GenSight Biologics S.A. (SIGHT) Earnings Call Transcript & Summary

Good morning for those who are in the U.S. and good afternoon for the others. Thank you for attending our webcast. I'll start with some introductory comments, and I think it best would be for us to leave time enough to answer to potential questions. As you know, the manufacturing of commercial batches for the process performance qualification is forever, for everyone, a delicate state, which is subject to technical uncertainties. This is, of course, particularly true for gene therapy because of the inherent complexity and novelty of the manufacturing process. And when those risks materialize and issues occur, this uncertainty naturally have a direct impact on the development time, especially when you depend on a partner to execute the manufacturing, as is the case with GeneSight. Anyway, in 2020 and in the first half of this year, we had already encountered manufacturing issues, but they were related to the COVID situation, and in particular, to the restriction on the availability of manufacturing equipment and material that was imposed by the Defense Production Act. These problems then, earlier this year, led us to a first request to postpone the resumption of the D120 clock stop in order to give us time to supply the PPQ data needed by the European agency. And indeed, we obtained and we announced this postponement, with a deadline extended to January 2022. And then 3 such PPQ batches were due to be manufactured to meet the standards required by the regulatory agency. And after resolving the supply issues, we were able to resume the manufacturing of these 3 batches in August of this year at our production partner in Boston. That went well, all the stages of the manufacturing process took place as planned with good yield, except for the final filtration stage. During this step of filtration, we noticed the loss of a significant amount of our vectors. This loss, which again, was observed for each of the 3 batches, very similar, at the very same final filtration step, ultimately resulted in a quantity of vectors that was lower than the predefined specifications. As such, we immediately mobilized our team and those of our partner, of our manufacturing partner, to identify the root cause of this very, very unexpected phenomenon. Indeed, this filtration step has been reproduced several times before and have never posed the problem in the previous rounds. The investigation clearly demonstrate that the observed loss is linked to the very nature of a new filter used during this step, and therefore -- which the loss of this large quantity of our vectors was due to a limited technical program. The finding does not challenge the manufacturing process itself, which indeed, is important. And with this, and with our manufacturing partner, we have decided to restart the manufacturing of 3 new PPQ batches as soon as possible by using proven filters to correct this observed problem, and these production runs will restart this coming December. At the same time, of course, since the production results of these batches are necessary to obtain marketing approval with we liaised with the European agency to inform them of the situation, to explain the remedies, and to request a further 9-month period to complete the references related to manufacturing, including the 3- and 6-month stability data. This highly unexpected situation is extremely frustrating for our entire team, and it is also no doubt disappointing for all our stakeholders, including all our shareholders that -- who support and trust us. We have collectively hoped for the smooth execution of our manufacturing. And above all, this will be a disappointing setback for our patients who are, of course, placing their hopes in our -- on our therapy. Unfortunately, the risk of an unexpected issue in manufacturing is an unavoidable feature in the commercialization of an innovative and biological therapy. However, it is very important for me to reemphasize the following 2 points. One and first, nothing in the situation raises any questions about the manufacturing process itself. And second, of course, nothing in the results bears a relationship with the actual therapeutic potential of LUMEVOQ. We remain entirely dedicated and committed to the timely and successful launch of LUMEVOQ in Europe, and to continue to push it in the U.S. I'll pause there, and I'd like to take the question that you may have posted on the webcast. Thomas, do we have any?

No questions for now. [Operator Instructions] So no question. Let's give another 2 minutes, and if there are no questions. We'll adjourn. Okay. We have one question. What will be the financial impact of renewing these batches?

So the financial impact is going to be the price of those 3 additional batch. But however, this batch were 3 additional commercial batch were already scheduled with our partner, so there will be almost 0 impact financially.

And to -- maybe to elaborate on that, we reported a runway to mid-2020. Today, we are confirming this guidance as we expect the -- we've been quite careful when establishing this guidance in the first place, and we believe the impact will be marginal. So we will be -- we will update the markets on any marginal change to this guidance. But for today, we keep it unchanged. Other questions are coming up. Do GeneSight have some product left for ATU purpose in France?

Yes, indeed, we still have a product left for ATU use, using the previous batch produced, by the way, at our partner in Boston as well.

What is the impact of this on the regulatory process in the U.S.? Have you met with the FDA for the pre-BLA meeting yet?

Not yet. And that, of course, creates a new situation where we will certainly continue to go for a meeting with the FDA before the end of the year to present the results of REFLECT and the comparison with natural history and get some clarity on what's next on the FDA side. However, we may decide that this is not going to be a pre-BLA meeting, but rather a Type C meeting. Because as you know, pre-BLA meeting is only onetime meaning. There can't be 2 pre-BLA meeting. So we may not burn this ammunition and then prefer to go for the Type C meeting knowing that this delay in the manufacturing is, of course, going to push also slightly the time lines in the U.S.

A question on time line. Is there a risk that the EMA may declined to extend? Should the EMA refuse to extend, what would be the impact on approval time line?

Well, obviously, I cannot comment on the response of the -- from the EMA, but I think, given the good relation and the many, many discussion we have between us and the European agency, I would say it is unlikely that they would not consider our request as a rational one. I believe we have explained the situation Again, I cannot predict what it will be. I doubt it would be just rejected as is. But I'm also confident that they may find a way for us to move forward smoothly within this 9-month period of time. So I'm very confident. And I want to -- certainly to thank our regulatory person, Leigh Shaw, who is heading this interaction with the FDA -- with the European agency, sorry.

Okay. Regarding the new filter. Has your partner used this new filter for other products as well? And did they have similar issues of product loss with the new filter?

I obviously can't answer this question because we don't know for which customers our partner in Boston is working with. What I can say is those filters are -- have been taken from a catalog of a vendor who, by the way, is the same vendor of the filter we used before. So we will simply go back to the former filter we were using. It is not going to be a major change control, and we expect, again, this to resolve the situation. Again, I think it's important to emphasize this step, the filtration step that went wrong is the final one. All the previous step that leads to the -- that are part of the production process, went extremely well. We have identified the root cause, we proposed a very simple solution that we can implement very quickly. The process itself is not at stake. The process is up and running. And as I said, all the steps are doing very well. So clearly, I believe that we are there. We -- the root cause identified, remedies are taken. And I would like also to thank our partner in Boston because I mean, they have been really reactive on this to work with us and opening up for a very soon, a slot to restart the PPQ campaign.

So we probably responded partially to this, but maybe be more specific. Can you comment on whether the yield before filtration was above, at or below the previous years?

I don't have the numbers close to me, but the yields we obtained before the filtration steps are consistent with the specification we have. They're consistent with what we have seen before. Obviously, we see variations, differences in the yield on a batch per batch basis. But those variations are limited. So we are within the previous observation in the previous runs, and the only thing that really went wrong is this filtration steps where we identify clearly that during this step, we lose a very important quantity of material.

A question on -- concerning the new expected approval in Europe now, the time line?