Taysha Gene Therapies - Q1 2023

Transcript

Operator (participant)

Thank you for standing by. This is the conference operator. Welcome to the Taysha Gene Therapies First Quarter 2023 Earnings Conference Call. As a reminder, all participants are in listen-only mode. The conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star and zero. I would now like to turn the conference over to Hayleigh Collins, Director, Head of Corporate Communications. Please go ahead.

Hayleigh Collins (Director, Head of Corporate Communications)

Thank you. Good afternoon, and welcome to Taysha's First Quarter 2023 Financial Results and Corporate Update Conference Call. Earlier today, Taysha issued a press release announcing financial results for the first quarter 2023. A copy of this press release is available on the company's website and through our SEC filings. Joining me on today's call are Sean Nolan, Taysha's CEO, Sukumar Nagendran, President and Head of Research and Development, Kamran Alam, Chief Financial Officer, and Salman Bhai, Assistant Professor of Neurology at UT Southwestern. We will hold a question and answer session following our prepared remarks. Please note that on today's call, we will be making forward-looking statements, including statements relating to the existing clinical data for TSHA-120, the therapeutic and commercial potential of TSHA-120 and TSHA-102.

These statements may include expected timing and results of clinical trials for our product candidates and other clinical and regulatory plans in the market opportunity for those programs. This call may also contain forward-looking statements relating to Taysha's growth, forecasted cash runway, and future operating results, discovery and development of product candidates, strategic alliances and intellectual property, as well as matters that are not historical facts or information. Various risks may cause Taysha's actual results to differ materially from those stated or implied in such forward-looking statements. These risks include uncertainties related to the timing and results of clinical trials of, and regulatory interactions for, our product candidates, our dependence upon strategic alliances and other third-party relationships, our ability to obtain patent protection for our discoveries, limitations imposed by patents owned or controlled by third parties, and the requirements of substantial funding to conduct our research and development activities.

For a list and description of these risks and uncertainties that we face, please see the reports we have filed with the Securities and Exchange Commission, including our annual report on Form 10-K for the year ended December 31st, 2022. The conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, May 11th, 2023. Taysha undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call, except as may be required by applicable securities laws. I would now like to turn the call over to our CEO, Sean Nolan.

Sean Nolan (CEO)

Thank you, Hayleigh, and welcome everyone to our 2023 first quarter financial results and corporate update conference call. Today, I will begin with a brief corporate update. Dr. Sukumar Nagendran, President and Head of R&D of Taysha, will provide an update on our clinical development programs, along with our collaborator, Dr. Salman Bhai, Assistant Professor of Neurology at UT Southwestern. Kamran Alam, our Chief Financial Officer, will then follow up with a financial update before I provide closing remarks and open the call up for questions.

We've made significant progress across two lead programs in Rett syndrome and giant axonal neuropathy this year and remain on track to deliver on multiple key milestones, including the generation of first-in-human clinical data for TSHA-102 in adult patients with Rett syndrome, the submission of a CTA to the MHRA to initiate expansion of TSHA-102 in pediatric patients, the submission of an IND application to the FDA for TSHA-102, and obtaining further clarity from the FDA on the regulatory path forward for TSHA-120 in GAN. Screening is completed, and the dosing of our first potential patient with TSHA-102 in the phase I/II REVEAL trial in adult Rett syndrome is scheduled for the second quarter of this year.

For our GAN program, the new comprehensive analyses of the totality of the data for TSHA-120 continues to be encouraging and includes compelling findings that offer potential to further support a regulatory path forward. I want to highlight that much of the data presentation plan for the FDA will be new to the agency, and we will work to contextualize the data in a manner that clearly elucidates the potential for meaningful benefit to patients. We plan to submit the meeting request this quarter and expect the formal meeting to occur in the third quarter of this year. In the near term, we look forward to hosting an R&D day in June, where we will provide an overview of the GAN disease state and share these new clinical data analyses. Additionally, we plan to provide an update on our Rett program.

Suku and Salman will discuss this in more detail shortly. At the upcoming ASGCT conference, new preclinical data supporting Taysha 102 and the miRARE technology in Rett syndrome will be presented as part of a poster presentation. We remain focused on achieving the anticipated near-term milestones for our Rett syndrome and GAN programs and continue to work towards our mission of bringing transformational new treatments to patients with these devastating neurodegenerative diseases. I will now turn the call over to Suku to provide a more in-depth discussion of our clinical programs in Rett syndrome and GAN. Suku?

Sukumar Nagendran (President and Head of Research and Development)

Thank you, Sean. Good afternoon, everyone. First, I will start with an update on TSHA-102, our gene therapy program in development for the treatment of Rett syndrome. As a reminder, TSHA-102 utilizes an innovative miRNA-Responsive Auto-Regulatory Element, or miRARE platform, to regulate the cellular expression of MECP2. At the upcoming ASGCT conference, we are excited to present new preclinical data that we believe supports the potential for TSHA-102 and the miRARE technology as part of a poster presentation on May 19th. For our phase I/II REVEAL study in adult patients with Rett syndrome, we have completed screening and scheduled the dosing for the first potential patient. We expect the dosing to take place in the second quarter of 2023.

We plan to report initial available clinical data, which will be primarily on safety in the second quarter of the year at our upcoming R&D day. In the second half of the year, we plan to continue dosing adult patients with Rett syndrome in our REVEAL trial and provide quarterly updates on available clinical data thereafter. We received feedback from Health Canada on our protocol amendment to expand enrollment eligibility to subject 15 years or older in the REVEAL trial, which suggests that Health Canada supports the expansion following initial efficacy and safety data from adult patients. We plan to submit a CTA to the UK MHRA for TSHA-102 in mid 2023 to enable the initiation of a pediatric Rett syndrome study.

We also have an IND application submission to the U.S. FDA plan in the second half of the year to further expand our clinical study footprint with TSHA-102. Let's turn to TSHA-120 for the treatment of GAN, an ultra-rare neurodegenerative indication with no approved treatments or established regulatory pathway. As Sean mentioned, we are currently completing a comprehensive review of data from the ongoing natural history and interventional trial that includes functional, biological, and electrophysiological assessments. We plan to seek a formal meeting with the FDA to discuss the new analysis that FDA has not seen and regulatory path forward for TSHA-120.

As a reminder, early analysis based on MFM32, the primary efficacy scale discussed at the FDA Type B End-of-Phase II meeting, demonstrated clinically meaningful slowing of disease progression in patients with GAN following treatment with TSHA-120 across the therapeutic dose cohorts. Importantly, long-term analysis points to sustained durability and the ability of TSHA-120 to prevent nerve degeneration, generate nerve fibers, and preserve visual acuity, which are significant findings for patients affected by neurodegeneration. Importantly, over 6+ years of long-term clinical safety data supports a well-tolerated safety profile with no major drug-related events. The FDA has stated that MFM32 can be a relevant primary endpoint in the setting of a randomized double-blind controlled trial and acknowledged Taysha's challenge in executing and enrolling such a study design due to the ultra-rare nature of GAN.

As such, the FDA indicated that it is open to regulatory flexibility in a controlled trial setting and is willing to consider alternative study designs utilizing objective measurements to demonstrate a relatively large treatment effect that is self-evident and clinically meaningful. Our comprehensive analysis of the totality of data from the ongoing natural history and interventional trial, which will inform our plans for future interactions with the FDA, continues to be encouraging and includes compelling new findings with potential to further support a regulatory path forward. I will now turn the call over to our collaborator, Dr. Salman Bhai from UT Southwestern, who will provide a high-level overview of some of our initial analysis of the data for TSHA-120 in GAN and the clinical relevance to the disease state. Salman?

Salman Bhai (Assistant Professor of Neurology)

Thank you, Suku, and hello, everyone. My name is Dr. Salman Bhai, and I'm an assistant professor of neurology at UT Southwestern. I earned my medical degree and completed my neurology clinical training at Harvard Medical School with sub-specialization in neuromuscular disorders. As a practicing neuromuscular neurologist, I am keenly aware of the devastation that GAN causes, not only to patients, but also to their families. I've been working closely with Taysha on the development of the Taysha TSHA-120 program for over a year and a half, and am energized by the opportunity to help bring a potentially transformational treatment to the GAN community. I've been heavily involved in the ongoing comprehensive analyses of the totality of data and have been working collaboratively with the team to identify new data findings.

Based on the GAN clinical phenotype and pathophysiology, we are building a clinical narrative around the data to support our regulatory path forward for TSHA-120. I'm pleased to provide an update on the compelling findings from our ongoing data analysis. One goal of evaluating the totality of the data for TSHA-120 is to determine whether we can identify potential objective measurements that demonstrate a clinically meaningful treatment effect. For context, I think it's important to understand that GAN clinically manifests with marked incoordination, ataxia. Due to both severe central and peripheral nervous system degeneration will lead to significant disability and early mortality caused by respiratory failure. There is no approved treatment for this ultra-rare fatal disease. We have access to the largest natural history database of GAN to date through the NIH.

As a result of our analysis of these data, we have a clearer understanding of how to measure meaningful treatment effect for these patients. I'm a neurologist, so of course, let's start with the neuroanatomy. We know there's central and peripheral nervous system degeneration with GAN. Specifically, this involves the cerebellum, long tracts, and sensory and motor nerves. Clinically, these anatomical localizations translate to severe incoordination, which is ataxia, and weakness. Patients struggle with simple tasks like picking up objects and feeding themselves. How can we measure this, the integration of the central nervous system and the peripheral nervous system pathologies? We believe we have a comprehensive scale that we prospectively collected in the natural history and interventional patients, the Modified Friedreich's Ataxia Rating Scale, or mFARS, which was recently used as the primary outcome measure for drug approval for Friedreich's ataxia.

This scale is based on functional and objective measures within the neurologic exam, focusing on ataxia, a key driver of disability in GAN patients. As a whole, we can prospectively measure the integration of the central and peripheral nervous systems using mFARS. We can capture several objective peripheral nervous system data points, including nerve conduction studies, myometry, and nerve pathology. We have scientific evidence of TSHA-120 leading to peripheral nerve regeneration in some patients, meaning nerves are growing back. Nerve conduction studies indicate sensory nerves recover responses that were absent prior to treatment, a key finding that was truly unexpected, and to my knowledge, has never been demonstrated previously in GAN patients. We also see an increase in regenerative clusters on nerve biopsy. This is direct electrophysiologic and biological evidence of nerve regeneration in a neurodegenerative disease.

The peripheral nervous system data is key because recovery of sensory nerves directly impacts patients' performance on mFARS, providing links between objective biologic data and a clinical rating scale. By developing a disease progression model through Bayesian analysis based on the natural history data, we show that the progression of mFARS in GAN is predictable, monotonic, and homogenous across patients. We can use this model to determine treatment effect. Preliminary determinations of treatment effect size relative to the disease progression model, as measured by mFARS and with multiple peripheral nervous system endpoints, show disease slowing. Let me repeat. We have direct central nervous system and peripheral nervous system outcome measures in clinical and biological objective data that show positive disease modification with TSHA-120 in an ultra-rare, fatal neurodegenerative disorder that has no approved treatment.

The restoration of sensory nerve responses on nerve conduction studies and positive impact on other clinically relevant endpoints show the potential for even greater clinical impact in this neurodegenerative disorder if treated at an earlier stage of disease with TSHA-120. I believe these data have the potential to provide objective measurements that demonstrate clinically meaningful treatment effects. We are truly inspired by these patients and their caregivers. We are hopeful that we can bring a potentially transformational treatment to the GAN community. We look forward to working collaboratively with the FDA through our anticipated future discussions. With that, I'll now turn the call back to Suku.

Sukumar Nagendran (President and Head of Research and Development)

Thank you, Salman. As you can see, we have compelling findings that we expect to submit as a part of our formal meeting request to the FDA in the second quarter of this year. These data will inform our discussions with the FDA regarding alternative study designs, additional objective measures, and ultimately, a regulatory path forward. We anticipate a formal meeting to occur in the third quarter of 2023. Importantly, administration of TSHA-120 also shows a translational correlation between preclinical and clinical studies. With TSHA-120, GAN knockout mice show improved dorsal root ganglion pathology and motor function, both of which translate to our human studies with improved sensory nerve integrity and sensory nerve action potentials, better known as SNAP, as detected by nerve conduction studies and biopsy analysis, and improvement or stabilization in strength.

We saw similar clinical translational impact with spinal muscular atrophy and the SMN Delta 7 mouse model, which we developed Zolgensma at AveXis, which showed improvement or stabilization in motor function and strength after treatment with gene therapy that were congruously seen in human studies as well. In June, we are excited to host a virtual R&D day where we will detail these new analysis and review therapeutic potential in the context of the GAN disease state, as well as provide an update on our Rett syndrome program, including new preclinical data for TSHA-102 in Rett syndrome being presented at the upcoming ASGCT annual meeting and available clinical data from phase I/II REVEAL trial in adults.

Lastly, with respect to manufacturing, we have completed the CMC Module 3 amendment submission detailing our commercial process, product manufacturing, and drug comparability analysis and are awaiting feedback from the FDA. We continue to believe in the transformative potential of TSHA-120 and look forward to having a collaborative dialogue with the FDA regarding the potential registrational path to bring TSHA-120 to patients with GAN, who, to reiterate, have no approved treatments. I will now turn the call over to Kamran to discuss financials. Kamran?

Kamran Alam (CFO)

Thank you, Suku. Research and development expenses were $12.5 million for the three months ended March 31st, 2023, compared to $38.2 million for the three months ended March 31st, 2022. The $25.7 million decrease was due to reduced research and development compensation as a result of lower headcount of $10.7 million. The decrease was also due to reduced manufacturing and other raw material purchases of $7.1 million. We also incurred $6.4 million reduced expense in non-clinical studies related to translational and toxicology studies, and $1.5 million lower expense in other research and development activities.

General and administrative expenses were $8.8 million for the three months ended March 31st, 2023, compared to $11.5 million for the three months ended March 31st, 2022. The decrease of $2.7 million was due to reduced general and administrative compensation as a result of lower headcount and reduced consulting and professional fees. Net loss for the three months ended March 31st, 2023, was $17.6 million or $0.28 per share as compared to a net loss of $50.3 million or $1.32 per share for the three months ended March 31st, 2022. The net loss for the three months ended March 31st, 2023, was partially offset by revenue of $4.7 million recognized related to the Astellas transaction.

As of March 31st, 2023, Taysha had $63.4 million in cash and cash equivalents. Taysha continues to expect that its current cash resources will support planned operating expenses and capital requirements into the first quarter of 2024. I will now turn the call back over to Sean for his closing remarks. Sean?

Sean Nolan (CEO)

Thank you, Kamran. We believe that the clinical and pre-clinical data generated to date across our Rett syndrome and GAN programs reinforce our gene therapy approach and the therapeutic potential for our innovative programs to address severe unmet needs in monogenic central nervous system disease. In the year ahead, we are focused on executing across our near-term milestones in our Rett syndrome and GAN programs. In the second quarter of this year, we look forward to dosing the first potential adult patient with Rett syndrome and reporting initial clinical safety data for TSHA-102. We are excited to host an R&D day in June to review the analysis of the totality of the data for TSHA-120 that will inform our regulatory path forward for TSHA-120, as well as provide an update on our Rett syndrome program.

We look forward to providing further updates on our programs throughout the year. With that, I will now ask the operator to begin Q&A. Operator?

Operator (participant)

Thank you. We will now begin the question-and-answer session. To join the question queue, you may press star then one on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then two. The first question comes from Yanan Zhu with Wells Fargo Securities. Please go ahead.

Kwan Hong (Analyst)

Hi, thanks for taking our question. This is Kwan Hong for Yanan. Congrats on the progress. First on the GAN program. I wonder, thanks for the color on the new analysis. I wonder if the patient's data would be compared to their own control, like pretreatment progression, or be compared to the natural history. I wonder if there is a bar, a clear bar on what levels of change on those readout are clinically meaningful. Thank you.

Sean Nolan (CEO)

Thank you for the question. I would ask Suku to take that first, and feel free to add in, Salman.

Sukumar Nagendran (President and Head of Research and Development)

Yes. I will answer the question based on how I understood it, and if I do not, please, you know, clarify your question. The analysis that is still ongoing, we do plan to compare each patient to their own pretreatment status as well based on the natural history that has been collected by the NIH. We also have the option of looking at the broader dataset in the natural history database, where there were 52 patients with a mix of all types of GAN, which include classic GAN and non-classic GAN. I would remind you that in these two types of GAN, the root cause of the disease is the same. Hence, the gene therapy and its findings, I think will lead to a, hopefully, a very productive discussion with the FDA if and when we get that meeting.

I hope that answered the core of your question. Was there a second part to your question that I may have missed?

Kwan Hong (Analyst)

Yeah. Thank you for the color on that. The second part is for those readout, is there a clear bar on what levels of change are clinical meaningful?

Kamran Alam (CFO)

Great question. It's important to understand clinically what's not only important for the patients, but also for the families, right? A simple number on mFARS that change is, doesn't necessarily mean it's important to the patient. That's why we work closely with patients and have interview with families too to identify what's most important from them. As a clinician, it's important for me to understand that patients enjoy independence, and we're looking at our data to correlate objective biologic data with functional clinical outcome measures to define how that link is there and what it means for patients.

Salman Bhai (Assistant Professor of Neurology)

When we have that data in totality, we are seeing positive trends. Of course, this is preliminary. We also use data from other diseases that have ataxia and peripheral nervous system disease to come up with correlates. You know, as you know, this is an ultra rare disease. To clearly identify clinical meaningfulness for this disease alone is difficult and perhaps impossible. However, if we correlate it to other diseases and other clinical syndromes related to this, we can come up with very good proxies that would give you a reasonable answer for what patients think is important.

Sukumar Nagendran (President and Head of Research and Development)

got it. Thank you so much.

Operator (participant)

The next question comes from Jack Allen with Baird. Please go ahead.

Abbie Gray (Equity Research Associate)

Hi, this is Abbie Gray on for Jack Allen. Thank you for taking our question. Recently we've seen the FDA leadership make what appears to be a significant push to pursue the accelerated approval pathways for gene therapies, I guess mainly Sarepta's product in DMD. We realize that you're still discussing the regulatory pathways for GAN, but we're hoping you could provide some color surrounding the correlations you're seeing between functional endpoints such as the MFM32 score and the more objective biomarker endpoint, such as the retinal thickness or retinal vein thickness and nerve biopsy results.

Salman Bhai (Assistant Professor of Neurology)

Excellent question. Right, when we take a look at functional clinical measures, of course there's an issue with sometimes there's bias or effort dependence, that's where we turn to biology. That's, in the biology, that's where the question of accelerated approval can come in. Specifically, if we're looking at sensory nerve action potentials, for example, something that we're seeing recover that was not previously there, well, that feeds into the feedback into your coordination for mFARS and motor function as well. If you have deafferentation of your muscles, meaning you can't feel where your muscles are, your strength will decrease. Having these kinds of markers correlate to clinical measures is important. We take it a step further because sensory nerve action potentials are electrophysiology. We have nerve biopsies that show axonal regeneration.

Preliminarily, as we evaluate this data, we can also look for giant axons decreasing, that gets closer and closer to the biology. We can then tie and correlate that biology from histology to clinical data to functional outcome measures and have a very clear trajectory of what's happening to the patient. Does that answer your question?

Abbie Gray (Equity Research Associate)

That does.

Sukumar Nagendran (President and Head of Research and Development)

Yeah, I want to add. Can I add a little bit-

Abbie Gray (Equity Research Associate)

Sorry, go on.

Sukumar Nagendran (President and Head of Research and Development)

A bit of more information, which I think is relevant. As, you know, as Dr. Salman Bhai walked you through, to step back and look at GAN, obviously it's an ultra-rare disease. There's no therapeutic option available. Obviously, you need an intervention where the benefit outweighs the risk. In our assessment, using the predefined efficacy endpoints per the protocol in the interventional study, looking at the model that we've generated, looking at the progression of the disease, looking at post-hoc analysis, what we're seeing collectively at this point in time is a trend when it comes to functional, physiological, biological, electrophysiological, and even potentially radiologic impact of the intrathecal gene therapy that affects the broad spectrum of the disease in the central nervous system and the peripheral nervous system in a clinically meaningful way.

Hopefully, once you complete the analysis and we go to the FDA and receive that meeting, we can make our case for an appropriate regulatory path, which may hopefully result in approval sooner rather than later.

Abbie Gray (Equity Research Associate)

Wonderful. Thank you so much.

Sukumar Nagendran (President and Head of Research and Development)

Thank you.

Operator (participant)

The next question comes from Kristen Kluska with Cantor Fitzgerald. Please go ahead.

Speaker 8

Hi, this is Rick on for Kristen. Thank you for taking our question. Just to ask about, maybe you could add a little bit more color on the preclinical Rett syndrome data guided for ASGCT this month. How can we kind of put this into context as it relates to other data, other preclinical data we've seen from the program, and what should we be expecting there?

Sukumar Nagendran (President and Head of Research and Development)

That's a great question. Let me start by saying I'm very excited about the ASGCT data with the caveat that I can't speak about it in great detail because it's embargoed. The date, I think, is in our press release, but it's on the Friday, let's see, that's next Friday, which is the 19th, between 12 to 2 is when the information will be presented in front of the poster. If someone is there, hopefully you all will go review it. What is fascinating about gene therapy, and you know, I've been in drug development for a very long time, but it's very rare or unusual where I see preclinical data translate directly into the clinic in the human. I saw this with the SMA program when I was CMO, Chief Medical Officer at AveXis.

I did comment that we are seeing this with GAN now, where the preclinical data appears to translate into the human based on the 14 patients we've dosed. What I would state is that the Rett preclinical data that's being presented at ASGCT next week is very interesting, but the details, as you decipher them, I think will hopefully show that we have a very good construct with the miRNA technology that hopefully will be validated in this preclinical data set that will be presented next week. To go beyond that, I'm also hoping that once we start dosing patients, both adults and hopefully children, that all this preclinical work that has been done in these different rodent models and other models will now translate almost one to one in the human and hopefully create an SMA-like situation and Zolgensma.

Again, to tie this back together, I'm sincerely hoping that the preclinical data presented next week at Rett, which I think I hope you'll find impactful, will translate into the human and give us hope that we have something clinically meaningful in this gene therapy product.

Speaker 8

Thank you.

Operator (participant)

Once again, if you have a question, please press Star then one. The next question comes from Joon Lee with Truist Securities. Please go ahead.

Speaker 10

Hi. Good afternoon. This is Mary on for Joon. Given the ultra-rare situation for GAN, is it at all feasible to do double-blind, placebo-controlled trial or not? Also for objective measures like mFARS, is there the aim for getting a statistically significant change for this measure? Is that, again, given the ultra-rare situation, is that possible or not? Thank you.

Salman Bhai (Assistant Professor of Neurology)

Excellent question. When we think about ultra-rare diseases like this, first we come into a question of what's the practicality of doing an RCT in a blinded fashion with a placebo control. I think with this disease, that's not possible. We simply don't have enough patients to power a study to find statistical significance. That's why we're using our data to look at patients as own control as well as natural history to serve as a control. Right? With this disease, when we have natural history as a control, it serves as a powerful comparator arm. Now that we have several other patients within the natural history to compare to the intervention, we can determine treatment effect and find statistical significance. mFARS, as you mentioned, is objective. It's of course the neurologic exam, which I love.

That adds some objectivity to it, and we're able to detect changes, especially when we use the disease progression model, to show differences. The next step is to find clinical meaningfulness in that data, and that's our hope with the biology, the histology, the electrophysiology to the clinical impact. Right? It's quite widespread over the central and peripheral nervous system, and we're able to detect those changes. Suku?

Sukumar Nagendran (President and Head of Research and Development)

Yes, Salman, one more thing I have to emphasize is the NIH generated the largest natural history database that exists in the world for GAN. That's point 1. Number 2 is the interventional data that we have is also the largest for a disease like GAN. The third thing that the NIH and we've discovered in the natural history study is that all these patients have ataxia, and therefore makes mFARS an appropriate clinical measure to see the efficacy of the product, right? Do you agree, Salman?

Salman Bhai (Assistant Professor of Neurology)

Yeah. Yeah. The neuroanatomy fits perfectly.

Sukumar Nagendran (President and Head of Research and Development)

Yeah.

Salman Bhai (Assistant Professor of Neurology)

What we're seeing in patients, 100% have ataxia.

Sukumar Nagendran (President and Head of Research and Development)

Right.

Salman Bhai (Assistant Professor of Neurology)

Why not measure that? Why not use biologic measures to show that correlation between biology to function?

Sean Nolan (CEO)

Yeah, this is Sean. Maybe just to add, you know, one other point, is that the FDA asks for a double-blind placebo-controlled trial in the context of MFM being the primary endpoint because they thought it was effort-based. When we asked them for clarification around that, they did come back and acknowledge that in this type of a disease state with an ultra-orphan population, you could not feasibly conduct that study. They also then went on to say and reinforce published guidance that a well-controlled trial that has clinically meaningful endpoints that are objective would be considered. Hopefully, what you're getting a flavor for here and that Dr. Bhai is providing additional color on is that, you know, as we've interrogated the database, and as Suku said, it's the largest database in the world for GAN.

We're seeing across multiple clinical domains that affect both the CNS and the PNS, what we think is clinically meaningful impact on objective endpoints that are unequivocally objective. That's why we're so confident, or I should say encouraged by the data that we're generating thus far. We look forward of, you know, showing it in much more detail at the upcoming R&D Day.

Salman Bhai (Assistant Professor of Neurology)

Can I add a.

Speaker 10

Of course.

Salman Bhai (Assistant Professor of Neurology)

point to that too? With the natural history data, what's crucial for this model, which we've shown, is that it's homogeneous, it's predictable. Based off those reasons, we can now use that model to compare to our intervention patients.

Speaker 10

Awesome. If I may, like, I reformulate the question and ask it different way. If mFARS was the primary objective from the beginning, would that trial data so far make it convincing for FDA to have, you know, to approve the drug?

Salman Bhai (Assistant Professor of Neurology)

Awesome question, right? You know, in hindsight, when we take a look at this data, right, it's clear. We look at the neuroanatomy, it's quite clear. With an ultra-rare disease like this, it's always a struggle, right? What's the initial hypothesis and what are we getting? If we were to go back and make that the primary, of course, right? This is a disease that has ataxia in 100% of patients, and those are the findings that we're seeing that we believe to be clinically meaningful.

Sukumar Nagendran (President and Head of Research and Development)

Then I would add one more thing to what, you know, Dr. Bhai just said, is that these patients who were treated were 6 years and older, so the disease had already progressed somewhat, given it was neurodegenerative. Given that we saw, 6 or more patients having restoration of SNAP, or sensory nerve action potential, and other measures of electrophysiology, that could potentially translate into a clinically meaningful effect that could be far greater if these children were treated much earlier, given that the neurodegeneration may have not progressed as much. Obviously, I have to caveat it by saying we haven't studied children younger than 6 years of age, and we have great interest to see, you know, if we can have that kind of significant clinical impact in younger patients as well.

Collectively, we are very encouraged with the data that we are seeing and looking forward to meeting with the FDA and talking to them.

Speaker 10

Thank you very much for taking our questions.

Sean Nolan (CEO)

Thank you.

Operator (participant)

Once again, if you have a question, please press star then one. The next question comes from Gil Blum with Needham & Company. Please go ahead.

Speaker 9

Good afternoon, everyone. This is Gil on for Gil. Maybe a good place to start is just to help me understand the order of events. You're having your R&D event ahead of an FDA meeting in the third quarter. Why not the other way around?

Sean Nolan (CEO)

You wanna take that, Suku?

Sukumar Nagendran (President and Head of Research and Development)

Sure. That's a good question. Keep in mind, though, that we are putting the meeting request in in the second quarter, and there is going to be a certain time lag before we actually get the meeting, hopefully. At the same time, we are generating significant amounts of data from pre-specified endpoints, post-hoc analysis, and the model that, you know, Dr. Bhai was talking about that we think are truly clinically relevant. There's significant interest from many who would like to understand not only the impact of our intrathecal gene therapy on this specific ultra-rare disease to understand benefit over risk, but there's also significant interest in trying to understand the intrathecal platform. What kind of impact could it have across a broad aspect of neurodegenerative and neurodevelopmental disorders?

I would again remind you that if you look at the SMA program with Zolgensma, the IV formulation had significant impact in SMA type 1 and some other subtypes as well. Recently, Novartis released more data with the intrathecal approach, where there was significant clinical impact in SMA type 2, type 3, and type 4 as well. This platform, I think, being proven over time, will give us, hopefully, a simple route of administration, which is through lumbar puncture, that could address many complex disorders of the central nervous system. Due to the significant interest, we think it's appropriate to have this R&D meeting towards the end of June so that we can talk about some of our findings that I think will be hopefully significantly relevant to the patients in question.

Sean Nolan (CEO)

I think the other thing to add to that is that in a perfect world, there would be a scientific conference that lines up with this. That would have been the preferable way to disclose things. In all candor, we stepped through this analysis not knowing exactly what the outcomes were gonna be. At this point, we're very encouraged by what we're seeing. You hopefully can tell from the way we're coming across on the call that, you know, we feel this is very compelling. We felt that was the best way to disclose it, explain how we were gonna move things forward with the agency and highlight our rationale and provide the data, you know, that in our view justifies our conviction with the program.

Speaker 9

Okay, that's fair. bear with me here for a second 'cause this is a little complicated. Sarepta is on top of mind of everyone, and I'll venture to say that the reason the FDA was okay with Sarepta submitting on an external control for a functional measure was because they have a randomized study right behind it. That's basically the key difficulty, right? If you're doing an open label study for a functional endpoint, the training aspect of it, right? That's what the FDA does not like. That gets me to my actual question: Is mFARS more objective?

Salman Bhai (Assistant Professor of Neurology)

As a neurologist, of course, I would say that it is. For example, if you hold your arms out in front of you, if you happen to have a headset on, and you take your right 1 pointer finger and touch your nose, there's a little bit of jitter there. To most people, that might not be much, but to me, I can pick that up. If you have even more jitter, I can pick that up further and start to objectify what your exam findings look like. That's mFARS. Not only are there objective pieces from the neurologic exam there that I can point towards and say, "This has intra and inter-rater reliability," but there's also objective measures that then back that up.

If I was a bad neurologist and not diagnosing correctly, right, I have objective measures there to help support that. mFARS, I would argue, has objective measures within that.

Speaker 9

'Cause in my opinion, I think that might go to the heart of the matter, because it's really obvious that the FDA doesn't like external controls when it comes to things that can be trained in an open label study.

Sean Nolan (CEO)

Also like the Reata product that was approved.

Sukumar Nagendran (President and Head of Research and Development)

Yeah.

Sean Nolan (CEO)

with mFARS, right?

Speaker 9

Yeah.

Sukumar Nagendran (President and Head of Research and Development)

you know, there is.

Sean Nolan (CEO)

Give her example.

Sukumar Nagendran (President and Head of Research and Development)

Exactly. There is a history there on the regulatory side, you know, that sometimes it's just impractical to ask for randomized specific control trials and perfection when it comes to clinical trial design. When there is no therapeutic opt-option available and these kind of studies, especially in ultra-rare disease, show clinical benefit, I think then it becomes a negotiation between the regulatory agencies and the sponsor in making sure the product is appropriately made available to the patient community in question.

I would go even further to state that Peter Marks and colleagues have been out there obviously encouraging a serious discussion between the agency CBER and the sponsor of these kind of ultra-rare disease programs in having some flexibility if the benefit far outweighs the risk and there's no other therapeutic option available to the patient community, such as in GAN, which is frankly a terrible disease. If you meet these patients and families and see what happens to them, I think that pathway is now open for us to appropriately position our data, talk to the FDA, and show them that we ourselves are convinced, and hopefully we can convince them that this is an appropriate product for approval such that patients can use the gene therapy product.

Sean Nolan (CEO)

I think one other thing to add, too, it would simply be that, you know, in addition to mFARS, you know, what we're trying to do is also demonstrate multiple endpoints that are objective.

Sukumar Nagendran (President and Head of Research and Development)

Right.

Sean Nolan (CEO)

I mean, we wanna talk about SNAP or EIMs.

Sukumar Nagendran (President and Head of Research and Development)

CMAP.

Sean Nolan (CEO)

CMAPs and MRIs.

Sukumar Nagendran (President and Head of Research and Development)

Mm-hmm.

Sean Nolan (CEO)

Right? To show that no matter where you're kinda cutting the bread, you're getting an effect.

Sukumar Nagendran (President and Head of Research and Development)

Mm-hmm.

Sean Nolan (CEO)

in all these domains that can only be attributable to the drug. You know, I think with the model that we've got put together, we have a very scientifically driven, data-driven, you know, control that we can point to.

Sukumar Nagendran (President and Head of Research and Development)

Mm-hmm.

Sean Nolan (CEO)

This highlights the effectiveness across all these different domains. Put very simply, we're not hanging our hat on any one thing. It is the totality of the data.

Sukumar Nagendran (President and Head of Research and Development)

Right.

Sean Nolan (CEO)

Yeah.

Speaker 9

Okay. Thank you for taking our questions then. Again, congrats on the progress.

Sean Nolan (CEO)

Thank you.

Operator (participant)

Once again, if you have a question, please press star then one.