REGENXBIO Inc. (RGNX) Earnings Call Transcript & Summary

Ladies and gentlemen, the program is about to begin. [Operator Instructions] At this time, it is my pleasure to turn the program over to your host, Alec Stranahan.

All right. Great. Hey, everyone. Good morning, and welcome to Day 2 of the 2022 Bank of America's Mid-Biotech Conference. Thanks for joining the session with REGENXBIO. My name is Alec Stranahan. I'm Vice President and Senior Biotech analyst covering REGENXBIO here at BofA. And I'm pleased to be joined today by Steve Pakola, REGENXBIO's Chief Medical Officer; as well as Vit Vasista, Chief Financial Officer. Thanks, guys, for joining the conference.

Great to be here.

Thanks for hosting us.

Yes. So it will be a fireside format, so we'll just keep it to Q&A. I've got some here, but those dialed in. If you do have a question, feel free to log it through the Veritas platform, and I'll read it out anonymously as we go along.

But maybe just to start, Ken's outlined the 5x25 strategy. Could you sort of walk us through what this means and how you plan to achieve that?

Sure. Great question. Thank you, everyone, for joining us. Looking forward to it. So the 5x25 strategy is really based on the fact that we expect by 2025 to have 5 NAV technology programs, either in late-stage pivotal trials, all the way through an actual approval of a BLA. So obviously, there are certain programs that are already out there. Zolgensma to be one that has an active BLA, but we plan on going forward and having some of our own internal programs in pivotal trials or joining Zolgensma as approved products. Now when you think about it, we've got few pivotal trials going on right now for REGENX-314 subretinal delivery of our drug product, atmosphere in Ascent, and we hope to be wrapping those up and looking at the BLA in late 2024 per our guidance. We also announced earlier this year that we've initiated our CAMPSIITE trial, which is a pivotal trial for REGENX-121, which is for the treatment of MPS II. So we're definitely well on our way in terms of moving our programs for it, and we plan and give you updates as other programs in our pipeline move forward into pivotal trials. So that's kind of what we plan to do it, Alec. And we've got the team in place and we are very excited.

Great. And obviously, manufacturing is a big component of that, that you guys have been putting in place preemptively, right? I think you just opened your new facility earlier this year. How does having commercial scale manufacturing in-house sort of part of the commercialization plan by 2025?

Well, I mean, it's obviously a key now. Before, we were using CDMOs and we had relatively great experience with it, but now we are in control of our own destiny. The manufacturing plan is a 2 by up to 2,000 liter. So 2 trains, each train can handle up to 2,000 liters, and it's all the way from, obviously, raw materials in the warehouse building all the way through fill finish, which should be up and running by the middle of next year. We produced bulk drug product for our clinical trials in-house and been very successful. But we think that being able to produce a suspension based 2,000 liters will be key, especially as you look at programs like DMD, Duchenne's, where there is a large material need to meet the marketplace. So we're very excited about it. And even from day 1, we hired a commercial scale lead in terms of our manufacturing, and we've got everything in place to actually do it.

Fantastic. Yes, obviously, that's a big benefit to have that in-house from a competitive and also a developmental perspective. Maybe shifting over to 314. This is your lead program, 2 Phase IIIs ongoing. Steve, I was hoping to hear your thoughts on the non-inferiority as the endpoint versus the anti-VEGF comparator arms at 12 months in these studies. And maybe we can go over the trial design as well.

Great. Thanks again, Alec, for having us. So as you mentioned, our lead program that introduced in the opening comments, we've got 2 pivotal studies looking at RGX-314 subretinal delivery for treatment of wet AMD patients, and each of these 2 studies has an active control arm that are really the most clinically validated on-label treatment approaches. Lucentis monthly injection in the atmosphere study and loading doses followed by every other month dosing of EYLEA according to label. So these are really 2 good axle and gold standards, not only from a regulatory standpoint, but of course, also clinically. And we started these studies after end of Phase II meeting, alignment at that stage. And not surprisingly, it wasn't too hard to get alignment actually because of the history in the space and the precedent of using non-inferiority to an on-label repeated anti-VEGF injection approach. So we have a very novel approach in terms of a onetime treatment to provide sustained anti-VEGF activity to maintain or improve vision and anatomy, while dramatically decreasing treatment burden. But from a regulatory standpoint, our bar is this tried and true non-inferiority on best corrected visual acuity at 1 year, a very standard approach. And the FDA -- also not surprisingly, there's also a good history of exactly what non-inferiority margin you use, that is based on the variability that's been seen with whatever control arm that you're using. So we were able to set all those components up. One aspect, of course, is when you're looking at extended duration even trials that others have done, you have the opportunity for supplemental injections if treatment is needed in those cases. So there's also a history with the FDA of how to deal with supplemental injections. In our case, we're not just thinking of extending durability in the way that other incremental advances are coming along with other treatments, like the VABYSMO and others in development, but a more dramatic change in terms of sustained treatment where some patients may not need any supplemental injections and those that do have a decreased need for injections.

Right. And I think it makes sense from a real world use perspective to allow that -- to allow the supplemental injections in the study. I guess in terms of the non-inferiority endpoint with the rescue injections, I guess, does that -- could that impact the statistics at all? I'm sure this has been factored into the study design, right?

Yes, that's a great question, Alec, because when you're attempting to confirm non-inferiority, if you have a lot of supplemental injections, a lot of patients who need supplemental injection, especially if it's close to your primary endpoint, time point, that could be a confounding factor that needs to be accounted for. So this is the kind of thing we were able to proactively go into our discussions at the end of Phase II time point before starting these studies and align on an approach for addressing that. And the basic common approaches are a straightforward approach where you can look at the last observation prior to a patient needing a supplemental injection or getting a supplemental injection. But there's also other ways to sensor or deal with that data from patients who need or get supplemental injection. The good news is if it's more than a few months since a patient that's gotten supplemental injection, then there is much less of a possibility that it would confound a particular BCVA. But nevertheless, we have this opportunity to assess this in different sensitivity analysis that would be incorporated -- already incorporated in the stat analysis plan to basically show consistency of what we demonstrate or hope to demonstrate in our primary endpoint in these different sensitivity analysis.

All right. That makes sense. And I think most recently, we've seen data from the suprachoroidal studies and also diabetic retinopathy. I guess, Steve, could you maybe walk us through sort of where those studies are, the data that we saw recently and then the expectations from the higher dose cohort, which I think are enrolling currently?

Sure. And this is a case where we and our global partner, AbbVie, who has a long history via Allergan component of the company in anti-VEGF and exploration in this area and understanding of retina, so we and our partner are excited not only about the subretinal pivotal program, but also the opportunity to advance in in-office suprachoroidal delivery as a onetime gene therapy approach. And we have the 2 studies that are the first ever studies looking at suprachoroidal delivery as a space for gene therapy delivery. And the first study is the AAV8 study looking in wet AMD, so the same indication as our subretinal pivotal program. And the other study is the ALTITUDE study, which is looking at suprachoroidal delivery in patients with diabetic retinopathy. And as you mentioned, we had 2 -- we updated on both these programs in terms of both data and also announcing that we and our partner have decided to advance both studies by expanding to add additional cohorts. And those studies are ongoing because of this expansion. So it's really great for us, but also to have a partner, who knows the space that's equally excited about the opportunity of not only the subretinal but also the in-office exploration in 2 different indications, wet AMD and DR. The thing I'd add here is DR is really a fascinating space in that, although we know repeated anti-VEGF injections can actually benefit these patients. The unsustainability of repeated injections is simply not something that doctors nor their patients and their patients' families are going to sign up for in the setting of diabetic retinopathy, whereas with wet AMD and DME, other indications, they have no choice because they have symptoms, and they need the repeated injections. And in those indications, we hope to address that unmet need by decreasing dramatically the injection burden, whereas in diabetic retinopathy, these patients are currently not getting treated. So this is a unique opportunity, particularly with an in-office onetime treatment approach. And also in that indication, the opportunity to have a negative control arm just observing the patients where we understand that those patients will only get worse without treatment, and we can compare treatment effect. So we're excited for the new year to -- in both studies show longer-term follow-up in the cohorts and the doses that we've already looked at and also eventually have initial interim results on these new cohorts once we complete enrolling these additional cohorts in both studies.

Perfect. And just in terms of framing what is a meaningful outcome when we do see the higher dose data, understandably DR, it's a different disease, right? So it's got a different efficacy metric to [ TRSS ]. We've had some investors point to non-inferiority within wet AMD, between suprachoroidal and subretinal sort of the bar. Do you think this is the right way to be thinking about it? Or does the convenience factor sort of add something additional to whatever efficacy you're getting with the subretinal?

Yes, good question where -- what we're looking for certainly depends on the indication. Fortunately, in both wet AMD and diabetic retinopathy, we, as a company in the field, we have very good experience and history of assessing noninvasively how patients are doing and how much treatment effect you have based on these different approaches, not just BCVA function, but also the anatomy and also first treatment burden in terms of wet AMD. And we have that history of doing that with our subretinal program. So as we advance in the dose-ranging study in wet AMD with suprachoroidal, we got to use those same parameters. To your question is, is our target product profile any different in suprachoroidal? In a rough brush sense, no, it's really the same benefit/risk consideration and how we think of adequate treatment from a regulatory standpoint. Other than I'd say the fact that you're taking it out of the operating room could, maybe around the edges, allow for a view that the benefit/risk expands the proportion of patients that a doctor and the patient who's sitting in his chair would consider in terms of, "Hey, here's a treatment modality that a onetime treatment might allow me to not need any future injections or if I do need future injections into my eyeball I, on average, greatly decreasing how many of those I need." So there can't be an argument that maybe that would be a little broader. But ultimately, we would still have to demonstrate the same type of efficacy from a regulatory standpoint in terms of non-inferiority. Now diabetic retinopathy is a different case. There, even though Lucentis and EYLEA are on label for treatment of diabetic retinopathy, even in settings where patients don't have vision-threatening complications like center-involved DME or high-risk proliferative diabetic retinopathy, as we mentioned, it's not standard of care because it's just not a sustainable treatment option. And because of that reason, that's why we're able to have a negative control arm, which makes the power much easier. So -- and we have known acceptable endpoints based on the DRSS score that allows for the ability once you have assessed doses that you believe can hit on those accepted primary endpoints, you'd be able to advance into pivotal development. What we're finding when we speak to clinicians on the DR front is that there are certain regulatory bars in terms of 2-step improvement or decreasing rate of patients who have 2-step worsening. But from a clinician standpoint, the -- how they treat their patients is, well, anything that can slow down or even reverse the direction of their patients is going to be clinically meaningful for them, if, for example, it's in-office onetime treatment. So that really would change the whole paradigm in terms of how the treating clinicians and their patients would think about such a treatment modality.

Perfect. That makes sense. I do want to switch gears and talk about the rest of the pipeline. Obviously, we can talk about 314 all day. A lot of things to dig into there. But maybe since DMD is becoming more topical and you guys are sort of advancing your initial study towards the clinic, maybe just at a high level, how do you plan to differentiate among other gene therapy companies, which are currently in the DMD space? Maybe you can talk about the design of your gene therapy and how that design could benefit efficacy or safety?

Yes. We're very excited about Duchenne and our novel gene therapy for treatment of Duchenne, our RGX-202 program. This is something that has come out of our laboratory and our Chief Scientific Officer, Olivier Danos, who has over 30 years of expertise, particularly in Duchenne research. So it's really a unique opportunity where we have the scientific research and development expertise, via our Chief Scientific Officer, blended with our expertise in terms of gene therapy as well via Olivier and our entire company and our platform where therein lies the differentiating aspects. First of all, we are certainly very supportive of accelerated approval and the belief that if you can express functioning dystrophin or microdystrophin, that is reasonably likely to translate into clinical benefit for these patients. So at a larger level, the way the field is evolving is something we're very supportive of. On top of the basic dystrophin function, certainly a key component that Olivier has brought to the fore is taking advantage of everything we know about the entire dystrophin-native protein, incorporating the C-terminal domain and the key components of the C-terminal domain that allow for association of the microdystrophin with the dystrophin association -- associated protein complex that allows for greater functionality that we've shown preclinically in, in vivo models translates into better function and better resistance to stress in the actual muscle fibers in the animal models compared to microdystrophin molecules that don't have the C-terminal domain. So that's one of the, I guess, the most scientifically sexy and clinically relevant from a how dystrophin works standpoint that we believe is potentially differentiating. Having said that, that's just one aspect. We have always been a big believer that it's not just your transgene, it's your promoter. It's how you optimize all the components of the genetic material that you have in your vector and it's also your vector that you use. So therein lies all the potential differentiating aspects are specific vector AAV8 is different from both Sareptas and Pfizer solid vectors. So just based on serotype differentiation, this is a massive opportunity where there's going to be some excitement of that pie, if you will, where patients and their families won't be able to avail themselves at other treatments simply because of their immunogenicity status. But on top of that, we're very excited about these other differentiated aspects of RGX-202.

Right. And you guys are, obviously, the AAV experts. So AVA seems like the right choice. You mentioned Sarepta, I'm sure you're watching the competitive development in the space pretty closely. I'd be interested to hear your thoughts on the Sarepta filing acceptance a week or so ago and how that can help inform not only the regulatory path, but also maybe your future study design as well?

Yes. We're members of this community, and we've always had a strong patient advocacy connection across our different therapeutic areas, including the license almost storage diseases and with Duchenne. And just like in our MPS programs, we've also been heavily involved in leading actually in various consortia, and that pulled together a lot of the different stakeholders, clinical, scientific, regulatory and patient advocacy in the patients themselves, including in Duchenne. So we're -- at a broad level, we're very excited that the field is moving forward with more treatment options and seeing the regulatory advance here. As I mentioned before, we believe microdystrophin levels in muscle are reasonably likely to predict clinical benefit. So we anticipate that being confirmed with the clinical data. And so advances elsewhere, a, we're happy for the field, and we're happy for our program as well because I think any advances there allow for a good, fast follower process where more patients and doctors will have more options for their patients with Duchenne, including cases where even with an improved therapy or two, there's going to be some segment of the population that won't have those options available to them simply based on immunogenicity status.

Makes sense. Is it -- I wanted to ask you on the cash position, $617 million cash on the books currently. What are sort of your capital allocation priorities in the next 6 to 12 months? Is it mostly going into the pipeline? Obviously, you've got a lot of irons in the fire. Or is BD maybe on the horizon as well to help complement your own capabilities?

Yes, that's a great question, Alec. As it relates to CapEx, we've done a lot of spending over the past year or 2 to stand up a new corporate headquarters and obviously, our cGMP manufacturing capabilities. I think as we look forward to where we would plan to deploy capital resources, we're always on the lookout for interesting indications that might be complementary or expand our capabilities outside of just the new CNS and larger rare indications, so looking into the space is potentially like cardiac or other neuromuscular indications. We're also always looking to add potential technologies to bring in-house, enhance our [ R & ED ] capabilities and also enhance our delivery or potential for our indications go broader. So -- and then last but least, there are, obviously, a lot of programs out there that are suffering from -- and access to capital. And we always, through our corporate development team, take a look and see whether any of those programs might be of interest to REGENXBIO. So we want to be good stewards of our capital. Obviously, it's a tough environment out there, but we're always on the lookout for things that will make REGENXBIO better going forward.

Perfect. That's helpful. And maybe in the last minute that we have, just to tap everything up. I guess what would you guys say on maybe the top 3 updates we should expect heading into next year? I know you've had some updates on your MPS programs, but anything 314, DMD, what would you point investors to in terms of what's most important in the next 12 months?

On a clinical standpoint, fortunately, with late-stage development, continued execution on those programs towards our guidance in [collaboration] with that be, I think certainly in the suprachoroidal, the 2 studies we spoke about, similar to our cadence, previously, we're going to have an opportunity to show a longer-term follow-up confirming durability in each of these indications for what we've already shown as far as proof of concept. And also initial interim data from new cohorts that we'll have the milestones of completing enrollment in those and then the typical cadence of follow-up. So longer-term follow-up and more cohorts to assess both of those in our collaboration with AbbVie. And I think the other 2 big areas are the programs we spoke about where MPS II -- MPS I, we announced this morning, completion and dosing there. So I think further follow-up, further durability on both the biomarker endpoints and also the clinical outcomes for these infants and children in both those indications. And then lastly, Duchenne as per guidance, being able to start dosing in the first half of the new year and a follow-up that we'll have from treatment of patients thereafter.

Very good. We'll see that -- I think we'll have to end it there, but I wanted to thank you both for taking the time to participate in the conference. Great discussion.

Thanks, Alec.

Thanks, Alec. Have great holiday.

Thanks. You, as well. Take care, guys.

Bye.