Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) Jefferies London Healthcare Conference November 16, 2022 4:10 AM ET
Company Participants
Stu Arbuckle – Executive Vice President and Chief Operating Officer
Conference Call Participants
Michael Yee – Jefferies
Michael Yee
Good morning, everyone. Well, thank you for joining us on day 2 of the 2022 London Global Healthcare Conference here at Jefferies; I’m Michael Yee, Managing Director and Biotechnology Analyst. I’m really happy to have up here with me Stu Arbuckle, Executive Vice President and Chief Operating Officer of Vertex. Obviously, Vertex has a ton of stuff going on, both commercially and in the pipeline. I know, Stu, do you want to give a brief overview and some quick highlights, and then we’ll go into some of the pressing topics of issue, and we’ll have a good discussion.
Stu Arbuckle
All right. Thank you, Mike. Thank you to you. Thanks to Jefferies for the invitation to be here. Great to see so many people in the room, and good morning, good afternoon to those on the webcast.
First thing I would like to draw your attention to our Safe Harbor statement. I will obviously be making forward-looking statements. There are inherent risks and uncertainties, full details you can find in our SEC filings.
So, I’m really pleased to be here today, Mike. This is a really, really important time for our company. We see ourselves as being what we like to describe as a really strategic inflection point for our company. We believe we have a unique and differentiated strategy, and that strategy is kind of playing out before our very eyes.
And I just wanted to spend a couple of minutes talking about that and what we see of some of the highlights, and then we can go wherever you want to go, Mike. So when we say unique and differentiated strategy, our corporate strategy is to invest heavily in scientific innovation to discover transformative medicines in serious diseases in specialty markets. And all of those words are important. When we say invest in scientific innovation, we invest north of 70% of our operating expenses in R&D because we believe that is the best way to drive value for patients and for our shareholders. We only do that in serious diseases where we can deliver transformative benefit. And we only do it in diseases that we can serve with a specialty sales and marketing infrastructure because we want to keep our SG&A as low as we possibly can so that we continue to reinvest the vast majority of our OpEx back in R&D.
Now coupled with our corporate strategy is our research strategy. And the research strategy is designed to deliver unprecedented success. We all know that one of the biggest issues in biotech and biopharma R&D is the lack of productivity. For every 20-or-so molecules that you put into patients with the disease, only one will ever make it out to be an approved medicine. We want to turn those numbers on their head. To do that, we focus on diseases where we truly understand the human biology, and we focus on diseases where we have a validated target, a validated target that’s causally linked to the disease in humans. And then if we hit that target, we’ll have a transformative benefit.
And the last part of our research strategy, you’ll see from our pipeline, is to be modality agnostic. Whatever tool is the right tool to hit that target is the tool we’re going to use. Obviously, our heritage is a small molecule company. But we now have programs in gene editing with CRISPR/Cas9, cells for Type 2 – Type 1 diabetes, pardon me, cells plus devices, whatever the right tool for the job is the tool we’re going to use.
So how is that playing out? Clearly, we’ve continued to extend our leadership in cystic fibrosis, TRIKAFTA, our medicine that can treat up to 90% of CF patients continues to perform incredibly well. And we have a number of important milestones coming up for TRIKAFTA and the rest of the CF franchise that I’m happy to talk about that we’ll continue to expand our leadership in CF.
Beyond CF, we have five additional disease areas where we’ve demonstrated proof of concept. Actually, five out of the six disease areas that we took medicines into proof-of-concept hit in terms of proof of concept. So, five out of six, so roughly 85%, way better than the odds I described earlier. So, we do believe our research strategy is delivering unprecedented levels of success in R&D. Those five disease areas, many of them are in late-stage development. And so we are now preparing for commercialization for what we hope will be our next disease areas after CF, sickle cell disease and beta thalassemia with exa-cel, our CRISPR/Cas9 gene editing therapy, and then also preparing for acute pain in the U.S. where VX-548, our NaV1.8 inhibitor, has just begun its Phase 3 program.
Beyond that, we need a strong financial base. And because of the revenue growth that we’ve seen in CF and because of our unique business model, we have generated industry-leading margins. We have a substantial financial balance sheet, which allows us to continue to invest in internal and external innovation.
So that’s our story. That’s our strategy. That strategy, I think, has played out really, really well, particularly over the last 18 months or two years where we’ve demonstrated proof-of-concept in multiple diseases outside of CF. This is just another way of looking at that success. This is our development pipeline. This is just the pipeline that is in the clinic in patients with these diseases. A couple of things that are different about this slide from a few years ago, a few years ago, it would essentially have had CF on it. Now we have seven diseases listed on here, as I said, five of them where we’ve demonstrated POC outside of CF.
A couple of other things I would say, there is a lot of these programs, which are to the right-hand side of this slide. That means they are in late-stage clinical development. So VX-548 is in Phase 3. Our exa-cel program, we are putting together our filings to begin filing at the end of this year. Our AMKD program is in a Phase 2/3 study. We are moving these programs forward. Many of these programs are in late-stage development.
The last thing I’d highlight on this slide is with the stars on there are the programs which are either solely as a result or have been partly enabled by our business development efforts. And 40% of our clinical stage pipeline is either as a result of acquisitions. So for instance, the acquisition of Semma and our Type 1 diabetes program or collaborations with other partners in the industry, such as our mRNA program for cystic fibrosis where we’re partnered with Moderna. So, this is our clinical development pipeline, as I say, multiple assets moving multiple of them in late stages of development.
Because of the progress we’ve seen, we have a lot of milestones coming up. I will point out just a few on this slide. We have a number of milestones in CF that we are going to complete by the end of this year. We will file for TRIKAFTA in two- to five-year-old kids around the world by the end of this year. We’re on track to do that. We will complete enrollment in our next-generation triple combination program, which is a combination of three separate medicines, vanzacaftor, previously 121; tezacaftor; and deutivacaftor, and we believe that combination has the potential to be even better than TRIKAFTA. And we’re also on track to file our IND for our mRNA program, which will help us try and address the 5,000 or so patients who don’t respond to our CFTR modulators and so don’t have a therapy that treats the underlying cause of their disease to gain.
A couple of other important things that will be in here, one of which is we are on track to submit our IND for what we call VX-264. This is the combination of our fully differentiated islet cells in Type 1 diabetes in combination with our proprietary device, which protects those cells from the immune system. We’re on track to file the IND for that program by the end of the year, incredibly exciting program.
With all that success has come great financial success. This looks at our revenue growth over the last few years. It’s really been exceptional as we’ve continued to execute on our CF research strategy. We continue to see continued growth in CF, and I’m happy to talk about that, through treating more and more patients and getting down to younger age groups. As I said, because of our business model, we have industry-leading profitability margins. We have a very, very healthy balance sheet, which allows us to continue to invest in both internal and external innovation.
So what I’ll leave you is I believe we have a unique and differentiated corporate and research strategy. That strategy is playing out. It’s leading to our success in CF. It’s leading to the advancement of our broad and deep clinical pipeline, much of which is in late-stage development. And to enable all that, we need a strong financial platform, and we have that as well.
So it’s a real pleasure to be here. As I say, we think the company is at a really, really important inflection point. And so it’s a real pleasure to be here with everybody today. So over to you, Mike.
Michael Yee
Good. Good, that’s a great overview. Maybe we could take that in two parts, commercial growth and where the opportunity is for CF, and then we’ll talk a little bit about where the opportunities are on the pipeline. And I’d like to try and integrate some of the investor debate around a little bit and give you an opportunity to address some of that. So on CF, there’s still some growth, you said filing for two to five roles around the world, so the incremental growth from that, as well as I would think the – I call super TRIKAFTA, I don’t even have a name yet for it, but the improved TRIKAFTA that is complete enrollment has data next year. So talk about what the new TRIKAFTA coming with data next year. What does that mean for the business? Is it a revenue growth thing? Is it a margin thing? It’s a once-a-day pill, not a twice a day pill? So what is the value of that drug for people?
Stu Arbuckle
Yes, I would say all of the above, Mike. So just to ground everybody, TRIKAFTA sets an incredibly high bar in terms of efficacy and also tolerability, but we do believe it’s possible to do even better. And the vanzacaftor, tezacaftor, deutivacaftor combination, we believe, has the potential to do that. Why do I say that? We have great preclinical assays, which have proven to be both qualitatively and quantitatively predictive of what is going to happen in people with CF. Our HBE assays, which we developed in our labs in San Diego, have been incredibly predictive of how things will actually work in people with cystic fibrosis.
So when we look at the new triple combination in those same assays, it delivers higher levels of chloride transport, which is the marker of CFTR function in the lab. So that’s incredibly encouraging, higher levels than we’ve seen with TRIKAFTA ever before. In addition to that, we’ve done a Phase 2 study with this same combination. And again, we saw higher levels of both FEV1 and also lower levels of sweat chloride. Sweat chloride is the pharmacodynamic marker in patients with CF of CFTR function. And we saw greater reductions in sweat chloride with this new combination than we saw with TRIKAFTA. So both of those give us reasons to believe that this combination could be even better than TRIKAFTA.
Now we have to prove that. We have embarked on a Phase 3 development program, looking at this new combination head-to-head with TRIKAFTA. It’s not going to be possible for people to do placebo-controlled trials in these kind of pivotal studies anymore in this disease. With TRIKAFTA established as the standard of care, you’re going to have to go against TRIKAFTA to get approved. We’re going head-to-head with this new combination. The study will be fully enrolled by the end of this year.
On data, Mike, just a slight caveat, this is a 52-week study. So we’re going to have to study those patients. The last patient in is the one that starts the clock for 52 weeks, collect the day, scrub the data and then report out. So we haven’t talked about exactly when that data will be available. But it’s going to be incredibly important data and doing the study head-to-head, we’re going to know just how good this combination is.
Now what are the benefits? From a patient benefit, we think there is the opportunity for enhanced clinical benefit. That would obviously be great. It is, as you said, once a day versus twice a day for TRIKAFTA. It does also have superior economics. The royalty rate for TRIKAFTA is in the low double-digits. The royalty rate for this will be in the low single-digits. So from a margin point of view, it has benefits as well. It will essentially be for the – pretty much the same population over time as TRIKAFTA as though, Mike.
So in terms of new patient growth, the real opportunity is going to be patients who either haven’t yet started on TRIKAFTA, which is diminishing a few; or patients, again, relatively few who might have discontinued from TRIKAFTA for whatever reason. So that’s the real…
Michael Yee
So Jefferies estimates the data end of the year, but maybe early 2024 at another San Francisco conference. But the data is coming in due course around a year from now. The margin benefit, due to the lower royalty, is quite a financial impact. And just to clarify that, because you guys have publicly said your view, the royalty company has their view, does that something that just has to go to a legal dispute? Is that presumably a reasonable expectation?
Stu Arbuckle
Yes. I mean, from our perspective, it’s not really a matter of opinion. It’s a matter of contractual facts. So we feel pretty confident in our assessment of the contract and our view that the royalty rate is going to be low double-digits – low single-digits, not low double-digits. So we don’t think it’s a matter of opinion. We think it’s a matter of fact.
Michael Yee
Okay. And just for clarification, yes, it’s better the Phase 2 FEV data was similar to the endpoint that everyone looks at. The Phase 3 is powered for non-inferiority on FEV. So you expect to see similar FEV benefits and people will go, well, hey, Stu, is it really better? Looks similar. Is there one key endpoint that you will point to that’s going to – that was so much better.
Stu Arbuckle
There were some patient groups where the FEV1 benefit was actually even higher than we’ve seen with TRIKAFTA in our Phase 2. Now again, we have to be careful about cross-study comparisons. But there were some patient groups in the 121 study where the FEV1 benefit was actually higher than we’ve ever seen with TRIKAFTA.
In terms of the design, you’re absolutely right, the primary endpoint is non-inferiority. That’s the regulatory endpoint of choice. But assuming that we hit on that, we will then be able to test for superiority. So that is a key part of the statistical analysis plan. But the regulatory endpoint, you’re absolutely right; the first hurdle is to demonstrate non-inferiority to TRIKAFTA.
Michael Yee
There is a statistical test…
Stu Arbuckle
We will be able to look at superiority.
Michael Yee
And is there one endpoint, just really quickly that as you guys think is what you could point to?
Stu Arbuckle
No. I mean I think the…
Michael Yee
Secondary say yes, it is better.
Stu Arbuckle
Yes. I mean I think the thing we know about CF is it’s a multisystem disease, and therefore, there’s lots and lots of endpoints. And while FEV1 is, again, the regulatory endpoint of choice and a very – obviously, a very important endpoint, there are a number of other ones. I do think the reduction in sweat chloride is going to be an important one to look for. Sweat chloride is the pharmacodynamic marker of CFTR function.
If you think about parents of kids with CF, they both carry one copy of the mutation. They have what we call carrier levels of sweat chloride. It’s not normal. It’s not wild type, but it’s lower than you would see in patients with CF and those people essentially live without any symptoms of CF as we know with carriers. So if you can get sweat chloride down to carrier levels of sweat chloride and you can do that early enough in life, and so as you know, KALYDECO now is down to one month of age where we’re dosing people, we believe that you will be essentially able to prevent CF developing as we know it today.
Michael Yee
Make sense. Make sense.
Stu Arbuckle
So in addition to FEV1, which you would imagine has got some sort of physiological ceiling to how high you can go, how much you can correct that. Sweat chloride, which is well correlated with the real outcomes of interest in CF patients, I think is going to be a really, really important metric to look at.
Michael Yee
Number two on CF, you have a IND coming by a Phase 1 2023 situation with the Moderna partnered inhaled CF for the nonsense mutation, it was about 10% of – Jefferies estimates about $1 billion. You said 5,000 patients. So…
Stu Arbuckle
Yes. Maybe more like 7%, more like about 5,000-ish.
Michael Yee
Okay, times maybe 200,000. It’s a $1 billion type opportunity. You’re very confident that an inhaled mRNA compound can drive FEV benefits in nonsense people?
Stu Arbuckle
So yes, you’re absolutely right, this program is for those people who don’t respond to opportunity, so they don’t produce any protein. Our CFTR modulators need protein to work on. These folks don’t produce any CFTR protein, which is why we need a different approach.
There are really two parts to the challenge that you’re facing here. One is to have the right construct, what’s the right construct that is going to lead to the expression of CFTR protein. The other one is delivery. Can you get to the cells of interest with the right levels, create the right level of protein expression? And can you do that reliably and on a frequent enough basis to have durable benefit?
So we’ve chosen to partner with Moderna on this. We’re essentially using chemically altered but human CFTR protein, mRNA with codes for the human CFTR protein and then we’re delivering it through liquid nanoparticles. Why do we think that’s important? The cells that you need to get to the epithelial cells, these are relatively high turnover cells. So you need to be able to get to those cells in the right way. You need to create the right level of expression and we believe you’re going to need to dose on a relatively frequent basis.
And so with liquid nanoparticle delivery, that has been – as precedent for regular delivery there. We know from our same HBE assays in San Diego, we’ve known for a while that we can create delivery to those cells, and we can create the right levels of protein expression in those. We feel good. It’s in the assays now. The difference is we’ve done that many, many times with small molecules and shown that it works in people with CF, Mike.
We don’t have that kind of in vitro to in vivo correlation yet. This program will be the first time we’ve done that. So do we feel good about where we are? Yes, of course, we do. That’s why we’re filing an IND. We feel like we’ve done all the work we need to do. We feel like from the work we’ve done in the labs that this has a really good chance of working, but you never know until you go into patients with the disease. And that’s why we’re going to be filing the IND by the end of this year.
Michael Yee
Okay. I want to talk next about the pain program. The talk about the pain program is because I think, although Vertex might agree that numbers-wise, that could be one of the largest opportunities in your pipeline to having non-opioid, non-addictive type, non-abusive type pain. Now you have an acute pain program. So talk about that because that’s in Phase 3.
Stu Arbuckle
Jefferies estimates.
Michael Yee
Could have Phase 3 data next year. So it is a Phase 3 readout, although you’re not guiding on the specific timing, but it could be next year. And more importantly, acute is due to its short duration. Chronic is big time chronic revenues could be much more the size. So can you talk about acute, your confidence that that’s going to work, what that means for you revenue-wise and the chronic situation, that would be many multiples, and that has Phase 2 data.
Stu Arbuckle
Yes. So let’s take it scientifically why do we think this is going to work. So as I said in my opening remarks, we only go after diseases where we truly understand the causal human biology and where we have a validated target. And NaV1.8 is both genetically validated as being important in pain, and we pharmacologically validated it multiple times now. So you will remember, we have VX-150, where we studied was our first NaV1.8 inhibitor we took into the clinic. We did multiple Phase 2 studies with that program. We did acute. We did neuropathic, and we did kind of chronic inflammatory osteoarthritis knee pain. It worked in all three of those.
Michael Yee
It did work in neuropathic pain, the first one did.
Stu Arbuckle
And it worked in osteoarthritis and knee pain. So – and that is very, very unusual. Most pain medicines do not work across multiple different types of pain. And the reason why we think this works is because most agents are not actually addressing the underlying cause of pain or the underlying transmission of the pain signal.
So if you think about opioids, they’re not actually working where the pain is happening or working on where the pain signals. They’re working on your sense of pain. They’re working in the central nervous system and dulling your sense of pain. That’s not what we’re doing. We’re working on these NaV1.8 receptors in the periphery where the pain starts. And essentially, we are dealing with the pain signal in the periphery, not in the central nervous system. So 150 worked across all three settings. 150, unfortunately, was not the best medicine to be taking forward as a marketed drug, but it has proven, from our perspective, pharmacological validation of the target.
Michael Yee
The biology and the mechanism worked.
Stu Arbuckle
Biology and the mechanism worked, we just needed a better medicine. VX-548, we believe, is that medicine. We have demonstrated in Phase 2 studies in acute pain that it works and works really well. So now that program is in Phase 3. We have three studies as part of that program, which we’ve agreed with the FDA, if successful, would give us a broad label for moderate to severe acute pain.
There are two studies which are essentially mirror images of the studies that we ran in Phase 2, bunionectomy and abdominoplasty. Short-term studies, two days of active treatment, they recruit very quickly. We’re confident that program is going to recruit quickly. And we’re confident that, that study, as confident as we can because those studies are going to be positive because we’ve essentially done this experiment twice already. We did it with 150 in these same settings. We did it with 548. These studies are really just bigger.
The second difference about the study is not only are they bigger, they are placebo-controlled, but we also have an opioid comparator arm in there. In the Phase 2 program, we had a referenced arm, not a comparator arm. And we believe that could be important from a marketing and commercialization point of view.
There is a third study, which is in a broader set of kind of an all-comers acute pain setting, which could be other types of acute pain. That’s an open-label study where patients will be treated for up to 14 days. That’s to ensure that we have a moderate to severe acute pain label that isn’t just limited to surgery and isn’t just limited to two days of dosing, to your point. So that program is underway.
As I said, we think about the pain market in three separate segments. There is the acute pain segment, which is the first program or the first set of studies; there is neuropathic pain, which is essentially all sorts of different types of pain, but which are all caused by some sort of neurological damage in the periphery. Again, we think 548 will be able to help there. We are embarking on a neuropathic pain study, a Phase 2 study with 548 in neuropathic pain. Again, we believe we’ve shown with 150 that…
Michael Yee
First generation worked…
Stu Arbuckle
First generation worked.
Michael Yee
Not everything works in acute and chronic, the biology can be different. This did work in acute and chronic.
Stu Arbuckle
Yes, if you think about the standards of care in acute and chronic and neuropathic, right, you’ve got prescription NSAIDs. And then in acute pain, it was typically opioids people would go to. In neuropathic pain, its triple, you have Lyricas, the pregabalin, gabapentin, and things like that.
Michael Yee
Yes, in chronic opioids for neuropathic pain.
Stu Arbuckle
Right. It’s very unusual for two different pain states to be effectively addressed with the same mechanism.
Michael Yee
And then there is the broader sort of chronic inflammatory lower back pain, osteoarthritis and knee pain. That is a whole different – completely different section of the market. Acute and neuropathic segments of the market, Mike, are markets that we think we can address with a specialty sales and marketing infrastructure. So those are markets where we think we can address those ourselves as Vertex.
It’s not that we don’t think NaV1.8 might work in that more chronic lower back pain, osteoarthritis knee pain market. It’s more that the unmet need is probably less there. And also from a commercialization point of view, you’re probably talking about how to get to more primary care markets. That’s not who we are. We want to focus on markets we can serve through a specialty sales and marketing infrastructure because that’s what leads to us having the high margins that we can reinvest. So very – the pain…
Michael Yee
Is it crazy to believe the neuropathic pain study will read out next year?
Stu Arbuckle
I mean we’ve just started it. So again you can’t tell when it’s is going to finish.
Michael Yee
What’s the timeline of end point? Neuropathic pain, is it a three-month endpoint? Is it a one-month endpoint? It’s not six months.
Stu Arbuckle
I think it might be – it’s yet to be communicated. When we’ve embarked on it, we’ll share that.
Michael Yee
Okay. I believe that chronic pain could read out next year. The point is it’s a much bigger market than acute, and people are focused on this more because the data is reading out.
Stu Arbuckle
So let me just characterize the markets, on the market size. So acute neuropathic, right? Let me talk about acute neuropathic. In terms of current market size, if we just think about the U.S., both markets are actually not that dissimilar in size. Let me describe them to you. In the acute market, the way that people talk about pain is in treatment days. The acute pain market in the U.S. alone is 1.5 billion, with a B, treatment days a year. And despite well north of 90% of that market being generic, generic opioids, generic NSAIDs, generic prescription NSAIDs, things like that, it is a $4 billion market. If we can bring something which has really, really great pain efficacy and avoids the addictive potential and other side effects of opioids and it’s going to be at a branded price, we think that market has multibillion dollar potential.
Michael Yee
But here is the problems too.
Stu Arbuckle
Neuropathic pain is around about the same kind of size. Again, it is – since Lyrica went off patent, it is also virtually all generics. So the markets are actually not that different in size and, therefore, potential.
Michael Yee
The pushback is that people have had some pain things, albeit they were opioids. So they were abuse limited forms of opioids. The problem is, is that the price for your product wouldn’t be $0.50 for generic price. It would be some form of reasonable price, but it’s a branded price. So all these payers in the U.S. feel, hey, it’s not my fault I got an opioid addiction. We still got to give them the generics first. Can you address that briefly in a minute, like why would someone pay the $5 price?
Stu Arbuckle
So to your point, because of the opioid epidemic there have been severe restrictions put on who can prescribe opioids, for whom they can be prescribed, in what setting, what duration, et cetera, et cetera. So essentially, what has happened is you have this chasm, which is open between prescription NSAIDs and opioids which have essentially been reserved for the last line. This pain has not gone away. So all this has created is not just – it has solved an opioid epidemic, but has actually caused a real gap in the management of pain for these folks. So there is a significant gap. So we do believe if we can bring something forward which has really truly effective pain relief and avoids both the addictive potential, but also the other side effects of opioids, somnolence, respiratory depression, et cetera, et cetera, there is a significant need for new pain medications in the market, and we think that’s going to be a proposition which people are going to like.
Michael Yee
Okay. We’re going to do – and I know Wall Street will do more work on that. That is the primary dynamic is, well, hey, again, just call it these payers and they’re tight on these generics. So this is the issue that we want people show and overcome. So we’re doing work around that. Again, generics versus a better non-opioid seems like a no-brainer, but payers restrict these things. Diabetes, really quick, because there’s data next year. For this audience, you had some initial data with the immunosuppressed patients, data looks promising. We’re going to get an update in that diabetes program, but the device is filing an IND shortly. So there could be data next year on that. Just briefly, because we only have like 2 minutes, talk about what we’re going to get there?
Stu Arbuckle
Sure. Yes. So again, going back to the kind of strategy, the etiology of Type 1 diabetes has been understood for probably 100 years or so. Autoimmune destruction of the islet cells in the pancreas, insulin; it was its 100th anniversary this year. So the underlying cause of this disease it’s been known forever. If you can replace those islet cells, you have the chance of curing somebody of Type 1 diabetes. The problem has been quantity and quality of those cells. It’s been demonstrated with cadaveric islet cell transplants. You can get very good efficacy, but the quantity and quality of cells does not allow that to be a routine procedure. That is what Doug Melton and the folks at SEM [ph] are essentially correct. They have been able to develop from stem cells, develop fully differentiated fully mature glucose-sensing insulin-secreting islet cells. So that has solved the problem that is the problem.
The issue then is you need to protect those cells from what created Type 1 diabetes in the first place, which is autoimmune destruction, how do you protect those cells? Our first program takes those cells, infuses them and provides immunosuppression to prevent the body attacking those cells. And we’ve shown the results in two patients, demonstrated proof of concept that that works. The cells are the solution. The challenge is to protect them from immunosuppression. So immuno – from the immune system. Immunosuppression is one way; our proprietary device is a different way. It allows the cells to be perfused and vascularized, which means that they can survive and thrive, sense glucose, gives them a route to excrete insulin, but it protects them from the immune system.
And then the third – and it’s the same cells in that device. And then the third approach is those very same cells, but edited to make them essentially evasive of the immune system, hypoimmune, however you want to call it. But it’s the same cells. So the important thing about this is the cells, which are the solution, the immunosuppression, the device, the editing is really about protecting them from what created Type 1 diabetes in the first place. We have the cells. We can make them in industrial quantities. We’re excited about getting them into the device, getting the IND into the…
Michael Yee
By the way, the device is not like – it’s more of a usual bag, but it’s – just explain the device…
Stu Arbuckle
Yes. That’s other people’s device. Our device is a device. Our device is a small disk, which has the ability to allow for vascular. You put the cells in it, it allows for vascularization, as I say, which is incredibly important because the cells need oxygen, they need nutrients to survive, but they also need to be able to detect glucose in the blood system and it gives them an avenue to be able to excrete insulin. But it protects them from the immune system by the design of the device. So it is a device, it is not a pouch or a bag, which is some other people’s programs.
Michael Yee
Okay. All right. We believe that data could be next year. So we’ll talk more about that, but that would be a big proof of concept if it…
Stu Arbuckle
Yes. And there’s 2.5 million people alone in the U.S. and the EU, adults living with Type 1 diabetes. This is a huge opportunity.
Michael Yee
Stu, thank you very much. A lot of catalysts, a lot of things coming up in the next 12 months. So I appreciate the update, and we’ll catch with you.
Stu Arbuckle
Thanks Mike. Yes, my pleasure. Thanks.
Michael Yee
Thank you. Okay.
Question-and-Answer Session
Q –
Be the first to comment