REGENXBIO Inc. (RGNX) Earnings Call Transcript & Summary

Good morning, everyone. Welcome to Barclays Global Healthcare Conference. It is my -- this is Gena Wang, I cover SMid cap biotech. It is my great pleasure to introduce our -- at least in my session, last but not least, presenting company, REGENXBIO. With us today we have Ken Mills, President and Chief Executive Officer. We also have Steve Pakola, Chief Medical Officer. Ken, so maybe I will let you give a brief overview about the company, and then we dive into the Q&A.

Sounds great, Gena. Thanks to you and your team at Barclays for having us here. We're happy to be back in person. It's our first conference, at least at an investor level returning. So REGENXBIO is a gene therapy company. We are focused on AAV therapeutics as a platform. We've had a history in the field really for over 10 years since our formation. We've been a leader in pioneering the use of novel AAVs that were isolated in the lab of Jim Wilson at the University of Pennsylvania. They've gone on to be adopted by many companies in this space and have resulted in, so far, one approved product that is Zolgensma, marketed by Novartis. Our pipeline and our focus as a company today is really a vision in the next several years to advance our pipeline of AAV therapeutics into late-stage development and products. And we actually began that journey about a year ago with initiation of our first pivotal trial, a randomized controlled study in wet age-related macular degeneration using AAV therapeutic technology developed at REGENX. We're continuing that with the start of a second pivotal trial we announced early this year, 1 of 2 for wet AMD. We've, in the last several months, also closed on a global partnership with AbbVie to help continue the pioneering work we're doing in gene therapy and eye care, working with them on globalizing this pivotal program, but also bringing forward additional AAV therapeutics using AAV technology for eye care, including in wet age-related macular degeneration, diabetic population suffering from similar disease. And the future for us, I think, is bright. We have eyes on starting new clinical trials, advancing more data. And our focus is primarily today on eye care, neuromuscular and neuroscience indications but believe that the opportunity space for AAV therapeutics to become treatments that are meaningful and an unmet need, but importantly for us, addressing large commercial opportunities is a great place to be. So we think we have the capabilities to achieve that. I know we're going to get into some of the hows and whys of that with Gena today.

Thank you. Thank you, Ken. So maybe a big picture before we dive into specific questions. You did lay out a new strategy 5x25. How do you plan to achieve this? You gave a little bit of color there. So if you can provide a little bit of rundown what could be the key candidates do you think that, that will reach that goal by '25?

Yes. So we announced around the filing of our 10-K, a new internal and external strategy that we're communicating about having 5 programs in pivotal phase of developments or approved in 2025. And as I alluded to, we're starting already with one meaningful indication wet age-related macular degeneration where we currently have 2 pivotal phase programs ongoing what we call ATMOSPHERE and ASCENT. We started those programs and that program plan really at the beginning of last year after sort of end of Phase II discussions with FDA about the pharmacology of our product candidate that we call RGX-314. And I mentioned we continue to expand that program with this global partnership that closed for us with AbbVie in November. There's indications in our program for RGX-314 that are offshoots to that. We're working on next-generation routes of delivery, and we're working at additional indications that focus on the same mechanism of action. This is inhibition of VEGF using AAV therapeutic technology. So we think that some Phase II studies we have going on today with our suprachoroidal route of administration are potential opportunities for us to advance into a pivotal phase and towards commercialization. And in addition, we have several rare programs in neuroscience and neuromuscular that we've reported data on, including in our MPS II or Hunter syndrome program, MPS I, our Hurler syndrome program that we view. We've gone through dose escalation. We've gone through expansion in some cases of patients enrolling in studies. We've been preparing our manufacturing processes to take on more and more responsibility for late-stage development, pivotal phase and commercialization. So we have 3 or 4 programs we view in the rare universe that could contribute to meeting our 5x5 strategy -- 5x25 strategy, sorry. And in addition, we continue to have a lot of partnerships that we think are eligible. Zolgensma, as I alluded to, is an approved product for spinal muscular atrophy type 1 today labeled and sold worldwide. We received royalty revenues. We completed a monetization with HCRP of that revenue stream, but we see additional indications coming from the Zolgensma platform but also other partner platforms. So really, when I stepped back and started to think about the vision for REGENXBIO in this next chapter, I didn't see any real AAV therapeutics that had the same end-to-end capabilities that we have in terms of research, development, medical infrastructure, manufacturing infrastructure, experience in partnership like we do. And I thought that a goal to translate more AAV therapeutics into actual products was an important one for us as a leader. So there's probably a whole basket of things, Gena, that could sort of fill the coffers of meeting our 5x25 strategy. But the idea here is to be focused, focused on large indications, indications with unmet need and turn that value into helping many, many patients and expanding that value significantly.

Great. Maybe I will dive into your -- I think most -- the program that I get asked most, that's your 314 suprachoroidal program. And so the -- at the -- when you have -- so the wet AMD AAVIATE trial, when we look at the different cohorts, so there's some investors look at the lack of a clear dose response when we look at the injection reduction. And so maybe, Steve, can you help us understand like what -- how should we interpret the data? And when you dose higher, what kind of -- what should we expect certain metrics should we continue improving? And what is the threshold there for you to move forward?

Sure. Thanks, Gena, and thanks for having us. Great to be here. Yes, the question you asked is a key one in the entire space of wet AMD, speaking of that particular indication, where we get to take advantage of all the learnings in the field and our own learnings even from our subretinal program, the Phase I/II study that we had, the pivotal studies that are ongoing now. And just as some background for the group, the AAVIATE study is our first in-human RGX-314 suprachoroidal delivery route. So this is an in-office route of delivery for treatment of wet AMD. And in parallel with that, we also have a RGX-314 suprachoroidal delivery for diabetic retinopathy. And to your question, Gena, we fortunately have a lot of measures of response that we can take advantage of when we do these trials, including a wet AMD, where we look at the anatomy, how well is the disease responding on OCT, noninvasive imaging. And of course, we look at best-corrected visual acuity, how is the patient functioning in terms of their central vision. And the goal is to maintain or improve anatomy and function in these patients who are already on very frequent and burdensome anti-VEGF injections to be able to decrease that burden of injections while maintaining the visual acuity or benefit. And what we've seen is, in some patients, you can even prevent the need for any reinjections. So back to AAVIATE, we do look at that percent reduction in how many injections they're needing after onetime treatment with RGX-314 compared to how many we know they needed previously. And we already know, fortunately, we see even at the very first dose that we have a clear reduction, greater than 70% reduction in treatment burden. And in cohort 2, a dose level higher, we've seen efficacy there as well with a greater than 70% reduction. Relatively small numbers of sample size with wide confidence interval. So exactly how that dose response will look with longer follow-up is something we'll watch, but we can also look at those other variables and also look at other ways of looking at treatment burden, such as how many patients didn't need any injections at all, where 40% of the patients in Cohort 2 fit that really grand slam scenario for a onetime gene therapy. And we have the benefit of dose level 3, which we announced completion of dosing in Cohort 4 with that dose earlier this year, and we plan to complete Cohort 5 with that same dose in this half of the year. So we feel very good about the data we're seeing. The -- we have the benefit of having these different -- 3 different levels, data points including with multiple cohorts at dose level 1 and dose level 2 that are going to really help us to tease out what type of dose response. The good news is we're seeing very good safety and tolerability, and we're seeing a response, and we've already had the benefit of being able to look at multiple doses, all in the setting of no prophylactic steroids. So it's really a great opportunity to have this in-office delivery approach and to be at the stage where we're getting data from multiple dose levels.

Very helpful. So maybe several questions here. Like the first 2 cohorts, you did present 2 sets of data. One is the injection-free patient -- percentage of patients that will become injection-free and the other one is the rescue injection reduction, right? So which are the metrics more important or more meaningful to the doctors and the patients?

Both. And I think each has a value when you think of our investigators and our thought leaders when they're sitting with their wet AMD patients and they're consenting for this trial or when they would be talking to their patient in the future about different treatment options. Both of those characteristics resonate for the doctors and the patients and their family that there's the opportunity to decrease this treatment burden for the patient and their daughter or son who's taking a day off of work every month or every other month with existing therapies. There's definitely a value of decreasing that rate and also the potential that in some proportion of the patients they may not need future injections.

Yes. And they're interrelated, right, Gena of course, at the level we're talking about, at least in particular. But I think that we've always had vision for sort of that interaction between a caregiver and a patient where they could say, well, maybe there's a 1 in 2 chance that you'll never need another injection again. I mean that's a really powerful statement to be able to make with the type of clinical background that they've been experiencing, in some cases, for years of monthly injections. And there's an equally likely, maybe higher likely chance that you'll have some significant reduction be it intervals that are more like every 6 months per visit. So I think that we -- one of the things I think about the AAVIATE program that's important for us historically, but we knew we were starting at dose levels that were sort of already in an efficacy range, at least we thought we did from the preclinical comparison. And we established that right out of the gate. It was really exciting, I think, for this platform to sort of already be in a zone where we're really trying to improve upon a target product profile. We're not trying to claw our way into it.

Okay. So like when I look at the data, I felt some of the benefit got lost a little bit because of the patient baseline and some of the patient burden was not that high. And so like I say, 70% of those low burden will be very different to achieve versus high burden 70% reduction -- if you give a gene therapy. So how would you sign up some patients with sort of only 3 months pre-injection follow-up that will be, in my view, too short? So like when you move forward, how would you try to address this, make a more uniform patient -- I know you try to enter into less severe patients. But when we talk to the doctors, basically, even with faricimab, they were, well, we will start with EYLEA monthly dosing or once, I believe, 2 months dosing EYLEA, we will not start with naive patients, right? So the gene therapy, I assume, even in more severe patients that they were thinking to initially putting on. So if we keep that in mind, with the higher dose as an additional dose, like what you could do make it in a way that we can see like maybe clearer dose response when you increase the dose or like dosing up and then we can see the clear dose response or reflect better the clinical benefit with your therapy?

Yes, that's a good point that the metric of percent reduction is, in some ways, influenced by the baseline frequency that a patient was getting. So if they were not so frequent at the beginning and you have a certain reduction that has a different meaning than say a patient that's been getting monthly injection, for example. And this is something we've talked about before. The aspect of how to derisk by ensuring not excess variability would exist in terms of how well controlled patients are not. And it's actually something we've built into our subretinal pivotal program, where we have a lead in of a couple of injections, monthly injections, of Lucentis before the RGX-314 injections. In that regard, the deck is stacked against us in AAVIATE. Where we did not include these kind of standard upfront to control, make sure everybody was very controlled during the period that you would have the gene therapy ramp-up. And so directionally, it's a good point that there could be a little more variability in there and really biased against showing the effect. We chose to do it that way to get a very clean look. It's similar to how we looked at not including prophylaxis that this is really a setting to just see without too many different factors. But if we can show a meaningful effect here, going forward, we would build in a lot of those derisking factors for -- such as a short run in with consistent therapy to really derisk -- decrease that variability that you're referring to.

Okay. Very helpful. And then next question, also like now you have either the same dose but one injection, which means a little bit higher concentration, you're also going after patients now with existing neutralizing antibody. So when we go to those cohorts, how should we compare to, say, the early cohort like the same dose, but 2 injection? Like how should we interpret the data there? Like should we see increased risk of efficacy -- I mean, risk of the safety? Or should we expect to see increased efficacy? And then with the existing neutralizing antibody, actually, should we see actually erosion of the efficacy? So if you can lay out what should we expect with the higher dose with all those conditions there?

Okay, sure. So Gena is referring in our AAVIATE in Cohort 2, the second dose level, we gave split basically between 2 separate injections, each 100 microliters. But fortunately, we were able to advance from a feasibility standpoint to basically double the concentration compared to dose level 1 to allow us to give a single injection, which is just a much better approach feasibility-wise for the patient and the doctor. So in cohort 3, we're looking at dose level 2 in a single injection of 100 microliters versus cohort 2 was that dose in 2 separate injections. Our priority -- there's not a strong argument to say one would necessarily be better than the other. For every argument that could exist to say one would be better. There's another to go the other way, but we'll get to look at that. The other variable at play now that we've dosed cohort 1 at the low dose level without -- in NAV negative patients without prophylactic steroids, we then were confident to go into dose level 2, looking at both NAV negative but also NAV positive. And now fortunately, we have dose level 3 with a NAV negative and a NAV positive arm. First things first, safety and tolerability. So we'll look to see does that impact safety and tolerability. And from an efficacy standpoint, it's the same variable that we've been talking about that is do we see anything meaningfully different in the NAV positive arm or cohorts of dose level 2 and dose level 3 and that's what we'll have an opportunity to look at.

So for the 2 doses -- 2 injections versus 1 injection, you do not expect any major efficacy differences?

We have no strong reason to [indiscernible] that one would be better than the other I'd say.

Okay. What about -- so what about the -- I mean one argument as you penetrate both sides of the back of the eye, it was one injection, you only penetrate one side of the eye. So like do you think that, that will enough play a role there?

Yes because with the one injection, it's one side of the eye, but it's double the concentration. So...

Okay. And then with the double the concentration, will you be worried about increasing risk of inflammation or safety?

That's why we're glad we were able to -- we've already presented on dose level 1 and dose level 2 in NAV negative patients in AAVIATE. And we're going to have a chance to look at that as well in ALTITUDE where we're looking at the same doses in that study is all a single injection by the way. And we haven't seen a dose response in terms of safety and tolerability to date, which is encouraging. What we've seen is very tolerable from the standpoint of the clinicians and the patients.

Okay. Very good. I think I still have more question on this program. Because this is very important and if it works is really transformative. So we talk to quite some doctors. And then historically, a few doctors, very inactive on gene therapy in general, in wet AMD. But did mention that if it's suprachoroidal then there will be a different story, but then the condition is the safety. And then -- so my question is, and we understand from our part, and I think a lot of the investors here maybe understand the safety profile from yours very -- completely different from [indiscernible], but most investors -- or like a doctor was -- still we got burned by that type of safety inflammation. And so kind of -- like how would you educate a community with the doctor and the patient that your safety profile will be different, and it's a mild, self-resolving and the -- like how would you communicate with them, make them feel comfortable that your safety profile will be different, and it will not be concerning? And we also know in wet AMD in general, all the doctors just are very cautious about any kind of inflammation -- so how would you convey this message to the community?

Yes. Overarching, I'd say, prospectively, what has been seen in the field and has been borne out, supported why we chose suprachoroidal to begin with years ago even based on the data that was available years ago where to allow for expansion of RGX-314 from the subretinal to also the optionality of in-office approach, for us, the important thing was preserve the gold standard aspects of subretinal, which we know are the ability to inject locally to maximize efficacy transduction of the target tissue itself to not need to give very large doses to allow for diffusion to get to the target tissue, and importantly, to have it compartmentalized. So both subretinal and suprachoroidal are compartmentalized injections right at the target tissue and importantly and anatomically very separate from the vitreous cavity and the anterior eye structures. So unfortunately, what's been seen with intravitreal gene therapy is somewhat predictive based on what we know scientifically and anatomically. So right off the bat, it's very different. And I think everything that's coming out is supporting why we chose to go with suprachoroidal. And we're seeing that preclinically. We're now seeing this clinically where unlike intravitreal, we are not using prophylactic steroids. So we are really looking at -- in a very sensitive way for what type of immune response would exist and we're seeing a very acceptable profile.

Okay. I know we don't have too much time left. But I wanted to quickly ask about another, I think to me is, a very exciting pipeline asset, the DMD one you're planning to go to Phase I this year. So any thoughts on -- it is -- we also follow very closely the other programs in the similar category, microdystrophin approach. So do you think microdystrophin gene therapy as a class? They're all very similar. Of course, everyone has a slight improvement on certain things. So if the other competitors show [ fail ] of the study, what could be the reason to you for your program?

Yes. I think we generally do think of the science as a class of science in terms of functional truncated dystrophin genes being inserted into cells and expressing and getting changes. Where I think our program diverges from others is kind of the recency of the science we've been able to draw on to launch a candidate that's based on what's best available. And in addition, high-quality manufacturing, a process that's ready to scale from pivotal to commercial today has -- and that contributes meaningfully to safety as well as anticipate some things that may have been observed in other trials already clinically today and install things either prophylactically or in response to potential observations to treatment that I think clear the pathway for clinical development. So Gena, we expect to get the types of changes in cell morphology and expression of microdystrophin early like the other classes are. I think our addition of the C-terminal domain is a grab towards that longer-term outcomes seeing improvements in the scores for like North Star for the boys at 2 years, 3 years and beyond, better stabilization of disease. But I think the big opportunity space that we saw in addition was build a highly scalable, high-quality, safe manufacturing process right out of the gate and look at what's been going on in the field, not just in Duchenne gene therapy, but also in gene therapy for spinal muscular atrophy as an approved product. And draw on those understandings to say, here's clinically how gene therapy needs to be delivered to be safe and incredibly, I think, important.

So I totally agree on the safety part. With the efficacy part, we saw like Sarepta and Pfizer as well show 2 score and a North Star benefit if using a certain way because the control arm natural history could be very variable. But do you think -- what is your goal in terms of a North Star benefit for your program that you think like you need to achieve in order to be competitive?

Well, again, I think at 1 year, we would assume parity to other existing constructs. Even though many of those constructs were sort of academic reagents 10 or 15 years ago, I think the concept of the class of microdystrophins is that at relatively early time points and even with the solid construct that does have some interesting new biological aspects, we're all in the same group. It would surprise us if we have meaningful differences in things like North Star at a year. It would be great if we did. But I think what we think the C-terminal domain can really contribute our longer-term outcomes at 2 years. I think we start to see more differentiation at 3 years. So this has got to be an emerging story, but I think we're very comfortable with the improvements in the data and the benefit/risk of gene therapy overall for Duchenne for all of the class of microdystrophins. Again, I mean, our big emphasis is on safety because that is, just like you were talking about with the retina KOLs. Now we're in the pediatric population, and we're talking to docs that don't have a lot of options for these kid. But they want to know that something is safe. They want to feel comfortable with that. So that's been our focus. Parity, long-term differentiation and high-quality manufacturing.

Okay. Very good. Thank you very much, Ken and Steve.

Thanks for having very us.

Thank you, everyone.

Thank you.