REGENXBIO Inc. (RGNX) Earnings Call Transcript & Summary

Great. Good morning, everybody. Thanks for joining us for the next session. I'm Matthew Harrison, one of the biotech analysts here at Morgan Stanley. Quickly, before we get started with REGENX, I just need to read a brief disclaimer. Please note that this webcast is for Morgan Stanley's clients and appropriate Morgan Stanley employees only. This webcast is not for members of the press. If you're a member of the press, please disconnect and reach out separately. For important disclosures, please see the Morgan Stanley research disclosure website at morganstanley.com/researchdisclosures. If you have any questions, please reach out to Morgan Stanley sales representatives. So with that, very pleased to have the team from REGENXBIO with me, Ken Mills, the CEO; and Steve Pakola, who is the CMO. And I guess I thought we should probably just get started with wet AMD and what you're doing there. Maybe a good place to start is you're obviously looking at multiple delivery mechanisms now. So maybe just talk a little bit about the data that you have and the suprachoroidal study that you're starting.

Yes. Thanks, Matthew, and thanks to you and the team from Morgan Stanley for hosting us in this unusual time, but we're excited to engage with everyone virtually. I'll let Steve talk to some of the data, but maybe just to give a high-level perspective. Later this year, we'll be starting the first of REGENX's pivotal studies as a program to advance our RGX-314 candidate for wet AMD towards potential registration. And that's a really exciting opportunity and time for us. We're building on many years of clinical execution and data with, I think, a real high-quality candidate that has shown itself to be not only safe, but durably and consistently demonstrate clinical benefit in patients with advanced severe wet AMD. We've studied RGX-314 at 5 dose levels in over 42 patients. Several of our cohorts have had over 10 patients. We've been able to, therefore, adopt a lot of understanding from the clinical work that's gone on. All of the patients that have been enrolled and received RGX-314 have been followed up for over a year. And many of the patients we've followed for over 2 years. So we really feel like we have a tremendous amount of momentum with understanding the pharmacology, the durability and the safety of RGX-314. The pivotal trial will involve our subretinal route of administration. I think we're -- by now all of us in the community are familiar with the subretinal route of administration. It's the basis of one of the few important gene therapy approvals with AAV technology and Spark Therapeutics, LUXTURNA, now marketed by Roche and Novartis worldwide. That route of administration, I think, is unequivocally established from a safety and efficacy perspective to be literally the standard for delivery of AAV gene therapy to the retina. That's why many years ago, we chose it for a starting point for treating wet AMD with RGX-314. What's become part of our understanding and appreciation as we've looked to achieve growth with RGX-314 over time is that we can go even further. Having established safety, having seen durability of a gene therapy in a wet AMD population, we think we can take it even further than what the subretinal route of administration may offer, which we think is a phenomenal opportunity. And to do that, we needed a few things. We needed to be able to get into other parts of the clinical care delivery system, including out of the operating room and into the offices of some of these treating physicians. The other thing we needed to do is we needed to address one aspect of the profile of subretinal administration, which is the effect of formation -- the potential formation of cataracts in patients who receive the vitrectomy upfront before the administration of RGX-314 subretinal. And while that, for our target product profile, was not something that we felt important to addressing wet AMD patients because the majority of them based on age, severity of disease or other factors have already had their lens replaced, so they're not candidates even for developing cataracts. There are other indications for RGX-314, including in diabetics, who will suffer complications from their diabetes that involve vision loss and blindness, where that side effect profile would be something that we would look to change or improve upon. And so that brings us to our suprachoroidal route of administration, which we're also excited about and I'll let Steve talk more about that. In terms of subretinal, Steve, maybe you can summarize the clinical trial data to date at a high level and talk about what we can expect from our sort of pivotal stage of development with subretinal.

Perfect. Thanks, Ken. And as you highlighted, the reason we're able to move into pivotal stage clinical development later this year for the subretinal route of administration is because of the data that has been maturing over time. And it's really based on the early reads that we were getting across different cohorts that at the beginning of the year, we realized that we had the opportunity to do this with long-term follow-up data and that we were, in effect, really meeting our target product profile for subretinal delivery for treatment of wet AMD. So specifically, what have we seen? Well, as Ken alluded to, both in terms of 2-year data that we have for Cohort 3 and at least 1 year data for Cohorts 4 and 5, across that range of doses, the top 3 doses, we've seen greater than a 60% reduction in anti-VEGF treatment burden compared to the prior treatment burden that these chronic very anti-VEGF needy patients had before entry into the study. And importantly, with that reduced treatment burden, these patients were maintaining or improving visual acuity and retinal thickness. And not surprisingly, since we were seeing those clinical outcomes, we also have shown good durability of actual protein expression. So we've really hit on all of the key parameters that we wanted to hit on in terms of not just proof of concept, but even at a magnitude and a duration that was needed to go into pivotal development with confidence. So that's why we're very excited to move into pivotal development. We're glad that we have a range of doses where we've met and seen what we wanted to see. So we're in the process of dotting our Is, crossing our Ts. Ken mentioned learning a lot from the trial. We've learned not only a lot about the doses that we have potential with to move forward, but also about the inclusion/exclusion criteria, certain enrichment approaches that we can take to go forward here to even further derisk and enrich for achieving clinical outcome that we want to achieve for these patients in need of sustained treatment options. So we're excited about that, but we're also excited about the potential to expand into a non-OR, office-based treatment option with suprachoroidal. This has actually been a big month for us in, really, the field of gene therapy and retina therapeutic approaches in general, as we announced last week, the first patient ever treated with gene therapy via the suprachoroidal route of administration. And this was a milestone reached based on a lot of work over the last couple of years, predominantly around the advance where we've seen with AAV8 and also AAV9, by the way, that in preclinical studies, both large and small animal models, that unlike first-generation AAV vectors, we have not seen inflammation with suprachoroidal delivery of AAV8 and AAV9. And perhaps in part because of that, we've also seen very good transduction and good broad transduction of the retina with suprachoroidal delivery, including with specifically RGX-314. So it's based on that, that we've been able to reach this milestone. We look forward to, as we've guided to before, having interim results from this first study, AAV8, which is suprachoroidal delivery of RGX-314 for treatment of wet AMD. Since we only just started dosing, we're not going to have a long-term data, but at least a few months on the patients that we've enrolled by that time, which will be very important in terms of looking at safety and tolerability and some of the early months in terms of some of the other endpoints that we've looked at before. One of the benefits of the subretinal program is that we've learned a lot from that in terms of the dose range that we can apply to this study. So instead of revisiting or trying to explore the entire dose range, we decided to be more efficient and actually start off with the highest dose that we used, DL5, dose level 5, in the subretinal study, start with that dose in our ascending cohort design for our suprachoroidal study for wet AMD. And we're also excited that we'll be starting another suprachoroidal RGX-314 study for treatment of diabetic retinopathy. And this is an area, as Ken alluded to, where an office-based approach where you potentially don't have inflammation, that really opens up the door to potentially treating diabetic retinopathy before the patients develop the sight-threatening complications because otherwise, these are exactly the patients that are at risk of going blind from sight-threatening complications but aren't getting signed up for current therapies because of the unsustainability of repeat injections of anti-VEGF therapies. So a lot going on and a lot to look forward to in terms of both the subretinal program as well as the suprachoroidal program.

Okay, great. Thanks for that in-depth overview. I guess 2 things on suprachoroidal that would be helpful to clarify. One, the doses that you're using there, I mean, should we think of these as 1:1 translation in terms of the dose? Obviously, it's a different part of the eye. So how should we think about the relative dose and what you can achieve with that? And then secondly, any key safety issues that you might be focused on with suprachoroidal that you're looking out for?

Yes, both great and relevant questions. One, we'd like to have a quantitative 1:1. Can you bridge in that way? We don't really look at it that way. I think we have a healthy caution to realize that it is a different route of administration. But we have been comforted by what we've seen in our bridging work where at these doses, we're seeing good transduction of the retina. The part that makes it hard to do any kind of 1:1 or have any kind of fudge factor is just the qualitative differences of subretinal delivery where you have more focal, high expression versus a broader spread that you get with suprachoroidal. So the balance of area of transduction relative to intensity of transduction is really something why you have to do the clinical study to see what we'll see in terms of protein expression and also what we'll see in terms of the hard outcome measures that we're able to measure, fortunately, in -- already in first-in-human studies, like we've shown in the Phase I/Phase II study. In terms of safety, we're certainly comforted by the fact that we haven't seen inflammation preclinically. But again, here's the case -- until we actually show that in the clinic, this is a case where, to echo what Ken said, subretinal is the gold standard, in part because of not only local administration, which is true also for suprachoroidal, but also because of the immune-privileged status that exists there. So in our subretinal program, for example, we don't need to worry about AAV8-neutralizing antibody status in contradistinction to intravitreal administration approaches. And we've shown that already in our Phase I/II study where, independent of whether patients had neutralizing antibody status -- neutralizing antibody titers, they did very well from a safety and efficacy standpoint in that study. So those are 2 aspects that we still need to confirm in the clinic. Can we show lack of inflammation? Based on the preclinical data, we're going into these 2 studies without any prophylactic steroids before or after RGX-314. So we're going to really get to evaluate that aspect. In terms of the neutralizing antibody status, we are excluding patients who have high titers of AAV8. Neutralizing antibodies in our suprachoroidal studies initially until we've gotten our feet wet, so to speak, with this new route of administration and evaluated safety and tolerability and efficacy in initial cohorts before we move in that direction. So those are the areas that we're focused on.

Okay. Great. That's very helpful. And then maybe just on the pivotal study for the subretinal delivery. I guess, 2 things people are very focused on. What's the -- or how do you think about rescue injections? And what sort of criteria you're going to set there? And then secondly, just broad thoughts on potential size and scope of that study.

Yes. You'll recall from the Phase I/II study, we had a very low bar for retreatment in that study where there didn't even need to be an increase in retinal fluid at all. Even just residual fluid investigators could reinject given that, that was the first-in-human study before we'd shown a proof of concept. Now that we have the clear clinical outcomes that we've seen from that trial, now that we're moving into pivotal development, we're going to have a higher bar and a more standard bar. So we haven't disclosed details, but if you look around at other precedents of what's out there, it will be in line with those where we have quantitative thresholds in terms of increased retinal thickness and/or decreased visual acuity, for example. But certainly, the fact that we were able to see a dramatic reduction in treatment burden, even when the bar for retreatment was low helps give us confidence that directionally, by using a higher bar for retreatment, that we'll be in a good position in that regard. In terms of the size of the study, again, we'll be giving details on that later in the year. But just roughly, if you look around and you consider the outcome measure, best corrected visual acuity, an approach that we've talked about before that's out there of a noninferiority design to an anti-VEGF standard of care approach, that makes a lot of sense in this case. And that if we could show in a pivotal study that we're noninferior to very strict standard treatment, then that translates into actually being better than what's actually going on in the real world since patients are not getting anything close to that very strict, frequent anti-VEGF injections. And based on that, we're talking in the hundreds, not thousand kind of patients. And again, we'll have more details on that when we announce later in the year.

Okay. Perfect. Probably a good time to talk about manufacturing, where you are in terms of scale up, what sort of investments you've made in manufacturing and what sort of capacity you have there.

Yes. I mean the development of our team and our capabilities on the CMC side has been really fantastic. Our initial focus was to really bring in a group that had experience in the development and commercialization of biologic products with focuses on quality and scale and get them familiar with the processes that existed behind AAV. Although we did have the benefit of locally being able to access people who had experience in the development of processes and scale of vaccines. And then there are a lot of similarities there, especially when you move to larger scale, as you would expect. Where we are today is we continue to really champion the use of vermilion cell-based systems. And literally, every single one of our programs has now moved into suspension-based bioreactor work. And so even if we had started some of our early clinical development, like with 314 several years ago with more of an adherent-based approach, we've already outlined the processes for ourselves and with regulators for bridging all of that. All of the new studies that we will be starting will initiate with a plan to move to bioreactor either with first patients or through some bridging process. We're building a facility a few hundred yards from where I'm sitting right now here in Rockville that will house up to capacity for 2,000 liters. So we view that we have everything now in place from about 200 liters up to 1,000. We'll be able to flex that facility up to 2,000 liters. So we're really sort of running with everything in place right now to support all of the early, mid- and late-stage clinical development as well as early commercialization plans that we have. And with that, our supply chain largely focused on CMOs that we've been working with for several years, who have supported us with their facilities and their CapEx, but we've been putting our teams in place in their plan, training them on our process, in our SOPs. Literally, Matthew, we back close to 1,000 in terms of release of batches and quality of batches to support the diversity of our clinical pipeline. And we continue to feel that, that's a real strength of the company, adding our own sort of CapEx infrastructure, which will be part of our new office lab and headquarter facility coming online in 2021 just bolsters the quality of the team and the process and the infrastructure that we already have.