Precision BioSciences, Inc. ($DTIL)

Good morning, and welcome to the Precision BioSciences Investor Update. [Operator Instructions] As a reminder, this call is being recorded, and a replay will be made available on the Precision BioSciences website following the conclusion of the event. I'd now like to turn the call over to Naresh Tanna, Chief of Staff and Head of Investor Relations at Precision BioSciences. Please go ahead, Naresh.

Thank you. Welcome to Precision BioSciences PBGENE-DMD Investor Update. I'm Naresh Tanna, Head of Investor Relations, and I'm joined by my fellow members of Precision's management team, including Alex Kelly, Chief Financial Officer; and Dr. Cassie Gorsuch, Chief Scientific Officer. We are also joined by our co-presenters and esteemed members of the key opinion leader community, including Pat Furlong, Founder of Parent Project Muscular Dystrophy, also known as PPMD, a leading DMD advocacy organization. We're also joined by Dr. Veerapandiyan, a leading DMD investigator and pediatric neurologists from Arkansas Children's Hospital. Next slide, please. Before we begin, I'd like to remind everyone that our remarks today may contain forward-looking statements. These statements are based on current expectations, and actual results could differ materially. Please refer to our latest 10-K and 10-Q filings for a detailed discussion of those risk factors. Next slide, please. Without further ado, I'd like to hand it off to Alex Kelly, CFO.

Thank you very much, Naresh, and thank you again to everybody for joining our call this morning. We can go to the next slide and just cover a little bit of an intro to Precision BioSciences for those who may not be familiar with the company. Our company was founded in 2006 as a spinout from Duke University. Our co-founders, including Jeff Smith, who's our Chief Research Officer, developed a novel platform called ARCUS, which is designed with the goal of treating and curing difficult-to-treat diseases with high unmet need, including rare genetic diseases such as Duchenne Muscular Dystrophy. Our platform is proprietary. We own more than 75 patents that cover the ARCUS and in vivo gene editing. And as I mentioned earlier, it's wholly owned from Precision BioSciences. There is a number of different gene editing tools that are available. Many people know CRISPR. ARCUS is not CRISPR. CRISPR is derived from bacterial sources, whereas ARCUS is derived from a homing endonuclease I-CreI, which is found in green algae. So it has some -- a lot of features that help differentiate ARCUS from other gene editing tools, including its size, the way that it cuts and its simplicity. Those are the 3 differentiating characteristics of ARCUS. But ultimately, it's all about helping patients and improving function. Next slide, please. One of the things that we've seen and demonstrated over the last 15 to 20 months is that ARCUS as a platform works. ARCUS works in a variety of settings. We've seen this demonstrated from our partners in vivo gene editing, such as iECURE. And iECURE is using an ARCUS nuclease developed by Precision BioSciences for a gene insertion program for neonatal OTC deficiency, a rare disease that unfortunately has very dire consequences for the infants who are born with this disease. iECURE has been in the clinic for more than a year. And in that time, they've demonstrated that they have a complete clinical response in the very first patient who was treated with ECUR-506. ECUR also expects to give further updates on their programs in the first half in 2026. Next, we saw proof that ARCUS works in ex vivo gene editing. We saw this demonstrated in the cancer setting by Imugene, who is partnering with us and taking azer-cel forward for oncology. We've also seen very good progress made by TG Therapeutics using azer-cel for autoimmune diseases such as multiple sclerosis. Both of those trials are ongoing right now, and we look forward to seeing more results from both of those. We've also demonstrated on our own that PBGENE-HBV for chronic hepatitis B works for its desired goal as well. PBGENE-HBV is being studied in the ELIMINATE-B Trial, which is studying in chronic hepatitis B. You may know that chronic hepatitis B is a very large disease. It affects some 300 million people around the world. So -- and it also over the course of 20 to 30 years, often results in serious liver complications such as cirrhosis and/or liver cancer. So with our PBGENE-HBV program, we've been in the clinic for a little over a year now. We've treated 13 patients so far across 5 cohorts, and we've administered 30 -- more than 30 doses of PBGENE-HBV. So we have additional clinical data expected this year. I think that I would direct investors to look at the major medical conferences that are focused on hepatitis B. And the first opportunity for a major conference is probably the EASL conference coming up at the end of May. So we'll be giving more and further updates on the ELIMINATE-B program at that conference. The focus for today's call is on PBGENE-DMD, which is our gene editing, in vivo gene editing program focused on Duchenne Muscular Dystrophy. Our Phase I/II clinical trial is called the FUNCTION-DMD trial because our goal with this trial, it's all about improving function over time in the children who suffer from DMD. We currently have an IND accepted by the FDA, and we are undergoing site activation right now. We have tried to do things as expeditiously as we can. We've already started work with the institutional review boards with the hope of activating sites for this trial as soon as possible. And then the important thing is we want to get to patients soon. Our goal is to enroll 3 to 5 patients in the FUNCTION-DMD trial in 2026 and have a readout for multiple patients by the end of 2026. So with that is like the background, let me hand the call over to Cassie Gorsuch.

Thank you, Alex, and thank you all for joining us this morning to talk about our FUNCTION-DMD study. Next slide, please. I'm really excited to spend some time with you all discussing our FUNCTION-DMD study today. This study will be evaluating PBGENE-DMD, which is, as Alex mentioned, our ARCUS gene editing approach for Duchenne Muscular Dystrophy. PBGENE-DMD is designed to excise a hotspot region of the dystrophin gene that is often mutated and causes Duchenne Muscular Dystrophy in up to 60% of the DMD patients. And our goal is by gene editing at the DNA level to be able to permanently and safely restore muscle function for kids living with DMD and significantly improve the lives of families affected by this really devastating disorder. Next slide, please. So when we set out to develop PBGENE-DMD, we really looked to improve upon the limitations that exist in the treatment landscape today. Those can be broadly categorized in really 2 buckets: microdystrophin approaches, a number of which are in clinical study today and exon skippers, which are also in clinical studies as well as some approved products. In our view, both of these approaches, while they have progressed the field in Duchenne muscular dystrophy, still present limitations for patients, whether it is limited functional benefit from a very truncated microdystrophin or the need to continually repeat dose with small efficacy observed in many of the exon-skipping trials, we really sought to improve upon these and provide a differentiated option for patients living with DMD. So for PBGENE-DMD, an ideal therapy, what we sought to achieve was that we could be broadly applicable to patients. This is a challenge for exon skippers where really only a subset of the population are amenable to a single exon skip, making those approaches limited in the patients that they can reach. So PBGENE-DMD has been designed to excise this hotspot region, allowing for potentially up to 60% of patients to be eligible for this type of an approach. Of course, we've designed this program and the clinical study with safety top of mind. We'll spend a lot of time talking about that particular component of this today. We've been able to demonstrate in preclinical models that we can improve muscle function over time, actually seeing gains in muscle force output in a DMD mouse model. And so we look to translate that as we now move into our clinical study. Because DMD affects a number of different muscle types, including skeletal muscle, cardiac muscle and diaphragm, we aim to be able to design PBGENE-DMD with the ability to reach all of the affected muscles efficiently to be able to really provide meaningful therapeutic benefit for patients. With the gene editing approach, we see the potential for long-term durable benefit. And this is evidenced again in a DMD mouse model where we see improvement in function, improvement in dystrophin protein expression over time, the ability to reach the vast majority of cells within these tissues up to 85% of cells in skeletal muscle and really driven by the fact that we can edit within satellite cells, the stem cell population and satellite cells. And we believe that this could lead to long-term durable benefit for patients. Of course, we will be using an AAV administration approach. This represents a onetime administration and our goal after that onetime administration is to provide that durable functional improvement over time. And in our view, this type of product profile really advances the therapeutic options for patients, which is really at the end of the day, the goal for Precision. Next slide, please. So today, we're going to share with you the reasons that we are excited as we stand at this really important milestone entering our clinical study for PBGENE-DMD. We're honored to be joined by Pat Furlong, as Alex mentioned, and she's really been a huge force in the DMD community who worked tirelessly on behalf of patients and families. And she'll share with you today that we're not home yet. There's more work to be done on behalf of DMD patients. The unmet need persists, and we need to continue investing in new therapeutic options. I'll walk through why we think ARCUS is the right platform for Duchenne muscular dystrophy. In our view, applying the right gene editing tool in the right therapeutic application is what can really make the difference. And we believe ARCUS is the right gene editor for DMD. I'll walk through some of the robust preclinical data that we've generated to support this important milestone as we move into the clinic. And then I'll hand it over to Dr. Panda to tell you a little bit more about our clinical trial, how we designed this with patients top of mind with safety top of mind. And we're really privileged to be working with world-class DMD clinical sites with investigators who are highly experienced in both Duchenne muscular dystrophy and in AAV gene therapy. Next slide, please. In addition to the immense opportunity to potentially impact the outcome of patients living with Duchenne muscular dystrophy, there is also an immense opportunity on the global market. As you can see, Duchenne muscular dystrophy affects about 20,000 births every year globally and over 500 in the U.S. alone. Up to 60% of these patients, we expect will have mutations in the hotspot region of the Duchenne muscular dystrophy gene and the DMD gene between exons 45 and 55, making them potentially eligible for our function DMD study. The commercial potential in DMD is also supported by strong patient and advocacy voices who continue to reiterate the need for novel modalities like PBGENE-DMD. Next slide, please. And now it's my pleasure to hand things over to Pat Furlong, President and Founder of Project Parent Project Muscular Dystrophy, PPMD. Thank you for joining us, Pat.

Thank you. And I apologize for being on mute. Thank you, Cassie, and thank you for inviting me to today's meeting. I'm happy to discuss Duchenne muscular dystrophy. Next slide, please. I wanted to talk to you a little bit about the progression and natural history of Duchenne muscular dystrophy. I'll start with my own experience. A long ago, more than 30 years, I had 2 boys that were diagnosed with Duchenne muscular dystrophy. Having no family history, I found that I was also a carrier. My mother was not a carrier. So this was a new mutation that happens about 30% of the time. So we're never going to see Duchenne that would be nonexistent in our world. The natural history of Duchenne is that these babies are looking quite normal at birth. They sometimes are delayed in their milestones, but they do walk and over time, about the age of 12 to 13, they will lose the ability to walk. That follows in terms of progression that by the time they're 15 or 16, they are unable to lift their hands to their mouth. And the mean my sons were here were teenagers. They died at 15 and 17. It was very interesting to me when my little son said to me he wanted to buy something very expensive, and I said no. And he said, pretend it's my midlife crisis. And indeed, it was because he would only live a few more years following that. But today, it is not the [ Duchenne ] history while different in that the -- we've pushed things to the right. The mean age of loss of ambulation is in the early teens. Still by the age of 16 or 17, young men with Duchenne cannot lift their hands to their mouth. So they require full-time care by someone to achieve all the activities of daily living. You can imagine the good news is the mean age of death is now in the 30s, but the type of care required to help these young men throughout their lifetime is an extraordinary burden for their families. Next slide, please. When my sons were diagnosed, their genetic testing was not available, not widely available. In fact, the only thing that was known is a gene and a protein product. My sons were diagnosed by a biopsy in which they saw tissue that looked really terrible actually. On biopsy, the cells were irregular in shape, and there was infiltration of fat and fibrous tissue. This is the same that we see today, and we can predict by the degree of fat that invades the tissue, what the predicted outcome of this young man. In fact, we can predict by the time this young man's tissue looks like what you're seeing on the right, the ability to move and the ability to walk will soon be unavailable to this young man. So we still see this lack of dystrophin in this fatty infiltration of muscle that removes all muscle, not just skeletal muscle, but cardiac muscle has infiltration of fiber and fat as well as smooth muscle and the diaphragm. So by the time these children are teenagers, not only can they not walk and not lift their arms to their mouth, they also need help with breathing. So most of the time, by the time their early teens, they are on BiPAP ventilation at night, to assist the diaphragm and removing carbon dioxide, which is really another burden in terms of this individual who has to sleep with a mask on to help them breathe. Next slide, please. And back to the progression. We are happy in this world of Duchenne today that we have 8 therapies that are currently approved, but none of them halt progression. Parents and family members need really sophisticated treatments that are going to halt progression. This is what we're looking for. Replacement or expression of dystrophin is the highest need of these families. We recognize that gene therapy offers a microdystrophin and that antisense Oligonucleotides are useful to some degree in our population. But the burden of those antisense are weekly infusions or monthly infusions that create extra burden for these children who not only have to have the burden of IV infusions frequently, but also are having difficulty because the smooth muscle in the veins makes really delivering any infusion some difficult, especially over time. So we come back to this really highly unmet need. The patients and families want and need dystrophin expression. They are looking for better therapies that will halt progression. And we believe that we're looking at one opportunity now that could very well do that. Thank you so much. Back to you, Cassie.

Thank you, Pat, for sharing your personal story and your perspective on where the field really stands today. So now I'd like to jump into telling you all a little bit more about PBGENE-DMD. Next slide, please. As we've mentioned, PBGENE-DMD was designed to provide durable functional improvement for a broad population of people living with DMD. So the way PBGENE-DMD works is it's an AAV Vvector, one Vector that encodes 2 ARCUS nucleases. And this is where we take advantage of the small size of ARCUS nucleases. They're encoded by about 1,000 bases of sequence, and we can comfortably fit both ARCUS nucleases into a single AAV viral genome. The ARCUS nucleases have been designed to recognize target sites surrounding exons 45 to 55 in the introns of the Duchenne gene -- the dystrophin gene. These ARCUS nucleases, we designed them to be compatible with each other. When they cut DNA, they leave a 4 base pair overhang or a sticky end, and those overhangs have been designed to religate efficiently with high fidelity, allowing for excision of this hotspot region of the Duchenne gene between 45 and 55. By removing this hotspot region of the dystrophin gene, you can restore the reading frame, allowing slicing from exons 44 to 56, resulting in a near full-length dystrophin protein expression. And as I mentioned, up to 60% of patients have pathogenic mutations in this region. Next slide, please. We've designed PBGENE-DMD really with these principles in mind, just to reiterate, broadly applicable to DMD patients, the ability to improve muscle function over time, the ability to provide a long-term durable benefit and really that function being derived from a near full-length dystrophin protein. And I'll tell you in a second that this protein is actually present in nature. It occurs in a subset of Becker Muscular Dystrophy patients. So it has known function in humans. And finally, a single administration, as Pat mentioned, really improving upon the burden that patients currently face with exon skippers. And so together, in our view, these attributes of PBGENE-DMD position it to really be a potentially best-in-class therapeutic option for people living with Duchenne muscular dystrophy. Next slide, please. When we talk about the dystrophin protein production that's made after administration of a therapeutic, the type of dystrophin really matters. At the top on this slide, you can see the full-length dystrophin protein. It's a very large protein. It's actually encoded by the largest gene in your body, and it contains a number of important functional domains. You can see those color coded here. What dystrophin does in the muscle is it binds with a number of different proteins, providing integrity and stability to muscle tissue. And so the fuller length, the bigger the protein, really the better it can interact with those binding partners and provide stability within the muscle. The protein that's made by PBGENE-DMD gene editing is shown in the middle. You can see this protein retains 80% of the full length wild-type dystrophin protein, representing a near full-length dystrophin. This is really in contrast to the microdystrophin approaches, and these are truncated versions of the dystrophin protein. And they're truncated because the need here is to fit within an AAV genome, a packaging capacity of an AAV genome. And so they are much, much smaller than the full-length dystrophin protein, about 30% to 34% of full-length dystrophin. And we've known actually for a long time that these truncated dystrophins do not have the same type of functional capabilities as a fuller length dystrophin protein. However, as I mentioned, the design was necessary to fit into the AAV vector. And so we've really sort of changed the approach here using an AAV to deliver ARCUS nucleases that allow us to edit at the DNA level, resulting in this near full-length dystrophin protein rather than delivering a microdystrophin within the AAV vector. Next slide, please. I mentioned that the protein that's made by PBGENE-DMD has known function in humans, and that's really what's indicated here on this slide. On the left, this is the clinical presentation of a young man living with Duchenne muscular dystrophy. I think we've heard very clearly from Pat, this is a progressive disorder that unfortunately results in early death and loss of ambulation along the way. It's a very devastating progression for these boys with DMD. On the right is a Becker muscular dystrophy patient who has this exact genotype, deletion of exons between 45 and 55. And so these boys, these patients express the protein that will be made by PBGENE-DMD. And we know that this protein works because their clinical presentation looks quite different than that of DMD kids who have out of frame mutations. These Becker muscular dystrophy patients can live into their 60s or 70s. Many of them are mildly symptomatic or even potentially asymptomatic. They have normal muscle function ambulation for most of their life. Some of them do have cardiac involvement. Oftentimes, it's manageable with cardiac medications. And so what this tells us is this is proof of principle that the protein that's made by PBGENE-DMD has known function in humans. And so oftentimes, we say this is really the best test, the best animal model when you think about can this therapeutic approach be successful. We've already derisked the fact that the protein itself that is made has good function in humans. We go to the next slide. So next then, we really think about what's the therapeutic goal as we think about this protein, how much protein could be beneficial for patients. And I want to highlight a study here showing that there's pretty big differences with even small amounts, about 5% or even less of dystrophin protein produced in terms of ambulation and survival. And so what you're looking at are a couple of graphs that were pulled from this natural history study. Group A are individuals with no dystrophin expression. Group B are individuals with up to 5% dystrophin expression and Group C are individuals with more than 5% dystrophin expression. And you can see on these plots that these individuals who express any amount up to 5% dystrophin protein have significant improvements or significant duration in ambulation and better survival overall. And so this really supports a lower end threshold of about 5% expression of a near full-length dystrophin protein will be clinically beneficial for patients living with Duchenne muscular dystrophy. So on the lower end, we think as little as 5%, of course, more will be more in the context of providing dystrophin expression for DMD kids. Next slide, please. One important difference as we think about the PBGENE-DMD approach as it relates to microdystrophin gene therapies is the use of the AAV in the context of the mechanism. So microdystrophin gene therapies, in this case, the microdystrophin protein itself is expressed from the AAV transgene. What this means is that you have to have persistence of the AAV transgene in order to express that microdystrophin protein and have therapeutic effect. So as we know, in a progressive muscle wasting disorder, muscle cells will turn over and the AAV transgene can be lost over time. And this will unfortunately correlate with loss of therapeutic benefit for patients treated with microdystrophin gene therapies. In the context of a gene editing approach like PBGENE-DMD, the effect is independent of the persistence of the AAV transgene. And this is because the AAV transgene or the AAV genome in this case, contains the editing machinery, the ARCUS nucleases, which can edit the DNA, correct at the DNA level and provide durable dystrophin expression even if the AAV is diluted over time. And so this really comes down to the use of the AAV in the overall mechanism, both use AAV, but for really different purposes. And we expect that this mechanism of gene editing at the DNA level could lead to long-term therapeutic benefit. Next slide, please. So now that we've covered really the approach and the science behind it, I'd like to spend some time talking about the preclinical data that we've generated to support the program. Next slide, please. We won't have time to go through all of the data that was generated to support PBGENE-DMD. But summarized here is a capture of much of the safety and efficacy data, starting first on the safety side. I mentioned earlier that ARCUS nucleases have a number of advantages that we think make it an excellent choice for therapeutic gene editing for DMD. This comes down to the cut, the 4-based pair overhang that allows for high-efficiency, high-frequency gene excision gene repair to allow for predictable outcomes after gene editing. We've conducted a long-term DMD mouse study in both DMD diseased animals as well as healthy animals and found that PBGENE-DMD has been well tolerated in both healthy and disease animals for greater than 9 months. In these long-term durability studies in the disease animals, we were able to actually visualize improvements within the muscle pathology, the muscle histology after treatment with PBGENE-DMD. And of course, when thinking about a gene editing approach, specificity of the nucleases is very important, characterizing and understanding the effects of editing at the DNA level that could have long-term safety implications is essential. And at Precision, we take a very comprehensive, robust approach to characterizing the specificity and safety of our nucleases I'm happy to share that our nucleases utilized in this study showed no off-target editing in a non-human primate genome that conserved off-target sites, and we'll talk a little bit more about that. And in human cells showed no effect on endogenous gene expression. On the efficacy side, we've generated, as I've mentioned, long-term mouse data in a DMD disease mouse model out to 9 months. And what we found in that mouse model was the ability of PBGENE-DMD to increase dystrophin protein over time, increase the number of dystrophin-positive myofibers over time and both of those molecular markers in the tissue led to improvements in force output in these DMD mice. And so it was really important to us at Precision to demonstrate that at the molecular level, we could correlate that with significant functional improvements in this DMD disease mouse model. We've demonstrated the ability to edit satellite stem cells in the context of this DMD disease mouse model. And I'm going to share some new data today demonstrating that when we compare AAV transduction levels or the amount of AAV that gets to tissues between mice and non-human primates, we can see equivalent or even better levels of AAV transduction in non-human primates, suggesting that now as we look to translate our mouse data to human clinical data, we've demonstrated that it holds through primates. I think that's a really important step as we move into our clinical study. Next slide, please. So really to summarize the findings of the preclinical data, what we've demonstrated is that we can restore dystrophin protein in tissues across skeletal muscle, cardiac muscle and diaphragm and that this ability to increase dystrophin protein over time can help reestablish structural integrity of muscle fibers within these mice. By improving the stability and integrity of muscle fibers, we can actually visualize that through muscle integrity biomarkers, both at the histology level and the tissue as well as in blood biomarkers like CK improvements after treatment with PBGENE-DMD. And by improving the muscle at the molecular level, at the tissue level, we've also demonstrated that, that correlates with increased force output, increased functional benefit in these mice to near wild-type levels comparing to healthy mice. And so restoring this near full-length dystrophin protein at the DNA level and addressing the underlying root cause of muscle degeneration in DMD has led to improvements in muscle function, restored muscle function in mice. Next slide, please. So that was really a summary of some of the preclinical data. I'd like to touch on what we view as some of the most impactful data as we think about bridging now to our human study. Next slide, please. These are the functional data from the long-term mouse study that I've been discussing. On the left in the light gray bars are untreated disease DMD mice. And you can see we've normalized at each of these time frames 3, 6 and 9 months for force output in the muscle. In the darker gray, these are untreated healthy mice. And so this is really demonstrating the loss of force output in the disease animals compared to healthy mice. You can see a significant difference at each of these time points in healthy animals versus disease animals. On the right are PBGENE-DMD treated groups. The first group in the darker blue is a A1 A14 dosed cohort -- and the lighter blue on the right is a 3x 10 to the 13 viral genomes per kilogram group, the slightly lower dose. You can see at both of these dose levels, we achieved significant improvements in the ability of these mice to exert force after treatment with PBGENE-DMD. As I mentioned, this force output actually grows over time similar to the healthy animals, but similar levels observed between these 2 dose levels in terms of skeletal muscle function. Go to the next slide, please. Now as we think of translating that effect from mice into non-human primates, unfortunately, we do not have a DMD nonhuman primate model. And so many of the efficacy endpoints like dystrophin protein expression or force output are not measurable in non-human primates. What we can look at is AAV transduction or how much AAV gets to these tissues. We know that the first important step of the mechanism for PBGENE-DMD is being able to get the AAV where it needs to go in order to express the ARCUS nucleases and edit at the DNA level. And so what you're looking at here is across skeletal muscle diaphragm and heart. The green bars are the non-human primate AAV transduction levels and the gray bars represent AAV transduction levels in mice. Each of these normalized to 100% to be able to compare to the non-human primate. What you can see is across all of these important and essential tissues, muscle groups, we see as good or potentially even better AAV biodistribution in the non-human primate samples compared to the mouse samples. And so this suggests that the effect that we've seen in mice can be translated to non-human primates based on the fact that we can get the AAV there in equivalent or even better quantities. And this really supports as we see it, the ability to translate the data from the DMD mouse model as we move into our human study. Next slide, please. We've also conducted a number of nonclinical studies, both on safety and efficacy to really help inform selection of our clinical dose. So I want to walk through the data that we've really utilized to support a 1x 10 to the 14 viral genomes per kilogram dose for PBGENE-DMD for the clinical study. On the safety side, we've evaluated PBGENE-DMD and GLP studies in both that DMD disease mouse model as well as in non-human primates. We observed at this dose level, no adverse safety findings at the completion of these 2 GLP studies, again, in a DMD mouse model and in healthy non-human primates. We looked at conserved potential off-target sites. I mentioned earlier, specificity for a gene editing approach is essential to be able to robustly characterize. One of the ways in which we did this was to look at off-target sites that were identified as potential off-target sites for human, look at them in the context of the non-human primate genome. We looked at their sides in the context of our GLP study and found no off-target entity at any of these potential off-target sites above background, suggesting at therapeutically relevant doses, we did not observe off-target editing for PBGeneDMD at these conserved off-target sites. On the efficacy side, I mentioned earlier and I demonstrated through our force output data, we see similar levels of dystrophin protein expression and functional improvements in skeletal muscle in the DMD disease mouse model at both a 3e13 dose and a 1e14 dose. So very similar levels of efficacy in the skeletal muscle. In the heart, we also demonstrated the ability to achieve dystrophin protein expression and percent positive dystrophin fibers at similar levels between these 2 dose levels. Where we really start to see differentiation between these 2 dose levels is in the diaphragm. In the diaphragm, we see dose-dependent increases in both dystrophin protein expression as well as percent positive dystrophin myofibers. And we know that the diaphragm is an essential tissue for long-term prognosis for these kids. These kids with DMD die from cardiac or respiratory failure. And so the ability to reach the diaphragm we view as really important when selecting this clinical dose. And because you can only dose an AAV one time, it is imperative that you select a dose that can be both safe and efficacious. And so for these reasons, considering both our safety evaluation and our efficacy evaluations, we have selected 1x 10 to the 14 viral genomes per kilogram of PBGENE-DMD for a clinical dose with the goal of providing both a safe and efficacious dose for these patients. Next slide, please. When we think about safety, one of the most important considerations is the ability to manufacture high-quality AAV. So I want to spend a couple of minutes talking about the work that we've done at Precision to produce appropriately high-quality AAV for our clinical study. Next slide, please. In any manufacturing process to produce AAV, both full capsids and empty capsids are present within a batch of AAV. What this means is that the viral capsid proteins are present. In some of those capsids, the full AAV viral genome is also present. We call that a full capsid. And in sometimes a viral genome is not present. We call those an empty capsid. And in the manufacturing process of AAV, you get both. What's important is that you maximize the ratio of full capsids compared to empty capsids. And so for illustrative purposes on the right here, you can see up 90% when we talk about a 90% full capsid batch, what does that look like? That means 90% of the AAV capsids contain the full-length AAV genome, 10% contain truncated or empty capsids. That's in contrast here illustratively to a 50% full capsid batch where there is much more empty capsids present than full capsids. What we've learned as an AAV field over the last several years is that this full capsid ratio really matters for the overall tolerability and efficacy of AAV products, maximizing full capsid ratios is really essential for delivering a safe and efficacious AAV gene therapy, whether that's used in the context of a microdystrophin or in the context of a gene editor. I'm really proud of the work that we've done in our CMC team at Precision to be able to produce clinical trial material that has 90% full capsids to date. On the next slide, please. So why does this matter? When you think about how AAVs are dosed, they're dosed on how many full capsids are present in the batch. So we measure the full capsids, we set the titer based on that, and that's what is dosed based on your clinical dose. So those empty capsids, while they aren't considered in the dose calculation, they do come along with dosing AAVs. And so you can see when the empty capsid ratio is 50% compared to 90 -- I'm sorry, the full capsid ratio is 50% compared to a 90%. The total capsid dose really changes. In the context of PBGENE-DMD with a 90% full capsid ratio, you're looking at a capsid dose of just slightly above what your viral genome dose is versus a 50% full would have a lot more empty capsids, a much higher capsid dose, which could lead to poor tolerability clinically. So I'm really excited that at Precision, we've developed a very robust manufacturing process for making high-quality AAV. And in our view, that's really essential for delivering both a safe and efficacious product for patients. Next slide, please. So with that, it's my privilege really to hand it off to Dr. Panda, who is the Director of the Comprehensive Neuromuscular Program at Arkansas Children's Hospital and really a leading physician neuromuscular, pediatric neurologist in this field. So thank you, Dr. Panda, so much for joining us.

Thank you, Cassie. Thank you, everyone, and good morning. Next slide, please. So before we get into FUNCTION-DMD study, I just want to kind of set some expectations. As we all know about DMD, Pat beautifully talked about the unmet needs with some personal touch. I also want to kind of set expectations in terms of when these individuals with DMD enter clinical trials. Sometimes there are clinical signs and symptoms that comes with DMD that can complicate interpretation of clinical data. So many of these individuals experience falls, gait issues, toe walking. They're all part of natural history of Duchenne. Some of them can also have behavioral problems, speech delays, cognitive issues, et cetera. And then if you look at the lab values in biomarkers in the serum, as we all know, creatine kinase is highly elevated. And also liver enzymes like AST and ALT are also elevated because it's also coming from the muscle, not just specific to liver. And then they're also on background steroids, which can cause some side effects as well. So it is important to keep these things in mind when we evaluate and interpret clinical trial data to understand the efficacy and safety of the investigational products. It's applicable for any clinical trial that we do as an investigator. Next slide, please. All right. Now let's jump into FUNCTION-DMD study. This is a Phase I/II study evaluating the safety of PBGENE-DMD. As we discussed before, the dose is 1e14 vector genomes per kilogram, and the study will enroll ambulatory boys with DMD aged 2 to 7 years with pathogenic variants contained within exons 45 through 55. There's Part 1 that evaluate an initial safety cohort of 3 participants with approximately 8 weeks gap in between each one. Once the data is available from these initial 3 participants, then they would be expanded for more enrolling up to 15 total participants between this Part 1 and Part 2. Next slide, please. As discussed before, the selected dose here is 1e14 vector genomes per kilogram, which is a dose that is lower than most of the microdystrophin studies that are either currently ongoing or previously in development, including about 30% lower than this currently approved product. Next slide. All right the primary endpoint for this Phase I/II studies of course, is a Phase I/II it's safety, but there's also a number of secondary and exploratory endpoints that have been incorporated to evaluate both safety and efficacy of PBGENE-DMD. And the first one is the dystrophin protein expression, which will be evaluated in muscle biopsies taken at weeks 12 and 52 post dosing. There's all a number of age-appropriate functional and developmental endpoints that will be collected with the goal of trying to correlate these functional measures with the dystrophin expression if possible. Now this study has been designed with a clear clinical and regulatory path to approval with the potential to utilize an FDA accelerated approval pathway with biomarker endpoints, particularly in the light of unmet need that Pat spoke to earlier. Next slide, please. Here, kind of looking into the key inclusion criteria as shown here, about ages 2 to 7 with DMD mutations contained within exon 45 and 55. Of course, there are baseline more assessments, the criteria that they're dependent on the age of the participant and the screening, and they should be able to complete that. They should be on corticosteroids at study entry, have to be on stable dose for at least 12 weeks prior to dosing, again, standard for most of the clinical trials in this space. Now of course, in accordance with the guidance from FDA, all patients must be -- or all participants must be willing to participate in the long-term follow-up study. Also to highlight here, participants who are on exon-skipping therapies are able to enroll into the study after a 6-month washout period. And of course, who have previously received any AAV-based therapy will not be eligible for this study. Next slide. As a Phase I safety is a top priority for the study. And for that reason, a comprehensive immunosuodulation regimen will be utilized in this study, close to the proximity of PBGENE-DMD administration. And of course, this immunomodulator regimen has been developed in consultation with many DMD physicians as well as other experts who have tons of experience at AAV-based clinical trials as well as therapies. And again, potentially to mitigate known AAV-related side effects. Of course, Eculizumab will be employed to mitigate the complement activation. Everyone will also be on Steroids on top of their standard of care steroids to prevent systemic inflammation as well as Sirolimus. Now there will be frequent monitoring to help identify and mitigate any complications that may arise after the infusion as well. Now together, this safety monitoring plan as well as the immune modulation regimen has been designed with patient safety at the forefront. Next slide. Now I think Cassie had already mentioned there are a few sites that will be enrolling soon. And of course, this is being conducted at a world-class site. The sites have extensive experience in both treating patients and individuals with DMD as well as participating in clinical trials and utilizing AAV-based gene therapies. And these sites have demonstrated high-quality care as evidenced by affiliation with PPMD, MDA as well as their consistent publications and other research that's been happening in these sites. With that, I will pass this on to Alex for closing remarks. Thank you.

Thanks, Dr. Panda, appreciate it. Next slide, please. So thank you very much for the introduction and overview of the FUNCTION-DMD trial. Just to highlight some of the upcoming events and some recent progress. As mentioned, we had IND approval in early Q1 2026. The IRB process and site activation process is underway now. We've been trying to do all that we can to expedite that so that we can start dosing patients as soon as possible. We do expect to have data from multiple patients anticipated by year-end 2026, targeting 3 to 5 patients for enrollment this year. And in that data update towards the end of the year, we'll definitely have a chance to see safety data. We'll also see early efficacy data that we're going to assess by percentage of near full-length dystrophin. That's the functional dystrophin that we're creating with our gene edit, and we're going to be looking at muscle biopsies at 12 weeks. We'll also be looking at other functional assessments with wearables and other tools that we have available to assess the patients. You know that we have -- as I mentioned at the beginning, we have some updates coming throughout the year on the PBGENE-HBV program, including updates on Cohorts 3, 4 and 5 as well as progress towards getting patients to where we can discontinue nucleoside analogs and begin Part 2 of the trial. We also have a cash runway that's through 2028 with $137 million at year-end. We believe that, that is enough cash runway to carry us through a lot of clinical milestones for both of these programs. And in the case of the PBGENE-DMD program, assuming that we have success and good interactions with FDA, we could be in a pivotal trial in this 2028 period. So with that, we're happy to open up the call to questions. And I'll turn it over to Tara to see if there are any questions on the line.

Great. Thanks Alex. [Operator Instructions] So our first question comes from Maury Raycroft at Jefferies.

Maybe just starting off with a few clarification questions. For the functional assessments, if you can talk more about what functional assessments you're going to be looking at in the time course for when you're going to be doing those assessments? And then will you be using a natural history study comparator for context for that?

Okay. Great. Thanks very much, Maury. I really appreciate the question. We've been studying this field and doing a lot of work and having many discussions with investigators and KOLs throughout the U.S., also with people like Pat Furlong and others who are in the patient and parent community, trying to understand the endpoints better. Look, I think while we are the first gene editing approach to target Duchenne muscular dystrophy, we're not the first drug that's gone through the regulatory and clinical pathway. So we've definitely learned a lot in that experience. We've learned a lot, as Dr. Panda talked about in terms of things that we're doing in the IMR side for safety, but we've also learned a lot about the efficacy side. So maybe I'll ask Cassie to start on the efficacy functional assessments we're doing, and then I'll ask Dr. Panda to chime in as well.

Of course, yes. Thank you for the question, Maury. So in terms of endpoints to speak to efficacy, we do plan to utilize biopsy data as sort of the first indicator of proof of mechanism. And so we will be collecting biopsies from patients at 3 months and 12 months post treatment. And as we saw in our preclinical data, we expect that perhaps the dystrophin protein expression will actually increase over time, really given the stability of the protein that's being produced as well as the potential contribution from satellite cells. And so as we think about efficacy data, I think that the dystrophin protein expression is probably represents the earliest types of efficacy data that we may start to see from this study. We, of course, anticipate correlating the biomarker data with functional improvements. And so those functional improvements, there's a whole host, a very comprehensive list of functional assessments that patients will be completing while they're on study. As Dr. Panda mentioned, our inclusion criteria span patients from ages 2 to 7. And as you can imagine, the functional abilities of boys within those ranges is quite different as they grow and age and continue to develop. And so what we've done in our protocol is included age-appropriate assessments depending on the age of the patient at dosing and enrollment. So there are functional endpoints that are going to be more appropriate in the younger population, such as the Bayleys assessment. We also are very interested in following the Stride Velocity data very closely as that field continues to develop or that test continues to develop more clinical experience. And then as you get into the older ages, the 4- to 7-year-olds, time tests, those may be available to some degree in some of the younger patients that time test as well as North Star Ambulatory and a number of different functional assessments that are age appropriate. And so I think we will continue to collect those functional endpoints and look to correlate them with biomarker data. And in this Phase I/II study, we're taking a pretty comprehensive approach with the goal of utilizing these early patients as part of an accelerated approval path later and really better defining what the efficacy endpoints will be as we continue to progress in the study. And so I think we've really taken a comprehensive approach built on the experience, as Alex mentioned, of the clinical studies that have come before us and of course, working with really experienced investigators like Dr. Panda to really understand what's feasible in this population.

Dr. Panda. Okay, please.

Thank you. I think that we actually listed some of the assessments some of the slides, NSAA time to stand as well as some -- the Stride Velocity and a couple of in the younger boys. To kind of answer the natural history, I know there's no plans as of now yet, but I do think the field is moving towards comparing the from a efficacy standpoint with proper control natural history samples, which is I think, which is totally acceptable in this rare disease population rather than getting into a placebo arm or anything like that. But of course, that's a discussion later on with the regulators. But I think as a community, we are accepting natural history comparisons.

Got it. That's all really helpful. Maybe one other question just on -- there's a lot of discussion right now on accelerated approval path. What are your latest thoughts on that and what you need to show relative to other companies pursuing a microdystrophin-based approach?

Yes. Great. It's a good question, Maury, in terms of accelerated pathways. Obviously, this is an evolving landscape. And we have had very good discussions with FDA, good feedback from them all the way back from our pre-IND meeting throughout the IND process. And we look forward to continuing that discussion with them as we generate data. So we anticipate, as I said, having data from multiple patients by the end of this year. And then as we collect more data, probably if we get more than 5 patients, 5 to 10, 12 patients, that will be a time for us to go back to the FDA and talk about the data that we have to show them the biopsy data, the functional endpoints that we're measuring as well as the safety and get a lot more direct feedback from them about what is the trial design going forward from a pivotal standpoint. Cassie, I don't know if you have anything you'd like to add to that?

Yes. I would just reiterate that we think with a well-designed study that's particularly in a population like this, where you heard from Pat and from Dr. Panda that the unmet need is immense in DMD. And so I think in our view, the accelerated approval pathway will be available with a robust data set. So correlating that biomarker data with functional improvement is top of mind for us. We expect to be able to do that to demonstrate that dystrophin protein expression, this near full-length dystrophin protein expression correlates with functional improvements for patients. And with that demonstration in hand, I think that represents really a meaningful therapeutic approach for DMD patients and that we look forward to continuing to work with FDA as well as the community, the DMD community to bring this therapy to patients.

Yes. So our next question comes from Ry Forseth at Guggenheim.

This is Ry from Debjit's team. Maybe we could start off, could you give us some insight into the algorithm that led the team to the comprehensive IMR being implemented? And to what extent was this a function of the 10^14 vg per kilogram dose versus a lower dose, something like 1.3x10^13?

Yes. Great. Thanks very much for the question, Ry. Look, we've done a lot of research here and a lot of work with investigators in choosing the dose. We know that from talking to families and from clinicians that really we need to go into this trial with a dose that's effective and safe. I think that it's a challenge if patients and their families are not convinced that this is their best shot to get to a functional benefit from treatment since we are using AAV, it does really impact the choices that they can make in the future as well. So that was very much front and center in our mind in choosing the dose. And I think it was well informed by the data that Cassie and our team have generated on the preclinical models. Cassie, let me let you talk to some of that data, please.

Of course, yes. So I think, as Alex mentioned, really taking the feedback that we've heard from physicians in the space as well as the patient and family advocacy groups, selecting our best foot forward dose was something we really prioritized. We believe the 1e14 dose level represents that for the reasons I outlined, really driven by the ability to get better distribution, better dystrophin expression in the diaphragm, knowing that, that's an essential tissue for kids with DMD. And so that really led to the decision on the dose. In terms of the IMR regimen, I think, again, you only have one opportunity to dose an AAV in these kids, and you want to make that experience efficacious, as we just talked about, but also safe. And so what we've seen from others who've gone before us is a shift from a less aggressive immunosuppression regimen to a more comprehensive immunosuppression regimen really to provide the ability to have a safe dosing of the product. And so I think we viewed that not necessarily as an effect of the dose selection, but just as a principle of deliver a safe AAV dose. And so it was really working with experienced clinicians who utilized these types of immunomodulation therapies before like Dr. Panda to design the immunosuppression regimen in a way that balanced the risks of immunosuppression as well as the risks of AAV gene therapy, really with the goal of safety top of mind. And again, maybe I'll ask Dr. Panda, if you could please speak to your experience with immunomodulation regimens in the context of AAV dosing.

Sure. I think from an AAV dosing standpoint, the safety is the priority, right? I think the regimen that we're using here is more comprehensive sort of attacking all different immune responses, different types of immune responses that you could expect with any of the AAV-based dosing, like eculizumab for complement, sirolimus for what we call T cell-mediated immunity. And with all of these we have seen these come up with this AAV, right, complement activation or what we call TMA or kidney issues with that or liver injury, the T cell that responds. So I think overall, we discussed a lot in the field is, again, moving towards this comprehensive immunosuppressive regimen to sort of attack all of these different components of immune system to hopefully prevent these side effects. And we have experience using all of these in different clinical trials as well as in the clinical settings with AAV-based therapies.

Thanks, Dr. Panda. Pat, do you want to comment at all on this? I mean, from the parent perspective about dose selection?

Sure. Thank you for the question. I think for parents who have participated in gene therapy studies with the dose escalation, it does feel like if we're getting to a higher dose that this -- joining a study with a lower dose doesn't feel that you're doing the best or the right trial, as parents often describe it. Having a low dose first does not feel like you're going to achieve the same result if a company wants to go to a higher dose. So I think achieving a single dose in a trial is really important. In terms of the IMR regimen, we, as parents are very aware of acute liver injury that we've seen in gene therapy studies and toxicities. And I think having the use of eculizumab and sirolimus as has been demonstrated in other studies and in other diseases gives us really the satisfaction that we're doing our very best to keep these children safe. So I think this is exactly the right approach to go forward with PBGENE.

Can I add one more thing towards the -- again, the 2 different doses? I know we had a lot of discussions at the beginning. I do agree with Pat because we've had experience in the past with -- and even enrolling participants into the study, if you have 2 different doses, it automatically sets the mindset of low versus high dose. And it is not fair for someone to go to this "low dose" and what if that doesn't work or that what if it is less efficacious than the second dose level and it just takes up the opportunity. And I think I appreciate you guys and actually after all the discussions, taking one dose that would be to test in the trial.

And I think for these young boys, I mean, they know that muscle is lost and muscle can -- once lost can't be recovered. So the idea is you need to get to the dose that you think is going to be therapeutic and deliver the best possible option. This is a really difficult heartbreaking disease to watch is progression and giving a low dose does not give the confidence to patients and families that you are achieving the best possible outcome for this child.

Thank you, Pat. Thank you, Dr. Panda. Ry, do you have any other questions?

Yes. That was really insightful. Thank you all for your input there. Maybe 2 preclinical questions. Is there a minimal threshold of satellite cell editing you anticipate you'd need for long-term durability? And does that picture change as you go across different muscle types?

Okay. Great. Why don't I hand this over to Cassie.

Sure. Yes. Thanks for the question, Ry. I think it's a good question, and it's a challenging question to answer exactly what is that threshold of necessary satellite cell editing. What we're encouraged by in our preclinical data is that we are seeing increased dystrophin protein expression and increase in the number of dystrophin-positive myofibers over time and that, that has correlated with an increase in functional outcome. And so I think most importantly, when you think about how do you provide clinical benefit for these patients is thinking about kind of the end goal. The end goal here is to provide meaningful functional improvement. And we've demonstrated that at the level of editing we're achieving across these tissues, we can achieve increases in dystrophin protein, and we can achieve increases in force output. And so I think that's really the most important question here is, are you getting sufficient enough biodistribution to drive that necessary amount of protein, necessary number of cells expressing the protein and functional benefit. And so that's how I think about it is that you really start with the end goal in mind and focus on that functional improvement as the primary driver of how you think about setting that dose.

And maybe just one last question, if I may. Given that your dystrophin construct results from a cut between exon 44 and 45, do you retain alpha dystrophin and nNOS binding? And sort of what's your position on the importance of recruiting that factor in your construct?

Yes. So we have looked at a number of different binding partners for the dystrophin protein preclinically. We do anticipate based on both published data and preclinical data that we will be able to recruit nNOS and have functional signaling through that. And that really speaks to, I think, the importance of the near full-length dystrophin protein. We know that the binding partners that form that complex, all of which have important functions for muscle integrity and muscle strength. And so that really, I think, supports the differentiation as you think about this near full-length dystrophin protein that you can retain a number of those important binding domains, important binding partners to really provide better function from that dystrophin protein. So I think it's a great question, and it is something that we've looked at and has been published with this 45/55 internal exon deletion that a number of those protein binding partners are still present.

Yes. So our next question comes from Catherine Novack at Jones Trading.

Just curious about the heterogeneity of this patient population. I mean we know that baseline dystrophin phenotype vary depending on which exon is effective. So is baseline dystrophin expression part of the inclusion/exclusion criteria? Or do you anticipate that it would be fairly similar for patients with mutations in exons 45 to 55?

Cass, why don't I let you take that one?

Sure. So we will be taking baseline biopsies to assess baseline dystrophin protein expression in each individual patient. And to your point, I think we view that as important baseline data to understand the potential therapeutic benefit after dosing PBGENE-DMD. There may be some heterogeneity within patients or across patients with how much baseline dystrophin is produced. However, I think when you look across all patients, not just patients with mutations in this region, there is more variability with mutations in other parts of the dystrophin gene where internal skipping can occur. And so I expect we won't see a whole lot of variation compared to the larger patient segment within these patients who have mutations between exons 45 and 55 at baseline, but it is something we'll be measuring and assessing.

Dr. Panda from a clinical perspective, what you -- what have you seen in this regard?

Yes. I agree with Cassie. I think almost majority of them would have -- especially with the mutations within this region would have the dystrophin expression of less than 3% or so that we typically see in the DMD population. Of course, the only thing we have to be careful about is we are not including any in-frame deletions that would kind of predict a milder or Becker phenotype.

Got it. And then just thinking about how we should be interpreting the 12-week dystrophin data when we see initial post-treatment biopsies. Should we be thinking about this more in terms of a fold improvement over baseline? Or is there a threshold that you anticipate just given that you are seeing increasing dystrophin expression over time and 12 weeks really be the starting point, how should we be thinking about interpreting the initial readout?

Yes. I think the way that I think about it is that we -- as we've outlined through some of the published literature, we think as little as about 5% from a threshold perspective, about 5% of this near full-length dystrophin protein could be clinically beneficial for patients. And so as we think about sort of the North Star for what we hope to achieve, I think that's really kind of starts to set the lower limit. I think we're seeing some exciting data from some of the more recent exon skipping therapies, including Dyne, where they've correlated about 2.5% dystrophin protein expression, again, of a near full-length dystrophin with functional benefit. And so to me, as we think about how do we assess that 3-month biopsy data, there's a couple of really important considerations. First is there will be a temptation to compare to microdystrophin gene therapies. And I think that, that's really an apples versus Volkswagen's comparison, if you will, because the proteins are just so different, as we've outlined here, a much different protein with known differences in terms of function, known differences in terms of their ability to provide stability within the muscle. And so I think it's important that when we think about what does success look like for PBGENE-DMD, we assess that on the mechanism of PBGENE-DMD. And I think that's really where that 5% threshold. Of course, what we've seen preclinically associated with function is closer to 20%, 25% dystrophin protein expression in mice. And so I think more dystrophin will be better in this context. But I think of it from what do we know about the threshold that could lead to clinical benefit. And as we compare to more appropriate clinical data coming out of clinical studies like exon skippers, where the protein is more similar to the protein being made by PBGENE-DMD, that's how I start to think about how to assess that 3-month biopsy data. Of course, we're collecting the 12-month biopsy data, hoping to recapitulate what we've seen in preclinical models where that dystrophin expression grows over time, potentially contributing to improved function over time as well. So I think that's really how we think of what success could look like in that 3-month biopsy sample.

Got it. And just to clarify, these thresholds, is that citing muscle content unadjusted dystrophin? I know it's been common for exon skippers to be reporting adjusted and unadjusted numbers.

Yes. The natural history paper that's cited there is not a muscle content adjusted number.

Our next question comes from Patrick Trucchio at H.C. Wainwright.

Just a couple of follow-up questions from us. The first is just given the recent AAV safety events in DMD, what gives you confidence specifically that your approach can deliver a differentiated safety profile? And I guess related, how meaningful is the greater than 90% full capsid ratio in reducing toxicity versus some of these peer programs?

Great. Thanks for the question, Patrick. Look, I think that you touched on part of why we have a lot of confidence in the safety of the program, that is the product itself. is high quality and has a high capsid fill ratio. I think also look at -- we've done the work in terms of nonhuman primate studies to demonstrate safety. We've got experience with this ARCUS platform, ample experience in terms of specificity and safety as well that have been generated over time. And I think that really adds to our confidence in the safety of the program. Let me let Cassie address your other question.

Yes. I think when I think about how PBGENE and DMD is different than microdystrophins, one of the important points, as we mentioned earlier, is that the effect of PBGENE-DMD, if you get to the cell, you edit at the DNA level, that edit can persist beyond the presence of the AAV genome. And that's not true in the context of gene therapies, whether microdystrophins or other gene therapies, the AAV genome must persist in order for the transgene to be expressed in order for there to be therapeutic benefit. And so when you think about it from a mechanistic perspective, that can really drive how you think about dosing these. As Dr. Panda pointed out, many of the gene therapy trials in the DMD space have utilized doses that exceed the 1e14 viral genomes per kilogram dose level. And that's really where a number of these unfortunate toxicities have arisen. And so I think in our view, utilizing the mechanism of gene editing by employing a gene editing mechanism, you can actually potentially dose the AAV lower because you don't need to stack AAV genomes long term. You need to get to the cell, you need to edit the cell, but you don't need to stack up AAV genomes to try to persist long term. And so that's really, I think, an important consideration when you think about how does AAV dose drive -- how does it work in combination with the mechanism of the drug and how does it contribute to the overall safety profile. In terms of the fill capsid ratio, this is something that I think the field has really come to understand better that it's really the presence of capsids that can drive a number of the immune responses that Dr. Panda talked about earlier. and that if you have a lower fill capsid ratio, you will have more capsids present. And so a 1e14 dose at a 50% full is actually a 2e14 capsid dose, which is twice as much. And that's a meaningful difference in terms of the AAV dose. And so I think we know that the manufacturing process and the ability to produce full capsids at high frequency can really help control the overall tolerability. I think that's starting to be better understood in the field. There's a number of newer publications around that. And so I think that is a really important point as we think about planning for safety on this study. Dr. Panda, I invite you to share your experience as well on the clinical side.

Thank you. I was going to add, from a pure clinician perspective, right, we do -- Cassie touched on the manufacturing process. We talked about immunosuppression. All of the measures that we put in place to -- from a safety standpoint, that doesn't negate the fact that the safety is going to be clean. You're not going to have any side effects at all. I think we need to sort of set our expectations. Some side effects can still happen on top of all of this. We have seen this with other clinical trials, the AAV-based programs. I think it is extremely important to set the expectations upfront. I am still expecting -- it is still expected or I don't want to say normal to have some side effects related to AAV or anything. So I think it's important that we set the expectations upfront with the families. So not going into the program saying that you're not going to see anything -- any side effects.

Yes. Pat, can you maybe comment on patients and parents and their awareness of safety and adverse events from AAV and how they generally think about them?

Sure. Thanks, Alex. I think we've learned a lot over time. PPMD has conducted studies in terms of benefit risk of these patients. And the first prior to the initiation of studies, there was a high tolerance for risk, assuming that there would be no side effects. Over time, we learned that there needs to be greater safety. And I think using sirolimus as well as eculizumab has really helped us understand the need for safety and immune suppression. But I think the other side of this is what we've learned is that in an older nonambulatory population, there may be some additional fragility and maybe a high viral load causes increased fragility. So we are very well aware of dosing of these viruses and also the capsid and the empty capsid risk. So I think we've learned a lot over time, and we're very enthusiastic again, remaining enthusiastic about this opportunity and also a lower dose. So I think that we're well informed, well appreciate the need for safety and very committed to this space. So I do think we are an informed group and recognize the opportunity -- the challenges of AAV gene therapy, but also the opportunity at lower doses to treat the entire population.

Just a couple of follow-up questions on the function DMD program. So I'm wondering what would trigger expansion to Part 2? Is this purely safety or a combination of safety and dystrophin threshold? And is that 5% expression that we discussed earlier that we should be looking for here? And how should we be thinking about scaling dystrophin expression as patients grow and muscle mass increases over time?

Yes. Thanks, Patrick. So look, I think the goal is to definitely have safety. That's the primary endpoint in this trial is on safety. The main efficacy endpoint we're looking at is the dystrophin expression at 3 months. And then obviously, the other efficacy measures that we've talked about. I think that will all create a package that will take us forward for an FDA discussion, which could lead to the expansion phase of the trial. But I think we're very optimistic that we've got the right dose and the right IMR regimen to support the safety and to allow PBGENE-DMD to do its work to create that functional improvement over time. Cassie, anything to add there?

Yes. I'll just -- I'll note that in the preclinical data, we utilized juvenile mice to try to anticipate that growth in muscle mass over time and to represent the pediatric population, the correct age population that we anticipated for our clinical study. And even in that context of dosing juvenile mice, we do see that dystrophin protein expression and percent positive dystrophin cells grow over time. And so I think we've designed the preclinical package to try to anticipate the clinical study and minimize the gap that exists always between preclinical and the clinical study. And so I think we've designed that with that particular component in mind.

Okay. Great. Thank you, Cassie. Tara, do we have any other questions on the call?

I believe that's it for analysts. I'll turn it over to Naresh to read any questions that came over the webcast.

Thank you, Tara.

Thank you, Tara. We have a few questions that have come in through text. The first one for Dr. Panda. What type of patients do you see in your clinic? Are they coming from the U.S. region locally? Or are you also seeing international patients that are enrolling in studies and coming for treatment?

Sure. So I follow more than 120, 130 patients with DMD, and they come from -- mostly from Arkansas, but we have patients from all over the country and also international patients that come and see us in the clinic as well as enroll in the clinical trials. Like I was telling before, we have families coming from India, Chile, Mexico, Poland, Australia, Middle Eastern countries, several international patients as well as from all over the country here, too.

Next question here is maybe for Alex. Could you comment on Precision's partnering strategy for PBGENE-DMD as it develops from Phase I through pivotal? How does the company think about it?

Yes. Great. Thank you for the question. Look, I think that we're very, very optimistic about this program. This is a program that Precision can fully execute on its own. Obviously, the Phase I trial is getting ready to kick off, and so we can execute this part of the trial. But thanks to the equity raise that we did in November, we now have the cash to also see this program through additional development, including getting into the pivotal trial for PBGENE and DMD. So we are well resourced for this. It's also the size of the disease that Precision Biosciences can manage on our own. And look, I can't speak to what the future will say in terms of how many other people might come to us with an interest in partnering for this program, but Precision has the ability to take this program forward to pivotal trial. Naresh, any other questions?

That's about it. Thank you.

Great. So maybe in closing, I just want to reiterate a couple of the points that were my take-homes in this call. Number one, time is function in the children who have DMD with longer time, they lose function over time. And as Pat pointed out, there are no currently available therapies that halt the progression of DMD. So it's a really important opportunity. And I think that with PBGENE-DMD, we have the right approach, and that is an excision approach that addresses mutations between exon 45 and 55. That's the hotspot region. We believe, as you've heard from Cassie and from Dr. Panda, we have the right dose. We have the right IMR regimen to ensure safety as well. And we also have the right clinical partners and KOLs and investigators such as Dr. Panda as well as patient advocacy groups like Pat Furlong to help us manage this trial forward. And we look forward to having more data. We hope you share our enthusiasm for this program based on all that you've heard today and the fact that we have the opportunity to really help children living with Duchenne muscular dystrophy with PBGENE and DMD. Thank you all very much for your time to Dr. Panda and to Pat, thank you very much for graciously spending the last 90 minutes with us. We really appreciate your input and look forward to working with you in the future. Thank you all.