REGENXBIO Inc. (RGNX) Earnings Call Transcript & Summary

Good morning. Thank you all for joining today my name is [ Steve ] [indiscernible] and I'm a member of the JPMorgan Healthcare Investment Banking team. It is my great pleasure to introduce Ken Mills, President and CEO of REGENXBIO. [Operator Instructions] Ken?

Thank you, [ Steve ], and good morning, everyone. Thanks to the organizers and JPMorgan for inviting myself and REGENXBIO to present today at the conference. Hope everyone is doing well and is safe in this new year. We'll be providing some forward-looking statements in this presentation. The references to additional information about REGENXBIO that are on file with the SEC can be found on Slide 2 of the accompanying presentation. But I'm going to start my presentation with Slide 3 and describe REGENXBIO, its mission, our focus, which is patient-focused, seeking to improve the lives through the curative potential of gene therapy as many patients and families as possible. We have multiple ongoing clinical studies at the company in ophthalmology and neurodegenerative effects of things like lysosomal storage diseases with additional early-stage programs in neuromuscular and liver indications. Our NAV technology has enabled the development of commercialized therapies for numerous gene therapies in clinical development, and including Zolgensma, the first FDA-approved gene therapy that uses our underlying NAV technology. The company has a new GMP production facility that is in process of being completed to allow for production and scale of NAV vectors at up to 2,000 liters. And we have an amazing team of experts in gene therapy manufacturing, but also preclinical and clinical development, research, early-stage development for the advancement of our internal pipeline programs. On Slide 4 is a look at our broad pipeline, which includes programs across therapeutic areas using technologies such as classic monogenic gene replacement, but also AAV-mediated antibody delivery for chronic diseases. We've just announced this week that our first pivotal program in wet age-related macular degeneration using a well-established ocular delivery technique is starting. Over the past year, we've initiated 2 Phase II trials with our candidate called RGX-314, also using a novel ocular delivery approach in both wet age-related macular degeneration and diabetic retinopathy. And we've also had a series of clinical trials to treat neurological disease with delivery to the cerebrospinal fluid to help achieve efficient correction of disease in cells of the brain and throughout the entirety of the central nervous system. Finally, this week, we announced a new program for the treatment of Duchenne muscular dystrophy. All of these treatment candidates are designed as a onetime administration. We have a busy 2021 ahead of us. I'll dive deeper into the pipeline and show you how it's expected to continue to grow and develop. On Slide 6, this is RGX-314 for the treatment of wet AMD. This is our most advanced program. The disease is probably familiar to many of you. It involves the blurring of central vision and eventually progressive vision loss through the formation of leaky blood vessels in the back of the eye. Now it's got known treatment response to series, a class of treatments known as VEGF inhibition biologics, including drugs such as Lucentis, EYLEA, and recently, Beovu. The treatment paradigm here is for repeat ocular injections of these biologics into the eye, often on the basis of either every monthly or every other month. Now RGX-314 uses our AAV8 vector to deliver a gene that encodes for an anti-VEGF antibody that is akin to the standard of care. And that turns cells into anti-VEGF drug factories, potentially eliminating the need for these repeated injected therapies. Slide 7 introduces the spectrum of activities that are ongoing with respect to our RGX-314 program in wet AMD. First, we have an ongoing trial, which is our first look at RGX-314 in the human eye using what we call our subretinal approach. In this trial, we've enrolled 42 patients in a Phase I/IIA study for subretinal delivery. The data from this trial has provided us with evidence of compelling clinical profile for the potential treatment of wet AMD in a broad range of patients. It's generally well tolerated in all patients with no inflammation and shows durable treatment effect. In fact, patients in Cohorts 3, 4 and 5 from this study have demonstrated stable to improved visual acuity and retinal thickness as well as meaningful reduction in anti-VEGF injection burden out to 1 year. We also have data from the Cohort 2 -- 3, excuse me, out to 2 years, which gives us confidence in the long-term durability of this gene therapy. Now recently, we completed an end of Phase II meeting with the U.S. FDA to discuss the details of the clinical data I described to support a pivotal program in efforts to plan to file a biologics license application. We're using the FDA meeting, the data and other learnings from that first-in-human study to inform a design of our pivotal program, which we've announced has just started last week. As I mentioned, we're also developing 2 separate routes of administration for RGX-314, the standardized subretinal delivery approach as well as delivery to the suprachoroidal space using what we call the SCS Microinjector, which is licensed from our partner, Clearside Biomedical. On Slide 8, I'm going to show you some of the data from the first-in-human study that I referenced. Now these are previously treated patients that have come into the study on standard of care. And for each cohort in 3, 4 and 5, we can see on the left that mean changes envisioned from baseline when they entered the study over time is stable or slightly improved. The right graph shows that their retinal pathology as measured by central retinal thickness by imaging techniques over time has maintained thickness or reduced over time. We can see across these cohorts, however, including on Slide 9, that these results are maintained despite significant decreases in injections across all cohorts. And in several cases, the vision persists and no additional treatment is required. On Slide 10, this shows that in these previously treated patients who come into our trial and are part of the injection-free outcome group, see improvements in vision out to a year. And Slide 11 shows previously treated patients from the Cohort 3 who haven't received injections since 9 months in the study or prior, all the way through 2 years have seen a 14-lever gain in their visual acuity. The trial design for our ATMOSPHERE pivotal clinical trial is our first planned trial that will evaluate the efficacy and safety for RGX-314 candidate in patients with wet AMD. On Slide 13, the trial will enroll approximately 300 patients across 2 RGX-314 dose arms versus a comparator arm of ranibizumab, which is one of the standard of care treatments. The primary end point of this trial is noninferiority to ranibizumab based on a change from baseline and best corrected visual acuity at 1 year. Sight activation and patient screening are ongoing, and we expect to begin dosing patients in this trial in the first quarter of this year, 2021. I want to swing back and talk about announcements we made at the end of 2020. Back in September of 2020, we announced the first patient dosed in our Phase II study of RGX-314 with the suprachoroidal delivery approach using the SCS Microinjector. The initiation of this trial was also an important milestone for our company as well as for the field because this was the first clinical trial to evaluate the delivery of any gene therapy to the suprachoroidal space. We're excited about the potential of this novel targeted in-office suprachoroidal approach may provide additional RGX-314 delivery options beyond the pivotal work that we're doing with the subretinal delivery. This week, we announced that we have -- rather, last week, we announced that we have completed enrollment of patients in the cohort, the first cohort of what we call AAVIATE, which is the Phase II study to evaluate the suprachoroidal delivery of 314 in wet AMD patients. We expect to report interim data from Cohort 1 that includes secondary outcomes out to about 6 months in the third quarter of 2021. And enrollment of patients in Cohort 2 is expected to begin in the first quarter. Based on the data from our wet AMD study and preclinical work, we also believe that a onetime suprachoroidal delivery approach with RGX-314 can be a treatment option for patients with another form of vision loss in diabetic patients called diabetic retinopathy. Now sustained long-term anti-VEGF delivery may reduce the severity of retinopathy in these patients with diabetes and prevent these vision-threatening complications such as macular edema and neovascularization that is similar to what's observed in wet AMD that can lead to blindness. ALTITUDE is the name of our study that's a multicenter open-label randomized dose escalation trial that will evaluate the safety and efficacy of suprachoroidal delivery of 314 in patients with diabetic retinopathy. Now this trial is expected to enroll approximately 40 patients, including 2 different cohorts of dosing. Patients will be randomized in this case against an observational control. Now on Slide 18, we're showing the status of this. Enrollment of patients continues in Cohort 1 of ALTITUDE. We expect to report initial data on this trial in 2021. And last week, between both the AAVIATE study and the ALTITUDE study, which we've -- as of reporting, have accumulated approximately 16 patients that have been enrolled on the treatment arms of these studies. We've reported that the suprachoroidal delivery of RGX-314 has been generally well tolerated with no evidence of ocular inflammation. So we're excited about the status and the progress, the current work we're doing in wet AMD and diabetic retinopathy with our RGX-314 pharmacological candidate across both the subretinal and suprachoroidal route of administration. Now last week, we announced that we're developing new lead product candidate called RGX-202 for the treatment of Duchenne muscular dystrophy. For those of you not familiar with DMD, the severe progressive degenerative muscle disease, it's caused by mutations in the gene which encodes for a protein called dystrophin. It's a protein that's involved in muscle cell structure and recruitment pathways for maintaining pliability, flexibility and strength of muscle cells. Without dystrophin, muscles throughout the body deteriorate, can become weak, eventually leading to clinically observations like loss of movement, independence and requiring support for breathing, cardiomyopathy, and sadly, premature death. On Slide 20, talking here a bit about the science behind the design of our RGX-202 candidate. It's delivering a novel form of a truncated translated protein of dystrophin called a microdystrophin gene, which includes a new extended coding region of the naturally occurring dystrophin protein on the carboxyl terminus end of that protein, something that we refer to as the C-terminal domain that's found in naturally occurring dystrophin as well our design has other fundamental improvements. Now we view that the presence of this C-terminal domain has been shown preclinically and through research and proof-of-concept work that's published as well as conducted inside REGENXBIO that has recruited several proteins that are key to muscle cell membrane strength that lead to improved resistance as well as resistance to muscle damage, including in disease models, mouse disease models of muscular dystrophy. RGX-202 is specifically designed to use our NAV AAV8 vector, which has been used in numerous clinical studies as well as characterized in specifically and efficiently targeting muscle as well as cardiac muscle tissue. We also have incorporated a muscle-specific promoter to support the delivery and targeted expression of our microdystrophin gene construct throughout the skeletal and heart muscle. Additional design features of our lead candidate include codon optimization and reduction of CpG content, which may potentially improve gene expression, increase translational efficiency and reduce immunogenicity overall clinically. Now again, on Slide 22, here are some of the proof-of-concept data from preclinical studies conducted by REGENX scientists or RGX-202 in the mdx mouse model of DMD, where we demonstrated broad and robust expression of our novel microdystrophin construct in muscle as well as recruitment of key proteins to muscle cells, improvements in muscle histology and meaningful increases in the animals' muscle strength and function. Our plans are to file an IND application, enabling studies to commence with the submission of an IND in the middle of 2021. And lastly, focusing on our internal pipeline, we continue to advance the programs in our neurodegenerative disease franchise with gene therapies for the treatment of Hunter syndrome, MPS II, Hurler syndrome, MPS I and CLN2 form of Batten disease. Each of these programs outlined here on Slide 23 uses our AAV9 vector and our intracisternal pathway to deliver them directly to the cerebrospinal fluid to access the central nervous system. These programs have received orphan drug designation, rare pediatric disease and Fast Track Designations from the FDA and other authorities. We're developing, on Slide 24, RGX-121 for the treatment of the neurological symptoms of Hunter syndrome, also known as mucopolysaccharidosis type 2. Slide 25 shows the current design of our Phase I/II trial, where we've provided initial data from patients that have been enrolled and have also announced that we've expanded the program to a higher dose level that we call expanded dose 3. We plan to evaluate the higher dose of RGX-121 in patients in this trial and expect to begin enrolling in the first quarter of 2021. In addition, we've also announced the expansion of this program into a different age range of boys with Hunter syndrome that includes expanding the multicenter study into pediatric patients with severe Hunter syndrome over the age of 5 years old. Now on Slide 26, going back to December of 2020, we announced some interim data from the first 6 patients that have been enrolled in the first 2 dose cohorts, Cohort 1 and Cohort 2 of the ongoing study. These are patients that have been treated with RGX-121 and age ranges up to 5 years of age. Consistent long-term reductions in biomarkers such as heparan sulfate in the cerebrospinal fluid were observed in patients for extended periods following the onetime administration of RGX-121. And patients in Cohort 1 have continued to acquire developmental skills up to 2 years after administration of RGX-121 in this clinical trial. Interim data on 2 patients in Cohort 2 also indicates observations of changes in plasma and urine biomarkers that provide evidence of systemic enzyme expression. An observation that we're interested to follow up on, including at an upcoming congress to report data on this lysosomal storage disease program in the beginning of February. We are developing RGX-111 for the treatment of the neurological symptoms of Hurler syndrome. The background of this trial and candidate is outlined on Slide 27. This is also a severe genetic lysosomal storage disease caused by a deficiency in an enzyme required to break down cellular waste products like Hunter syndrome. We announced that our first patient in this study was enrolled in the beginning of December of 2020. On Slide 28 is an outline of the activities going on related to the ongoing recruitment and patient screening of the Phase I clinical trial for RGX-111 in Hurler syndrome. It continues to advance, and we expect to have updates from this program also later this year. That's the summary of our internal pipeline programs. I'm now going to take a little bit of time just to dive into a little bit more of the background of the capabilities, some of the partnerships that REGENXBIO shares in the AAV space. Importantly, on Slide 30, we have deep in-house knowledge of AAV production and manufacturing, which provides us with the ability to scale production of our gene therapies while ensuring quality for patients across multiple different program platforms in multiple different routes of administration, including intraocular administration, direct to CNS administration as well as an intravenous administration. Our team has delivered clinical materials from our processes to many, many patients and centers throughout the country and the world. We maintain a strong network of well-known contract manufacturing organizations to support this work, and we're also building our own production facility at our headquarters here in Rockville, Maryland, which will produce -- have the ability to produce cGMP production space at bioreactor scales on our new platform up to 2,000 liters. Slide 31 takes a little bit of a view at the NAV technology platform that's the basis for not only all of our internal programs, but also intellectual property that was used to form the company about 10 years ago. This is a significant advancement in science over earlier generations of AAV vectors in terms of delivering genes to cells with differentiating attributes like novel tissue selectivity, improved manufacturability, higher gene transfer at equivalent doses and longer-term gene expression. Importantly, our broad portfolio of advantages is supported by fundamental AAV gene therapy patents and patent applications, including more than 100 worldwide covering our NAV vectors as well as sequences that are at least 95% identical to our NAV capsid sequences. Now the validation of this work is demonstrated through our own internal pipeline, but also on Slide 32, our lead product candidates described are one aspect of the profile of REGENXBIO's application of its technology. We've also partnered with a number of leading industry partners as well as continue to seek partnerships with innovative industry partners to develop NAV gene therapy candidates. Our platform review has been widely adopted, enabling us to have partners with best-in-class gene therapy candidates for a wide range of diseases, including, as I mentioned, the FDA-approved Zolgensma, which is marketed by Novartis. But as well, we have research development and clinical stage programs led by our partner sponsors in companies such as Astellas, Bayer, Pfizer and Takeda. And we believe that these programs continue to further validate the versatility of the NAV vectors, but also provide additional data that collectively drive the advancement of the AAV field in general. Our team at REGENXBIO is a wonderful blend of experience in gene therapy, drug development, clinical and commercial supply and commercial planning as well as excellent leadership attributes. As a team, we're applying resources here at our company and through our partnerships of gene therapy that we think is transformative and has the ability to deliver on the mission of the company to achieve the curative potential of gene therapy for as many patients and families as possible. And on Slide 35, I'll just summarize by outlining that 2020 was an excellent year of performance for the company in terms of program performance as well as financial integrity. Our last reported financials we had as of September 30, our Q3 earnings release reported revenues in the range of $130 million, largely attributable to the relationship that we have with Novartis around Zolgensma. Our research and development, G&A expenses continue to support the important growth in internal programs and value that we believe can be achieved through our ocular program for RGX-314 in wet AMD, our central nervous system neurodegenerative programs, including, importantly, in Hunter syndrome and our new program announced for Duchenne muscular dystrophy are all part of the focus of expanding value and advancing important medicines for the company in 2021. At the end of the year, we reported that we had approximately $515 million to $530 million in cash or cash equivalents. That included an end of year monetization of a portion of the royalties that REGENX is expected to receive from the Zolgensma product from Novartis. And as of last week, we also completed an additional equity financing of approximately $230 million in gross proceeds, which will be able to support the company's growth and development on a going-forward basis for our internal program goals. We'll continue to report on the status of our financial reporting and updates at our upcoming 10-K filing later this quarter. And finally, just as reminders for our program milestones across the background of this year. Hunter syndrome, as I mentioned, our program for RGX-121 has more clinical updates coming in early February at the World Congress on lysosomal storage diseases. We expect to have our Duchenne muscular dystrophy IND midyear filing accompanied by additional preclinical IND-enabling data updates. Our wet AMD suprachoroidal Cohort 1 data is expected in Q3 of 2021. And the second pivotal study for our RGX-314 wet AMD subretinal program is expected to initiate in the second half of this year. A lot of important medicine, a lot of important work, a lot of patient unmet need and a lot of patients that are relying on us to continue to provide advancement in our medicine development. Appreciate the opportunity, again, extended from JPMorgan to present about REGENXBIO, its plan and its people today as well as its science. And I guess we can rotate now into a Q&A session. Thank you.

Yes. I'm able to see that there are some questions coming in now in the chat feature of the Zoom. I'm just waiting for a couple of them to queue up, and I'll start to address them. Thanks for your participation and patience. First question looks to be a question about some of the design elements of the ATMOSPHERE study, which is the pivotal study for the subretinal treatment of RGX-314. So a number of questions that are layered in here, including why move forward with 2 doses for both pivotal trials? What's the rationale for giving anti-VEGF injections after RGX-314 is administered? And what's the rationale for using both Lucentis and EYLEA as a comparator? So based on everything that we've learned from our Phase IIa study about dose levels 3 through 5, we see really good efficacy across the range of that treatment effect. Any observed differences that we saw with respect to retreatment outcomes are really a function of the patients that were enrolled in the study as opposed to drug effect. So in terms of the design of the study overall, as I mentioned, we had a conversation through an end of Phase II meeting with the FDA on what we and they aligned with were the best features to really establish what are the best ways to measure the drug effect of doses that we want to study to support pivotal approval through the BLA process. And that included accounting for contributions from different types of patients and establishing what was demonstrated in the clinical effect from Cohorts 3, 4 and 5. Again, they were similar enough in range to justify that the dose range for a pivotal study could allow for 2 different doses to really emphasize the drug effect that we're seeing and allow for masking in the study as well as the comparator arm. The rationale for using both Lucentis and EYLEA was one that was really based on a consideration about how the pivotal plan for RGX-314 gene therapy could apply to the real-world situations that we see happening in clinics, where Lucentis and EYLEA have been adopted by patients and caregivers in many different forms, we wanted the ability for data to be designed into the outcomes of the pivotal studies to address comparability to both of the 2 primary sources of standard of care. Thanks for the question. We talk more about what AMD patients needs and explain both subretinal and suprachoroidal delivery approaches. The need in wet AMD that we see for gene therapy is that this is a chronic disease that requires chronic administration of intraocular injections. What we see is that the market supports anywhere between 6 and 10 injections a year are typically required for a patient that's been diagnosed with wet AMD. After that diagnosis, they continue to get treatment, on average, consistently for a year. But after that year, there tend to be divergence in expectations of outcomes because the chronicity and the burden of continuing to receive this standard of care, whether it's on the basis of convenience issues or, in general, patients staying compliant becomes a real problem. And after a couple of years, evidence from bodies like international and U.S. societies of retinal surgeons have established that, actually, the chronic nature of this treatment overwhelms the ability for people to stay compliant with therapy, and they end up falling below the baseline of when they were initially diagnosed. So we believe that with a onetime treatment that provides durable effect that is at least as good, if not better, than existing standard of care, but doesn't require the chronic administration of treatment would be transformational, and in particular, would allow for the sustained vision that is lost otherwise with existing standard of care in the background. There's a question that came through. Did the RGX-314 program come from internal research? Yes. Our Chief Science Officer, Olivier Danos, who's been with the company now for almost 4 years, has a long history and background in research, both in muscle wasting diseases as well as gene therapy. And it certainly was one of the first conversations between Olivier and I about the emergence of the R&D agenda under his leadership and guidance that brought up the concept of scientific ways to improve the potential of dystrophin and microdystrophin-based gene therapies to enhance clinical outcomes. And so this was work that was conducted within REGENXBIO, by REGENXBIO scientists, but also in cooperation with other leaders in scientific and clinical understanding of DMD in general. Importantly, on the manufacturability of the RGX-202 candidate, this is something that was entirely completed by our internal process development and manufacturing team at REGENXBIO in cooperation with our manufacturing partner, Fuji, based down in Texas. I'm not seeing any more questions in the chat right now. I think I'm operating it the right way. Okay. It looks like there are no more questions through the chat mechanism. Again, I want to thank the organizers and JPMorgan for inviting me to talk about REGENXBIO and its mission today. I hope everyone continues to stay safe and well. I look forward to seeing people in person, but even before then, being able to interact with you all in the next several months. Thanks a lot.