REGENXBIO Inc. (RGNX) Earnings Call Transcript & Summary

Yes. I mean as I think I said it before, like you should never take for granted, right? You talk about pediatric condition, which has its own comorbidities, high levels of AAV. The fact that, I mean, our safety profile has been pristine so far. I mean that speaks to, we believe, to the construct, but also some proactive measures that we did in designing this study. So we use a prophylactic immunosuppression regimen, that we believe that's also responsible for what we've seen in the clinic. So a differentiator on the safety for sure. On the efficacy, it's construct that it is different than the other ones that have been introduced in the clinic. It's the closest one to the natural microdystrophin, the longest one. And now I think we're starting to see the microdystrophin expression, robust expressions, that we see in the clinic. A couple of months ago, one of our investigators at the MDA conference presented some just the early videos from functional assessments in some of his patients, including a 12-year-old. And what you see there, again, it's preliminary and we're looking forward to the second half of the year to present more functional data, because I think that's when you start to separate yourself from the pack.

I think on a big picture, if you look at the Pfizer program, I think they've had lots of safety aspects evolving over time, and it's been consistent with that construct. What we have shown to date, I think, is consistently showing the efforts we took in building the construct, to the way we have actually installed the clinical program even on prophylactic immune suppression, is all moving us in the right direction. It's never good when a patient dies in the clinic. I think on a big picture, this probably creates more space for us as a competitor now right behind potential Sarepta's enlarged label that we are all waiting to see what it's going to be. And I think we have a few advantages here. The age group we're operating in, nobody has been able to show those type of outcomes. And then when you think about the ambulatory patient population, 50% of that population is 8 plus, and another 20% is below 4. So 70% of the market is actually the patient groups that probably haven't been studied properly and don't have data to support the existing landscape. We have generated data that really gives us confidence that, on an efficacy basis, on a safety basis. And you combine it with the COGS we have, on the efficiencies we've created, even as we come on the other side, outside of prevalent pool, then this becomes a 100% incident market. I think we have a chance to really bring forward a product that really wins on all those 3 concepts.

That's great. And Ram, you mentioned the Sarepta label expansion to the older DMD patients. Any high-level thoughts around that? And I guess what are you guys doing for your own program to position it to have data that directly addresses those older kids?

Yes. I mean we have already been focused on generating data in older patients, right? And you've seen the data that we put out there, and in our knowledge, the data hasn't been shown by our competitor to date in that older population. Again, to Paulo's point, it's not just expression, but it's expression that's considered to be consistent across age groups, that we hear consistently from investigators that double-digit expression really gives them confidence that you will see these functional outcomes on the basis of consistency. Of course, there are differences on function and age group, but generally speaking, that gives them a lot of confidence.

Okay. That makes sense. I want to switch gears here to your ophthalmology, 314. Maybe to start, this is your AbbVie partnered program now. We're eagerly awaiting the wet AMD readout for subretinal. There's plans to take suprachoroidal forward in DR. I guess maybe at a high level, how is the AbbVie partnership structured? And how has that relationship been to date?

Yes. The basics of the construct or it's a strategic relationship, we announced this coming into late 2021, AbbVie is responsible for global commercialization and development of the asset, and the pipeline assets, meaning DR and wet AMD, but the construct on the U.S. side is we do everything 50-50. So it's a 50-50 partnership on cost and profits. Once you step outside of U.S., it's high teens to low 20s in royalty streams, and they take care of all of the -- 100% of the efforts on a development and commercialization basis. And the split on overall development cost is 2/3 AbbVie and 1/3 us. So that's the -- those are the basics of the construct. And obviously, we retain a majority of the economics in the largest market. When I say majority, on a 50% basis. That's really the construct that's been designed to make sure that we have a product that's addressing public health priorities in wet AMD and DR, a partner like that that has a commercial infrastructure in 170-plus countries, not just commercial, but a development infrastructure and a regulatory infrastructure, really helps us to accelerate the whole process. And I think we've announced that we're on track to submitting global regulatory submissions in first half 2026. So I think that's the advantage of having a partner like that, that our program now evolved to be on a global basis and we can accelerate the access to product on a worldwide basis very soon. For the suprachoroidal programs, this is also a recent announcement. The DR program is in the process of planning towards moving into a pivotal in first half 2026. We believe that is an unmet need that no other product or product profile can address that we bring to a table on a very unique basis. And you know how many people have diabetes across the world. And just in the U.S., I think it's about 8 million people. And in the clinics, there are hundreds of thousands of patients in the retina clinic today that are simply being monitored because clinicians want to treat them but they don't have a product profile that they can use. So the concept of a onetime treatment in early diabetic retinopathy where you can stop the disease in it tracks from progressing to these vision-threatening complications, where it becomes too late to manage these patients or you have to manage them on a lifetime basis, that is a very attractive product profile for clinicians and payers.

Yes. Right. That makes sense. I mean you mentioned having AbbVie as a launch partner as really an asset to -- that's the kind of scale that's difficult to achieve, right? And there's other gene therapy companies developing wet AMD assets that you guys are obviously at the forefront. But they are there presenting data, but they don't have AbbVie as their partner, right? So how does that sort of create maybe a competitive moat for you guys? And how does that help you not just compete against other gene therapies, but against the entrenched anti-VEGFs?

I think I talked about the capabilities and the extent of our geographical footprint that AbbVie has. And with the acquisition of Allergan, they also acquired a lot of the ophthalmic capabilities on a worldwide basis, not just what they've been operating in immunology and neuroscience, right? So that really puts us in a very unique position because we think about not just a study design from the standpoint of getting regulatory approvals, but how do we get these paid in the most optimal fashion and derive the entire value of the asset, and also considering the local country dynamics on the basis of market landscape and local payer challenges, all the way through the local regulatory aspects. So we think through these very proactively. So when we get there, this is a global launch, not just a U.S. launch. I think that just gives us a very distinct advantage on how we implement this where we have years of lead time on everybody else in establishing, with the subretinal program, a gene therapy infrastructure commercially that is well-entrenched into the community, and coming behind it with something like DR with an in-office procedure that just makes the whole process very efficient. And then we have a suprachoroidal program in wet AMD, too, that's intended to take the procedure into the office because we know that will lead to broader adoption in the larger markets.

Yes. Yes. Maybe we can talk about suprachoroidal a little bit. So you recently reached alignment with AbbVie to move suprachoroidal 314 in DR specifically forward to pivotal study in the first half of next year. Maybe walk us through the data points that triggered this, the emerging data or the data we've seen, and how a pivotal program in DR could potentially look.

Yes, again, we went through this process a few years ago, looking at DR and where else can we take 314. And when you think about diabetic retinopathy, it's a disease that starts early on with a very asymptomatic piece of the disease progression where you see these changes in the retina, but patients have good vision, but they haven't gotten to a place where they developed macro edema, proliferative disease, which is called PDR. There's also another complication called neovascular glaucoma. All of these are a reflection of the progression of the disease. And there's very good established data to show what the risk of the progression is, once you're at a stage of diabetic retinopathy, on a 1-year, 2-year, 3-year, 4-year, 5-year basis. So the concept we've took, because think about a gene therapy that could be administered early in the disease process, so these patients never develop these symptoms. So you're preserving the maximum function in these patients and also not letting them to come to a stage where now they need these lifelong treatments to manage them on a chronicity basis. So I think with this concept, what we are trying to do is really have a disease-modifying effect in diabetic retinopathy and bring a whole new treatment and create a whole new market like what's been happening in dry AMD recently, right? And I think it's also a perfect space for gene therapies to operate because these are asymptomatic diseases that have to be treated for their lifetime. And if you can actually stop the progression of this disease in an early stage, you will preserve a lot of value for patients and health care systems.

Okay. That makes sense. And Ram, so suprachoroidal DR is moving forward. You have AAV8 suprachoroidal wet AMD ongoing. What's sort of the gating here to also move this one forward to pivotal? Is it waiting for the subretinal data? Is it something else you want to see from AAV8?

You're talking about suprachoroidal wet AMD?

Yes.

I mean we've announced publicly that we will give an update in third quarter this year on that data set. Obviously, a pivotal decision comes with we feel like we've reached a dose level that maximizes and extracts the value of 314 on the basis of risk and benefit. Yes, it's -- when we see that, we would want to move ahead with that process. We have seen that in diabetic retinopathy now with Dose Level 2, and that's really what's led us to get to a place where we shouldn't be wasting time and taking this forward.

Okay. That makes sense. And you've got your own internal pipeline. You've got the AbbVie partnership. But you also have out-licensed to Ultragenyx and others. Maybe specifically on DTX401, I think Ultragenyx is guiding to data this quarter. How much of an impact -- this is a Phase III readout. So how impactful would this be for you guys? Is there any read through?

I mean, Alec, these were historical licensee deals we have done when the company was focused on licensing the technology versus today we are a product company that's focused on moving our products to the market. So we have never publicly guided to any of this or publicly disclosed what it means. But I can tell you what our focus is our products, not the licensing outcomes.

Sure. It would be, I guess, a nice -- because there is some economics if it does get approved, right?

Yes. Again, these are all historical deals, so the focus then versus what we have today is very different.

Okay. And maybe just on cash as well. You recently completed a $140 million raise, which added to your 4Q cash position. So I think runway is now into 2026, it's the latest guidance I've seen. Some big events anticipated that could trigger milestones from AbbVie next 12, 18 months, and I think you could also be eligible for a PRV from 121 as well, right, which we haven't talked about. But are these factored into your guidance at all?

No. The $200 million milestone that we are contractually supposed to receive when the Phase III actually kicks off for DR, and the potential PRV that comes from the approval of 121, neither one of those are included in the cash guidance today.

Okay. And maybe we can just touch on 121 a little bit, give it a little bit of time in the sun. And then from that, maybe you could just talk about what you're most excited about just broadly across the pipeline in terms of catalysts in the next 12 months.

Yes. I mean 121 is an exciting catalyst for us from the standpoint of the organization is going from a clinical development organization to shifting towards a BLA submission and laying foundations to become a commercial organization. It really helps us to think about the set of things we have to do now and what we have to stand up coming into a process for BLA submission. The most exciting part for me, and I came to REGENXBIO 6 years ago and I followed 121 as a journey, and the product profile that we thought we were going to accomplish in terms of neurocognitive function, restoration and preservation in kids, it has actually exceeded our expectations in the clinic with the Dose Level 3 data, which is the pivotal data that we're submitting to the FDA, what we have seen is actually, with a single treatment, these patients are also coming off of enzyme replacement therapy for their systemic disease, right? So them coming off of ERTs, with the treatment that was designed for mostly addressing the neurocognitive function, really transforms the concept into a true onetime therapy now for these patients. And it has a huge implication on the socioeconomic impacts of treating this disease and the cost of feeding this disease with ERT, which is a single treatment that can address both neurocognitive issues and help these patients survive without any enzyme replacement therapy. So I think it's a big shift in what we went into this as a TPP versus what we're seeing coming out of the clinical data. It has a very enhanced profile and there's a lot of excitement in the patient community to access this drug. So we're excited about it. And then going into next year, we literally have 2 pivotal studies that are recruiting today in wet AMD, you'll see readout from that pivotal program next year in wet AMD, and we're going to start a new pivotal program in first half in diabetic retinopathy, both of which are public health priorities again. So it's getting us closer to becoming more of a pivotal stage company in large chronic prevalent conditions and setting the stage into rare diseases. And on the heels of this BLA submission, we've also announced a pivotal trial in DMD now coming into quarter 3, quarter 4 this year. So coming into next year, literally, there are 4 pivotal trials that are running into the next 2 to 3 years being very transformative for the company.

Great. Very exciting times for REGENX. Unfortunately, I think that's all the time we have, so we'll have to leave it there. But Ram and Paulo, I really appreciate the discussion and for your participation. Thanks a lot.

Thank you.

Thank you.