Neurogene Inc. (NGNE) Earnings Call Transcript & Summary

Thank you very much. Happy to be introducing Rachel McMinn, Founder and CEO of Neurogene, who has some new fresh data to talk us through for NGN-401 in Rett syndrome. And so I'm really looking forward to this presentation, and then we will have some time for questions. So please take it away. Thank you, Rachel.

Yes. Thank you, and thank you, Paul, for hosting me. Today, I am absolutely pleased to share new interim clinical data from our Phase I/II trial of NGN-401 for the treatment of Rett syndrome. As Neurogene is a publicly traded company, I want to note this presentation includes forward-looking statements subject to risks that could cause actual outcomes to differ materially. See our filings with the SEC and especially our risk factors in our annual report on Form 10-K and quarterly reports on Form 10-Q for more information. So these results just released reinforce our belief that NGN-401 has the potential to be both best-in-class and first-in-class. We believe that NGN-401 is setting the standard for Rett syndrome gene therapy. Caregivers and clinicians consistently tell us that a gene therapy for Rett syndrome must deliver multiple developmental milestone and skill gains that increase over time. One skill is not enough. Multiple domain improvements across key domains, hand function, gross motor function and communication, durability, once skills are gained, they are not lost and they're maintained over time and a favorable tolerability profile. Our updated data shows that NGN-401 continues to meet all these criteria. Patients are gaining multiple skills with 35 skills gained in total across multiple domains and all gains have been durable with no skills lost and NGN-401 continues to be generally well tolerated. We believe NGN-401's potentially best-in-class profile is being driven by a number of key differentiators. First, the decision to use ICV administration. This approach is a strength. Other gene therapy programs have demonstrated that administering virus locally into the brain is essential for efficacy. ICV is a common procedure, not a barrier to adoption, taking approximately 1 hour of operating room time. NGN-401 delivers a full-length gene, which we believe is essential to ensuring maximal functional benefits. And finally, our EXACT technology controls the level of transgene to avoid MECP2 overexpression toxicity. Today's efficacy data covers all 8 pediatric patients enrolled in the Phase I/II trial at the 1E15 vector genome dose. Patients in this trial are ages 4 to 8 with follow-up ranging from 6 to 24 months. This cohort represents the full spectrum of genetic severity in classic Rett syndrome. Safety data includes 10 patients at the 1E15 dose and additional data is planned for release in 2026. I'm going to start with the first 5 patients who had at least 12 months of follow-up post treatment with NGN-401 as it is aligned with our primary endpoint in the Embolden registrational trial. All 5 patients have shown functional gains in the core clinical domains of Rett syndrome. 4 of 5 patients have met the CGI-I responder definition and CGI-I scores have remained durable over time. 4 of 5 patients not only meet the responder definition for Embolden at 12 months, they far exceeded the minimum threshold for success required for the Embolden trial. Skill gains are increasing over time. If you look at the right-hand side of the slide, you will see this illustrated here. All responders have gained additional milestones up to 24 months post treatment with 14 skills gained at 6 months post treatment in aggregate, with skill gains more than doubling beyond 12 months in these patients. Moving on to the more recently dosed patients. We are also seeing skill gains here. 3 of 3 patients have functional gains. 3 of 3 patients have met the CGI-I responder definition and 2 of 3 patients have gained skills that match the Embolden skill list at this early time point of 6 months, which is well before the 12-month definition in the Embolden trial. This data is consistent with the previously dosed patients. Based on the current data set in totality, with additional follow-up to go, 6 of 8 patients meet these requirements to be a responder for Embolden, well above the 35% threshold required for a successful outcome in Embolden. This slide shows the breadth of skill gains across multiple domains per patient. Hand function, gross motor function and communication with increasing skill gains over time. As one of our principal investigators recently told us after reviewing all of this data, each of these skills are meaningful under themselves, but when you put them all together, they alter the course of disease in a significant way. So for the next set of slides, I'm going to take you through each of the patients with a response. And we see continued acquisition of new skills and durability of previously gained milestones. Please note that the complexity of the skill gains is also a significant differentiator. For example, this is patient one who has gained 11 skills in total. Most recently, she added the new skill of sitting up from a lying down position independently. Notably, she has not plateaued even 24 months after her treatment. Perhaps more remarkably, not shown on this slide, but while at baseline, she could not hold objects and now she's holding a hand shopping basket at CVS while shopping with her mom. Moving on to patient 2, who has gained 10 skills in total. She gained the new skill of drinking from a cup independently and climbing stairs with assistance. This is remarkable progress from baseline in both hand function and gross motor planning. This is our second patient starting to climb the stairs. Patient 3, who has gained 6 skills in total. She added hand function and executive function skills. At baseline, she couldn't eat solid foods. And now she is using her hands to grab a pancake from grandma to feed herself. She is also following instructions to pick up the right puzzle pieces while playing with her grandma. Patient 4, who has gained 4 skills in total, gained independent drinking from a cup and the ability to follow instructions. At the encouragement of her mom, after multiple attempts, she was able to successfully coordinate her arm and hands to turn off the lights on her own, something she was absolutely determined to accomplish. Moving on to patient 7, who gained 1 skill just 6 months post treatment, she progressed from palm feeding to using a fork for the first time to feed herself. This is yet another example of a complex skill gain. And patient 8, who gained 3 skills just 6 months post treatment, including using words in an exchange back and forth with her dad for the first time since her disease regression, pleasantly surprising her father. She also kissed her mom for the first time ever. As you can see from this data, the skills are complex, layering one on top of the other as gains remain durable over time, truly setting a new standard for what to expect in gene therapy for Rett syndrome. Shown on this slide is just kind of a composite in summary of what matters to families, and you are seeing some real activities of daily living, improvements in health-related quality of life that we haven't gone through, and I will keep my remarks short, so I won't go through all of these and multi-domain improvements. These are just some caregiver testimonials, so you have them. I'm not going to read them for you, but just know that they are in a slide deck, so you can get a sense of the kinds of improvements that families are experiencing firsthand. Moving on to safety. NGN-401 remains well tolerated at the 1E15 dose. All NGN-401 related events have been mild, grade 1 or moderate grade 2. The majority are known potential risks of AAV and are resolved or are resolving. There is no evidence of a hyperinflammatory syndrome at this dose. Most liver events were mild and consistent with data we have presented previously. A quick note on patient 5. She had abnormal nerve conduction findings and areflexia. The abnormal nerve conduction has returned to the normal range. Unrelated to NGN-401, this patient broke her leg while playing with her dad on the playground. This confounded her 12-month gross motor assessment. So looking ahead, we expect to complete the Embolden trial enrollment in the next 3 to 6 months and share additional Phase I/II data in 2026. And finally, we have sufficient cash to fund operations through the first quarter of 2028. And with that, I am going to open it up to the fireside chat, and you can ask me your questions.

Okay. Thanks, Rachel. We have time for a bunch, so this should be good. Maybe just to start, let's ask the obvious cross-trial comparison question, like how do you now stack up your data versus Taysha's data? How should we compare? What are the caveats of the comparison?

Yes. Look, I think it's really simple. We're seeing more skills over fewer patients. We have durability. We have more complex skills over multiple domains in multiple individual patients. We've really gone to great lengths to share data on an individual patient level data -- on an individual patient level, we're providing baseline characteristics so everyone can get the full picture of these durable multi-domain multiple skill for patient data and across the disease severity. Unfortunately, for TSHA-102, we don't have baseline data that has not been presented. The patient level data has not been presented. The durability data has not been presented. But even if we ignore all of that and just do our best to try to compare like-for-like, if you look at the Embolden task list and look at the REVEAL task list, we have 31 developmental milestones achieved with NGN-401 over 8 patients. We believe this represents approximately 50% more skills gained in fewer patients than TSHA-102. The skills are complex. We didn't talk through all of them, but think about pincer grasp, drinking from a cup, using utensils to eat, climbing the stairs, following instructions, and this is in multiple patients. We just haven't seen those kinds of skills from TSHA-102. We believe our strong results are consistent with our approach to unlock efficacy using local brain delivery with ICV administration and the full-length MECP2 gene.

Okay. Great. And then on the Phase III design, right, I think one question you've been getting regularly is kind of this whole dynamic of your primary outcome being at 12 months, not doing a 6-month interim whereas Taysha is. And so maybe just help clarify that and your engagement with the FDA. And within that, you said, I think, at the outset of your presentation, you think you can be best and first. This whole interim difference, I think, has led some to view Neurogene being second. So why do you think that's not the case?

Yes. So look, just very high level, the trial designs are pretty similar in that they're both baseline controlled studies, single arm with a primary endpoint of 12 months, right? Importantly, we have one registrational trial that encompasses ages 3 years and older. Based on our current enrollment projections, we expect to complete enrollment in the next 3 to 6 months. This is before Taysha anticipates starting its second registrational study, which is not planned until mid-2026. We learned last week that Taysha has not yet determined what this study design actually looks like. It's under discussion with the FDA. We don't know the protocol. We don't know if it's a safety or efficacy study. We don't know how large the sample size is. We don't actually know the dose yet. And as I mentioned, their guidance is to start that study in mid-2026. So what we know is that we have initiated dosing, right? We announced our first patient dosing. We expect to complete enrollment in 3 to 6 months. And our design allows for patients ages 3 years and above in one study.

Great. And then methodologically, can you talk about how benefit in this Phase I/II study is codified, specifically like milestones and how this is all kind of counted? And are there any differences between the way it's done here versus the pivotal study?

Versus the pivotal study. So very similar. So we have video evidence in both Phase I/II and the Embolden trial. The main difference is that the videos in Embolden will be rated by blinded central raters and blinded to time to ensure that bias is mitigated.

Okay. Okay. Like what's your expectation on how that could influence this at all?

Well, because we have independent validation of the videos that we've seen.

For the Phase I/II.

For the Phase I/II, I think we have significant confidence in the outcome here. And again, with a threshold, and I think you might even have a question on this, but from a threshold perspective of requiring 7 out of 20 patients to be successful. We have 6 out of 8 responders today that maybe even changes with time. I think we're feeling very good. And really what we're talking about now is what is the market share of the products and what will that look like and what really matters to families. So I think we're feeling very confident in the design and the product profile that's being generated to date.

Yes. Okay. Yes. Maybe let's talk a little bit about the regulatory piece because I feel like there's nothing like more topical right now than like gene therapy regulatory. Before we even ask just specifically, maybe just go back through like your engagement with the FDA over the past, I don't know, 9 months and like your confidence in the context of what we've just kind of seen with uniQure that this single-arm registrational study is like fully aligned and the right path [indiscernible] to take.

Yes. So let's point out there's a number of key differences. And I think when people see headlines and they see single-arm study, external control gene therapy, they just sort of throw a baby in bathwater and it gets thrown away. So what's different between Neurogene's Embolden study and what's going on with uniQure, quite different. So first of all, unlike uniQure, we are not seeking approval on the basis of a Phase I/II trial. A major limitation for filing for approval on a Phase I/II trial is that the key elements involved in the statistical analysis are not prespecified. So we are not seeking approval on our Phase I/II, right, which we've just presented some of that data today. So for Embolden specifically, we have prespecified all of the necessary elements required to be in place prior to dosing. And we've confirmed these aspects of the protocol with the FDA very recently to ensure alignment. In terms of sort of the general tenor and how we've been interacting to get to that point, under the START program, we have quarterly meetings. So every quarter, there's a stipulated meeting. But frankly, I'll tell you that we are interacting with them much more frequently than that because there's an opportunity for ad hoc. And so there's a lot of back and forth. And we're doing that across leadership changes. So that was true before, and that has continued to be true. So I think it's just a really incredible opportunity. I have somebody on my leadership team who has a wealth of regulatory experience and has made very clear comments that in her 25-year career, she's never seen the kind of regulatory engagement in terms of back and forth and being able to communicate with FDA as we have under the START program.

Okay. Okay. And then as it relates to the Phase III bar, so I think this is the first time you're sharing the statistical bar. It's kind of an impossible question to answer. But what do you think the like actual regulatory bar is?

Well, look, let me just tackle that in 2 pieces, statistics and then what does it take? So look, on statistics, just to be really clear, there's an assumed noninterventional response rate or we'll call it "placebo rate" just to make it simple. And then there's a drug treatment response that you're assuming. Given our treatment effect in the Phase I/II to date and our sample size of 20 patients, we believe that we are well powered to see a treatment effect. So that's just sort of a statement on the stats. But beyond meeting the statistical threshold, we believe we are setting a new standard for Rett syndrome gene therapy with multiple skills across multiple domains, durable over time with no plateau up to 24 months post treatment. And we think those factors are really going to matter to regulators and to everybody else.

Yes. Makes sense. Can we go back maybe to the safety slide for a second? Or I can just also ask a question too, if you don't want to jump around the slides. I think you made one comment that most events are mild. There's some moderate. They've all resolved or are resolving. How would you -- like can you just expound upon that a little bit? Like what does like are resolving mean? Like anything else or other details you can share?

Yes. I mean this is pretty standard for AAV treatment. So when you think about liver enzyme elevations, for example, the majority of patients do experience liver enzyme elevations. They tend to be grade 1. They tend to be transient. Can you have a patient where if they have some medication changes with the -- whatever is going on with them because they have a lot of other treatments that are ongoing, that can certainly interact and you have a bump in liver enzyme. So there's simple things like that, that have resolved in most patients, but maybe are not fully resolved because it's something that's ongoing. So certainly, there's nothing here.

Nothing that's evidence of like broader inflammation.

No, no. So -- and just going back to that question because I think just to educate on inflammation, when we saw that hyperinflammatory response in a totally different, much higher dose, a threefold higher dose, that happened immediately, right, within days. So this cohort here, and we're announcing that we have no evidence in any patient. So that is not something that we are seeing. But we feel very comfortable with the safety profile and mentioning here, again, that this is grade 1 or grade 2 events. pretty standard for gene therapy.

Yes, makes sense. Sure. Yes, please go ahead.

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So the question, just for people listening in on the webcast is communication is severely impaired in the treatment -- in Rett syndrome generally. It's one of the core hallmarks of disease, and we are showing improvements in communication across a number of patients. And what do we think that means over the long term. I mean, you're exactly right. I mean we're seeing improvements in executive function in order to turn off a light switch, for example, right? It's not only coordinating your body to like make your arm go up and hit the switch, but you have to want to do it. And you have to recognize that your mom is saying, hey, give it one more try, give it one more try. And it's just -- it's really incredible. Other types of executive function being able to see something that you want and reach out for it and grab it and feed yourself, like these are skills that it's not just about like an isolated hand function, right? There's this whole neural network. And so maybe just take a big step back, what is the gene that we're even talking about, MECP2. This is a gene that is responsible for the maintenance of neurons and neuronal health. And it's required lifelong. It's not like it's only required for a certain period of time during development. It's -- you could give an adult Rett syndrome if you pulled away their MECP2. So we're restoring that function, and we're restoring neural networks and as a result of that, these restored neural networks over time, we believe the data are showing us that you're starting to learn and gain skills and then -- and that's why we're not seeing a plateau. So I think we're optimistic. Obviously, we have more data to collect as we continue to follow patients with time. But we think this is a real altering of the trajectory of the disease.

Any other questions? For me, from a timing perspective, so just talk about the pivotal, like the number of sites. I think you said fully enrolled in 3 to 6 months. Have you identified all the patients at this point?

Yes. So we've been certainly working very hard behind the scenes over the last number of months to get us to the place where we are now. We have initiated the clinical trial sites, 12 of 13 planned. And as we mentioned the other week, we have already dosed our first patient, and sites are very excited, enthusiastic to enroll their patients. So I think we feel very confident in the enrollment projections. in terms of the time lines and you said, oh, have you identified all the patients, sorry, my brain is -- I need a booster. Are we -- have we identified? To be honest with you, there are certain sites that could supply all 20 patients with their own sites. So obviously, we're not going to do that, right? We're enrolling across multiple sites. So we don't think that patient identification by itself is going to be really rate limiting. So as you think about the time lines, just keep in mind that both companies, as we initiate trials, we're not only headed into the holidays, but more importantly, we're headed into flu and cold season. And any of you who have young children, they get sick. And if you get sick, your dosing date is going to get pushed out, right? It's just you're not going to dose somebody with a viral infection, for example, that would be something that would delay. So those are the kinds of things that end up being more relevant to dosing time lines. It's not necessarily the patient identification process itself. There's a lot of patients out there. It's a huge market opportunity with a huge unmet need and a lot of excitement.

Have you learned anything? So you have like not heterogeneous, but you have patients with variable baseline impairment in the study. Like have you learned anything for the types of patients that might respond better or might not respond better? And like what's your expectation for the pivotal cohort?

Yes. Look, it's a really important question because I remember sitting on this stand with you probably like 1.5 years ago, something like not this one, but maybe at a different conference in venue and you were saying, Rachel, do you expect patients with more mild disease to be better responders or somebody with more moderate or more severe disease? Do you remember that question?

Yes, I think so. Yes.

So you asked me that question. And I said, well, we don't know. And we started talking about what are the kinds of things that could improve more quickly. But I think what the data are showing us is that we're actually seeing improvements across that. That, by the way, was also a question among our principal investigators. If you have a little bit of residual functional protein, are you going to do better? Or like will we be more concerned with those patients? And actually, we're showing that all of these patients are seeing benefits. Obviously, if you have more impaired hand function, it might take you longer to be able to use a utensil, but we're seeing that. If you're not ambulatory, you're not flying out of a wheelchair, so we need to set expectations appropriately, but we are seeing the non-ambulatory girls continue over time to gain strength, require less support for the ability to stand and move their feet and moving along. So when you watch the series and time -- over time, you're seeing these benefits. And it really is regardless of mutation, regardless of presentation. Obviously, some skills are gained more quickly than others. Age doesn't seem to be -- we can't say like, well, geez, like the 4-year-olds did so much better than the 8-year-old. I mean I just showed you an 8-year-old with 3 skills gained within 6 months, who did -- who gained more skills than 1 of our 4-year-olds. So I think it's really about the presentation of disease, not being driven by mutation, but also thinking about like where is MECP2 going and how long does it take to kind of restore those neural networks in that individual.

Yes. Yes. Okay. Maybe one last quick question on the safety side. I think the slide mentioned something about like a nerve conduction finding. Can you just like clarify that for people? Like what happened there? And how comfortable are you?

Yes. So nerve conduction abnormalities are actually part and parcel of AAV administration. So this is something that we've seen certainly with a number of other drugs. Typically, there's no clinical symptoms associated with it. And you do occasionally, we pointed out for one of our patients that there was areflexia that was associated and the nerve -- underlying nerve conduction findings have moved to the normal range. So I think in the grand scheme of a treatment for Rett syndrome and the kind of benefits that we're seeing, I think we're not too concerned about this. Obviously, we want to manage any type of side effects as anybody would do who is seeing side effects with any treatment, but we feel very, very comfortable with the overall profile.

Great. Any last questions from the audience? Rene, yes.

[indiscernible].

Yes. So I can answer that question a little -- I think we're out of time on the webcast, but I'll follow up with you and explain that a little further.

Okay. Thank you, Rachel. Appreciate it.

Thank you.

Thanks.