Taysha Gene Therapies, Inc. (TSHA) Earnings Call Transcript & Summary

Welcome to Taysha Gene Therapy Strategic Investment Conference Call. [Operator Instructions] Following management's prepared remarks, we will hold a brief question-and-answer session. As a reminder, this call is being recorded today, Tuesday, October 25, 2022. I will now turn the call over to Dr. Kimberly Lee, Chief Corporate Affairs Officer. Please go ahead.

Good morning, and welcome to Taysha's Strategic Investment Conference Call. Joining me on today's call are RA Session II, Taysha's President, Founder and CEO; Dr. Suyash Prasad, Chief Medical Officer and Head of R&D; Dr. Frederick Porter, Chief Technical Officer; and Kamran Alam, Chief Financial Officer. After our formal remarks, we will conduct a question-and-answer session and instructions will follow at that time. Earlier today, Taysha issued a press release announcing that we have entered into a strategic investment with Astellas Pharma to support the development of Taysha's AAV-based gene therapy programs, TSHA-120 for giant axonal neuropathy, or GAN; and TSHA-102 for Rett syndrome. A copy of this press release is available on the company's website and through our SEC filings. Please note that on today's call, we will be making forward-looking statements, including statements relating to the safety and efficacy and the therapeutic and commercial potential of our investigational product candidates as well as our strategic investment with Astellas. These statements may include the expected timing and results of clinical trials for our product candidates, our expectations regarding the data necessary to support regulatory approval of TSHA-120, the regulatory status and market opportunity for those programs as well as the potential benefits of our strategic investment with Astellas, including the potential for Astellas to exercise any of the options we granted them in connection with this transaction. This call may also contain forward-looking statements relating to Taysha's growth and future operating results, discovery and development of product candidates, other strategic alliances and intellectual property as well as matters that are not of historical facts or information. Various risks may cause Taysha's actual results to differ materially from those stated or implied in such forward-looking statements. These risks include uncertainties related to the timing and results of clinical trials and preclinical studies of our product candidates, our dependence upon strategic alliances and other third-party relationships, our ability to obtain patent protection for our discoveries, limitations imposed by patents owned or controlled by third parties and the requirements of substantial funding to conduct our research and development activities. For a list and description of the risks and uncertainties that we face, please see the reports we have filed with the Securities and Exchange Commission. This conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, October 25, 2022. Taysha undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call, except as may be required by applicable securities law. I would now like to turn the call over to our President, Founder and CEO, RA Session II. RA?

Thank you, Kim. Good morning, and welcome, everyone. We are excited to announce today that Astellas Pharma has made a strategic investment in Taysha to support the development of our novel AAV-based gene therapy development programs, TSHA-120 for giant axonal neuropathy, or GAN; and TSHA-102 for Rett syndrome. Astellas Pharma is a premier biopharmaceutical company with global R&D, manufacturing and commercialization capabilities. We are extremely excited about this partnership. But before we discuss the details of this strategic investment, let me provide you with an overview of Taysha's unique approach to the development of novel gene therapies. Next slide. Our strategy is designed to accelerate development time lines and increase the probability of success for our programs. First, we leverage the clinically and commercially proven AAV9 capsid that has demonstrated clinical activity and tolerability across multiple CNS indications. Next, we use a proven HEK293 suspension manufacturing process that is highly scalable and provides excellent yields. Lastly, we dose all of our therapies interthecally, which enables direct targeting to the CNS. Each payload is tailored to address the driver and biological challenge for each disease, while the capsid manufacturing process and route of administration are kept constant across our pipeline. Next slide. Now let's discuss the terms of the agreement. Astellas will make a $50 million investment in Taysha in exchange for 15% of Taysha's outstanding shares as well as an exclusive option to license the worldwide development, manufacturing and commercial rights to TSHA-120 and GAN for a period of time until after receipt of the formal Type B end of Phase II meeting minutes from the FDA. Taysha will also receive an exclusive option to license the worldwide development, manufacturing and commercial rights to TSHA-102 in Rett syndrome for a period of time until after we provide Astellas access to certain clinical data from the Rett female pediatric study. Astellas will also receive certain rights related to a change in control of Taysha for a period of time until after receipt of the Rett clinical data package previously described. To further strategically align the two companies, Astellas will also receive one Board observer seat on the Taysha Board of Directors, enabling us to leverage Astellas' clinical and commercial expertise while we advance our programs. The economics associated with the potential licenses will be negotiated by both companies at a later date should Astellas decide to exercise any of its options. We are thrilled that Astellas has made a significant investment in the company which recognizes our emerging leadership in the development of AAV gene therapies for the treatment of rare monogenic CNS diseases with serious unmet medical needs. It further validates our proven technology platform, reinforces the therapeutic and market opportunity for our two lead clinical programs and highlights our novel approach of coupling validated gene therapy technology with novel targeted payload design. Next slide. We believe we have selected the best possible partner in Astellas, a premier biopharmaceutical company that has built global R&D, manufacturing and commercialization capabilities. Astellas is a dedicated leader in the field of gene therapy with a large-scale, fully integrated in-house cGMP manufacturing facility. Building upon Astellas' acquisition of Audentes, this partnership fits strategically within their long-term vision of expanding its gene therapy capabilities and enhancing focus on genetic regulation to ultimately bring new transformative gene therapies for serious genetic diseases with limited treatment options. We believe Astellas' clinical development and commercialization experience, combined with Taysha's capabilities and know-how in gene therapy, will help us both achieve our shared objectives. We look forward to this collaboration and the potential to bring life-changing treatments to patients around the world. Next slide. Our two lead product candidates, TSHA-120 in GAN and TSHA-102 in Rett syndrome were the key clinical programs that attracted Astellas. TSHA-120 for the treatment of GAN, a genetic and progressive neurodegenerative disease, is our most advanced program. TSHA-120 has received orphan drug and rare pediatric disease designations from the FDA and orphan drug designation from the European Commission. Our GAN program includes a comprehensive and robust clinical package that is supported by evidence generated across multiple functional and pathological endpoints. These include the MFM32 motor function assessment, demonstrating clinically meaningful slowing of disease progression across all therapeutic dose cohorts compared to natural history decline with a durability of effect observed up to 6 years post dosing; retinal nerve fiber layer thickness as assessed by optical coherence tomography, demonstrated stabilization and prevention of further visual tissue loss following TSHA-120 treatment; visual acuity as assessed by LogMAR also stabilized after treatment. Electrophysiologic nerve conduction studies support recoverability, stabilization and, in some cases, improvement in sensory response in patients treated with TSHA-120; nerve biopsies confirm that treatment with TSHA-120 resulted in active regeneration of nerve fibers; and lastly, CMC comparability testing validated that our clinical and commercial-grade material are comparable via our release assays and next-generation sequencing. We are pleased to announce that we have a type B in the Phase II meeting scheduled with the FDA via teleconference on December 13, which will enable us to have discussions regarding pathway to BLA filing. We expect receipt of the final meeting minutes by mid-January, at which time we will provide a regulatory update. Moving to our Rett program. Astellas was particularly excited about TSHA-102, the first and only gene therapy in clinical development for Rett syndrome, a severe genetic neurodevelopmental disorder. TSHA-102 utilizes the novel microRNA responsive auto-regulatory element or miRARE platform to regulate transgene expression genotypically on a cell-by-cell basis. TSHA-102 has received orphan drug and rare pediatric disease designations from the FDA and has been granted orphan drug designation from the European Commission. The totality of preclinical data generated to date for TSHA-102 represents the most robust data package supporting the clinical advancement of a gene therapy in Rett syndrome. This includes preclinical data in neonatal Rett knockout mice, demonstrating near normalization of survival, normalization of body weight and normalization of behavior, as assessed by the BERG score; pharmacology data demonstrated significant improvement in survival, body weight, motor function and respiratory health across treatment ages in Rett knockout mice; toxicology data supported a favorable safety profile of TSHA-102 in wild-type rats up to doses or fold over the clinical starting dose; nerve conduction studies remained in the normal range, signifying no evidence of dorsal root ganglia inflammation; and lastly, toxicology data in nonhuman primates demonstrated that all doses studied were well-tolerated while demonstrating broad biodistribution to the brain and spinal cord. Importantly, NHP studies demonstrated that the down regulatory miRARE platform worked well with minimal expression of MECP2 in wild-type cells with normal pre-existing levels of MECP2. These four preclinical studies together represent a comprehensive and robust package, supporting the clinical advancement of TSHA-102 for Rett syndrome. Our first-in-human Phase I/II study of TSHA-102 for Rett syndrome, also known as the REVEAL study, is ongoing. Considering our partnership with Astellas and our intent to provide them with a more comprehensive data set, we now expect to report preliminary clinical safety and efficacy data from the entire first cohort of adult patients with Rett syndrome in the first half of 2023. Also in the first half of 2023, we intend to initiate a female pediatric study in Rett syndrome. In summary, our two lead programs continue to progress well and we are extremely excited about the strategic investment from Astellas, which further validates our platform and our two clinical programs. The next 6 to 12 months will be a busy time for Taysha. On December 13, we are scheduled to have a teleconference with the FDA to discuss the pathway to a BLA filing for TSHA-120 in GAN. We expect to provide a regulatory update on the program once we receive the final meeting minutes from the FDA, likely in mid-January of 2023. In the first half of 2023, we anticipate clinical data for TSHA-102 from the entire first cohort of adult patients with Rett syndrome and intend to initiate a female pediatric study in Rett syndrome. We look forward to providing updates on our progress throughout the year. I will now ask the operator to begin our Q&A session. Operator?

[Operator Instructions] Our first question comes from Gil Blum with Needham & Company.

Congratulations on the progress here. Maybe a quick one on the negotiation of the option terms. So what kind of time frame are we looking at there? Can you clarify this a little bit?

Gil, thanks for the question. So the negotiation period for the option terms are tied to kind of key events that could either accelerate or take a little bit longer depending on clinical operations and a level of efficiencies. So really, they're tied to two key events. One, we clearly know about and we've just talked about that, and that's the meeting minutes from our end-of-phase Type B meeting, and the Phase II Type B meeting with the FDA. Essentially, for a period of time after receipt of those minutes, Astellas has the opportunity to review those and then decide to opt into the program. Once they decide to opt into the program, we would then proceed to negotiations around the economics tied to that particular opt-in. What we did negotiate and I really have to thank our colleagues over at Astellas, they did a fantastic job, are the key terms around those, whether there's going to be an upfront payment, whether there's going to be milestone payments, whether there's going to be royalties, things like that. But the economics attached to either one of those key terms would be negotiated at the time of the opt-in. So for us, we think that serves a lot of benefit because it allows us to negotiate once we have the answer in hand, and it gives us kind of full understanding around probability of success and path forward and timing to do that. So there's really nice ways to be able to financial model that through NPVs. And so you can clearly tie a negotiation to financial modeling. So for us, that was actually a really key aspect of the deal and particularly with entering into the collaboration with Astellas, and really their flexibility on this was, for us, one of the key aspects.

Okay. And maybe one additional one. How compatible is Astellas' manufacturing procedure with your own?

Really, really good question. We had the fortunate opportunity to be able to tour their Sanford facility throughout the conversations with them. And they've done a fantastic job building out that facility, that state-of-the-art facility that's not too far away from where we were intending to build out our own facility now that we paused that construction. So what I would say from a platform perspective, we're essentially, for lack of better words, running very similar platform and a very comparable platform. And the ability to be able to leverage their manufacturing facility and their capability was also a key aspect of the deal, at least from the Taysha side. And I suspect it also played a role in the Astellas side and their interest in our platform as well. But it's a very close manufacturing process and one that I think we would be able to utilize very quickly.

Our next question is from Salveen Richter with Goldman Sachs.

This is Mason on for Salveen. Could you comment on your expectations for what future cash operating expenses are going to look like and what your expectations for cash runway are going to be on the back of this announcement?

Sure. Kamran, do you want to take that question?

Yes, sure. Happy to. So based on this $50 million investment, that extends cash runway into Q4 of 2023. We're not providing specific operating expense guidance on a quarterly basis at this time. However, again, cash runway into Q4 of 2023.

Our next question is from Debjit Chattopadhyay with Guggenheim.

RA, congrats on the deal. This is Robert on for Debjit. On the cash side, can you walk us through the anticipated uses of the $50 million? Will that be used to pay down any of the term loan? Or will this be used for funding operations? Congrats.

Sure. So the primary use of these funds would be used for operations both geared towards the clinical development of both TSHA-120 in GAN and TSHA-102 in Rett syndrome. I think the key aspect of this capital injection was really around getting to meaningful data sets both in the Rett adult study and the Rett pediatric study, and I think that was extremely important. And to be able to have capital that allows you to get beyond those data sets, particularly the Rett adult study data set. And I think you saw from our previous guidance, now that we've entered into the collaboration with Astellas, we've decided, along with our partner, not to kind of just provide incremental updates but to provide more meaningful updates with a full data set. And for us, that was extremely important. And so you now see that we'll provide the first cohort of patients -- data from the first cohort of patients from the Rett adult study in the first half of next year. So that was extremely important. What I'll also say is what's also extremely meaningful is for us, at the very least, was to have close to a year worth of runway at the time that we had feedback from the FDA regarding TSHA-120 and the regulatory pathway towards the BLA. For us, we are extremely encouraged by the data set. I think we've listed out some of the key aspects, both functional endpoints and pathological endpoints. What I would also say is as we were putting together the briefing document, we were quite encouraged with the level of clinically meaningful data supported by a nice separation from the natural history study that was not only clinically meaningful, but also statistically significant across the majority of our primary and secondary endpoints. So for us, we are quite encouraged to go into that conversation with the FDA, with that data set in hand that we think supports a pathway to a BLA as well as the comparability data that we've shared to The Street, which essentially shows that our commercial-grade material and the clinical grade material are biologically indistinguishable. So that was extremely important for us to have, at the very least, a year worth of capital or close to a year worth of capital once we have that feedback in hand. And once we have that feedback in hand, which is likely going to be mid-January, we plan on providing that update to The Street.

Our next question is from Mike Ulz with Morgan Stanley.

Can you just clarify if Astellas had any access to the Phase I Rett data, I think from your prepared remarks, it sounds like no, but I just wanted to get some clarity there.

Mike, thanks for the question. So as you know, we never discussed patient dosing. This has been a policy of the company since our inception. We've never guided to patient dosing. We only guide to when data is going to be available. What I will say is Astellas had access to all available data to -- that the company is in possession of, and that enabled them to make a decision. That's essentially what I'll say. And what I'll also say is, again, to reiterate the new guidance, we'll now provide an update from the entire first cohort of patients from that adult study in the first half of next year.

Our next question is from Joon Lee with Truist.

Thanks for the updates. Was this a competitive process? And if so, why Astellas? And is there something about Astellas that makes sense, particularly good sense with your pipeline?

Joon, thanks for the question. So what I will say is, essentially, this was opportunistic and something that came out of conversations over the last, call it, 4 to 5 months that ultimately culminated in what I would consider a pretty creative deal. And again, I have to thank my colleagues from the Astellas side of really thinking outside of the box was a way to ensure that we get to meaningful value inflection points and meaningful data readouts, but also that both sides maintain significant optionality in the deal. And I think that was extremely important. So I think you wouldn't be able to do a competitive product and come out with something as creative as we've laid out here, a significant strategic investment. They joined the Board but also maintain optionalities on two clinical programs. I think when you start to think about Astellas as a partner, I don't think we could have selected a better partner. And I tried to lay this out in my prepared remarks, but this is a partner that is dedicated to the field of gene therapy. They've made significant investments in the field of gene therapy. I think when you go back to kind of those kind of original three companies in gene therapy, whether it was AveXis, Audentes, Spark, Astellas is right there in the mix as one of those three acquirers that made a strategic decision to be involved in gene therapy from the start. And they've doubled and tripled down on that decision with their recent completion of their manufacturing facility in North Carolina, but also their recent announcement of building out a new kind of cell and gene therapy center of excellence on the West Coast. So for us, this was extremely important to be aligned with a partner that has a real commitment to AAV gene therapy, has a real commitment to monogenic rare disease and particularly an interest on diseases of the central nervous system and diseases towards neuromuscular indications. And so for us, this aligned quite well. And I think this provides an opportunity for both parties to essentially have exponential growth and an opportunity for both of us to accelerate our development and commercialization and global reach with the portfolio that we'll be developing together.

Great. Looking forward to progress.

Thanks, Joon.

Our next question comes from Raju Prasad with William Blair.

Just curious if you could provide some color on the reasoning for putting the change of control provision into the agreement. It just seems kind of interestingly worded. So more color there would be helpful.

Raju, thanks the question. What I'll say is the change control provision, it is worded in somewhat of a legal way. Essentially what it is, is a right of first offer, right of first refusal. That's how it's laid out. And I think this is an important aspect to the deal that Astellas wanted in the negotiation, was an opportunity to be in a position to be able to acquire the company if the Rett data -- and have that opportunity tied to the Rett data. And so as we've all thought in the history of the company, Rett is going to be probably one of the biggest near-term value-creating opportunities for Taysha. And essentially, Astellas would like to have some level of optionality whether to license the program or understanding the value of that program, the opportunity to be able to essentially put in an offer for the company. But they also wanted the opportunity if someone, if a third party came in and tried to provide the company with a preemptive offer the opportunity to be able to respond. So that's the way that the change of control kind of provision is worded within the agreement, but it is somewhat worded legally in the press release. So hopefully, that provides you some additional color.

Our next question is with Jack Allen from Baird.

Congratulations on the deal. So maybe we could dive a little bit more into the upcoming data from TSHA-102. You mentioned that you're going to have the full data set on the first cohort of adult patients. So I was just hoping you could contextualize what investors should be looking out for in the first half of next year.

Thanks, Jack. Maybe I'll start and then I'll pass it over to Suyash in case I miss anything. But essentially, what we're going to be guiding to is both safety and efficacy from the first cohort of patients in the adult study that's currently ongoing. I think what we've also provided an update, and it's probably the first time we've mentioned it, was the plan to initiate the pediatric study also in the first half of next year. And to be quite honest, the pediatric study is really going to be the primary -- is really going to be the primary population that we're going to be looking at when it comes time to have real discussions, I think, with regulators around BLA pathway. And that's really just based off of the way that the disease manifests. The majority of these patients are pediatric patients. But with the understanding, Rett patients live -- tend to live within -- at the very least, within their fifth decade of life. So there's quite a few Rett patients, adult Rett patients out there that, unfortunately, are underserved because there's just not a therapeutic alternative available to treat them today. And certainly, not one that targets the underlying cause of the disease. So for us, it's going to be extremely important to share what I would consider the totality of data across a number of end points from the first cohort. And this would be the cohort treated at 5E to the 14 total BG, both from an efficacy perspective and a safety perspective and essentially the data that enables us to start the pediatric study. I'll stop there. Suyash, did I miss anything?

No, I think you've covered it nicely. I can add a little bit more color on some of the efficacy endpoints, if you like, Jack. And I think what I would add to RA's comments are -- RA's absolutely correct. Safety is a big part of it while we look at adverse events over time, immunological aspects of gene therapy, and then there's the efficacy endpoints. And to get a bit more granular there, with Rett syndrome being a global developmental disorder, which I know you understand, just with the lack of the MECP2, we need to look at a whole host of different endpoints. So the way to think of them, think of the endpoints really is to just look at them in big buckets. So one clear bucket is Rett behaviors. And we're going to look at those with well-validated, well-used scales such as the revised motor-behavior assessment, the hand function...

Suyash, you may have gone out of that for a quick second. Yes. I think you went out for a second. So if you don't mind, just kind of starting over at Rett behavior, the assessment.

Sure. Apologies for that.

No worries.

Yes. So if we think of the endpoints in big buckets. So one is Rett behaviors and Rett characteristics, so the revised motor-behavior assessment, the Rett hand [ function ] scale and a number of other Rett-specific measures that are well-validated, where there's good natural history. We need to look at the bucket of seizure activity. These are adults and children are affected significantly by epilepsy, so looking at what medications they're offered their seizures, if we wean them off those, how frequent the seizures are, how severe, how long seizure episodes are. That's another big bucket of endpoints. We need to look for autonomic dysfunction, so in particular, cardiac issues and, more importantly, respiratory breathing dysrhythmias, which as we know, is a big, big issue with Rett and causes families real concern. And we saw some very nice improvements in the autonomic aspects of breathing dysfunction in our animal studies. We'll also be looking at some harder endpoints, which are more exploratory in nature. So MRI scans, nerve conduction studies. Communication is a big part, so we're using certain scales to look at communication capability. And then, of course, we'll be looking at overall function using the clinical global impression. And I think when you look at the efficacy endpoints across those large buckets, you're going to get a really nice totality of a viewpoint on how the adults that we're treating the 5E14 dose will be improving from an efficacy perspective.

Our next question comes from Yun Zhong with BTIG.

So the first question, on Rett syndrome. I wanted to confirm that the decision -- I believe your guideline previously was data before year-end. So right now, first half of 2023, it's just you provide a comprehensive data, not because of any delays in the program. And secondly, I believe Rett syndrome, the disease itself from what we heard is not so much different whether it's an adult patient or pediatric patients. So other than safety, do you think -- how reliable do you think when you have the adult data to predict the outcomes in pediatric patients?

Thanks, Yun, for the question. So maybe I'll start with the first question. So really, our decision around changing our guidance is driven by this collaboration and investment from Astellas. I think because these data sets are going to be tied to particular opt-ins, particularly on Rett and the opt-in to license the program or an opt-in to essentially -- or kind of right of first refusal to potentially acquire the outstanding shares of Taysha, we wanted to make sure that our partner was getting data ahead of any type of decision before that data was released to the Street and that they had enough time to make an informed decision, whether it's around their opt-in -- whether they're opt-ins or other decisions that they needed to make. So that's what's driven our decision. So again, I think it's important just from this change of guidance, this is really a change of guidance now that we have a partner. And I think that's extremely important for us to be appropriate now that these programs are in a partnership. What we'll talk about from a Rett syndrome perspective, and I think this has been really nicely studied from a preclinical perspective, is earlier treatment is going to always be better, earlier treatment. And that's going to be the case, I think, across any genetic disease in any gene therapy, particularly those in the CNS. And you want to treat these patients before they've had any significant accumulation of disease burden. And I think we've seen this throughout our preclinical studies. In our neonatal studies, you see a near normalization of survival, normalization of behavior, normalization of body weight. And in our pharmacology studies, you can clearly see the earlier the intervention, you're going to have a better a better opportunity to have a positive outcome versus later intervention. But fortunate for us that we were even able to see an effect on mice up to 28 days post birth. And what I would also say to that is, if you think about the Rett knockout animal, that's about 50% through their normal life span. So essentially we, in some cases, allow these mice to mature essentially to a level of adulthood and accumulate a significant level of disease burden before we decided to intervene and still saw improvements across multiple parameters, including survival, including respiratory function, including motor function and a number of other key aspects. So again, I think if you allow the preclinical data to guide you, earlier intervention is always going to be better. But in the case we think every patient should have an opportunity for improvement just based on replacing MECP2 in patients that essentially are producing no MECP2. I'll stop there. Suyash, maybe you want to provide some additional comments.

Yes, of course, RA. It's a very insightful question about the difference between adults and children. And I think it's definitely -- there's definitely commonality between the two. And I also think that the adults -- what we see in the adults will read through and translate to what we see in Rett children, not in the very early Rett in the age of 1, 2 or 3 years, but from the age of 3 or 4 years onwards, once the children with Rett are in the stable phase. There's two key differences. RA has highlighted one of them, which is really related to the degree of recoverability. We know from our preclinical studies that if we treat younger, we're likely to see a better, more significant improvement from an efficacy perspective. And that makes absolute sense. We see this across the range of neurodegenetive disease. Not only do you see greater recoverability, but actually, the accumulation of disease burden is less. So adults will have developed contractures and severe spine scoliosis and maybe lost some lung tissue, recurrent chest infections. So these things are not reversible. So we expect absolutely that there will be a read-through from efficacy from adults to the children, the like of the children are going to see better efficacy. The second thing I'll say is that the endpoints -- when we think -- it's important to think still in the big buckets that I mentioned earlier, Rett behaviors, seizures, autonomic dysfunction. But sometimes the specific endpoints may be a little different between the children and the adults. And in the children, in particular, we'll need to also weave in some of the developmental progression assessments such as the Bayley Scale or the Vineland Adaptive Behavior Scales. But I think, really, to answer your question, we expect children to do better than adults from an efficacy perspective. But I think there will definitely be read through from the adults to the children.

Okay. Great. Maybe a quick follow-up question, if I may. So how does the partnership or deal change your consideration about pipeline development at this point?

Thanks again for the question. I don't think it changes anything today. What I would say is the primary focus of the company will be focused on the development of TSHA-120 in GAN and moving that forward through these regulatory discussions and hopefully onward towards BLA submission eventually and then continued focus on execution and data generation in TSHA-102 for Rett syndrome. So what I would say is we're really focused on executing on these two key programs. We still have full ownership of these programs. We still are developing these programs, are responsible for developing these programs solely. And so this will continue to be our focus until we get to an opt-in decision from our partners over at Astellas. And at that particular point in time, I think we would be in a position to provide an update around other programs within our portfolio, either accelerating those or what any type of portfolio prioritization decisions would be. But to date, I think the focus was strengthening the company's cash position, bringing on a phenomenal strategic partner to help guide these two programs and getting to meaningful value inflection points with these two programs.

Our next question comes from Yanan Zhu with Wells Fargo.

Congrats on the transaction. So a couple of questions. One on the trigger for the Rett syndrome program and one on the trigger for the FDA update. So for the Rett syndrome program, I think in the 8-K filed, I think there are two triggers mentioned. One is the ongoing studies data, but there's also a mentioning of a certain data from the female pediatric trial. Could you clarify whether this is -- there are two opportunities for Astellas to opt in? Or I just want to clarify that a little bit, if you could.

Sure. And great question, and thanks for allowing me the opportunity to be able to clarify. So Astellas actually has the opportunity to opt in anytime up to the delivery of particular data from the Rett pediatric girl study and then a period after that -- up to a period after that. So they could actually opt in today if they wanted to. But essentially, the opt-in is tied in kind of the outward band or the option essentially expires after we deliver data from the Rett pediatric girl study. So they have a period of time to review that data and then that option would expire if they decide not to opt in. So they can opt in from today up to a period of time after we deliver data from the Rett female pediatric study. They will -- they do have significant data rights and the opportunity to request updates on both the Rett program and the GAN program. But essentially, that is the red option. They could opt in today if they'd like or any time up to the delivery of certain data that has been agreed to from the Rett pediatric girl study that they have a period of time after that before their option expires. Hopefully, that was clear. But if you like for me to explain that, again, I'm happy to do so.

But maybe a quick follow-up is the adult Rett syndrome study will be read out before you have any data from the pediatric trial, right?

That's correct.

Okay. That's helpful. And then on the FDA trigger for the GAN program, what do you think Astellas is looking for given that you have laid out in the past three scenarios with the baseline being a few more patients worth of data before you could file with FDA and a better upside case might be analytical chemistry, and then there is the more longer-term case requiring new trial. In each of these cases, what do you think Astellas reaction might be, if that's an okay question to ask.

Sure. It's a good question. I think I'd be remiss to speak for our partner, Astellas. So I think it's probably a better question for Astellas to answer. What I will say, what attracted them to the program, I think, is the strength and the totality of the clinical data. I think we've laid this out in my prepared remarks, but really across a number of both functional and pathological endpoints, where we're not only seeing a level of clinically meaningful change from natural history but also a statistically significant change from natural history up to 6 years post dosing. And so we really feel strongly that the strength of our data set really does support a path to BLA. Obviously, we need to have that conversation with the regulators, and we've laid out kind of what our three scenarios would be. And I think today, there's nothing changed in those three scenarios and kind of our focus on scenario 2 as the base case, which would be that you need to treat a few more patients for a limited amount of time that would be able to support the BLA submission. But we think this still allows us to be commercialized within that 2024 time period -- somewhere within that 2024 time period. So all I can say is this program has essentially -- it has essentially performed like we hoped. The data continues to support, I think, continued development and a regulatory pathway, particularly in an indication where there's significant unmet medical need. It's a severe pediatric fatal disease, and we're seeing a disease-modifying effect. And so for us, we think this all supports a robust discussion around pathway to regulatory submission. But I think particularly what are going to be the key aspects of Astellas making their decision, I think it's probably a better question for our partners.

Got it, got it. And lastly, a quick question, if I may. Is co-promotion on the table should Astellas decided to license either programs?

Sure. Right now, the options are for exclusive worldwide development and commercialization rights for both GAN and Rett syndrome.

Our next question comes from Silvan Tuerkcan with JMP Securities.

Congrats on the great deal. I just want to ask the dosing question in a different flavor. So as I understand, there's no delay to the Rett data. You could have shown maybe 1 or 2 patients by the end of the year. This is just a decision to show a full data set in the first half of next year. Is that correct?

So Silvan, I think it's the same question asked a different way but that's okay. I think what we've never -- again, as a policy of the company, we've never guided to patient dosing, and it's not something that I think going to start today, particularly now that we are in a strategic collaboration with a partner. I think what -- again, what I'll reiterate around our change in guidance, our change in guidance has really been driven by the need for our partner to be able to see data ahead of any particular disclosure to the Street. What I'll also say is we wanted to make sure that our partner has that data in a meaningful way. So to reiterate the new guidance, we will provide data from the first cohort of patients on the adult study, and that will be both safety and efficacy data. And again, when you start to think about the disclosure that we'll provide, it will be more on the totality of the disease across a number of endpoints.

Great. And regarding the new female study, have you thought about or have you disclosed what patients in terms of age ranges or potentially sub cohorts you may be enrolling here?

Maybe I'll pause and let Suyash answer that question.

Sure. Happy to answer the question. We do have a protocol that has been drafted. It's not finalized as yet but it's been drafted, and we've actually discussed the protocol with a number of clinical experts and indeed with the IRSF, who are the patient organization. They have a clinical committee that likes to help companies design and develop protocols. So we've been through it in some detail. In terms of specifically the age ranges of the patients that we're going to be enrolling in the pediatric study, at present, the plans are to enroll patients who are about 3 or 4 years of age and upwards, i.e., if you remember the way rett patients are identified and diagnosed, at birth, children with Rett because of the Rett appear absolutely normal and fine and happy and healthy. And they seem to be that way until about the age of 9 or 12 months, where that's when the parents start to see some initial issues with their development, i.e. a lack of eye contact, some issues with communication and some of these unusual hand movements. And then there's a relatively rapid decline from a developmental progression perspective over the next 1, 2 or 3 years. By the age of about 3 or 4, children enter what's known as the Stage 3 of the Rett kind of process, where they're relatively stable but in a very compromised situation, i.e., these are children who are not talking, not walking, not moving, unable to communicate and need very significant support. And they usually stay in that stable level for many, many, many years. And it's those children that we'll be enrolling in the clinical trial. So we won't necessarily to start off with the enrolling patients are in the rapid decline phase, but we'll be enrolling patients who are in stable phase. And then as time progresses, after we've dosed a few of those patients, we will then likely bring the age of dosing a little bit earlier. That's the current thinking. Of course, as I said, the protocol is not yet finalized, so we need to do a few more tweaks and pressure testing and also learn from the adult study to inform the pediatric study. But that's the current thinking on the age of patients that will be enrolled in that study.

And one quick last one. In the adult, 5E14VG cohort, how many patients do you believe will be in that cohort by the time we get data?

So the way the current -- the protocol is currently designed, there are -- you'll notice from the slides that were presented earlier that the adult study is up to 18 patients. So the way the adult study is designed is 6 patients in the 5E14 cohort, 6 patients in the 1E15 cohort, and there's a provision in the protocol to extend either of those cohorts by another 6 patients if we need to depending on how the study is progressing. So to be more specific, on the -- at the end of the first cohorts, we should have 6 patients to share.

And Suyash, you may want to mention just the level of randomization.

Absolutely, yes. So the way the study is designed, we are randomizing patients on to either concurrent treatment, treatment with TSHA-102 or the delayed treatment control. It's not a placebo-controlled blinded study. There are ethical reasons why we're not able to do that. But patients we randomized in a one-to-one ratio, so 3 patients on drug and three patients on delayed treated control, who will then be rolled over onto to draw at a later stage. So what this does is it brings in randomization of the study, which makes the study a more disciplined and robust study and also gives us the opportunity to compare treated patients with concurrently observed nontreated or delayed treated patients.

Ladies and gentlemen, we have reached the end of our question-and-answer session. I would now like to turn the floor back over to Mr. Session for closing comments.

I just want to thank everybody for joining today's conference call. Again, this is a transformative opportunity for Taysha and really, I think, one that is significantly beneficial across a number of key aspects around value creation, both for patients but also investors. Combining these two companies or the opportunity to be able to utilize Astellas' scale, expertise, global footprint, I think will significantly positively impact the development of both TSHA-120 for GAN and TSHA-102 for Rett syndrome. And we look forward to providing the Street with updates on both of these programs at our next call. So with that, I want to wish you guys a wonderful morning, and thank you, guys, for joining the call.

Ladies and gentlemen, this concludes today's presentation. Thank you again for your participation, and you may now disconnect.