Rocket Pharmaceuticals, Inc. (RCKT) Earnings Call Transcript & Summary

Welcome to the Rocket Pharmaceuticals Inc. Danon Update Webcast Conference Call. My name is John. I'll be operator for today's call. [Operator Instructions] Please note, the conference is being recorded. And I will now turn the call over to Mayur Kasetty.

Good morning. This is Mayur Kasetty, Director of Business Development and Operations and Investor Relations lead at Rocket Pharmaceuticals. Thank you for joining us. The purpose of this call is to share and discuss key updates on our ongoing Phase I clinical trial of RP-A501 in Danon disease, which includes data that is being presented in an e-poster at the ongoing American Heart Association 2021 Scientific Sessions. Before we begin, I would like to briefly discuss the use of forward-looking statements on this conference call. Statements we make on this call may include statements which are not historical facts and are considered forward-looking within the meaning of the securities laws and which are usually identified by the use of words such as anticipates, believes, estimates, expects, intends, may, plans, projects, seeks, should, will and variations of such words or similar expressions. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Securities Exchange Act and are making this statement for purposes of complying with those safe harbor provisions. These forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, which are based on the information currently available to us and on assumptions we have made. Although we believe that our plans, intentions, expectations, strategies and prospects, as reflected in or suggested by those forward-looking statements are reasonable, we can give no assurance that the plans, intentions, expectations or strategies will be attained or achieved. Furthermore, actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors that are beyond our control, including, without limitation, those set forth in Item 1A, Risk Factors of our annual report on Form 10-K for the year ended December 31, 2020, as updated by our subsequently filed quarterly reports on Form 10-Q and our other SEC filings. We assume no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Participating on today's call on behalf of Rocket are Dr. Gaurav Shah, Chief Executive Officer; Kinnari Patel, Rocket's President and Chief Operating Officer; Dr. Jonathan Schwartz, Chief Medical Officer and Clinical Development Senior Vice President; Dr. Jose Trevejo, Chief Development Officer of AAV and Senior Vice President; and Dr. Eric Adler, Professor of Medicine and Medical Director of the Heart Transplant Program at the University of California, San Diego. There will be a question-and-answer session at the end of this call in which we will all participate. I will now turn the call over to Gaurav.

Thank you, Mayur, and thank you, everyone, for joining us today. We are very excited to provide you with an update on our Danon disease program today. In addition to the data presented by Dr. Barry Greenberg over this weekend at AHA, we have some additional promising data today that bolsters the initial proof of concept we reported last year and further supports our hope that this treatment can potentially transform the management of patients with Danon disease. Before we go through the slides, I want to summarize the 2 main points of this update Slide #3. Number one, the patients who were treated were between the age of 17 and 21. For all patients who are closely monitored for immunosuppressive regimen compliance, we are seeing evidence of clear improvement in functional parameters and clinical parameters. And the initial patient who was not closely monitored for appropriate immunosuppressive treatment following gene therapy still demonstrates stabilization. As a reminder, in this disease, even stabilization can be considered highly beneficial in a disease where rapid decline occurs in almost all male patients during the mid- to late teenage years. And secondly, today, we'll show that echocardiogram and invasive hemodynamic support the observed clinical improvements as well. In the patients closely monitored for immunosuppressive regimen compliance, there is strong evidence that we are actually improving both the structure and function of the heart. Next slide. To get started, I would like to provide a brief refresher on Danon disease. This is an X-linked dominant disorder of autophagy, resulting from mutations in LAMP2. Autophagy is like the recycling center or vacuum cleaner of cells and is particularly essential in heart tissue. In Danon disease, cardiac involvement is the overwhelming cause of morbidity and mortality, but the disorder could also affect other organs, including skeletal muscle and CNS. Danon disease almost always leads to cardiomyopathy and death in both males and females. The cardiomyopathy is more severe in boys who unfortunately have a median survival only to age 19. And although cardiac transplant is a potential treatment, it is associated with an approximately 50% failure rate over 10 years. Next slide, #5. How does RP-A501 work? Our approach to treatment is to deliver the LAMP2B gene to cardiac tissue using an AAV9 vector. AAV9 is delivered systemically by direct IV injection. This capsid was selected based on a strong tropism for heart tissue. Next slide. And next slide, #6. Yes, I apologize for the delay in the slides for some reason, there's somewhat of a delay here, but we'll continue. On the clinical trial, in our gene therapy trial as per agreement with the FDA, we started the Phase I in adult and adolescent males with the goal of ultimately treating younger patients earlier in their disease course. As updated previously, we have initiated dosing in the pediatric cohort at the low dose, and we look forward to providing an update on the status of this patient comprehensively soon. In today's presentation, we will focus on the high and low dose cohorts specifically regarding safety, clinical outcomes, histology and gene expression. Next slide. You'll see it in just a second, bear with us. This is about patient entry criteria. The protocol adjustments made to the inclusion and exclusion criteria, you'll see in second in bold on this next slide, specifically, we now exclude patients with ejection fraction of less than 40%, and we've also instituted more conservative criteria for both hepatic and renal function. These adjustments were made in conjunction with the FDA to exclude patients whose disease progression is too extensive and who are unlikely to benefit from gene therapy. Now we've always known that there's a point of no return when there is progressive fibrosis of the heart tissue and at which timing would be too late for gene therapy. Next slide, #8. So as we move into discussing the updates from our Phase I clinical trial, we first want to discuss the baseline status of the first 5 patients who received RP-A501. Functionally, each patient demonstrated key findings, highly characteristic of Danon disease. All patients had a baseline NYHA class of 2, which means they had symptomatic heart disease with functional limitation during ordinary activity. In addition, these patients show modestly impaired 6-minute walk distances. And although these are not dramatically low numbers for an adult population, these are young patients who would typically walk further. You can see further up here now in the NYHA class column in the 6-Minute walk column. In terms of relevant circulating biomarkers, all patients, except for 1001, the initial patient had elevated BNP prior to treatment. And as a reminder, BNP is a biomarker that correlates with worsening heart disease. In many settings, BNP increases are frequently indicative of worsening cardiomyopathy. Since we're going to discuss the data of the individual patients today, it's important to think of these patients one by one as we can learn a lot from each one. With regard to the first patient 1001, who did not have closely monitored compliance, we want to highlight some key points. First, he was discharged from the clinical unit after 2 weeks on oral steroids. Secondly, after he went home, we have a few reasons to believe that there were lapses in its prescribed steroid intake during the weeks where T-cell suppression is likely important for preservation of transgene. And we believe that this ultimately led to partial clearance of his vector genomes and transgene. Following the experience with patient #1, we initiated close monitoring of our patients for up to 3 months after treatment. Next slide. In addition to functional parameters and biomarkers, this will be Slide 9 in just a second, all patients showed distinctive hallmarks of cardiomyopathy -- hypertrophic cardiomyopathy, which are 3. Number one, thicken myocardium is the hallmark of hypertrophic cardiomyopathy. It's in the name itself. Looking at the echocardiogram results in these patients at baseline, we see that LV wall thickness is elevated across all patients. The second hallmark of hypertrophic cardiomyopathy is preserved ejection fraction, and we see preserved ejection fraction in all patients, except for 1007. In fact, preserved ejection fraction is a feature of Danon disease until later stages of disease where there is progressive fibrosis of heart tissue. Elevation in pulmonary capillary wedge pressure, which measures filling pressure of the LV is the third indication of hypertrophic cardiomyopathy as it indicates impaired cardiac relaxation in fact, consistent with concentric hypertrophy. Next slide, 10. Now we'll move to the safety finding, starting with the high dose cohort. The first patient in this cohort tolerated the high dose well, and its overall course was unremarkable. As previously disclosed, one patient in the high-dose developed complemented mediated thrombotic microangiopathy, which resolved fully with transient hemodialysis. This patient was the heaviest patient treated to date and had highly advanced disease. This last patient continued to have progressive disease considered unrelated to gene therapy by the trial investigator and transplant cardiologist and successfully received a heart transplant. Now the patient is currently clinically well. I will discuss this patient's explanted heart tissue shortly. Through our collaborative discussions with the FDA, we have agreed to adjustments to the immunosuppressive regimen to potentially mitigate future adverse events. These include earlier steroid taper, sirolimus instead of tacrolimus and also more aggressive early monitoring of complement activation. We will also treat patients only with left ventricular ejection fraction greater than or equal to 40%, a criterion that would have excluded this patient 1007. Next slide, #11. In general, with regard to low dose, the low dose was well tolerated, and the SAEs observed were not directly linked to gene therapy, but rather related to steroid therapy. As noted, we have adjusted our steroid protocol to taper it sooner to minimize potential myopathy. All AEs and SAEs have completely resolved. And in general, this RP-A501 at the low dose has demonstrated a manageable safety and tolerability profile. Next slide, #12. So this slide is particularly exciting to us as it is evidence that RP-A501 may not just be stabilizing these patients but potentially modifying their disease. Across the 3 patients that were closely monitored for immunosuppressive regimen compliance for a longer period following gene therapy, all 3 of these patients have improvement in NYHA class from 2 to 1, which means essentially no impairment. The initial patient 1001, who was not closely monitored, as mentioned earlier, has stabilized, which is still potentially highly beneficial versus natural course of disease. Furthermore, all patients have had stabilization or improvements in 6-minute walk test and all patients have had significant improvements in BNP. Now these results are observed at a time point of 12 months or later and with the low dose patients, we continue to see these improvements at later and later time points suggesting this may be a durable effect. Next, Slide 13. In addition to these clinical and functional measures, we also collected echocardiogram data on these patients at baseline and following treatment. As mentioned, earlier, wall thickness is a key hallmark of hypertrophic cardiomyopathy. And the 2 key areas where we can measure LV thickness are in the posterior wall and the intraventricular septum. Next slide, 14. As one would expect in a progressive disease like Danon, wall thickness tends to increase over time. These charts show data from 32 male patients plotting wall thickness, both LV and septal versus age. And what you see here is the general trend of increasing wall thickness. The bottom line is that these patients' hearts get larger with time. Next Slide #15. So with that natural history picture in mind, this is another equally exciting slide. Again, to remind everyone, when we initiated this program, our initial goal was stabilization or prevention of further hypertrophy. Here, we're actually seeing in all patients stabilization or improvements in wall thickness in both the LV posterior wall and septum. In fact, for example, in patient 1002, we see significant changes with nearly 50% reduction in posterior wall thickness, in the 2 low-dose patients overall with closely monitored compliance as well as 1 high-dose patient, we see an average of 23% decrease in wall thickness. And we believe this is truly groundbreaking with RP-A501, we are seeing potential evidence of cardiac remodeling. Next slide, #16. Taking this a step further, here we show LV posterior wall thickness plotted against injection fraction for each patient. And as you might remember from earlier, normal EF is the norm in concentric hypertrophy and diseases such as Danon, but it plummets late in a patient's disease course. Here, especially amongst the 3 patients who are closely monitored for immunosuppression, we see EF stabilizing or, in fact, improving during late adolescents on average, about 20% and this is in conjunction with the decrease in wall thickness of also approximately 20%, both of which are plotted here. So not only are we potentially remodeling the heart, but we're potentially improving and stabilizing its function. Next slide, #17. In addition to the improvements seen in Echo, we see further evidence of functional improvement from the invasive hemodynamic assessments, and this chart shows pulmonary capillary wedge pressure, which is a measure of the filling pressure of the heart in diastole. This measurement is elevated when the heart tissue is unable to relax properly. Once again, we are showing that these patients have stabilization or slight improvements in pulmonary capillary wedge pressure. Next slide, 18. And looking at cardiac output and stroke volume. Once again, in the patients who are closely monitored for compliance with the prescribed immunosuppressive therapy, we see that there is stabilization or improvement sustained over longer time periods. Now before we move to expression data on Slide 19, we want to take a moment to look back to preclinical data we shared several years ago. Our preclinical data and a Murine Knockout Model has shown that we're able to remodel heart tissue and improve function with improvements in contractility and relaxation. And we raise this again simply to emphasize them what we saw in preclinical models was also observed in the clinical data presented today. Slide 20. Looking across all patients treated with long-term follow-up, those who are closely monitored for compliance showed stable VCNs in the 1 to 2 range out to one year. The patient who has only monitored for 2 weeks also had stable vector copy number, but lower. Based on the results from the explanted heart tissue that we'll show you shortly, it's also possible that these VCN values may not actually represent the full expression levels in the ventricle, but nevertheless, are an appropriate range of 1 to 2. Next slide, #21. We now turn to protein expression where we see the clinically observed effects supported by the presence of LAMP2b and target tissue. Immunohistochemistry shows the percent of heart tissue that expresses LAMP2B. And it's clear that in the patients who are closely monitored, there is a broad expression based on IHC and long-term data points between 68% and 100% expression. We've always believed that it is important to confer a broad distribution of expression as we are seeing here. Next slide. On Western blot, we also see sustained expression at later time points. We presented Western blot data before. We know that others in the field use this method commonly for protein quantification but we want to note some important caveats. LAMP2B is an intra membrane protein that gets recycled rather than a structural protein. And there are, therefore, natural fluctuations and expression that complicate quantification. So although Western blot may be an informative component of efficacy assessments, we believe IHC provides a more histologically specific cell-by-cell quantification of protein and may be relevant as it indicates the breadth of LAMP2B tissue expression. Next slide. Slide 23. So pictures always tell a good story. And these IHC images support the point in patient 1005, we see that the 9-month image looks almost identical to the normal control in terms of LAMP2B expression, which is the dark brown staining in the upper right slide. Furthermore, in the electron micrographs, we see that the large vacuoles present at baseline disappear, and we see a restoration of orderly underlying myocardial architecture on the bottom right. Next slide, 24. Here, we have the same images, but from the high-dose patient 1006. Once again, we see a similar expression and resolution of vacuoles and emergence of underlying myocardium. Next slide, 25. So we shared BNP time points earlier in the presentation. Here, we are plotting the same data in terms of percent change. And as you can see, the patients who are closely monitored for compliance with immunosuppression all have similar proportionate decreases in BNP and patient 1001 shows stabilization. Similarly, we see stabilization across other biomarkers, including CK and transaminases and both tend to increase during the natural history of Danon, especially in patients of this age range. Slide 26. A few points on this patient, 1007, who went to transplant 5 months after gene therapy, which we believe was due to advanced Danon disease. The key point to point out here on this slide is that the histologic examination of the explanted heart tissue confirmed our suspicion of advanced disease. On the bottom right, the blue areas in this stain -- trichrome stain, indicates severe fibrosis. And the PI of the study noted that these large swaps of fibrosis are rarely seen. Importantly, also in this image, there is no evidence of inflammatory infiltrate in the explanted heart thus disease progression is unlikely to be due to treatment. Both the PI and the patient's transplant cardiologists determine that Danon disease progression was the cause for progressive heart failure leading to transplant. Next slide, Slide 27. Also on patient 1007, the explanted tissue afforded us an opportunity to examine the heart in a way that biopsy cannot. First, on histology, the explanted tissue shows robust and broad expression in nonfibrotic regions, consistent and perhaps even slightly improved compared to the 8-week biopsy. The dark staining again here is LAMP2B. Looking at vector copy numbers, we actually see meaningful increases in ventricular vector copy numbers at 5 months versus the week-8 biopsy. And we also see significant increases in LAMP2B expression by IHC in the explanted ventricular tissue at 5 months across both venticles and both atria, where we see 100% expression on nonfibrotic areas. Next slide, 28. So let's summarize, starting with the high dose and then the low dose. In the high-dose cohort, one of the 2 patients, as mentioned, developed TMA, which resolved with hemodialysis. As the heaviest patient, this patient had received the highest total dose of vector, which was approximately 1e16. Unrelated to the gene therapy but rather due to late-stage disease, this patient went on to have a heart transplant. As in the low dose, we do see sustained expression in this high-dose patients as well. The other high-dose patient in the cohort has shown improvements both in clinical biomarkers and also an echo and invasive hemodynamic parameters similar to but not necessarily better than the low-dose patients. Next slide, 29. The low-dose treatment is generally well tolerated with appropriate immunosuppression and all adverse events associated with treatment have been reversible and have completely resolved. Clinically, the patients that were closely monitored for compliance with the immunosuppressive regimen show improvements in functional and biomarker parameters. One patient who was only monitored for a short time stabilized. On echo, we are seeing remodeling of the heart tissue and actually reversal of the hypertrophic phenotype with reduction in wall thickness, improvement in heart function and this is also supported by invasive hemodynamics. The 3 hallmarks of hypertrophic cardiomyopathy have also improved in these patients. Finally, our histologic analysis showed that these clinical outcomes correlate with sustained protein expression. Of note, although these numbers are small from an efficacy viewpoint, it does not appear that there is much added benefit to increasing beyond the low dose. And with the positive benefit risk seen at the low dose, we have agreed to move forward with low dose in close collaboration with the FDA. Slide 30 is the last slide. The data that we've presented is obviously important, what matters at the end of the day for patients is improvements in their lives. Anecdotally, we've heard from patients and families that they have seen positive effects from gene therapy. And these are 2 examples of real feedback from patients. In the first case, a patient was barely able to walk up a flight of stairs and had frequent palpitations and chest pain, and didn't have much energy and left home infrequently. Following gene therapy is able to walk upstairs without being short of breath and does not have chest pain or palpitations. He's now able to work a job. Another patient was fearful to enter his 20s, knowing the mortality statistics. Following gene therapy, he feels better and as hoped. This patient is applying for college where previously he never thought that as a possibility. So I'm incredibly proud of our team and the work we've done so far to bring this potential treatment to patients with Danon disease. And importantly, we're incredibly fortunate to work with partners who share our passion and dedication. I want to take a moment to thank everybody here. Back to you, Mayur.

Thank you, Gaurav. This concludes our prepared remarks. The Rocket executive team is now happy to address any questions on this update. I'll turn the call back over to the operator for Q&A.

[Operator Instructions] And our first question is from Tyler Van Buren from Cowen.

Thank you very much for the comprehensive and encouraging update. Three, I guess the first is -- maybe you could talk a little bit more about the time course of improvement from a wall thickness standpoint. It looks like they continue to improve beyond 12 months, which is nicely correlated with ejection fraction. And then two is, now that we have all this data, what functional and biomarker endpoints do you think might be best suited for a pivotal trial. The initial update last year seemed to focus on cardiac output. But again, the wall thickness, ejection fraction data seems pretty interesting. And then the third is just on the steroid induced myopathy, a quick follow-up. Can you talk a little bit more about the actual manifestation of it and how it affects these patients? I know you discussed how you plan to limit it in the future, but just wanted to hear a little bit more about that.

Excellent. So on Slide #15, I think we had mentioned and shown the wall thickness. And you're right, past 12 months at least in patient 1002 and also even 1005, we do see decreases in thickness, both posterior wall and septum. I do think that's encouraging. And at the end of the day, with regard to pivotal end points -- so I think the totality of data is what's going to matter. This is -- in some way, it's uncharted territory, but it also builds on a long history of development in hypertrophic cardiomyopathy. And what is important in that particular disease type? One, certainly, NYHA class may be important, BNP may be important. Other clinical outcomes may be important, wall thickness may be important and also demonstrating protein expression alone could be a valid endpoint, but we will look at all of these results together, comprehensively approach the FDA after we treat at least 2 more pediatric patients and then have a discussion around Phase II design. And the third question on myopathy. I will actually turn that over to Jose.

Yes. Thank you for your question. we've learned from every single patient that we've treated. And what we've learned is that early tapering of steroids is important in these patients. And now with our new regimen with sirolimus, our goal is to get them stable on sirolimus and then do early tapering of steroids. And we found for patient 1006, which was the high-dose patient. This worked very well and he had minimal myopathy side effects. So that's what we're going to be doing going forward.

Our next question is from Mani Foroohar from SVB Leerink.

A couple of quick ones. So as we're looking at a little bit more full thickness analysis like VCN explanted heart versus maybe a septal biopsy, something more limited. Other specific caveats you point out around the comparability of those data sets and sort of which ones should we be looking at to be more reflective of what we'd expect to see going forward on the PD data set, for example? And then the second question, can you help us give a sense of what we should expect to see and when from these younger pediatric patients are 2 and 6 months up to biopsy, so right, that is still kind of the right expectation? How should we think about meaningfulness of expression levels and clinical biomarkers, cardiac function in these younger, presumably much earlier into these patients?

Yes. So I think on the full thickness analysis that you mentioned, if we go back to Slide 20, the septal biopsies demonstrate VCNs long term between 1 and 2. And we think that these could represent long-term steady state. We have the unique circumstance here where we were able to gather tissue from the explanted heart and look at the full thickness of the myocardium. And here, you can see the vector copy numbers tend to be higher. The septum may be an okay but not perfect, harbinger or measure or a surrogate marker of real VCN in full thickness myocardium. It seems like it may actually underrepresent true VCN. And I think that's probably good news; and secondly, you asked about pediatric patients and when we'll expect to see data, comprehensive clinical updates in at least 2 patients sometime next year and similar to a conference like today's.

That's helpful. And I've got just now received a number of from a fleet of your investors in the company. Can you -- you obviously can't disclose incremental pediatric data today, obviously. But could you describe sort of the status of background medication these patients on before the study extended their steroid experience and sort of how that informs how we think about the safety profile of these patients?

Yes, sure. I'll answer that question. these patients don't come in on steroids. And I think that's what we found is that Danon patients are sensitive to steroids, which is why we use it initially, but then we go to taper it. The main side effect of steroids in these patients is a steroid-induced myopathy, which they tend to be more sensitive to. Three of these patients in our trial have an ICD coming into it. And a lot of them are on different antiarrhythmic agents, including beta blockers as well. So that's really the extent of their baseline therapy. It's mostly supportive and beta blockers. And in 3 cases, ICD-9. I mean, ICDs, sorry.

Our next question is from Esther Rajavelu from UBS.

I have a couple of quick questions. First, we've received feedback from some transplant physicians that they typically do not prefer sirolimus use due to its negative effect on wound healing. So curious to hear your thoughts on that. And then I have a couple of quick follow-ups.

Jose?

Yes. Thank you for the question. So sirolimus, the doses of sirolimus we're using are not induction doses, but more lower dose stabilization with lower troughs. And these patients are on them transiently. They're on them for about 3 months. So we're not -- we're obviously going to monitor this very closely. But given that our troughs are on the lower end, and also that they're not on really prolonged doses of sirolimus, we're not as worried about wound healing. Also, these patients aren't post transplant. So they don't have lots of vessels stitched together, et cetera. They've just been given gene therapy. So we don't worry as much about those sort of side effects like transplant physicians do. But so far, I think our experience with sirolimus has been very good.

Great. And then how many pediatric patients do you expect to treat by year-end? And when should we expect to see any data on these patients? And then if you can also talk about the natural history study that you've -- that I believe you have ongoing and the timing of that data and then what forum we should expect that?

Great. So we have treated our first pediatric patient. And as I mentioned, the course has been unremarkable so far. We haven't given exact guidance on when we'll treat the next patient. But the total cohort is between 2 and 4. So between 2 and 4 patients total will present those results sometime next year. on timing of natural history, I mean, what we showed today was just a high-level snapshot. There's going to be a more detailed analysis that is up and coming in the next 1 to 2 months that we will share. And actually, since you asked about natural history. I'll ask Eric to just expand on that a little bit based on his experience, what we're seeing so far.

Sure. It's Eric Adler, and I just quickly want to disclose that have stock options in Rocket and renter intellectual property, and this is not endorsement by UC San Diego supporting Rocket Pharmaceutical based products. That being said, I see a number of patients with Danon in my clinic. So I have anecdotal experience and as well as conducting a natural history study, and I think we'll work together with Rocket in terms of when we will present results of natural industry. I'll tell you, I think that the patients in this 18 to 20-year-old age range that we see receiving gene therapy here in our previously published work on natural history as well as my anecdotal experience. These are exactly the patients we expect to decline. This is around the time point where many are getting transplant. So I think that what we see here, which is in the majority of the patients with stabilization or improvement in the clinically relevant parameters is quite exciting. I look forward to sharing more natural history study results in the future.

Great. And if I can just one more for Dr. Adler. Assuming the therapy is approved Dr. Adler, how do you see this essentially being used across the U.S. among your peers? Is it -- do you sort of see this as specific treatment centers where most patients would go? Or do you think a pediatric cardiologist anywhere would be able to access the therapy?

I think it's a little early to say, but what I envision is that most of these patients do filter down to kind of academic centers with experience in treating these genetic cardiomyopathy and have the abilities to monitor the patients for gene therapy. And that's true. Most Danon patients, they might get initially screened by their pediatric cardiologists and they're usually referred to kind of tertiary and quaternary centers.

Next question is from Dae Gon Ha from Stifel.

Congrats on all the progress. I wanted to maybe go back to the pulmonary capillary wedge pressure a little bit. I know it's still evolving picture, but can you maybe talk a little bit about the dynamics that you see between patient 1005, 1006 versus a 1002 sort of a delayed response. So how should we think about maybe the appropriate time of follow-up should we think about the next trial or pivotal trial? On the immunosuppression, I was also kind of wondering what you thought about pediatric, the implications of what you're modifying in the steroid regimen as well as the sirolimus and rituximab. Do you sense any biological difference in the pediatrics that might warrant you to either use different doses of steroids? And how should we think about sort of the delayed transaminase elevation as it pertains to perhaps transgene, I guess, suppression? And then thirdly, you were talking about the membrane structure of LAMP2B. So can you talk a little bit about potency assay? Has that been cleared up in terms of demonstrating that it does indeed function to the satisfaction of the regulators?

Great. So thanks for the questions. For pulmonary capillary wedge pressure, in fact, all parameters we think that you need at least 6 to 12 months follow-up after the gene therapy infusion to have a meaningful follow-up of clinical outcomes and functional outcomes as well as imaging and pace of hemodynamics. I think anything before that is probably premature. And I think the longer we wait, you are starting to see greater and greater improvements across all these parameters. So 6 to 12 months is perhaps where we're thinking in terms of end points right now. And on the immunosuppression, the difference in pediatrics with regard to steroid use, we haven't disclosed exactly, but it's in guidance with use in pediatrics and formulated in conjunction with the FDA. Transaminase elevations in patients due to T-cell response usually occurs, and this is pretty commonly known say, between 3 weeks and 8 weeks, and that's the key time when we are therapeutic with regard to our rapamycin. And for the third question on potency assay I'll turn that over to Jose.

Yes. Thank you for your question. As you know, potency assays obviously very important and the focus of the FDA. We feel we have a very viable functional assay in addition to obviously being well on track for our infectious assay. And I think we're on track with that assay, and we don't see any issues with the functional potency assay.

And I'll just jump in with the wedge pressure. It doesn't surprise me that it lags a little bit behind because you have remodeling of the pulmonary veins and pulmonary arterial system. So it's actually exactly kind of how we would predict that it would take a little bit longer to normalize. And if you look, most of the wedge pressures now are in the normal range.

Yes. Just to follow up that comment, so that's exactly what we were going to say as well is the remodeling that we're seeing takes a little bit of time in that 6 to 12 months range that Gaurav mentioned. And then we will see that pulmonary wedge also react. And so we think that's within the range of what we'll see.

Our next question is from Josh Schimmer from Evercore ISI.

I have a few, so we'll go through one by one. First is multipart question. What percent of the Danon population has LVEF less than 40%? Why did you choose 40% specifically? And just to clarify, going forward, is that going to be a selection criteria? Or is it going to be based on an age for enrollment? Or will it be both?

So Josh, Gaurav here. So we don't have an exact number of patients with LVEF less than 40%, but we believe that it's the patients who are in the 1- to 2-year prior to transplant status. So the percent is probably relatively modest. And I think ultimately, the EF will be a cutoff. Why do we believe that it predicts late-stage disease? In our case, we looked at the data from patient 1007 whose EF was 35% and actually continued to decline in the -- even in the months after gene therapy. And we think at that point, progressive disease is -- has set in, and it's too late for gene therapy. The patients who had greater than 40% have all benefited so far. So 40% was the cutoff we agreed to with FDA. We think that it's a good barometer of late-stage disease even as we develop the pivotal trial. But it will not likely cut out too many patients, we think, because once patients have onset of cardiomyopathy. It's usually late-stage disease, and the drop is pretty steep in the last 1 to 2 years. And also ultimately, we want to move to younger and younger patients anyway, right? So those patients would have been cut out anyway from our ultimate treatment.

Okay. Are these patients going to be monitored with serial heart biopsy to gauge the vector copy number stability over time?

Originally, we were not planning on it. We've had an amendment now to look at a 2-year biopsy point to ascertain more sustained and potentially durable expression. But we think that cardiomyocytes don't really turn over. We have many of the -- most of the same cells that we were born with. And we think that if we see expression out to 1 year, it should pertain long-term expression.

Okay. Got it. Why sirolimus versus tacrolimus? I think you had made a point that you had maybe changed from one to the other.

Jose?

Yes, good question. I think in discussion with the agency, they felt that sirolimus had less of a kidney side effect. And also, there's evidence out there that sirolimus has not only T-cell but B-cell coverage from an immunosuppression standpoint. And as I stated earlier, the lower troughs that we're using, we think, are very reasonable from a side effect profile.

Got it. And do you expect sirolimus will reduce the extent to which patients make AAV9 antibodies and potentially enable redosing in the future if needed? Or is that not a consideration?

Potentially, it does have, through its T-cell effects, it does have some B-cell suppression through T-helper suppressive effects. So potentially, that could happen. But we'll definitely be looking at our patient antibody levels and measure that.

Got it. And then last question for me. It looked like in a couple of patients in the slides that wall thickness and wedge pressure worsened before they got better -- Is that the steroid myopathy? Or is there something else that, that is attributed to? Or did I miss that entirely? .

Yes. We think that's likely due to steroid use. That's right.

Our next question is from Eric Joseph from JPMorgan.

Just a couple. First, as it relates to the pediatric study. Can you just talk a little bit about what the focus is there before meeting with FDA? Is the focus primarily on safety and understanding the immunosuppressive regimen or I guess, and also just wondering whether it's reasonable to expect changes in BNP and other hemodynamic markers in this younger kind of earlier-stage patient population? And then secondly, with respect to endpoint selection in a pivotal trial, -- just wanted to get your latest thoughts on the endpoints that might capture functional benefit across the spectrum of age cohorts looking to be recruited.

Great questions, Eric. Gaurav here. So the pediatric study, again, 2 to 4 patients, yes, it's -- we're going to be looking at safety and efficacy. And at least 6 months, you asked specifically about BNP. So I do want to make one point, which is that while these patients are younger than the adult and adolescents that we've already enrolled, they still have signs and symptoms of disease that is an entry criteria that we comply with. So just because they're younger doesn't mean that they don't have elevated BNPs or impaired function. So we do anticipate that we could be able to see relevant changes in those parameters that we measure today. And with regard to endpoints, I think you're asking -- we're seeing improvements in adult and adolescents, pediatrics, if we see only stabilization, is that good enough? I want to reiterate again that stabilization in this disease that is rapidly progressive itself could be considered highly clinically beneficial. And even if that's all we see in the pediatric patients, that could be good for an approvable drug. That said, the patients that we are enrolling who are younger do have some impairments, like I mentioned. So it's possible that we may see some improvements, not just stabilization there remains to be seen.

Our next question is from Greg Harrison from Bank of America.

Congrats on the update. First one is, is there a way you can quantify the normal fluctuation of LAMP2B and how that affects your interpretation of these and future data?

Yes. So I'll hand this over to Jose, but I do want to mention, for example, we're able to reference Slides 21 versus 22, the explanted heart tissue has shown 100% by IHC, whereas the Western blot had only shown 44%, 45%. And I think that's an example of why there's such a variation on LAMP2 when we're looking at Western blot, but Jose for more ones.

Yes. We just want to reiterate that, that's why we believe that immunohistochemistry, which shows the broad expression, is the key way to track this. Within a cell or within a heart, there's probably fluctuation of LAMP2 based on the metabolic state. So absolute levels of LAMP2 will probably fluctuate from individual to individual or even from metabolic state to metabolic state. So that's why we believe immunohistochemistry is a good measure of this. And as you saw from the data that we report, we're seeing very broad expression in our patients, both on biopsy and when we had the opportunity to look at explanted tissue.

Got it. And then one on the pediatric cohort. How young would you want to go with the treatment? Is the goal to really hit that area where they're closer to disease progression where you could get the benefit of whatever durability there is? Or would you try and go as early in the disease after diagnosis is possible.

Jonathan?

Thank you, Gaurav. I think in general, when it comes to gene therapy for rapidly progressive deleterious diseases, whether you're talking about some of our hematologic disorders or certainly condition like Dan and earlier is, in general, better. At present, the Phase I studies pediatric cohort age range is a group aged 8 through 14 which seem to us to be a highly appropriate way to enable patients upon diagnosis or presentation to participate. It's likely that we'll continue with that. We may refine it slightly depending on additional natural history findings or FDA discussions, but I think that's really that 8 to 14 is where we want to be. Just one other quick addendum to the prior question on LAMP2 protein expression. Certainly, I think that looking at these electron micrographs from these different biopsies that we've been able to do really gives you, in some sense, a better picture of how well LAMP2 is present and performing its job. There's a lot that we don't know about the protein in terms of being able to quantify it. You think about it, LAMP2 is a membrane protein that's on a vesicle that's essential for autophagy when we're treating patients even relatively young or early patients, as you can see from those pretreatment electron micrographs -- there's a real backlog of cellular debris that requires clearance. So it's quite likely that in the months subsequent to therapy, a lot of that membrane brown LAMP2 that's now being produced post gene therapy is going to end up leaving the cell as those vesicles are excreted and pushing out all of the cellular debris that the cells were previously unable to do that. So it may take several months before those patients reach a steady state where they've caught up on that backlog of autophagy. And we'll learn more about that as we treat more patients and have opportunities to capture these different end points over the months and one year after treatment.

Our next question is from Gil Blum from Needham & Company.

Congrats on all the progress quick couple from us as well. Do you think that the progression of transplant may be considered as a functional outcome assessment in the longer term? And do you guys have any thoughts on the optimal intervention window that has before there's too much fibrosis in the heart. And is there potential patient-specific monitoring, which could assist in determining this window?

Could transplant be an outcome and then optimal timing and what's going to predict optimal timing. So on transplant as an outcome -- it is something that we follow. We'll be following these patients in a long-term follow-up study for many years. So we will be able to capture that. And that's going to sort of determine long-term fate of the program. Our hope is that by stabilizing or potentially improving heart function and clinical function that we can avoid transplant all together, for example, hopefully, in the 4 patients that we've treated already but with long-term follow-up. And in terms of optimal timing for intervention, we think it's any time before there's the onset of fibrosis, which tends to be in the 1 to 2 years prior to transplant. And it could go as early in life as single-digit years. That's not out of the range of possibilities. Do patients have to have symptoms ultimately to be treated with gene therapy for Danon disease? That remains to be seen. But right now, the current trial does need patients to have some symptoms or signs of Danon disease, at least 8 years old, but ultimately, we may not even need that as part of the life cycle.

Our next question is from Raju Prasad from William Blair.

You showed the slide on left ventricular posterior septal wall thickness natural history with the echo. Do you have a sense of what the ejection fraction looks like kind of in the natural history database? And then I was just curious to know on the steroid-induced myopathy -- is there like a mechanism in patients in particular, that you think is causing that? I'm just kind of curious to hear your thoughts there.

So with regard to LVEF in the natural history, we'll reveal that when we have it all together, we don't have exact numbers. But in general, EF is preserved until late in patients' disease course. So forthcoming with regard to the mechanism of steroid myopathy, I'll ask Jose to weigh in.

Yes. This is actually something that's been consistently seen even in patients who have transplant. There's actually paper out there showing that post cardiac transplant then patients also have myopathy from steroids. So it's not particular to our therapy plus steroids. We believe something about the impairment of the autophagy pathway sensitizes their skeletal muscle cells to this myopathy. So that's the general thought around the pathway.

And this is Jonathan. And I think it's important to emphasize that even for the patients who had more extensive steroid myopathy in cohort 1 that, that myopathy did fully resolve subsequent to steroid discontinuation. So it's not an ongoing event. And as Jose mentioned earlier, the use of the sirolimus and other elements of the immunosuppression regimen are now enabling us to really withdraw the steroids much more rapidly. So we are anticipating this as a much more limited problem as was the case with the patient 1006 in the high-dose cohort.

Great. And then maybe just one last one. I mean, obviously, as you're looking to enroll the pediatric patient population, that's symptomatic as well as maybe move this program forward. Is there any -- are you leaning towards any specific efficacy end points here to really maybe take to the agency next year for the pivotal trial related to the late-stage trial?

Jose?

I mean I think as we've shown today, we are really excited about the totality of our data, which demonstrates improvement or stabilization across multiple endpoints. But I think as Gaurav stated earlier, we believe that several of these endpoints, including New York Heart class, which is a measure of function, BMP and obviously, the echo-based parameters are all strong candidates. And obviously, we'll also collect expression data as well. I think those are pretty good candidates all of themselves. But after completing treatment, especially in this pediatric cohort, we're going to go talk to the FDA and obviously discuss the final design and the final endpoint.

Our next question is from Patrick Dolezal from LifeSci Capital.

Can you elaborate on the learnings from analyzing the explanted heart, particularly surrounding the breadth of LAMP2B protein expression within each quadrant kind of curious if it was more diffuse in certain regions or if there was any gradient as you away from major vasculature and just generally how the regional biopsy is reflective of the broader heart following this experience.

Yes. Thank you for your question. I mean, we believe this is an unprecedented opportunity. And when we looked at the heart, obviously, when we're taking a biopsy, it's just of the intraventricular septum in the endomyocardial portion of the intraventricular septum, which probably has a lot more connective tissue when we were able to look and see in the very business ends of the heart, the ventricles where, obviously, that thickening is happening and the hypertrophy is happening, that we got very robust expression there. I think that told us that we're getting exactly where we need to be. And the other thing, Gaurav mentioned earlier, the fact that we're having a little bit of discordance where we think we're probably underrepresenting the total expression from the biopsy. That also tells us, look, the biopsy is letting us know that we're getting expression, but we're probably getting slightly more robust expression in the target tissue. I think those were the main learnings. Obviously, there was fibrosis there, which caused the patient to progress and the expression was in the nonfibrotic cells. So I think all of that is very positive in general for how our therapy is getting to the target tissue and at the levels it's getting to the target tissue.

This is Eric. I would reiterate that when you're doing a cardiac biopsy, you're just getting a millimeter or a few millimeters past the surface of the endocardium if you're lucky. So I think that the explanted heart gives us a much fuller picture. And I'd also remind you that when we're looking at quantitative expression where the denominator is also not just cardiomyocytes. So we look at like VCN or protein expression, it's actually -- since myocytes are 50% or less or 30% of all the cells in the heart, the VCN and natural myocytes or the LAMP and actual myocytes is double or triple that. As we know the cytoplasm aren't transduced as well as the myocytes.

Super helpful. And since adding the exclusion criteria of LFEV less than 40%, I'm curious if that's the sole additional criteria designed to exclude patients like 1007 or is there any other consideration like a degree of cardiac fibrosis that's now being implemented, especially given the fibrotic areas are not showing protein expression.

Yes. It is meant to exclude patients like 1007 very simply.

With respect to fibrosis, I think one of the noninvasive measures of fibrosis is MRI. Some of our patients have ICDs, so we're not able to have MRI. But in those patients that we can have cardiac MRI, you can look at fibrosis as well. So that could potentially be a way of also looking at that. But as Gaurav said earlier, we really believe that this is just something that we need to treat before late stage. So we don't think this limits our patient population at all. It's really that we want to treat them earlier in their disease before they get to that late stage.

And our final question is from David Hoang from SMBC.

So most of mine were already asked, I just have a one to put forth. So I was wondering in terms of the time course of the 6-minute walk test, what type of decline would you expect in Danon patients from natural history, how rapidly would you expect the 6-minute walk to decline? And how closely does that parallel some of the other parameters that you have been looking at, such as the cardiac output, the ejection fraction and the increase in wall thickness?

David, the 6-minute walk test is a more comprehensive measure of overall body function, not necessarily specific for cardiomyopathy. Nonetheless, we are seeing stabilization or improvements in 6-minute walk test anyway. As far as which one comes first, that's hard to say for sure. But 6-minute walk test may end up being an exploratory endpoint or supportive endpoint. -- unlikely in a cardiomyopathy disorder to be a primary or key secondary in our opinion, but it's all part of the totality of evidence that we anticipate.

And it's Eric. I would jump in and just say that the 6-minute walk time reflects cardiac myopathy probably. It's early good for both. And so I think the other end points you mentioned such as the BNP, the wall thickness reduction is more -- certainly more interesting. I'd also note that the 6-minute walk in these patients -- in most of the patients wasn't was still above a 300-meter cut off at the beginning. So they were down for their age, but not terrible to begin with. So I would keep that in mind as well.

And we have no further questions at this time.

Great. Thank you, everyone, for joining. This concludes our call.

Thank you, ladies and gentlemen. That concludes today's call. You may now disconnect.