REGENXBIO Inc. (RGNX) Earnings Call Transcript & Summary

Hi, everyone. Welcome. This is the fireside chat with REGENXBIO. My name is Vikram Purohit. I'm one of the biotech analysts with the research team. Before we get started, I just need to read a brief disclosure statement. For important disclosures, please see the Morgan Stanley research disclosure website at www.morganstanley.com/researchdisclosures. And if you have any questions, please reach out to your Morgan Stanley sales representative. With that, happy to have with me Ken and Steve from the REGENXBIO team. Thanks for joining. Appreciate it.

Thanks for having us.

We have roughly half hour to get through quite a few different topics. Ken, I was thinking first, if you could just start with some opening remarks from your side on this kind of key inflection points progress with 202, 214 and additional pipeline programs, but I'll let you kick it off.

Yes. 2023 has been an exciting year of, I think, growth and development for the company. We have marketing someone just out in the hallway, I mean 8 ongoing clinical trials or at least programs, probably more than that in truth in terms of literal numerical number of trials, but 8 different diseases that we're focusing on as a company. And we have some exciting data coming up this coming quarter and through the beginning of next year from our Duchenne in diabetic retinopathy and wet AMD study. We're running 2 pivotal trials, right? Basically in wet AMD with our subretinal approach, and we're in a pivotal phase. We fully enrolled our pivotal phase of development for RGX-121, our lead neurodegenerative program for Hunter syndrome. We have expanded the capabilities of the company in both research and manufacturing this year, really finished the first full year of use of our GMP facility. So we're now supporting all of our clinical trials with bulk drug and soon to be our fill finish line in Rockville later this year. And in research, we continue to believe that it's kind of a limited platform AAV for addressing a lot of different diseases in unique ways with onetime treatments, whether they're more bespoke indications in sort of rare genetic diseases or in very, very large indications like in wet AMD or diabetic retinopathy. So it's -- we're just a few weeks away from our first measures of secondary endpoints, efficacy endpoints in our Duchenne trial. In the beginning of November will be our AAO update, a great time to be kind of touching base on everything REGENXBIO right now.

Great. Maybe let's go to DMD first just because as it's been a topical area people have been digging into recently. At high level, what -- how long have you been thinking about DMD and kind of what are -- what line of growth led you to DMD as an area of focus because you now have 2 programs nominated there, so what is the path to getting there?

Yes. REGENX's entry into DMD is just a few years been thinking about it across probably 3 or 4 decades. In research, both in industry and to kind of contribute to the field when it comes to muscle wasting diseases and Duchenne in particular. He came to REGENX with a notion that there is beginning to be scientific evidence that microdystrophin is a benefit in important models of disease, and that was emerging even in early clinical evidence, but there were still limitations that a lot of the reagents that were being used in the clinic have been designed in like the '90s or early 2000. So we're talking about things that were like 2 decades old. So Olivier and his team spent time. We had some really good molecular biologists internally, people that really understood modeling in Duchenne preclinical to develop in [indiscernible] candidate. We added some science that had never been included in a reagent candidate before into the clinic. We focused a lot on manufacturability. It's an intravenous onetime administration for these -- this class of products, microdystrophins are at the higher end of the range in terms of doses. So having good product quality, but also good product yields to be process capabilities as well. So we launched our clinical trial, I think, with the most recent science that was available to focus a microdystrophin candidate. There's obviously others. There's now an approved and accelerated approved product in the U.S. based on a class of products that are microdystrophin. We think we're a meaningful improvement to that, and we're looking forward to clinical data that continue to support that thesis.

Got it. And on that point, could you just recap for everyone the really clinical data you presented so far and what we can learn in October and how that October update could, I guess, kind of derisk the thesis you have with the construct of 202?

Yes. So just back in July, we had an internal R&D Day that we hosted. We talked about the fact that in our first ever clinical trial for our candidate, we had those 2 patients. We had safety data on those patients on out as far as about 90 days, and we were seeing, importantly, a safe profile at the first dose level, which is actually below what the equivalent approved product is and below even where another company, Pfizer is with its pivotal development. But nonetheless, in our hands preclinically, it was a dose that was showing meaningful response in the animal models, and we thought would have not only a safe profile, which I think we all but confirmed early on here in the development but also would begin to show potential evidence of clinical benefit in voice as well. So that's what's coming next, Vikram, is just in a few weeks, we'll have the first thing that we're able to measure, again, at early time points, just about 3 months, which are is the gene therapy not only safe and has it sort of traveled through kind of after a onetime delivery the period of time where you can be certain or certain that you're kind of dealing with a safe medical product candidate, but also has the gene therapy itself done and what it was designed to, has it turned on in terms of expression. And in our case, what we're able to do is we're going to measure the protein that's being expressed from the candidate, this new novel truncated form of dystrophin with our special science designed into it and see levels of protein for the first time. Others have already shown that they've done that with other candidates. I think we show that we can do that with our candidate, then we're absolutely in the game of being able to then show that the benefit of the science we designed in could have even more improvements longer term. But the first step is to show that we're expressing that protein at reasonable levels. And this is our first dose as well. So we have a trial that's designed to go up a factor of 2, even beyond what this first dose is, which means what you might see from us initially could be improved upon, both in terms of expression. And I think the evidence too is that, that long-term outcomes could be improved.

Got it. Then the natural question then is how much microdystrophin expression from this first dose level is going to be enough? How do you respond to that question? Like what's the benchmark in your mind?

Yes. So it's -- in my mind, I've been saying that we'd like to see evidence of expression based on the assays that we're using and how we're sort of characterizing our microdystron at somewhere between 20% and 40%. This is -- I'm kind of drawing on other data to support what's been seen. It's from other companies and other constructs and other methods for development. But I think it's something that is a reasonable approximation. This is our first dose, as I said. I think we achieved that or something that approximates that with the first dose, in principle, the second dose is twice that. So if there's a linear correlation, we could see a doubling of that through dose escalation.

Got it. Got it. And maybe going back to the fundamentals of how 202 is different structurally. So you talked about a unique promoter. You talked about the extended CT domain that's on the construct of this gene therapy. From a real world perspective, what benefits do those 2 pieces of the construct provide versus a gene therapy that doesn't have those items? Or what could they provide?

I mean the big differentiator is the C terminus elements of dystrophin that the team has been able to design into RGX-202. It -- the simplest way I can describe it is it potentially makes the drug itself. And the drug here is this a onetime AAV gene therapy treatment. But ultimately, what it's doing, what the sort of continuing pharmacodynamics are, are expressing dystrophin protein in cell walls for as long as possible, as long as the voids lives. And on a per protein molecule basis, we think that our microdystrophin to be more potent, more effective than other microdystrophins that are part of reagents that others have designed. That means less protein to give more of a response, the same amount of protein could give a better response long term. And it's because the C terminus is importantly complicit in stabilizing the cell walls of muscle and recruiting other species, other proteins to basically the walls of cells to be able to with the membranes of cells to be able to reinforce the structure of those cells. And without that C terminus, we've shown preclinically that the microdystrophins are a little bit less effective. And with that C terminus, again, they're more effective or to be more potent.

Sure, sure. I guess pivoting but staying on DMD, but paving to a different topic. Understanding it's early days right now for the 202 program. But thinking forward, what do you think is the path to a potential pivotal study and potential approval, given everything else that's in this space right now?

I think we had a great amount of understanding and clarity in the U.S. supplied by FDA's evaluation of the first ever accelerated approval of an AAV gene therapy in Duchenne. It told us as a company, it told a lot of stakeholders, especially families that FDA was supportive of surrogate biomarkers like measures of protein in cell membranes as predictive indicators of clinical benefit. And with that as kind of a road map, we've also seen that, that was established, looking at the labeling of the product with a relatively small number of patients. And on a program that also was only ever examined at 1 dose level, right? So there was never even necessarily any kind of dose ranging that was done just kind of a constant dosing at the same dose throughout the entirety of a clinical program. It's pretty unique. For us, we expect to finish our 3+3 design that we have for 1E14, which is our current dose 214, which will be dose escalation. And with data in hand from that trial, be able to make a decision about moving into a pivotal phase and sort of reproduce with a small number of patients, the potential for an accelerated approval based on microdystrophin expression as a surrogate endpoint for approval. That's something that we believe from where we started and what we reported on July, what we'll update on in World Muscle Society is something that we believe we can transition into coming into 2024 and be a company that's -- so we're in pivotal phase already with our wet AMD subretinal. We fully enrolled pivotal phase with respect to our Hunter program. So this would be our third program that we'd be in pivotal phase with at REGENXBIO Duchenne muscular dystrophy as early as 2024.

Got it. Okay. I'll ask you 1 more question on DMD and then we should pivot to ophthalmology. At your Investor Day earlier this year, you also talked about an Exon 53 targeted product candidate. Could you kind of talk us through the pieces for that program and where it stands right now?

Yes. I think another reflection on the part of Olivier and the scientific team when he arrived at REGENX was that while these microdystrophin constructs are improvements to what exists, which was nearly nothing. And that our science is an improvement even on those reagents that I alluded to already had been designed years ago, really what we need for full correction of Duchenne muscular dystrophies full length dystrophin to be expressed or near full-length dystrophin to be expressed. Unfortunately, AAV is not big enough to be able to package the full-length genome of the dystrophin. But a lot of technology has been developed to be able to use different types of [indiscernible] to change kind of the transcription and translation of genes. And we think that we've designed something that can allow us to express near full-length dystrophin using technologies that others have used and delivered on a kind of chronic repeat basis, but do this with a onetime treatment in AAV. So we're starting that work. We have IND-enabling work going on. We think that there are INDs that we're targeting for as early as 2025. That could be the first clinical candidates where we're using a onetime treatment with AAV to take people's existing DNA, boy's existing DNA and turn that into something that is a productive near full-length dystrophin expression. And I think that, that for us needs to be done at a level of efficiency that hasn't been demonstrated with any other types of technologies before, but we think preclinically, we've seen that.

Got it. Okay. Great. Any questions on DMD before we go ophthalmology?

[indiscernible].

Yes. With respect to our Duchenne program, we're using immune suppression in short course based on a number of recommendations from physicians who had experience with different types of microdystrophin products that sort of predated us in the clinic. There's actually a working group that's been assembled by some academicians that have sort of looked at certain types of responses that have occurred in other trials. And so we're using a short course of steroids, things that are on the order of days. We're actually using some other immunosuppressive agents as well as something like a week or 2 of an anticomplement medicine as part of the prophylactic regimen in the early investigation of RGX-202. And it's been very supportive, I think, of the evidence in the safety profiles that we've seen.

Okay. Let's pivot to ophthalmology then. So 314, Ken, you've got subcutaneous as well as a suprachoroidal.

Subretinal.

Subretinal, sorry, subretinal and suprachoroidal, slip of tongue. Route to administration for 314. We'll touch on subretinal first. You've got 2 studies enrolling there, Atmosphere and Ascent. You a little while back, announced that you're increasing the enrollment targets for both studies. Just talk us through what the intent was there? And I think you mentioned that a larger patient database could afford you some flexibility with labeling considerations. So just talk us through what those could be?

He talked about this.

Thanks, Ken. Thanks for having us. Yes, I think an important context for the -- this is a decision not just by us but by our global partners. And it, in fact, is 1 of the key reasons why we wanted a global partnership with somebody who has the [indiscernible]. So not surprisingly, there is the opportunity to include the goal reach of our [indiscernible]. And that's always been a goal of ours.

So it looks like the microphone might be off.

So with AbbVie, this is a great opportunity not just to expand patient numbers, but also actually get experience outside the U.S. So we expanded to include Europe, Israel and Japan. And so part of the program in a good way that with that expansion, we can enroll more patients and we can have more power for key secondary endpoints. And certainly, the more endpoints you can hit on that really helped you particularly ex U.S. when you think of Europe and health technology assessment organizations. So for us and AbbVie, there's a chance to show more value by hitting on some of the secondary endpoints. And a lot of them fit in the category of part of the big value proposition, which is a dramatic reduction in treatment burden. So we can not only look at some of the key ones like percent reduction in injection burden compared to what patients were needing before onetime gene therapy but also look at certain binary endpoints, like how many patients don't need any injections and also other cuts along the spectrum like maybe a patient only needed a top-off or maybe even though patients needed treatment, it was under a certain cutoff. So we can really achieve great power with the increased patient numbers to hit on some of these.

Got it. Okay. Taking a step back, subretinal, suprachoroidal, where do you see both of these options, assuming they're eventually approved fitting versus each other and then the other anti-VEGF agents that are out there currently in the market?

Yes. Certainly, in either case, the other agents that are out there in the market and that are coming, all fit in this category of extending durability, which is great. Those are good incremental benefit, and we're clearly seeing that the marketplace values those incremental benefits from greater proportion of patients getting from 8 to 12 weeks and from 12 to 16 weeks, et cetera, but it's really a paradigm shift to think of a onetime treatment where a majority of patients may not need any injections. So we think both really have a place. Now with subretinal that's the most tried and true. That's really the gold standard when thinking of getting safe and effective transduction and expression at the target tissue. But it does involve surgery. It's still the benefits outweigh the risk of a simple surgical procedure, but suprachoroidal brings in the opportunity to not only have a onetime treatment, but in-office nonsurgical treatment. So we really see that as an opportunity to expand the optionality really in terms of the spectrum of patients that the doctor and the patient and the treating physicians think is a great opportunity.

Got it. Got it. Now in terms of the path to a pivotal program for the suprachoroidal option, do you have any updated thoughts there? And do you think there's the potential to use any data points from the ongoing subretinal pivotal program to kind of bridge the path towards approval for suprachoroidal?

Sure. So starting with wet AMD, where that question in part relates particularly what we can learn from the ongoing subretinal. It's too early to say and conservatively, we're not going to come out and say that we can do less. But certainly, it helps inform the same drug, a little different route of administration. So I think it certainly will give us more confidence. The other thing that gives us is really derisking from a regulatory standpoint because we know the route to approval, and there's at least the comfort level of the subretinal experience. And it's a tried and true route not administration, but tried and true regulatory clinical development path. Treatment of diabetic retinopathy, there's a lot of benefits there as well. We do have a pathway there. We know from the repeat injection anti-VEGFs, where there's the opportunity to go against a negative control. And that's a really big positive in terms of powering and probability of success because we know that without treatment, patients with moderately severe to severe NPDR don't get better magically that they generally get worse and significantly worse. So again, a nice case of derisking where there's the opportunity to demonstrate adequate safety and efficacy in hundreds of patients, not thousands of patients. And the other key aspect that's less regulatory but more the true value and the unmet need is we know anti-VEGF work to prevent patients from developing blinding eye disease, but the problem is the repeat injections. It's just too much of a burden. So really, a onetime in-office injection can really step in and potentially fill that unmet need.

Got it. Got it. Now your 2 studies ongoing right now with suprachoroidal AAV8 Altitude, you mentioned that we see some updated data there later this year, early next year. Just walk us through what those updates could be and what's the incremental information we're going to get from those updates versus what we've already seen?

Sure. So what we've already seen and presented in both programs is good safety and proof of concept across a range of doses, actually. And at the Investor Day that Ken mentioned, we not only talked about DMD, we also gave an update on recent cohorts in both studies where we added short course topical and noninvasive forms of prophylactic steroids, where early follow-up, but long enough follow-up that we could demonstrate that with topical steroids, short course, we could actually mitigate and actually eliminate in the patients treated in both studies, any IOI. So for us, that's a very big step from a safety and tolerability standpoint. So moving forward, a key focus for us is also durability. So at AAO in early November, we'll be presenting an update on Altitude, where we'll present longer-term follow-up 1 year a follow-up. Previously, we presented 6 months. So this is really a great opportunity to see can we see durability in terms of not only safety and efficacy, but also effect on actual diabetic retinopathy severity.

Got it. Okay. Great. We have 2.5 minutes left and Steve, maybe we can touch on some of the other pipeline programs. 121 for MPS II, you've mentioned that a BLA filing is on track there for next year. You've also mentioned that we could see some camp site data ahead of that filing. So just frame for us what we could expect to learn and just any updates on where regulatory interactions stand with that program?

So we talked about earlier that we got regenerative medicine advanced therapeutic designation from FDA, which is a designation that only comes with FDA evaluating clinical data from a program, in this case, in our Hunter syndrome program. I think the supportive evidence is there that we're showing biochemical changes in the cerebrospinal fluid of these kids. And that correlates with intracellular changes that are known to have correlation to improve cognition and neurocog outcomes in kids. And we've enrolled tens of boys in this study. There's not going to be a 100-patient study that, in fact, even in our sort of pivotal phase, we targeted 10 boys to enroll over 5 or 6 months. That's about the evidence that you can generate in sort of incident prevalent populations like this. But I think really strong endorsement with that RMAT designation that the use of a surrogate biomarker looking at changes in this case, reductions of the native substrate of the enzyme that's missing in these boys is predictive of good clinical outcomes. So that's going to be the basis of our regulatory approach here. So we'll be able to show those biochemical changes in the pivotal phase boys that were enrolled sometime in the beginning of next year and plan to file the BLA after that. What I'm really excited about with that event is after Hunter syndrome, we have Hurler syndrome lined up right behind it. And it is as close to cousin to the disease as you could possibly have. And we'll rely on, if not identically, something very similar in terms of the surrogate endpoint for approval. So the same type of barrier that I think has been broken through with the first AAV approval based on accelerated approval pathway for Duchenne. I think we're encouraged will happen for neurodegenerative diseases, like Hunter syndrome and then Hurler syndrome. And then another fast follower on that is our work that we've been doing in CLN2 form of Batten where we just had our first clinical data presented by investigators. And just a couple of weeks ago that showed again, expression of protein, but also changes in clinical measures in these kids who have regular seizures with Batten we saw an 86% reduction in the seizures pre and post administration of drug in terms of that delta. So there's 3 programs that are very similar in terms of clinical approach, I think clinical implementation, regulatory pathway and commercial potential in terms of their size that we view our all very potential rapid accelerated approval development programs. And it fits in nicely. I mean I talked about at the beginning. We're running 8 clinical trials in different diseases. Three of them I mentioned, could possibly 2 are already in pivotal phase. If we bring Duchenne into the clinic in pivotal form in 2024, that will be 3. Said publicly at the beginning of last year that we have a goal to have 5 programs in late-stage pivotal development or commercial by 2025. So I feel like we're well on our way to achieve that. I think it's with a broad spectrum of focus and a great deal of strong capabilities scientifically, clinically and from a manufacturing perspective. I just there's no one in AAV gene therapy that's like that, except for REGENXBIO.

Great. And with that, we're actually at time. So it's a good spot to end out at. Thank you. Thanks for your time. Appreciate it.

Enjoy the rest of the conference.

Thank you.