Lexeo Therapeutics, Inc. (LXEO) Earnings Call Transcript & Summary

Good afternoon, and thank you for joining Guggenheim's 2026 Emerging Outlook Biotech Summit. I'm Debjit, one of the therapeutic analysts and my privilege to welcome my next presenting company, Lexeo Therapeutics. And from Lexeo, I have Nolan Townsend, the CEO; and Louis Tamayo, the CFO. Thank you, gentlemen.

Thank you. It's great to be here. Thanks for having us at the conference.

If I could ask you just do a quick intro before we get into the Q&A.

Yes, sure. So Lexeo is a cardiac genetic medicines company. Our most advanced programs, utilizing AAV gene therapy to correct genetic cardiovascular diseases of high unmet need. Our most advanced program is treating Friedreich's ataxia. Our gene therapy is having a meaningful impact on both the cardiac pathology of the disease and it's showing signals of improvement in the neurologic disease. We'll spend some time talking about the data. But on the cardiac side, for all of the patients are presented with abnormal heart mass, they've all returned into the normal range. We've also seen an effect size on the neurologic scales Friedreich's ataxia that are similar to the commercially approved therapy. So we think this treatment has the potential to change the standard of care in that disease, and we're moving this program into a registrational study this year, which I think we'll spend some time talking more about. But there's obviously a disease of high unmet need. For most of the patients, the cause of death is cardiovascular disease. So to see this type of treatment effect across the totality of the disease, we're very excited about. Our next most advanced program is treating arrhythmogenic cardiomyopathy. Here, we're focused on the most common genetic mutation causing arrhythmogenic cardiomyopathy, which is the plakophilin-2 or PKP2. This is a 60,000 patient rare disease in the U.S. So it's more than twice the size of a disease like Duchenne muscular dystrophy, making this one of the largest commercial opportunities in systemically administered gene therapy. We completed the enrollment of a Phase I/II study last year. We have 10 patients total enrolled, 7 patients at our high dose. We had a data readout earlier this year with data at early time points for a high-dose cohort. This showed a meaningful improvement on endpoints like ventricular tachycardia, both relative to the patient's baseline, but also relative to a natural issue study that we have running alongside it. We'll have conversations with the FDA and then a future data readout at more mature time points associated with that program. But I think it's showing some very interesting early signals of clinical benefit against some very important end points in the disease. And we have a preclinical pipeline also focused on genetic cardiomyopathy. So we're making a lot of progress in this new and evolving field within the broader cardiovascular treatment landscape, where you've seen very few precision medicines approved in cardiovascular disease. And we think the AAV vector has unique properties that allows it to treat genetically mediated cardiac disease, and we're really at the tip of the spear and some of that work with our clinical stage programs.

Well, thanks for that. And let's start on the regulatory side in terms of interactions with the FDA. The FDA was open to pooling Phase I/II data and also using an earlier time point. When should we expect that -- expect a definitive update on that?

Yes. So we're -- so maybe I'll just take a step back and kind of walk through where we are. So as you mentioned, our prior meeting with the FDA, they were open to pooling patients from our Phase I/II study with a yet to be conducted a registrational study. It was left to us to come back with the statistical plan that could allow for pooling in that picture. It's not -- it's a relatively complicated exercise, but that's part of the alignment that we're working to reach. We are expecting to give an update on the final statistical plan and study design in early 2026. I think from a guidance perspective, in terms of study size, study length, we remain in line with the prior guidance. The work that we're doing with the FDA now is really on a couple of fronts from a statistical perspective. I think one is trying to minimize sources of bias in the forthcoming study relative to the control. And the second is trying to give -- have some visibility into the future confirmatory end points. We do not have to design the confirmatory study in order to reach alignment on the accelerated approval study. But we -- I think the CBER would like to have a lens into where we're headed from a confirmatory perspective, and we're likely to have important cardiac endpoints as confirmatory study endpoints here. So those are a few of the things we're working on, and we expect to give an update in the time frames that we previously guided in terms of final study size, study length and other attributes of the statistical plant.

And given that LVMI is not necessarily subject to biomarker, it's a hard clinical end point, you should be fairly confident that there should be no walk back from the FDA. Highlight some of the recent CRLs we have seen, which are more sort of biomarkers.

Yes. I think LVMI is clearly -- cardiac hypertrophy is the hallmark of this disease. LVMI is the most -- and cardiac MRI is the most sensitive measure for it. Left ventricular mass is a commonly used biomarker by cardiologists that evaluate hypertrophic cardiomyopathy. So it is really the best and most efficient and most sensitive way to evaluate disease progression in Friedreich's ataxia cardiopathy. We've agreed on a 10% improvement in left ventricular mass as a clinically meaningful threshold. There's literature that links this to a 20% risk of mortality. So it's very much a surrogate that's linked to the disease and has a clear link to mortality. So no guidance change with respect to LVMI.

And where do you think the duration of follow-up could land up? Would you prefer a 6-month study or a 9-month study?

Look, there's trade-offs. The FDA is open to a time point shorter than 12 months. We have, at the higher dose, a 28% reduction in left ventricular mass at 6 months. We have a 30% reduction in left ventricular mass at 12 months. So there is some difference in effect between the 2. So there are obviously trade-offs in looking at an earlier time point with potentially less deep treatment effect. So we're working through all of that in terms of the alignment on the statistical plan, and we'll be able to give a final conclusion on that at -- when we provide the update. I mean our goal is to have the fastest, most derisked path to an accelerated approval. So the design that we land on will take all of this into account to get us there in the most efficient way possible.

Got it. Now the company has 2 late-breakers at the ACC. Are we expecting substantial new data from the 2 programs? Or I mean, given that it's a late-breaker, people are expecting something different?

Yes. So I think for FA, the last data update, we had all of the abnormal LVMI patients were at 12 months. We had most of the other patients with normal left ventricular mass at 12 months. We saw a consistent improvement in left ventricular mass. We saw consistent improvement in troponin. I wouldn't expect a materially incremental picture to that. I mean, there may be some additional data there. But I think the story for FA in terms of the treatment effect, the relevance of the endpoint, I think that's all clear from prior data updates. I think it's important that this therapy, this LX2006 has not been presented at an academic conference. So this will be the first one. We'd like to ensure that this therapy has been introduced to cardiologists that they understand the treatment effect. They understand the relevance of gene therapy for this type of disease. So I think the focus is more the audience and ensuring cardiologists have awareness of what this therapy is achieving in this very serious disease.

So in your discussions with KOLs, the LVMI greater than 2 standard deviations, is that the threshold for treating? Or if your data look anything like your earlier data set, there's going to be an urgency to treat them out of what?

Yes. So I think the -- obviously, the patients with 2 standard deviations and above will likely be the early adopters for this therapy. Those are the ones that are closer to the latest stages of heart disease. But also looking at the Phase I data, we had 11 patients that did not have abnormal LVMI at baseline. Many of these had elevated troponin, many of these had elevated wall thickness. We saw improvements in lateral wall thickness. We saw meaningful improvement in troponin. So there is a case to be made to treat patients that do not yet have the 2 standard deviations or greater of left ventricular mass disease burden potentially on the basis of troponin. I would agree that probably the more urgent treatment, those seeking treatment would be for that abnormal LVMI population. But we do not expect the label to be limited to that population. I think we can look across a number of rare diseases including within Friedreich's ataxia where the label of the commercially available treatment does not match the inclusion criteria of their pivotal study to say that we're likely to have a label that's broader than just abnormal LVMI population and then looking at biomarkers like troponin that may be the right trigger point to consider a therapy like this could be the pathway to treat patients earlier in the disease. And what we've not talked much about is the benefit on the neurologic size. So we're getting about a 2-point improvement in the modified Friedreich's ataxia rating scale, which is the neurologic function scale that evaluates disease progression of Friedreich's ataxia. It was also the clinical endpoint used for the approval of the existing commercial treatment. That treatment was seeing roughly a 2-point improvement in the mFARS scale. So for patients that even have earlier stages of cardiac disease or do not yet have cardiac disease the potential benefit of a 2-point improvement in the modified Friedreich's ataxia rating scale is also clinically meaningful. If you remember, at the outset of the approval of SKYCLARYS, there were, I don't know, up to 4,000 patients on treatment, seeking exactly that treatment effect of this 2-point improvement in mFARS. So there's a case to be made here for patients that are even much earlier in the cardiac disease and the potential neurologic benefit that they could experience from LX2006. So I think we'll -- the story will play out over time here, but I think we have a strong case to be made for a range of patients across the disease and treatment of this profile.

This is a complicated disease. You've got neurologist on one side, cardiologists on the other side. Who is your primary target? And where does the intervention need to occur?

Yes. So I think the early adopters are likely to be cardiologists. There are a range of patients that are under the care of a cardiologist. They're there under the care of a cardiologist for a reason. They will probably have some form of discernible cardiac disease. Some of the sites we're working with are already doing cardiac MRIs on the patients. So they're tracking the progression of the disease in a pretty robust way. So I think the early adopters for treatment are likely to be cardiologists. But I think for the points that I just made about the benefits on the neurologic side, we're likely to see neurologists that also engage in therapy in our sites from our Phase I, actually, all of our PIs were neurologists. So a lot of the patients that have been treated to date have been under the care of neurologists and have considered LX2006 for their patients.

So maybe talk about the ease of administration, corticosteroids, et cetera, which adds to the commercial appeal?

Yes. So our immune suppression, we're using a 1E12 vector genomes per kilogram dose, and that's a dose we'll take forward into our pivotal study and into our -- into the commercial setting. Associated with that, we're using a relatively low dose of prednisone as the immune suppression. So as you're pointing out, I think it's not very onerous treatment course. We've had a very compelling safety profile associated with this therapy. I think that's to be expected at this dose. So the expectation would be that this would be a gene therapy that is amenable to the range of patients across the disease. We also have adolescent and pediatric cohorts that we're expecting to have in the study. So from an age group perspective, we would expect to potentially be able to treat the range of the disease as well.

And from a CMC perspective, do you have end-to-end control of the product? And in terms of PRT, empty-to-full capsids are you versus...

Yes. So we have completed production of the clinical batch for the pivotal study using our final commercial process. This is a high-yielding process, and we have information on our website. But in effect, you can back into when we're looking at cost of goods in some cases that are close to biologics. And this process, we transitioned from a HEK293 adherent process to Sf9 suspension for our clinical and commercial material. This required a comparability study for us to complete. That study is complete. The FDA has approved the comparability protocol. So we're cleared to move forward with dosing in our pivotal study from a comparability and FDA perspective. We also received CDRP designation, which is a designation designed to advance innovation in what's required from a PPQ process validation perspective for BLA. That conversation is running alongside our conversation about finalization of the clinical trial. We hope to align with the FDA on a PPQ process validation requirements that could allow for a rapid path to a BLA following the completion of the pivotal study and then that top line readout.

What role do you think natural history is going to play in your BLA submission for accelerated approval?

Yes. So that's -- it's a good question. We have the natural history study, the prospective natural history study already running. So that natural history study has an identical inclusion criteria to the treatment study. So we already have sites up and running that are looking for patients that are the identical profiles to what we need for the treatment study. So that study will be a feeder of patients into the ultimate treatment study, allows us to get the sites up and running earlier, allows us to look for the patients that will ultimately be part of the treatment study as well. So I think it will play an important role. And as we align with the FDA, it allows us to advance from a site operations and enrollment screening perspective as well.

Got it. You guys are clearly well ahead, but the competitive landscape is changing. So are you thinking about the dual approach or the dual AAV approach going after CNS and cardiac?

Yes. So I think there's obviously, there's different approaches here. What we're seeing from our systemically administered therapy is it's having an impact across a pretty broad swath of this disease. So I mentioned the improvement on the mFARS scale. We're seeing very definitive and very important improvements in the cardiovascular component of the disease. It's not likely that a substantial amount of our therapy is actually getting into the brain itself. And in the brain, there's aspects of Friedreich's ataxia that are mediated by the deep cerebellum, the dentate nucleus. And there is, as you're pointing out a therapy that's evaluating intraparenchymal injection of frataxin gene therapy combined with a systemic injection. So -- however, it's not exactly clear to us that these therapies are -- will be direct competitors over the long term. And what I mean by that is there's a possibility that a patient who receives a systemically administered dose of gene therapy may still be eligible for an intraparenchymally administered dose or CNS administered dose of gene therapy. So there's not been definitive preclinical or nonclinical work completed to really flush that concept out. We'd like to understand that a lot better. But in a world where a patient can be sequentially dosed first systemically and then later in a direct CNS administration, it would mean that these therapies are not necessarily direct competitors that there's an aspect of that therapy that may be amenable to patients that have been treated with LX2006. So I think more to come on the competitive landscape. I think if I look at all the therapies out there today, whether it's protein therapies and others, there may be -- maybe a world where these all coexist as they do in some of the other disease areas that are out there.

So let's talk about the PKP2 program. I mean, in general, people were expecting variability in the PVC side. But you had -- you have some variability on the NSVT endpoint as well. How do we address this going forward?

Yes. So I think going into this, what we understood is that the endpoints are likely to improve at different rates that you won't see at the same exact time point in the same patient improvement in non-sustained VT, PVCs and ejection fraction that likely the remodeling that's occurred -- the modeling that we would expect to occur will cause those endpoints to improve at different rates. So that was expected. We did see a 22% reduction in non-sustained ventricular tachycardia. If you look at our natural history study running alongside the treatment study, patients saw a 20% worsening of non-sustained VT. So there's a 42% delta between the treated patients and untreated cohort. And that's what several of the patients at the earliest time point where we can evaluate efficacy. If we look at the 9-month time point, there's a 65% reduction in non-sustained VT again versus this 22% worsening. So you're looking at an 85% delta. So I think we're seeing the early signals of a treatment effect in non-sustained VT. And I would draw a comparison to the existing, let's say, commercially available treatments, amiodarone, for example, this is a mid-20s treatment effect in reducing VT about 24%. So already at the earliest time point for many of the patients, we're already seeing a treatment effect that's similar to what's available today for patients. And what's also corresponding to this is that the patient has the longest duration of treatment follow-up is showing a 30% improvement in their ejection fraction. And one could say a 3% to 5% improvement in ejection fraction could be noise, but I think any cardiologist would say a 30% improvement in ejection fraction is likely to be clinically meaningful. So with that improvement in non-sustained VT, we're showing signals of an improvement in an important structural endpoint like ejection fraction. There is no therapy today that is improving arrhythmia burden at that effect size and also showing any signal of improvement in structural elements of the disease. So with this early data readout, we're already seeing that. You're pointing out, we had 1 patient who saw an increase in their non-sustained VT burden. This patient was at an early time point at 6 months. It's not clear to us, is this a nonresponder or is this a patient that is yet to respond. But if you look at the overall picture of this early data, we're actually very encouraged by it. The question from here is what's the right pathway to a registrational study? What are the right registrational endpoints? Ventricular tachycardia is frankly the hallmark of this disease. It's not even a surrogate. It is a clinical endpoint. So we think that will play an important role in our the future alignment with the FDA. And I think the only question is sort of the one that you're asking, which is what is sort of the final treatment effect that we can expect to see at longer time points? Is it something more similar to the 9-month patient? Is it something more similar to the average of what we're seeing today? And then how much variability is there? And the endpoint over time, I think we'll have that answer as we look at the data later in the year and see more of the patients at these longer time points, such as 12 months.

And how do you -- when you think about the PKP2 expression versus mRNA or the protein, I mean there wasn't a direct correlation there or even versus VCN. Why do you think that is? And is there a way to sort of address that?

Yes. So just taking a step back, what we did see. So we saw a dose-dependent response in every one of our biopsy endpoint. So we saw greater vector copy in our high dose than our low dose. We saw greater mRNA in our high dose versus our low dose. And the same with protein. We saw more protein in our high dose versus our low dose. And we got, in some cases, between 3 and 5 vector copies per cell, which we think is a great outcome to achieve that kind of result and do so with no classic gene therapy-related SAEs, so no SAEs related to complement activation, no SAEs related to liver injury. So we defined a very clear therapeutic window. We're getting a great payload. In fact, this validates the use of AAVrh10 for the heart in that I have not seen another capsid demonstrate that type of distribution into the heart, but do so with the safety profile. So that's, I think, a very positive picture that we're happy with. In terms of the direct correlation on the patient-to-patient basis between VCN, mRNA to protein, you remember these all come from different tissue samples. So you would like to see the high dose with more protein than the low dose across all these measures, which we did see. But you wouldn't expect an exact correlation patient to patient because you're looking at a different tissue sample for each one of those end points. So for us, the usefulness of this data is sort of, as I was describing, I think we know we're at the right dose to get between 3 and 5 VCN implies we don't need more than 5 copies of the gene per cell. We're seeing protein expression. We're seeing protein expression actually localized to the right place in the desmosome. So we know functionally from validating the biology, it's going to the right place. I think this is what this data is helpful for us to understand all of that. I think it's unlikely to be a pivotal study endpoint both because of tissue quality issues with the disease itself results in fatty fibrotic tissue to accumulate in the heart. So if you end up with tissue samples that are primarily fibrosis, you will see kind of variable picture. The other challenge with using plakophilin-2 as an endpoint or biopsies in a future study is the patients are presenting with a pretty wide range of pretreatment baseline, so anywhere from, let's say, 20% to 50%. So it will be a lot harder to understand how much more PKP2 do you need to add to have a clinically meaningful benefit. So I think the usefulness of the biopsies is as we described, I think we know we're at the right dose. I think we know it's getting the right place in the desmosome. This validates all the biology that we saw preclinically. And now I think we're more focused on the clinical endpoints like non-sustained VT for the future of the program.

And in terms of the 3 SAEs of sustained ventricular arrhythmias that you had, how do you go about addressing that? Do you need any changes to...

Just to correct. There's 1 SAE. Yes, 1 SAE. We had 1 SAE of a sustained ventricular tachycardia. This is actually an endpoint that we're measuring in the disease. This patient had a prior treatment -- prior history of sustained VT prior to entering the study. So while it was assessed it's possibly treatment-related, it looks very much like arrhythmogenic cardiomyopathy, I would note that over the course of this treatment, none of the patients in the trial have had their ICDs fire. So not only are we seeing improvement in non-sustained VT, we're also seeing no ICDs fire. And so that endpoint looks like the disease. And I would point out, we've not had any SAEs related to complement or any SAEs related to liver injury, which is what you would typically see in some of the higher dose gene therapies. So I think we're in a very positive place from a safety perspective, in particular, for a disease like this one where many of the patients will experience sudden death arrhythmias, many of the patients will go on to require transplant. So from a benefit risk perspective, we think this is a very attractive picture that's developing for this therapy.

Well, awesome. Unfortunately, we have run the clock and looking forward to the data update, especially on the regulatory side and wish you guys the very best for this year.

All right. Thank you. Thanks for having us.

Thank you.