuss our pipeline updates.

Charles Albright -- Executive Vice President and Chief Scientific

Thanks, Cindy, and thank you for joining the call today. Starting with our in vivo editing medicines, we continue to make progress with our ocular programs and are pleased to report the completion of dosing of the first cohort in the BRILLIANCE trial, EDIT-101 for LCA10. As Cindy mentioned, we've experienced slower enrollments due to the COVID-19 pandemic and remain eager to advance the trial to bring this potentially transformative medicine to patients with LCA10. Switching gears to our engineered cell medicines, an important strategic pillar at Editas that continues to gain momentum, we continue to make progress with EDIT-301, our autologous cell medicine being developed as a potential best-in-class durable medicine for sickle cell disease. We remain on track to file an IND for EDIT-301 by year end. Further, we've identified the lead principal investigator of the trial and engaged a contract research organization to support the trial and planning to hold an investigator meeting before the year end. As a reminder, EDIT-301 leverages our proprietary Cas12a to directly EDIT the beta-globin locus where the mutation that causes sickle cell disease is found.

Anything at this site increases fetal hemoglobin more than can be achieved by editing at the BC11A enhancer region. We believe this increased fetal hemoglobin will translate into better patient outcomes. Furthermore, our editing approach is supported by human genetics as some people with high levels of fetal hemoglobin due to mutations in the region we are editing do not have symptoms of sickle cell disease. In contrast, editing at the BC11A site is not supported by human genetic data. We look forward to presenting additional data on EDIT-301 at the upcoming ASH Annual Meeting. The presentation will detail successful on target editing of CD34 cells from healthy donors and sickle cell disease patients with our proprietary Cas12a. In these studies, we will show that editing was efficient, at greater than 90% and specific as there were no measurable off targets. Further, editing of CD34 cells from healthy donors in sickle cell patients led to robust fetal hemoglobin induction. Red blood cells derived from editing of the sickle cell patient CD34 cells show that this increased fetal hemoglobin reduced the negative consequences of sickle hemoglobin. Finally, we will show more than 90% editing of CD34 cells from healthy donor and sickle cell disease patients with a functionally closed semi-automated system. We know that we are editing the long-term progenitors in these experiments as we found more than 90% engraftment of the edited cells in mice.

These data together support our ability to manufacture EDIT-301 at scale. Taken together, these data support the advancement of EDIT-301, a medicine with the potential to transform the lives of sickle cell patients. Moving next to our oncology programs, we continue to make progress of EDIT-201, our edited healthy donor-derived NK cell medicine. As a reminder, EDIT-201 uses our proprietary Cas12a to knockout the CISH and TGF beta genes. CISG is a negative regulator of the IL-15 pathway, a major survival pathway for NK cells. TGF beta is a well known inhibitor of the immune cell function in the tumor microenvironment. We look forward to presenting data at the upcoming ASH and SITC meetings. At ASH, we will present data showing the NK cells with CISH and TGF beta knockouts are more potent than unedited cells, particularly in the presence of TGF beta. We will also show that the combination of therapeutic antibodies of EDIT-201 further enhances tumor cell killing. These and other data support the continued advancement of EDIT-201, a medicine with the potential to provide valuable benefits to cancer patients. We also continue to progress our engineered iPSC-derived NK cell medicines. At the upcoming ASH meeting, we will show that knockout of CISH and TGF beta with Cas12a enhances INK potency, specifically double knockout clones, which were differentiated into INK cells were more effective than controlled INK cells in killing tumor cells in a spheroid model.

These data support the potential of our INK program as an off the shelve cell therapy to address a broad range of oncology indications. Further, we expect that these INK cells will avoid the challenges associated with T-cell immunotherapy such as graft versus host disease and cytokine release syndrome. We're excited by our progress and we will continue to provide periodic updates on our INK program. Overall, we've made considerable progress across our two pillars. We're on track to file our R&D for EDIT-301 this year, and we continue dosing of EDIT-101, the first ever CRISPR in vivo medicine. We're proud of our progress and look forward to updating you in the future on our pipeline progress.

With that, I'll turn the call over to our Chief Financial Officer, Michelle Robertson.

Michelle Robertson -- Chief Financial Officer

Thank you, Charlie, and good afternoon everyone. Editas remains in a strong financial position as we advance our portfolio of experimental CRISPR medicines. Our cash, cash equivalents, and marketable securities as of September 30th were $541 million compared to $599 million as of June 30, 2020. The proceeds we raised from our equity offering last quarter have strengthened our balance sheets, and we expect our cash balance will fund our operating plan into 2023. This strengthened balance sheet leaves us well positioned to continue execution across our clinical and preclinical pipeline, funding both our ongoing BRILLIANCE trial and also enabling the advancement of additional in vivo and ex vivo candidates into the quarter. Revenue was $62.8 million for the third quarter of 2020 compared to $3.8 million for the same period last year. The increase in revenue as a result of the Company recognizing the remaining deferred revenue balance related to the Allergan collaboration, offset by certain fees paid to Allergan in connection with the termination of our previous agreements. Research and development expenses for the third quarter of 2020 were $34 million compared to $23 million for the same period last year. The increase in our R&D expenses was attributed primarily to an increase in expenses related to the clinical and manufacturing development of EDIT-101 and our other programs including a one-time expense of $5 million for reaquiring the LCA10 license from Allergan.

In addition, the Company continued to invest in the clinical CMC organizations, which resulted in an increase in employee and facility-related expenses as compared to the prior year. General and administrative expenses for the third quarter of 2020 were $19.9 million compared to $16 million for the same period last year. The increase in our G&A expenses was attributed primarily to an increase in expense for professional service fees incurred by the Company in connection with the termination of the Allergan agreements as well as an increase in employee and facility-related expenses. Total operating expense for the 3rd quarter of 2020 were $48 million, net of non-cash stock-based compensation expense of $5.8 million. At this time, we do not expect any material negative financial impact from COVID-19. We will continue to monitor the situation and provide an update in the future.

With that, I'll now turn the call back over to Cindy.

Cynthia Collins -- President and Chief Executive Officer

Thank you, Michelle. I'm incredibly proud of our progress, which was achieved through the dedication of our strengthened leadership team, employees, and valued partners. We have advanced our two strategic pillars and are encouraged by our momentum as we aim to provide differentiated CRISPR medicines that have the potential to revolutionize the treatment of genetic blindness, cancer, sickle cell disease, and neurological conditions as the first and only company to have administered an in vivo CRISPR medicine.

We have carved our place as a leader in the genomic medicines field. The presentation of our data and strategy for engineered cell medicines, which leverage our differentiated Cas12a editing marks a new phase of development at Editas, particularly for our oncology program. These data combined with a strong foundation for scalable manufacturing leaves us well positioned to advance these medicines to the clinic. We are excited about our progress and we look forward to advancing more medicines into and through the clinic. We thank all of you for your continued interest and support.

With that, we will open the call for Q&A. Operator?

Questions and Answers:

Operator

[Operator Instruction]. Our first question comes from the line of Cory Kasimov with JPMorgan. Your line is now open.

Cory Kasimov -- JPMorgan -- Analyst

Hey, thank you so much for taking my question. This is a Turner on for Cory. So I think it was touched on a little bit in the prepared remarks, but the FDA clearly has high standards of gene therapy these days, particularly with the recent news, so has your approach with EDIT-301 changed at all, especially with what you use in the clinic next year and do you see this as a potential way to perhaps changing ground-on competitors? And then just lastly, if you have any longer term plans of bring the manufacturing in-house? Thanks.

Cynthia Collins -- President and Chief Executive Officer

Thank you for your question. First of all, the manufacturing for EDIT-301 is being done in-house through the leased space clean-room space that we have at Azzur and we don't have any plans at this point in time to bring that wholly in-house. We will evaluate our options as we move the program forward and we do believe we have gained ground with the most recent announcements on Bluebird's delay on PLA submission, and we have always believed that during the COVID period that we were making up ground while we were working on our IND. So, we feel that we're in a very competitive position with the 301 program.

Cory Kasimov -- JPMorgan -- Analyst

Great, thanks.

Operator

Our next question comes from Gena Wang with Barclays. Your line is now open.

Gena Wang -- Barclays -- Analyst

Hi, this is Sheldon on for Gena, thanks for taking our question. So I have two questions, if I may. Firstly, it's about EDIT-101. So when can we expect some initial data on presentations either from the low-dose cohort or after you dose some additional patients? And the other one is about on EDIT-201. So after the ASH presentation, what's your next step in the preclinical and clinical development, have you identified any particular tumor types that can be called more susceptible to NK therapy?

Cynthia Collins -- President and Chief Executive Officer

Thank you for your question. I will take the first question and then I'll ask Charlie to address the second issue. We have not determined when we will disclose data at this point in time. We have a new CMO who will be joining us who we will consult with to discuss the plan for releasing data. But as you've heard, we have now achieved the dosing of the first cohort and we're eager to move forward. But it will be largely dependent on the new CMO's view of how she wants to think about releasing data going forward. Charlie, do you want to take that the second question?

Charles Albright -- Executive Vice President and Chief Scientific

Sure, thanks, Cindy. The second question was about development strategy for 201 and so, we do have a development strategy for 201 and yes, we do think there are tumor types where these medicines will be more effective, but we're not ready to disclose that at this moment in time.

Gena Wang -- Barclays -- Analyst

Okay, thank you

Operator

Our next question comes from Phil Nadeau with Cowen. Your line is now open.

Phil Nadeau -- Cowen -- Analyst

Good afternoon and thanks for taking my questions. First is on the LCA program. In light of the fact that the first cohort is enrolled, but you're experiencing some delays versus COVID, I'm curious to get your most recent thoughts on when we could see data from that trial?

Cynthia Collins -- President and Chief Executive Officer

As I mentioned, the data will be reviewed and we'll do that in consultation with the new CMO who is joining us. And it will depend largely on what the data set looks like and we want to be responsible about what data we release and make sure that it is a wholesome set of data and we're not eager at this point to release on a patient-by-patient basis.

Phil Nadeau -- Cowen -- Analyst

Got it, OK. Sorry, I apologize, I think I missed what you just said. And then second is on the, can you tell us the significance of going in as the senior party?

Cynthia Collins -- President and Chief Executive Officer

So, the senior party generally has the stronger position, as I mentioned. The junior party holds the burden of proof for the proceedings. And so, they have to go first in terms of putting forth their depositions and their data. And we will -- or the Broad on our behalf will go second. So, we believe that this puts us in the strongest position overall, I think the data suggests that the majority of the time the senior party prevails. We continue to remain extremely confident in our patent portfolio from the Broad.

Phil Nadeau -- Cowen -- Analyst

That's helpful. Thank you.

Operator

Our next question comes from Matthew Harrison with Morgan Stanley, your line is now open.

Matthew Harrison -- Morgan Stanley -- Analyst

Hi, good evening, this is Thomas Lavery for Matthew. Can you talk about your thoughts on initial dosing strategies in sickle cell? Given that you're editing a unique site, how low the dose do you need to start versus being able to start at a more, potentially efficacious dose? Thanks.

Cynthia Collins -- President and Chief Executive Officer

Charlie, you want to take that one.

Charles Albright -- Executive Vice President and Chief Scientific

Sure. So you don't do a dose response in a hematopoietic stem cell transplant experiment like we're doing for sickle cell disease. The dose is set because you want to ensure that you get good engraftment. And so, there is no dose finding study. We know what the dose should be and that's why it's so key that you add in a really high fraction of hematopoietic stem cells and so, we've shown in preclinical studies and we'll show more at ASH that we added more than 90% of the alleles and that we have engraftment that could lead to pancellular distribution and those are the key properties.

Operator

Our next question comes from Steve Seedhouse with Raymond James. Your line is now open.

Steve Seedhouse -- Raymond James -- Analyst

Yes, hi, this is on for Steve Seedhouse. So our first question is about the BRILLIANCE study. So you mentioned there was a slowdown and to what extent does that impact your dosing in the mid-dose cohort because I think previously you were guiding to dose some patients in mid dose by year-end, but we haven't -- we don't really see this guidance anymore.

Cynthia Collins -- President and Chief Executive Officer

That's correct. We've adjusted the guidance. As I mentioned, we are seeing a bit of a challenge with the COVID situation. We have patients that are located outside of the US that cannot easily travel because of travel restrictions across borders. There's also some reluctance of patients to be treated during the COVID period as well. We continue to enroll and screen patients, the clinical sites are all open, and we continue to work directly with the investigators to bring those patients forward.

Steve Seedhouse -- Raymond James -- Analyst

Okay, thank you for that. And I'm not sure, if you can comment on any safety from the BRILLIANCE study? The first patient looks like he has about eight months of follow-up now. I'm not sure if you can say whether the safety is good enough to continue dose escalations now assuming COVID delays fixed corrected?

Cynthia Collins -- President and Chief Executive Officer

So I will say that we are clear to dose that there are patients.

Steve Seedhouse -- Raymond James -- Analyst

Okay, great. And one last question. And this question is regarding one of your ASH 20 abstracts for double knockout NK cells. Could you talk about the importance of IL-15 presence, you sort of mentioned the cells are grown in the presence of IL-15, but is that something that can also be used to co-administer during actual treatments? And what other -- I know, you're trying to co-administer with antibodies, you mentioned that, can you talk about the target that you're trying to test? Thank you.

Charles Albright -- Executive Vice President and Chief Scientific

By the targets, do you mean the knockout targets or the tumor? I'm sorry I didn't understand that one [speech overlap].

Steve Seedhouse -- Raymond James -- Analyst

Yeah, no problem. It's basically the targets for the other therapy at that you're -- you want to co-administer with NK cells.

Charles Albright -- Executive Vice President and Chief Scientific

Well, yes. So, we decided it's preferable to increase the sensitivity of the NK cells, the IL-15 and that's why we are knocking out the CISH gene because it's a negative regulator of the IL-15 pathway. And when we're doing, we're not going to co-administer with IL-15. And we've seen both in vitro and in vivo that -- in mouse models, that's quite effective. I'm still not sure on the target question. So, we had too knockouts, we haven't disclosed the tumor types that we're going to test in humans yet if that was the question.

Steve Seedhouse -- Raymond James -- Analyst

Okay. Yeah. Thank you very much.

Operator

Our next question comes from line of Joon Lee with Truist. Your line is now open.

Joon Lee -- Truist -- Analyst

Hi, thanks for taking my questions. So, on EDIT-101 data disclosure, I appreciate that you're trying to be responsible for the patients, but I'm sure the investors are eager to learn about some of the efficacy and safety. Is it fair to assume that you will face something about the efficacy and safety in 2021? Or are you not willing to commit to that just yet? And I have a follow-up question.

Cynthia Collins -- President and Chief Executive Officer

We are not ready to commit to that just yet, and I want to do this in consultation with our new CMO and develop the data release plan with her.

Joon Lee -- Truist -- Analyst

Okay, just a couple of technical questions for Charlie. For 301, EDIT-301, there is a duplication, I believe where -- for hemoglobin 1, gamma one and two promoter, where you kind of target. So do you need to knockout both to have a clinical set to therapeutic effect? There are obviously several combinations of outcome such as a deletion between the duplicated promoters, inversions, single. So is there one outcome that is desired for your therapy goal? Thank you.

Charles Albright -- Executive Vice President and Chief Scientific

No, it's a great -- that's a great question and you're right, it's a complex locus and so we have done a detailed genotype, phenotype analysis and we will -- we look forward to disclosing that at an upcoming scientific meeting, because it is fascinating. Suffice it to say that we -- more than 90% of the edited cells express what we believe are therapeutically relevant concentrations of fetal hemoglobin. So even though the locus is complex, we're able to achieve our therapeutic goals.

Joon Lee -- Truist -- Analyst

Thank you.

Operator

Our next question comes from Yanan Zhu with Wells Fargo Securities. Your line is now open.

Yanan Zhu -- Wells Fargo Securities -- Analyst

Hi, thanks for taking my questions. So, first, maybe a few questions on EDIT-201. So, this is to be used together with an antibody therapeutic. Do you expect repeat dosing for EDIT-201? And also, I'm wondering, what about the strategy to prevent rejection by host T cells? Would it be just lymphodepletion? And also lastly, on lymphodepletion, is there any concern that depletion -- lymphodepletion will obviously impact the endogenous NK cell compartment which could have been a contributor to ADCC, and now that, if they are impacted, would that have any negative consequences? Thanks.

Charles Albright -- Executive Vice President and Chief Scientific

Right. Great questions. This is Charlie. So, yes, we do anticipate doing lymphodepletion to prevent the rejection of the NK cells that we're using in this first iteration of our NK cell platform. And we think that the NK cells that we're adding are -- we're going to select ones that are very efficient and engaging the therapeutic antibodies and based on our preclinical studies, we think that will lead to robust clinical outcomes, so we're not worried about some of the things you mentioned.

Yanan Zhu -- Wells Fargo Securities -- Analyst

And whether it is a repeat dosing strategy?

Charles Albright -- Executive Vice President and Chief Scientific

Yeah. We want to leave open the ability to repeat dosing so that we take that into the -- into the way we're thinking both about the preclinical studies we do and the clinical studies we do.

Yanan Zhu -- Wells Fargo Securities -- Analyst

Got it. So maybe one question -- one more question for EDIT-301. The BCL11A targeted approach has demonstrated roughly 45% to 50% hemoglobin -- fetal hemoglobin in a couple of patients in Phase one trials to-date. Do you think that can be surpassed -- that benchmark can be surpassed based on your preclinical work? And also would higher HbF be bringing in additional clinical value -- clinical meaningfulness? Thanks.

Charles Albright -- Executive Vice President and Chief Scientific

Yeah, yeah. Thanks. Yes, we do believe that more than 50% fetal hemoglobin in sickle cell patients can be achieved and in fact, we aim to do that with our medicine and we do believe that will provide clinical benefit above and beyond which you can see with the current therapies and so while they are showing impressive results on vaso-occlusive crisis, we believe there are a lot of other things that have not yet been adequately tested in these trials and that they contribute significantly to the premature mortality that characterizes this disease. And so, we look forward to providing clinical benefit above and beyond what's possible now.

Yanan Zhu -- Wells Fargo Securities -- Analyst

Great, thank you, Charlie.

Operator

That concludes today's question and answer session. I would like to turn the call back to Cindy Collins for closing remarks.

Cynthia Collins -- President and Chief Executive Officer

Great, so with that, we thank you all for participating in today's call and your support as we work to bring transformative new medicines to patients. Take care and be safe.

Operator

[Operator Closing Remarks]

Duration: 32 minutes

Call participants:

Mark J. Mullikin -- Vice President of Finance and Investor Relations

Cynthia Collins -- President and Chief Executive Officer

Charles Albright -- Executive Vice President and Chief Scientific

Michelle Robertson -- Chief Financial Officer

Cory Kasimov -- JPMorgan -- Analyst

Gena Wang -- Barclays -- Analyst

Phil Nadeau -- Cowen -- Analyst

Matthew Harrison -- Morgan Stanley -- Analyst

Steve Seedhouse -- Raymond James -- Analyst

Joon Lee -- Truist -- Analyst

Yanan Zhu -- Wells Fargo Securities -- Analyst

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