REGENXBIO Inc. (RGNX) Earnings Call Transcript & Summary

All right. Great. So okay, back to the DMD program. So obviously, you've completed enrollment. That's excellent. And right now, what are some of the characteristics, clinical characteristics about your program that gives you the greatest confidence at this stage?

Sure. So I kind of harken back to what Curran mentioned about all the careful work we did upfront that ultimately is leading to what we're seeing in terms of clinical characterization. So we really methodically from all the 15 years of leadership in this space, took into account optimizing the construct, number one. So it was very important for us to make this as close to naturally occurring dystrophin as possible. And the key aspect there is inclusion of the C-terminal domain. And we showed preclinically that, that makes a difference that constructs with the C-terminal domain have better outcomes in DMD animal models than constructs that don't. So that was number one. Number two, it's not just the molecule, it's the actual overall product. So under Curran's leadership from a very early stage, we wanted to have state-of-the-art production suspension cell not only high yield, but high purity, importantly, particularly in a space like systemic gene therapy where there's such a high viral load. So we have an optimized construct, but also highest purity in the field with over 80% full capsid. And lastly, as Curran mentioned as well, careful immune suppression regimen. So we started out with what others are learning over time, unfortunately, given some of the events that have happened in the space to really right from the beginning, target what are the really detrimental side effects that can happen. And the 2 main buckets are complement activation, and the later adaptive immunity T cell B-cell response leading to such adverse outcomes like liver injury and unfortunately, liver failure. So to address those in a targeted fashion, right from the initial protocol, we included eculizumab, a complement inhibitor for just a couple of weeks and sirolimus for 2 months with a 1-month taper in addition to the standard steroid regimen that's used in these gene therapy trials. And what we're seeing with this constellation in our Phase I/II study is excellent safety. So we have no SAEs, no adverse events of special interest. And most notably, that is 0 liver injury. And although it's just Phase I/II, it's 13 patients with existing gene therapy, we know that, that rate is 40% liver injury. So there's already differentiation in terms of that with ELEVIDYS, for example, which also gives us more confidence about preventing other more serious events. We also see 0 thrombocytopenia, which we think is potentially due to the constellation of the 3-legged stool of characteristics that I described, which is a finding that's seen with other programs. And given these good results and the feasibility of applying this regimen, the investigators are very happy with this approach. So I've talked about safety, but safety directly links to efficacy in that it's because we pulled all these things together that allowed us to go to what is generally thought of as a target dose to get to 2E14 vector genome per kilogram. And we're the only ones who've been able to get to that. And we think a big component of that is all these safety aspects where we really took that into account right from the beginning. So the construct aspect and some of these other aspects are translating into efficacy signals already in the Phase I/II. First, the whole goal is you want to get a functioning microdystrophin and you want that expressed. And what we see very good and robust and consistent expression across the age range. So starting with that biomarker aspect. You have to take age into account when you think of microdystrophin expression since the younger boys, not surprisingly, can have higher microdystrophin expression because of the healthier muscle. And then over older ages, 8 and above, it's much harder to get a good gene expression. So for example, in 8 and above ambulatory boys treated with ELEVIDYS, it's low double digits, 11%, 12%, I think, on average. We're seeing consistently higher microdystrophin levels, most notably in the 8 and above, we see on average 40% microdystrophin. So on that aspect, we're very happy. What really matters is that translating into functional benefit. And that's where we're seeing -- we've shown results in the dose level 1 and also in the pivotal study with 4 boys. And across the board, we're seeing the patients are doing better on the functional assessment. So on the different ways of comparing to external natural history that I described, the boys are doing better than you would have expected them to do based on these comparisons. And they're also doing better based on different ways of measuring function. So the NSAA and also the time function test. We went in expecting NSAA crude test. It's not as sensitive. Maybe that won't show as much. But actually, we're seeing very good response on NSAA, including in those 8 and above boys that are the hardest to treat. So all in all, we're -- this just has us very excited to go into having pivotal top line results in early Q2.

That's great. Just one more question on the point of safety. The prophylaxis that you use is for a set period of time. When some of these safety issues come up? Obviously, it's a one-and-done thing. So does it usually show up within months? A year, 2 years? Like what -- how do you get comfortable with that safety issue?

Yes, that's a great point. And we know a lot about that also based on what the mechanism of the side effects are. So for example, complement-mediated adverse events tend to occur in the first couple of weeks. So you kind of have a peak in complement activation generally with gene therapy as early as 5 days. But if you get through those first couple of weeks without any issues, you pass that stage. The liver injury and some of the other adaptive cellular-based responses tend to occur more in the 6-week to 8-week to up to 3-month period. So the nice thing as far as monitoring and characterizing safety, if you get through that time window, you have a very good sense that you've mitigated against those 2 categories of events. So that also has us excited about the top line data because we'll have at least 3-month follow-up for all the boys in the pivotal study because the primary endpoint is 3-month microdystrophin. But by definition, we'll also have the safety data of at least that long for all the boys, which we'll be able to disclose at that time.

Yes. And I guess, despite the drama that occurred with ELEVIDYS, it seems that the interest in DMD for gene therapy has not waned given that you pretty rapidly or enrolled your study ahead of schedule. So would you say that, that's characterizes correctly?

Yes. I think just as you said, we earlier were projecting out to late this year, and we brought it in. So the enrollment did ramp up. The interest ramped up and in part because of various reasons we did this, but certainly, the ability to keep treating patients with open centers. We just continued enrolling into our confirmatory study, right as soon as we completed enrollment in the pivotal. So we are seeing that increased interest. And I think the more data we come out with on safety and efficacy is just helping the community recognize potential differentiation that may exist here.

Yes. Some of the sites that we're dosing at clinically now haven't previously or have discontinued dosing the commercial product. So I do think that speaks to interest in our program and potential for differentiation.

That's interesting to know that. So speaking of interest, I want to move to 314 for wet AMD really quickly because gene therapy for wet AMD has suddenly gained a little bit more interest from larger strategics. Obviously, we saw the Adverum takeout. We saw 4DMT in the Otsuka licensing. You obviously had a very big partner or have a very big partner in AbbVie, yet the investor community still doesn't believe wet AMD is a market. So what do they know? What do you know? And what do we all have wrong? So maybe you can just characterize it like that, set the stage here.

Well, I think I have to start with thanking everyone for their patience. We ran the 2 largest gene therapy trials that have ever been conducted, but that was something that we felt strong about powering the study the way we did having 2 doses, which helps derisk the outcome, I think. And AbbVie has been investing for the last 3 to 4 years heavily in this so it does take a long time to enroll those type of studies. But here we are, we finally have a stake in the ground, finished enrollment in September, and we're really excited that we'll have top line data on the program at the end of next year. And I think AbbVie is continuing to invest not just in subretinal, but in suprachoroidal. I think what we're differentiated on and why there's enthusiasm around our program is the demonstrated safety of subretinal administration and efficacy. So we have a nice therapeutic window to operate in where we're continuing to show long-term results that are really what people want is to not go and get their eye injected every month or 2 months, whatever the new interval is. And I think on top of it, people are seeing new developments in ocular therapy changing the -- what's considered current practice. And I think people felt like for years, the current practice or the prior practice with Eylea and Lucentis was impenetrable. Well, now we're seeing new components come into the market. And so there's, I think, more receptiveness that gene therapy could disrupt even further that.

And you're obviously speaking to Vabysmo and the port and all of those different developments.

Yes.

Okay. So maybe we can just talk on one component that investors have had a hard time wrapping their heads around is the subretinal versus intravitreal. And I would say the Street sees it as a big stumbling block to commercializability. How do you see it? How do retinal specialists see it? Maybe you can just give us a little color there.

Yes. Steve, you might want to reflect on ASRS.

Yes. So even before these recent deals in this space, as you know, the annual ASRS PAT survey of, I think it's close to 1,000 retina specialists now ask a lot of intriguing questions each year. And one of them this year was of all the different pipeline approaches out there, what are you most excited about? And half of the respondents way more than any other category said gene therapy.

Was it specific to you or specific to gene therapy?

Gene therapy in general, with the other categories being tyrosine kinase inhibitors and some other aspects. So I think that speaks to this concept of the onetime treatment option that is more than an incremental benefit which while important and the market has proved, it's important with things like Vabysmo and high-dose Eylea. And hopefully, tyrosine kinase inhibitors will be another, but they're still incremental and they still mean injections for the rest of your life. So I think that's why there's so much interest in gene therapy. Now for us, and I think why AbbVie came in on this and is bullish and advancing both subretinal and suprachoroidal, of course, with suprachoroidal diabetic retinopathy as even going into pivotal first half of next year is both of these have the advantage of being compartmentalized local delivery so you don't have the same safety issues that have plagued other programs, specifically immune-mediated inflammation. And the retina specialists, these are surgeons who like doing surgery and do a lot more complicated things than a subretinal bleb or in-office suprachoroidal injection. So we -- and we've been able to scale this with the largest studies ever done in terms of subretinal and suprachoroidal with a lot of experience in the community giving that injection. So we are not seeing any barrier in terms of being able to go into these areas. And obviously, neither is AbbVie.

Okay. Mitchell, I didn't forget you. But I keep hearing the largest gene therapy studies ever conducted. So why don't you tell us about how this is being paid for? And maybe you can talk about some of the sources of cash that are coming in that are almost as sizable as your market cap.

Great question. So these studies are fully enrolled as we speak, and we're very fortunate to have a great partner with AbbVie. Our balance sheet will get us into the early parts of 2027, but that's not including any nondilutive financing optionalities, which includes the monetization of the PRV, for example, as well as DR milestone, which we're expecting to receive $100 million from AbbVie as well. But just those 2 as an example, that will get us into the early parts of 2028, which is well past data readout and well into commercial launch for some of these products.

And the milestones that you get from an approval in MPS are also.

Yes, we haven't disclosed publicly the exact amount, but we are eligible to receive incremental regulatory milestones from NS Pharma for our MPS program as well.

So just to be clear, market cap of $600 million, about $350 million in nondilutive financing coming, you still have your cash and you have other milestones coming. So I just thought I'd level set that for you guys for anyone who's interested in a good value play with lots of catalysts. This is it. So we're totally out of time. And I thought -- I think that's a good place to end it.

Excellent. Thank you.

Thank you.