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

Greetings, and welcome to Taysha Gene Therapies Fourth Quarter and Full Year 2023 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce Hayleigh Collins, Director, Head of Corporate Communications and Investor Relations. Thank you. You may begin.

Thank you. Good afternoon, and welcome to Taysha's Full Year 2023 Financial Results and Corporate Update Conference Call. Earlier today, Taysha issued a press release announcing financial results for the full year ended December 31, 2023. A copy of this press release is available on the company's website and through our SEC filings. Joining me on today's call are Sean Nolan, Taysha's CEO; Sukumar Nagendran; President and Head of R&D; and Kamran Alam, Chief Financial Officer. We will hold a question-and-answer session following our prepared remarks. Please note that on today's call, we will be making forward-looking statements, including: statements relating to the therapeutic and commercial potential of TSHA-102; including the reproducibility and durability of any favorable safety results initially seen in our first and second patients dosed in the REVEAL trial to positively impact quality of life and alter the course of disease in the patients we seek to treat; our research, development and regulatory plans for our product candidates, including timing for our clinical trials and reporting results therefrom; and our current cash resources supporting our planned operating expenses and capital requirements into 2026. These statements may include the expected timing and results of clinical trials for our product candidates and other clinical and regulatory plans and the market opportunity for those programs. This call may also contain forward-looking statements relating to Taysha's growth, forecasted cash runway and future operating results, discovery and development of product candidates, strategic alliances and intellectual property as well as matters that are not 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 regulatory actions for our product candidates or dependent on 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, including in our annual report on Form 10-K for the full year ended December 31, 2023, that we filed today. This conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, March 19, 2024. 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 laws. With that, I would now like to turn the call over to our CEO, Sean Nolan.

Thank you, Hayleigh, and welcome, everyone to our 2023 full year financial results and corporate update conference call. Today, I will begin with a brief update on our corporate and clinical activities. Then Dr. Suku Nagendran, President and Head of R&D of Taysha, will provide an update on our lead TSHA-102 program and clinical evaluation for the treatment of Rett syndrome. Kamran Alam, our Chief Financial Officer, will follow up with a financial update. I will provide closing remarks and open the call up for questions. In 2023, we made tremendous progress on the development of TSHA-102, our lead gene therapy program in clinical evaluation for the treatment of Rett syndrome, which is a rare neurodevelopmental disorder with significant unmet medical need. This included generating initial clinical data in adult patients and expanding the trial into the adolescent population, obtaining regulatory clearance to initiate the clinical evaluation of TSHA-102 in 2 additional geographies and dosing the first patient in our pediatric trial. Importantly, we believe these accomplishments enable us to focus our efforts this year on generating critical long-term clinical data in a broad range of ages and stages of Rett syndrome patients across multiple geographies. We now have 2 ongoing first-in-human trials evaluating the safety and preliminary efficacy of TSHA-102, the REVEAL Phase I/II adolescent and adult trial in Canada and the U.S. and the REVEAL Phase I/II pediatric trial in the United States with clearance in the U.K. Today, we are excited to report longer-term clinical data from our first 2 adult patients treated with the low dose of TSHA-102 in our adolescent and adult trial. As a reminder, our ongoing REVEAL Phase I/II adolescent and adult trial is a first-in-human, open-label, randomized dose escalation and dose expansion trial evaluating the safety and preliminary efficacy of TSHA-102 in females aged 12 years and older with Stage IV Rett syndrome. We are currently enrolling patients in Part A, the dose escalation portion of the trial, which is evaluating 2 dose levels of TSHA-102 sequentially. Two patients have been dosed to date in cohort one, evaluating the low dose of TSHA-102 of 5.7e14, and dosing in cohort one is now considered complete. Today, we're pleased to provide an update on the encouraging follow-up data from the first 2 adult patients treated in the low-dose cohort. Recall, when we initiated the REVEAL trial, there were low expectations of efficacy for the Stage IV adult population among KOLs in the Rett syndrome community due to the advanced and relentless progression of the disease. The focus was placed primarily on safety. Therefore, it was very exciting when we announced the encouraging initial impact that TSHA-102 appeared to have across multiple clinical domains in the first 2 adult patients treated as early as 4 weeks following the treatment that we reported in November 2023. The data presented today for patient 1 is from her 6-month post-treatment assessment with clinical observations from week 35 post-treatment. Importantly, we continue to see a durable response, and we are seeing sustained improvement in the absence or reduction of steroid levels. We have received many questions since initiating -- since initially announcing patient 1 data about the possible impact of steroids on the disease itself. We're not surprised, but nonetheless pleased, to highlight today that patient improvements were maintained or further improved in the absence of steroids. As with the 6-month assessment, patient 1 has shown sustained improvement across key efficacy measures at decreased steroid levels with new improvement observed in the Rett Syndrome Behavioral Questionnaire, or RSBQ. Additionally, the second adult patient also sustained improvements across key efficacy measures with new improvement observed in certain measures, including the Revised Motor Behavior Assessment, or R-MBA, and significantly reduced seizures at 12 weeks post treatment. The longer-term clinical observations reported by the principal investigator showed that both patients had sustained and new improvements across multiple clinical domains, including autonomic function, social communication, motor skills and seizures compared to earlier post-treatment assessments. Importantly, these continued improvements were reported at week 35 following completion of the steroid taper for the first patient and at week 19 at decreased steroid levels for the second patient. As a reminder, these 2 patients have quite different genetic mutations. The first patient's MECP2 mutation manifests in a more severe disease phenotype than the second patient's mutation. For example, patient 1 was completely non ambulatory at baseline whereas patient 2 could walk with prompting. Despite the different clinical baseline characteristics, both patients showed improvements across multiple clinical domains as early as 4 weeks following treatment. And importantly, both patients showed sustained and new improvements across those clinical domains at the longer-term assessments. In addition to the positive safety data, we are encouraged by the longer-term safety profile observed. Data from the first 2 adult patients showed that TSHA-102 was well tolerated with no treatment-emergent serious adverse events as of the 35-week assessment for patient 1 and as of the 19-week assessment for patient 2. We believe the safety profile and these continued improvements across multiple clinical domains, even at reduced steroid levels, in both adult patients with advanced Stage IV Rett syndrome support the durability and transformative potential of TSHA-102 across multiple genotypes of Rett syndrome and further validate our construct. Suku will discuss the clinical observations and efficacy data in more detail shortly. Now let's turn to our pediatric trial. Our ongoing REVEAL Phase I/II pediatric trial is a first-in-human, open-label, randomized dose escalation and dose expansion trial evaluating the safety and preliminary efficacy of TSHA-102 in females aged 5 to 8 years old with Stage III Rett syndrome. We are currently enrolling patients in Part A, the dose escalation portion of the trial, which is evaluating 2 dose levels of TSHA-102 sequentially. We've dosed the first pediatric patient in cohort one, evaluating the low dose of TSHA-102 of 5.7e14 here in the U.S. The Independent Data Monitoring Committee, or IDMC, recently convened to review these longer-term clinical data from the first 2 adult patients and the initial 6-week data from the first pediatric patient treated with the low dose of TSHA-102. Following review, the IDMC approved our request to proceed to dose escalation in the adolescent and adult trial, which enables us to initiate dosing with the high dose of TSHA-102 earlier than planned. This is a critical step in our development plan as advancing to the high dose accelerates our ability to further inform our clinical development and regulatory strategy for Part B of the study by at least a quarter. With cohort one now completed in our adolescent and adult trial, we plan to dose the first patient in cohort two, evaluating the high dose of TSHA-102 of 1e15 in the second quarter of 2024. Initial data from cohort two of the adolescent and adult trial is expected in the second half of 2024. The IDMC also approved dosing of the second pediatric patient in cohort one in the REVEAL Phase I/II pediatric trial. The patient has been identified and dosing is scheduled to take place this quarter. We plan to complete enrollment in the low- and high-dose cohorts of the pediatric trial this year with initial available data from the low-dose cohort expected in mid-2024, as we disclosed previously in early January. Additionally, initial data from the high-dose cohort of pediatric trial is expected in the second half of 2024. Overall, we're focused on completing dosing in Part A of both studies this year. Importantly, data from Part A will be assessed by regulatory agencies and the IDMC to provide guidance to determining final key elements of Part B, the dose expansion portion of the study, including the hierarchy of efficacy endpoints, study design and the maximum tolerated dose or maximum administered dose. Another key focus in 2023 was broadening the clinical evaluation of TSHA-102 across geographies. In our REVEAL adolescent and adult trial, we recently announced the expansion of the ongoing trial in Canada into the U.S. following our submission of the protocol to the U.S. Food and Drug Administration, or FDA. We're now focused on site initiation activities in the U.S. for the adolescent and adult trial in addition to our ongoing U.S. site initiation activities in our pediatric trial. In our REVEAL pediatric trial, we announced earlier this year that the U.K. Medicines and Healthcare products Regulatory Agency, or MHRA, authorized the clinical trial application for TSHA-102 in pediatric patients with Rett syndrome, enabling expansion of our ongoing pediatric trial in the U.S. into the U.K., and we're currently focused on site initiation activities. Additionally, we are pleased to share that TSHA-102 received Innovative Licensing and Access Pathway designation, or ILAP, from the MHRA, which is a program that's designed to accelerate the review path of novel treatments. We believe this further reinforces the high unmet medical need for patients with Rett syndrome. As a reminder, TSHA-102 has already received Fast Track designation and Orphan Drug and Rare Pediatric Disease designations from the FDA and has been granted Orphan Drug designation from the European Commission for the treatment of Rett syndrome. Lastly, we are pleased to share that we have strengthened our clinical and regulatory leadership with the promotion of Dr. Meredith Schultz to Chief Medical Officer, and Rumana Haque-Ahmed to Chief Regulatory Officer. Dr. Schultz and Ms. Haque-Ahmed will continue to report to Suku. Dr. Schultz is a board-certified licensed pediatric neurologist who is experienced in treating patients with Rett syndrome. Dr. Schultz brings more than 17 years of clinical experience and has led numerous gene therapy clinical trials for rare diseases in her career. As Chief Medical Officer, Dr. Schultz will lead the company's clinical development, clinical operations, medical affairs and safety activities. Rumana Haque-Ahmed brings nearly 30 years of experience in global regulatory strategy and product development in multiple therapeutic areas. She has been instrumental in the development and execution of our regulatory strategies for TSHA-102, including obtaining IND and CTA clearances across 3 countries, and she's led the regulatory interactions across Taysha's gene therapy portfolio. She will continue to lead the company's regulatory affairs department and regulatory interactions. Dr. Schultz and Ms. Haque-Ahmed have been instrumental to the clinical development of our TSHA-102 program, and we look forward to continuing to partner with them in their new leadership positions. With a significant focus on execution in the year ahead, we believe our team is well positioned to continue to accelerate the development of TSHA-102. As you can see, we have made exciting progress across our TSHA-102 program over the past year. The sustained and new improvements in both adult patients with advanced Stage IV syndrome, coupled with the initial 6-week clinical data from the first pediatric patient that was reviewed by the IDMC, support the therapeutic potential of TSHA-102 for a broad population of patients with Rett syndrome. Looking ahead, we are focused on generating clinical data across a broad range of ages and stages of patients with Rett syndrome in multiple geographies with multiple value inflection catalysts anticipated in 2024. We look forward to further evaluating the therapeutic potential of TSHA-102 for patients and families living with Rett syndrome. I will now turn the call over to Suku to provide more in-depth discussion on our clinical program in Rett syndrome. Suku?

Thank you, Sean, and good afternoon, everyone. I'm pleased to provide an update on our TSHA-102 gene therapy program in clinical evaluation for the treatment of Rett syndrome. Rett syndrome is a rare neurodevelopmental disorder caused by mutations in the X-linked MECP2 gene, encoding methyl-CpG-binding protein 2, or MECP2 protein, which is essential for regulating neuronal and synaptic function in the brain. This disorder is characterized by a loss of communication and hand function, slowing and regression of development, motor and respiratory impairment, seizures, intellectual disabilities and shortened life expectancy. Rett syndrome progression is divided into 4 key stages, beginning with early onset stagnation at 6 to 18 months of age followed by rapid regression, plateau and late motor deterioration. The X-chromosome inactivation and silencing of MECP2 expression that occurs randomly with Rett syndrome results in a mixture of cells that are either deficient in or express MECP2 normally. This heterogeneity in MECP2 expression is what makes Rett syndrome challenging with traditional small molecule and simple gene therapy approaches. But we believe our construct, equipped with the novel miRNA-Responsive Auto-Regulatory Element, or miRARE, can appropriately address this challenge and provide therapeutic benefit. As a reminder, TSHA-102 is a self-complementary intrathecally delivered AAV9 gene transfer therapy designed as a onetime treatment. Because of the risk associated with both under and overexpression of MECP2, we have combined high-throughput microRNA profiling and genome mining to create miRARE, a novel miRNA target panel designed to mediate MECP2 expression in the central nervous system on a cell-by-cell basis. With miRARE, endogenous microRNA, which activated in the presence of MECP2, are thought to base-pair with targets in the viral genome-encoded mRNA and ultimately decrease protein expression levels through RNA interference. Thus TSHA-102 is expected to provide the necessary function of the MECP2 protein in cells lacking MECP2 while protecting against toxic overexpression of MECP2 in healthy cells. By increasing MECP2 levels in MECP2 deficient cells and maintaining healthy levels of MECP2 output in normal cells, TSHA-102 has demonstrated the ability to produce and maintain safe transgene expression in the CNS in preclinical models. As Sean mentioned, TSHA-102 is currently being investigated in the ongoing REVEAL Phase I/II adolescent and adult trial. The trial, which was designed primarily as a safety study is also measuring prespecified efficacy measures. All efficacy data being collected in this Phase I/Phase II trial is hypothesis generating. As we continue to generate long-term data across all patients and cohorts this year, these data across measures will further inform our thinking relative to optimal primary endpoint selection for registrational study purposes. Today, we are pleased to share the long-term data from the 2 adult patients treated with TSHA-102. I will be discussing data from 2 different time points for each patient. Efficacy assessments were captured at month 6 for patient 1 and week 12 for patient 2. Safety data and clinical observations from the principal investigator were captured at week 35 for patient 1 following completion of a steroid taper and week 19 for patient 2 at decreased steroid levels compared to earlier post-treatment assessments. All these data have been reviewed by the Independent Data Monitoring Committee. We will begin with an overview of the baseline status of the 2 patients prior to treatment with TSHA-102. As a reminder, the 2 adult patients who have been treated with the low dose of TSHA-102 differ in the severity of their disease. Both patients have been diagnosed with Stage IV Rett syndrome, the late motor deterioration stage, which is the most advanced stage of the disease. However, the patients possess different genetic backgrounds and mutation types in the MECP2 gene, which manifests in dramatically different phenotypes and clinical severity. Studies have confirmed that MECP2 mutation times can be reliable predictor of Rett syndrome disease severity with more severe mutations correlating to greater motor dysfunction, loss of ambulation and higher prevalence of scoliosis. Patient 1, a 20-year-old female, has a large deletion with MECP2 gene that manifests as a highly severe phenotype. This patient's severity is evident by here clinical presentation at baseline. Prior to treatment, she was in a constant state of hypertonia with complete loss of ambulation and was wheelchair-bound. She had lost the ability to sit or stand by 8 years of age as documented in the patient's medical history. She also became nonverbal at this time. Additionally, the patient had limited body movement, requiring constant back support, and had lost fine and gross motor function early in childhood. She had barely hand function with essentially no function of a nondominant hand. She experienced frequent apnea and hyperventilation episodes and had a history of seizures. The patient's level of severity is reflected in our baseline scores across efficacy measures, including Clinical Global Impression Severity, or CGI-S, which is a 7-point scale anchored to signs and symptoms of Rett syndrome that rate the severity of the patient's illness relative to the clinician's experience with participants who have the same diagnosis. At baseline, the patient CGI-S score was 6, indicating severely ill. In contrast, the second patient, a 21-year old female has a missense mutation in her MECP2 gene that manifests in a milder phenotype. The patient presented with a milder form of disease, which is reflected in our clinical presentation at baseline. Prior to treatment, she had only partial loss of ambulation and could walk with prompting, but she experienced progress with kyphosis and bradykinesia that develop in her late teens, impacting her gait and balance, as documented in the patient's medical history. Hand stereotypies appeared at 3 years of age following regression, and she mostly held her hands firmly together. She also became non-verbal at this time. Her ability to reach and grasp objects was weak. Additionally, the patient experience frequent hyperventilation episodes and had a history of frequent seizures. Her level of severity in the baseline scores across efficacy measures is reflected in her baseline scores across efficacy measures. Her baseline CGI-S score was 4, indicating moderately ill. The key takeaway is that there are phenotypic differences between the 2 Stage IV patients, which are correlated to their genetic status. We saw a consistent pattern of improvement across key clinical domains and efficacy measures as early as 4 weeks post treatment with the low dose of TSHA-102 in both adult patients despite the differences in their genetic set of severity. As Sean mentioned, we are pleased to share long-term data showing that both patients are having a durable response. Specifically, both patients sustained improvements and demonstrated new improvements compared to the initial post-treatment assessments based on the efficacy assessments and observations from the principal investigator. Based on clinical observations from the principal investigator, both patients showed sustained and new improvements across multiple clinical domains impacting activities of daily living, including autonomic function, seizures, socialization and communication and motor skills following treatment with the low dose of TSHA-102. Let's begin with an overview of the long-term clinical observations for patient 1. Further protocol, prophylactic immunosuppressant therapy begin -- or began prior to TSHA-102 administration. The first patient's steroid taper was initiated at week 17 and completed at week 33. At 35-week post-treatment assessment, the principal investigator observed that the patient's improvements across multiple clinical domains have been maintained following completion of the steroid taper as well as the new improvements that were observed compared to earlier post-treatment assessment. Specifically, 35 weeks following treatment, the first patient demonstrated sustained improvements from an initial 4- and 6-week assessments in multiple clinical domains after the completion of the steroid taper, including motor improvements. At the patient's initial 6-week assessment, she had gained the ability to sit unassisted for the first time in over a decade and have restored movements in her legs. At week 35 following the completion of the patient's steroid taper, these improvements of sitting unassisted and restored movement in her legs had been maintained as documented by video evidence. Further, the patient sustained improvement in hand function at week 35, including the gain the ability to grasp objects with her nondominant hand and transfer them to her dominant hand for the first time since infancy as documented by video evidence. At week 35, she also showed a sustained improvement in her ability to grasp with her dominant hand. Additionally, the patient demonstrated the ability to open her hands, dissociate her fingers, scratch her nose and touch a screen following treatment. [indiscernible] loss of hand function is a hallmark characteristic of Rett syndrome and a key concern for caregivers that impacts a patient's ability to communicate and impede daily activities which ultimately limits independence. These sustained improvements in hand function 35 weeks following treatment, which are not observed in the natural history of Rett syndrome, are very encouraging and support the potential of TSHA-102 to bring meaningful therapeutic benefit to patients and caregivers. The patient also demonstrated sustained improvements in autonomic function at week 35 with improved breathing patterns, reduced breathing dysrhythmias, including less breath-holding spells, and infrequent hyperventilation compared to before treatment. As a result, she experienced a sustained improvement in sleep quality in duration through week 35. Caregivers reported that following treatment, the patients sleep through the night for the first time in 20 years. Therefore, she is much more alert during the day. Additionally, poor perfusion of the extremities is a characteristic sign in patients with Rett syndrome that is thought to result from this autonomia, meaning it's controlled by the autonomic nervous system. Therefore, it's encouraging that the patient also showed a sustained improvement in circulation at week 35 post-treatment with the patient's hands and feet restored to normal temperature and color, whereas before treatment, her hands and feet were usually color blue based on the principal investigator's clinical observations. At week 35 post-treatment, the principal investigator observed new improvements in socialization and communication since the patient's initial 6-week assessment. As of the week 35 assessment, the patient was more alert and socially interactive with increased communication of her needs using vocalization. Caregivers reported that she showed an enhanced ability to use an eye-driven communication device, which caregivers said she hadn't expressed interest in before treatment. Specifically following treatment, the patient was able to use the device much more efficiently with the -- gain the ability to activate functions on the screen of the device. Difficulty in communication, including loss of speech, is one of the most prominent symptoms of Rett syndrome and is an area -- key area of concern for caregivers as they directly interfere with the patient's ability to communicate their needs and express their interests. These new improvements observed at week 35 post-treatment are highly encouraging as alternative and augmentative communication speech output technologies activated by Eyegaze can be leveraged by patients and families with Rett syndrome as a supplement to or replacement for natural speech. We believe that the ability to communicate could give patients a sense of control and greater independence. The principal investigator also observed that the patient's seizures have overall been well controlled through week 35 following treatment at lower levels of anti-seizure medicines relative to baseline and that the patient no longer experiences unprovoked seizures. These observations are supported by data from the Seizure Diaries. Now let's turn to the second adult patient. At the 19-week post-treatment assessment, the principal investigator observed that the patient's improvement across multiple clinical domains had been maintained while the patient was on decreased steroid levels as well as new improvements that were observed compared to initial 4- and 6-week assessment. Specifically, she sustained improvement in motor skills with a reduction in hand stereotypies, which are repetitive, purposeless hand movements and a diagnostic hallmark of Rett syndrome. Before treatment, the patient mostly held her hands firmly together. Her hand stereotypies had improved for the first time since regression at age 3 at the initial 4-, 6-week assessment. Based on the principal investigator's observations and supported by video evidence, the patient display less forceful handling and her hands were more often open and relaxed through week 19. The sustained improvement in hand stereotypies at week 19 post-treatment is encouraging, and it provides new opportunities for fine motor skill learning. The patient also sustained improvements in socialization and communication through week 19 with an increased interest in social communication and activities, including increased response to spoken words and eye contact. She also sustained improvement in autonomic function at week 19 with improvements in breathing dysrhythmias, including hyperventilation, and reduced apnea spells. The patient also showed sustained improvements in circulation at week 19 post-treatment with the patient's hands and feet restoring normal temperature and color, whereas before treatment, the patient's hands and feet were usually color blue based on the principal investigator's observation. Notably, the second patient demonstrated a pronounced improvement in seizure frequency at week 19 post-treatment, a significant reduction in seizures at lower levels of anti-seizure medicine related to baseline. These observations are supported by data from the Seizure Diaries, which I will discuss in more detail later. Both patients also demonstrated sustained and new improvements across key efficacy measures following treatment with TSHA-102, which reinforces these clinical observations from the principal investigator. Let's begin with an update on the efficacy data reported at the 6-month post-treatment assessment from the first patient. The first patient sustained improvements across key efficacy measures at decreased steroid levels and showed improvement at 6 months post-treatment. Specifically, she has sustained improvement from the initial 4-week assessment in: Clinical Global Impression-Improvement, or CGI-I; Clinical Global Impression Severity, or CGI-S; Parental Global Impressions-Improvement, or PGI-I; the Rett Syndrome Hand Function Scale, or RSHFS; the Revised Motor Behavior Assessment, or R-MBA; and Seizure Diaries. CGI-I is a clinician-reported 7-point assessment of overall improvement following treatment adapted to Rett syndrome that accounts for key aspects of the disease to determine global change score. A sustained score of 2, indicating much improved, was reported at the 6-month assessment, which is consistent with the score reported at the 4-week assessment. Additionally, the patient demonstrated a sustained 1-point improvement from the baseline score of 6, indicating severely ill, to a score of 5, indicating markedly ill in CGI-S month 6, which is consistent with the score at week 4. PGI-I is a caregiver-reported assessment of overall improvement following treatment that uses a 7-point scale. A sustained score of 2, indicating much improved, was reported at month 6. The RSHFS is a clinician-reported assessment of hand function in patients with Rett syndrome, which is evaluated by an experienced independent physical therapist with expertise in the hand function of Rett patients, records them -- the demonstrated hand function in each video at 1 of 4 levels, assessing the best score for large objects, ranging from no active grasping of any object to independent grasping. The high score that can be achieved for this assessment is a 4. The first patient demonstrated a sustained improvement in RSHFS at 6 months following treatment. Although there are no changes from the baseline score of 3, indicating the ability to hold an object for at least 2 seconds in her dominant hand, she was able to increase the number of objects held from 1 to 2. Additionally, she has gained some basic grasping ability in her nondominant hand and sustained this improvement at 6 months post-treatment. At baseline, she could not hold any objects in her nondominant hand. And at 6 months, a score of 2 was demonstrated, indicating the ability to hold an object for at least 2 seconds when assisted to grasp. Again, it is very important to note that hand function improvements are rarely observed in the natural history of Rett syndrome. The R-MBA, which is a 24-question clinician-reported scale measuring disease behaviors of Rett syndrome showed a total score improvement of 1 point from the baseline score of 43 to a score of 42 at month 6. Improvements are observed in motor dysfunction and respiratory behaviors. Seizure Diaries showed that the patient had stable seizure events at lower level of anti-seizure medication relative to baseline through week 35 post-treatment based on caregiver reported medical history. Before treatment, the patient had 2 to 4 seizures per year. As of week 35, the patient's seizures are confined to periods where her entire seizure medication levels declined to below 50 micromoles per liter, whereas before treatment with TSHA-102, she required levels of 100 micromoles later upgraded to control her seizures. Importantly, the first patient also showed new improvement in the 6-month assessment in the Rett Syndrome Behavior Questionnaire, or RSBQ. In RSBQ, which is a 45-item caregiver-administered questionnaire that assesses Rett syndrome characteristics, the patient demonstrated a 30-point total score improvement from the baseline score of 52 to a score of 22 at month 6. The score was driven by improvements in hand behavior, breathing problems, general mood, repetitive face movements, nighttime behaviors, fear, anxiety, body rocking and facial expression. Now let us discuss the efficacy data reported at the week 12 post-treatment assessment from the second patient. Recall that the second patient had a CGI-S severity score of 4, indicating moderately ill, versus the baseline CGI-S score of 6, indicating severely ill, for patient 1. At week 12 post-treatment, the second patient demonstrated sustained and new improvements across key efficacy measures from the initial 4-week assessment. A sustained score of 3, indicating minimally improved, was reported at week 12 in both CGI-I and PGI-I, which is consistent with the score reported at the 4-week assessment for patient 2. The patient showed a 2-point improvement in the RSBQ total score from the baseline score of 37 to a score of 35 at week 12. Improvements observed in breathing, body rocking, facial expression, general mood and repetitive face movements. Importantly, the second patient also demonstrated new improvements at the 12-week assessment in R-MBA. She demonstrated a 17-point improvement in the R-MBA total score from the baseline score of 38 to a score of 21 at week 12, which was driven by improvements in social skills, respiratory behavior, including less frequent hyperventilation and breath holding, seizures, truncal rocking, stereotypic hand movements and/or mouthing and aberrant behavior. The patient also showed new improvements at week 19 in seizures. The Seizure Diaries showed a significant reduction in seizure events at 25% lower levels of anti-seizure medicines related to baseline through week '19 post-treatment based on caregiver-reported medical history. Relative to the baseline seizure frequency of 2 to 4 seizures per week, there has been a significant reduction in seizures post-treatment with TSHA-102. Since treatment with TSHA-102, patient 2 had a single seizure event with 17 weeks reported seizure-free as of week 19 post-treatment. There were no changes reported in CGI-S or RSHFS at week 12. However, at week 12, the principal investigator reported a sustained improvement in the patient's hand stereotypies, which are not measured in RSHFS. For the first time since regression at aged 3, the patient displayed less forceful handling and more open and relaxed hands. More data -- details on this available data can be found in our press release issued today and our Form 10-K for the year ending in December 31, 2023, filed with the SEC. Overall, we are highly encouraged by the safety profile and the durable response reported in these long-term data in both adult patients treated with a low dose of TSHA-102. The critical takeaway is that following treatment with TSHA-102, there were early improvements observed across multiple clinical domains in the 2 Stage IV adult patients with different genetic mutation, severity and phenotypic expression. And importantly, both patients showed sustained and new improvements across those clinical domains at week 35 post-treatment for patient 1 and week 19 post-treatment for patient 2. We believe the safety profile and continued improvements observed, even at reduced steroid levels, in both adult patients with advanced Stage IV Rett syndrome support the durability and transformative potential of TSHA-102 across multiple genotypes of Rett syndromes. With the low-dose cohort complete in the adolescent and adult trial, we'll focus on collecting data with the high-dose TSHA-102 to further explore the clinical impact of TSHA-102 in patients with Stage IV Rett syndrome. Based on the IDMC's review of the clinical data from both adult and the initial clinical data from the first pediatric patient treated with the low dose of TSHA-102, the IDMC approved our request to proceed to an earlier dose escalation in the adolescent and adult trial. The IDMC also approved dosing in the second pediatric patient in cohort one, the low dose cohort, in our REVEAL Phase I/II pediatric trial. Both REVEAL trials have 2-part trial design. Dose escalation from Part A will be assessed by the regulatory agencies and the IDMC to provide guidance on key final key elements of Part B or the dose expansion portion of the study, including hierarchy of efficacy endpoints, study duration and the maximum tolerated dose or maximum administered dose. Therefore, advancing to cohort two in the adolescent and adult trial will expedite our ability to inform our clinical development and regulatory plan for Part B of the studies. This year, we are focusing on completing dosing in Part A of both trials. We anticipate significant data collection in 2024 with many clinical catalysts expected in the year ahead. As we discussed in early January, we expect to report initial safety and efficacy data from cohort one, evaluating the low dose of TSHA-102 in the pediatric trial mid-2024. We also expect to report initial data from cohort two, evaluating the high dose of TSHA-102 in the second half of 2024 in both the adolescent and adult and pediatric trial. As Sean noted earlier, our efforts to expand our clinical trials remain underway, and we're currently focused on additional site activation in the U.S. for our adolescent and adult trial with the goal of expanding our adolescent and adult trial in Canada into the U.S. We are also focused on site activation in the U.K. for our pediatric trial with the goal of expanding our ongoing pediatric trial in the U.S. into the U.K. As a reminder, there are no approved disease-modifying therapies currently available that treat the root -- the genetic root cause of Rett syndrome. There is significant unmet medical need with Rett syndrome caused by a pathogenic/likely pathogenic MECP2 mutation afflicting between 15,000 to 20,000 patients in the U.S., EU and U.K. and a high burden of care associated. We are pleased that TSHA-102 recently received ILAP designation from the U.K. MHRA. TSHA-102 has also received Fast Track designation, an Orphan Drug designation and Rare Pediatric designation from the FDA and has been granted orphan drug designation from the European Commission for the treatment of Rett syndrome. Overall, we are highly encouraged by the safety profile and long-term efficacy reported in the first 2 adult patients as well as IDMC's approval to dose the second pediatric patient following review of the initial 6-week clinical data from the first pediatric patient dosed with TSHA-102. This year, we are focused on collecting data across multiple ages of patients with the low and high dose of TSHA-102 to further inform our clinical and regulatory strategy for the next phase of the study. We look forward to sharing additional progress this year. I will now turn the call over to Kamran to discuss our financial results. Kamran?

Thank you, Suku, and good afternoon. Revenue for the full year ended December 31, 2023, was $15.5 million compared to $2.5 million for the full year ended December 31, 2022, as revenue was derived entirely from our option agreement with Astellas Gene Therapies. The increase in revenue is primarily a result of Rett syndrome research and development activities performed in 2023. Research and development expenses were $56.8 million for the full year ended December 31, 2023, compared to $91.2 million for the full year ended December 31, 2022. The decrease was due to reduced research and development head count, lower research and development manufacturing expenses and a reduction in third-party research and development consulting fees, mainly related to preclinical studies and IND-enabling toxicology studies. General and administrative expenses were $30 million for the full year ended December 31, 2023, compared to $37.4 million for the full year ended December 31, 2022. The decrease was primarily attributed to a reduction in compensation expenses as a result of lower headcount and reduced corporate insurance and consulting expenses. Net loss for the full year ended December 31, 2023, was $111.6 million or $0.96 per share as compared to a net loss of $166 million or $3.78 per share for the full year ended December 31, 2022. The net loss includes a nonrecurring and noncash expense of $34.5 million related to the change in fair value from the prefunded warrants as a result of the August 2023 private placement financing. As of December 31, 2023, Taysha had $143.9 million in cash and cash equivalents. The company continues to expect that its current cash resources will support planned operating expenses and capital requirements into 2026. I will now turn the call back over to Sean for his closing remarks. Sean?

Thank you, Kamran. As you heard today, we've made significant progress in the clinical development of our TSHA-102 program. We are highly encouraged by the safety profile and durable response reported at reduced steroid levels and the longer-term data from both patients in the low dose of our REVEAL adolescent and adult trial. These continued improvements in both adult patients with advanced Stage IV Rett syndrome, coupled with the IDMC's approval to dose the second pediatric patient following a review of the initial clinical data from the first pediatric patient dose with TSHA-102, reinforced the transformative potential of TSHA-102 across a broad population of patients with Rett syndrome. Building on the momentum from 2023, we believe 2024 is poised to be a transformational year for the company. This year, we're focused on data generation across broad range of ages and stages of patients with Rett syndrome in multiple geographies with the goal of completing dosing in Part A of both trials with the low and high dose of TSHA-102 to inform the next phase of the studies. With many clinical catalysts expected in the year ahead, we look forward to providing additional updates on our progress. With that, I will now ask the operator to begin our Q&A session. Operator?

[Operator Instructions] Our first question comes from the line of Whitney Ijem with Canaccord.

I guess to limit myself to one, just -- can you help set expectations into the pediatric data midyear, and in particular, our understanding of Stage III? And I think you guys have talked about this a little bit before, but is that the disease is kind of stable, more variable and potentially some improvements in terms of the natural history? So how should we be thinking about kind of what you could show at the initial update versus maybe over the longer term in the pediatric updates as we go through the year?

Thanks, Whitney. I guess I would say that, number one, keep in mind that the pediatric patients will likely be in a severity range of CGI-S of between 4% and 6%, which is similar to what's happening in the adolescent and adult trial. And I think if you talk to the KOLs out there, you'd get very consistent feedback that that's the most appropriate severity range to study in a first-in-human trial for gene therapy with this particular disease. So I think, Whitney, to answer your question, you're going to see a bit of a spectrum of patients, right? Someone who's a 4 is going to be different than someone who's a 6. We've seen that with our first 2 adult patients here. The time to impact, it's a new population. You would like to think that you should see a relatively similar time to effect, and hopefully, initial magnitude of effect is relatively similar depending upon the severity of the disease. It's also possible that it could take longer to see change in someone that's less severe versus more severe. So if you think about a midyear readout, I would say that we dosed our first patient at the end of 2023. So we'd likely have between 4 to 6 months of data at that particular time. We've guided to dosing the second patient this quarter. So you're probably talking between 2 to 3 months of data for that patient and, potentially, early data for the third patient depending upon the timing of that particular dosing. So hopefully, that gives you a little bit of flavor of what to expect.

Our next question comes from the line of Salveen Richter with Goldman Sachs.

This is Elizabeth on for Salveen. Congrats on the data. Mechanistically, what is your hypothesis around what is driving the RSBQ improvement for patient 1 at week 25? Noting that, that score was relatively flat from week 4 to 12. And then how should we think about expectations for the particular score metric on the forward?

I can go first and Suku can jump in. But I would say with patient #1, the changes that you saw in RSBQ were primarily driven by anxiety going down, general mood improving and hand function improvement. Those are the 3 main drivers in the latest decrease in that particular scale. I would just say one potential hypothesis right now on some of the mood aspects is that -- these patients are on very high levels of steroids for a long period of time. And we'll have to see how other patients do as well. But one potential is that you're reducing the steroids, the level of irritability, the impact on sleep, just the overall mood could be improving as a result of that. Put another way, it's possible that the steroids somewhat masked benefits until they're either reduced significantly or further withdrawn. So we're quite encouraged by what we've seen in that aspect of things, and hopefully, that gives you a bit of perspective on how we're thinking of it and what we see at this juncture.

Our next question comes from the line of Kristen Kluska with Cantor Fitzgerald.

Congrats on these data updates. I wanted to ask about the sleep anecdote you shared for patient 1. So we understand that sleep issues are very common in Rett syndrome patients, but they can present pretty differently depending on the type of mutation. So can you speak more to the background expected for this patient based on their mutation? And essentially, what difficulties they were having sleeping through the night? So was there any sleep screaming or laughing or other notable effects and, essentially, what you believe is happening that you were able to see the drastic change there?

Yes. So that's an important question, because as you pointed out, many patients with Rett syndrome do have significant sleep abnormalities and sometimes they also correlated with the respiratory abnormalities that can coexist. And in this patient 1, what was observed by the parents was that this patient never ever seem to have a reasonable night sleep and always had a very disruptive night sleep, which included restless leg features, night terrors, et cetera. And post gene therapy, the feedback from the caregiver, especially the father. Was that this patient was now sleeping through the night, and that's the first time he was getting a good nice sleep. So obviously, the gene therapy itself, I think -- we're speculating, but we think it's restoring MECP2 function in the sleep centers and probably helping with many features of sleep that resulted in this patient being restored to almost a normal state. Your second question, I think, was on seizures. So patient one is thought to have about 2 to 4 seizures a year. I'm sorry, do you have a...

Yes, sorry. Sorry. No, the question was just on the differences about sleep disturbances relative to the mutations that they experience, that they have.

Yes. So this first patient had a large deletion, which resulted in a severe phenotype. But to my knowledge, I don't think the severity of the genotype is necessarily correlated with the severity of the sleep abnormalities. That correlation doesn't seem to be clear. So -- but this patient -- I mean, patient 1 had severe sleep abnormalities. And if your question also is that what is the actual pathophysiology behind it, I don't think anybody fully understands that. But all I can tell you is the clinical observation is that the gene therapy appears to have restored normal sleep patterns. Does that help?

Yes.Appreciate it.

Our next question comes from the line of Gil Blum with Needham & Company.

Let me also add my congratulations to the progress. So just one from us. Can you maybe put into context the burden experience by adult Rett patients from being on steroids on a daily basis? And are steroids ever tapered during the standards of care for adult patients during the natural course of the disease?

Yes. So that's another good question. So immunosuppression or immunomodulation, in general, is not used to treat Rett patients in a disease-modifying fashion. It has been tried in the past, using drugs like sirolimus or prednisolone or hydrocortisone, to treat Rett syndrome. But it hasn't had any positive impact on disease duration, severity or outcome. So what we're seeing in our trial though is because it's a gene therapy trial, steroids and sirolimus are being used as immunomodulatory agents to allow us to get all that initial period where there might be some theoretical risk of the treatment itself.

Our next question comes from the line of Joon Lee with Truist.

This is Mahdi on for Joon, and congrats on the quarter. We have a couple, if I may. First, could you please elaborate on the safety and efficacy of using a fixed dose for patients as young as 3 years old to adults and if you expect to achieve a comparable exposure level in the CNS of these patients?

The answer to that, I can start, would be that the overall CNS fluid volume between a 3-year old and an adult actually is very -- there's very little difference, which is why we're comfortable, the IDMC is comfortable, the regulators have all been comfortable based on the preclinical data using that fixed dose in the same -- across patient populations, essentially.

And the other question is that how do you envision a registrational trial would look like if data supports and if you think MDRI, as a measure, could be considered given the nature of the disease requiring multiple domain improvement analysis?

I would say a couple of things. As it relates to clinical trial design, I think the headline is we feel like there's multiple pathways that we can go down and multiple endpoints that are there for consideration, which is a good place to be at this particular juncture. We've always been very steadfast in our view that we were going to use Part A to get to a better informed view and that we would have a discussion with the FDA prior to starting Part B of the study if we wanted to refine endpoints and refine our trial design. So that was one of the reasons we put out a press release out a few weeks ago when we announced that the IDMC had allowed us to go to the higher dose earlier, because we think that step will hopefully provide more clarity to us relative to endpoints and potentially trial design as well. So we can't say anything declarative right now about what exactly we're going to do. I would say we're -- we continue to be very encouraged of the pathway that we're on, to be further informed in the coming quarters that can help us with the FDA. And I think in terms of the endpoints, again, we know that there's a pathway there with CGI-I and RSBQ. And there may be additional endpoints for consideration that, again, we think we'll be better informed on as we continue to step through dosing patients, particularly at the high dose. Hopefully, that makes sense.

Our next question comes from the line of Yanan Zhu with Wells Fargo.

Great. Congrats on the progress. So I was wondering since the first patient seen at the pediatric trial has gone through the 6-week safety monitoring committee evaluation, wondering is there any color from that patient in terms of improvement that could be consistent with what you are seeing in the adult trial or, in general, potential for such improvement in the pediatric population?

Really appreciate the question. I just would -- I'd go back to -- we dosed the first patient, the pediatric patient, at the very end of December. And about a week later, we put out a press release saying that we wanted to begin to disclose data on a cohort basis and that we felt that was the most appropriate thing to do versus going patient by patient. And so all I can tell you at this point in time is that the IDMC saw the initial pediatric data as well as the data that we just reported on the 2 adults. And that was -- in their calculus is as they decided that we could go to the high dose in the adolescent and adult study, and we could proceed to dosing the second adolescent patient. So beyond that, we really prefer not to comment and foresee our path forward to disclosing that data in a more fulsome manner at midyear.

Understood. If I may do a quick follow-up question on the patient 1, patient 2 in the adult data set. We can see clearly patient 1 has continued improvement or new improvement in RSBQ. Patient 2 have new improvement in R-MBA. But interestingly, the other endpoint for those patients seems to be pretty flat. Do you -- so how do you think about that? And is there a potential for the other endpoint to also improve in the future?

If you're referring to like CGI-I, I would say this -- is that what you're talking about?

Sorry. Sorry. CGI-I, I fully appreciate. Even maintenance of the prior numbers, according to our check with the doctors, that's a very, very encouraging sign to have those minimally improved ratings maintained following -- in a follow-up and also to have the much improved for the other patient maintained. Those are great achievements. I'm talking about RSBQ and R-MBA, where both patients had one score improved and the other score relatively flat. Yes, that's what I'm talking.

I got you. So in patient #1 -- so first of all, the R-MBA is administered by the clinician in the hospital. The RSBQ is provided by the caregivers in the home setting, and they ask different questions, okay? So it's a little difficult to put apples to oranges. But I would say this, we actually asked the primary investigator this same question. And what she said was that patient #1 has gotten very aware of what's going on in her surroundings. If I showed you the video from pretreatment, she was very, very -- almost like in a catatonic state in a wheelchair, really not interacting. Now she's much more aware. She's trying to communicate and vocalize. And basically, what the PI told us is she does not like going through the testing at the hospital. She gets irritated, and she doesn't want to cooperate. And at this point, she has the strength to not cooperate. So that has been driving some of the -- it's driving the score that you're seeing. She's essentially not necessarily cooperating with some aspects of the disease -- of the testing. Where in the home setting, she's getting very much a comfortable situation and she's -- the parents are seeing. The other thing I would say is that some of the improvement that I mentioned earlier in the RSBQ the patient 1 had was in the anxiety, the general mood aspect of things. That is not captured in the R-MBA. So that's one aspect there. On patient 2, her R-MBA improved significantly, and it was driven essentially by her socialization, her interest in communicating with people and also her seizures. Those were big drivers. In the RSBQ, neither of those is addressed. Neither one of those is quantified. And in the RSBQ, again, she had an elevation in anxiety and some of the night time behaviors, which again, if you think about what I said about patient 1 and steroids, that could also be the case. She has had a bit of an issue with tolerating the steroids. So hopefully, again, that gives you some perspective on those 2 things. And Suku had something to add as well.

Yes. And also for patient 2, I would highlight the seizures were decreased by 95% post gene therapy treatment. So this patient had, I think, 8 to 16 seizures a month. And other than one seizure day 13 post-treatment, the patient has had none, no new seizures. And also the use of a combination antiepileptic meds have dropped by 25%. That is a big deal from a clinical standpoint and for the parents and caregivers and from an activities of daily living standpoint. The second thing you should note is in patient 2, some of the hand function and stereotypic movements have decreased, which also makes it promising that this patient may eventually get independent functionality of the hand. And there is something else that goes on in about 40% of these patients with Rett syndrome, which is the upper and lower extremities have abnormal circulation, which means the hands and feet get quite cool and, at times, painful. And you would note in patient 2 and patient 1, that resolved post-gene therapy treatment. So other than R-MBA and RSBQ, which obviously we focus on for different reasons, these major clinical observations, I think, could be life changing in this stage of population.

Our next question comes from the line of Jack Allen with Robert W. Baird.

Congratulations on the progress. I'm looking to zoom out a little bit and take attention to the Astellas collaboration that you have. It seems like you're really developing data quite quickly, especially with the pediatric low-dose data expected in the middle of this year and the potential initial high dose data later this year. Can you remind us of the structure of the Astellas deal and how it relates to the Rett program? And what measures are in place to ensure you get a fair deal? I believe the option was fairly open-ended when that deal was struck.

Yes. I mean essentially, what Astellas has is a right to negotiate an option with us, an exclusive right that they have. There's no predetermined terms to your particular point. The option period gets triggered after a number of -- about a handful of pediatric patients have, call it, 6 months of data or so. So there's no time crunch at this particular point in time. Where Astellas has to come in and either request an opt-in or not, that's likely a 2025 topic. The other point that I want to really stress is that Astellas certainly has line of sight to things, but it doesn't -- the agreement itself doesn't preclude another party who might be interested in the program or in the company from making an unsolicited offer. That's fine. We would just have to notify Astellas of that, and they would have the ability to counter, if you will. But there's no blocking right in it. Hopefully, Jack, that gives you some perspective on that. Or did you have a follow-up?

Yes. That's great color. I actually do have a brief follow-up around enrollment. How are you thinking about enrollment in these studies and any inter patient staggers? I know your competitor has recently announced that they're extending a lower-dose cohort, and they're allowed to dose concurrent. At what point do you think you could get to concurrent dosing? And what's the current stagger between patients right now?

The current stagger is 42 days at an IDMC meeting before you can proceed to the next patient. I think that it's a bit of an art and a science. I think it's -- when you have enough data that you can make a request to remove the stagger, I think for us, a [Audio Gap] is we took the 3 patients' worth of data and said we think based on this data, we've demonstrated safety, preliminary efficacy. And based on the preclinical data, there's a rationale to go to a higher dose, and we were able to do that. So instead of dosing 3 low-dose patients in the adult study, we were able to do 2 patients and then move to the higher dose, which we think is going to be more informative to the overall program and potentially better for patients. So if you apply that logic, there would be a point in time where we would be comfortable potentially going to the IDMC and talking about removing the stagger. And that's just something we'll have to do when we feel that we've got data that we feel sufficient to support that request in an incredible manner.

We have time for one last question. Our last question comes from the line of Silvan Tuerkcan with Citizens JMP.

Congrats on the great update. I just -- I have a question about your dose. Roughly going ahead, you can double the dose faster than you expected. Can you just talk about what that means in the -- in terms of the efficacy results that you're hoping for? Do you think there could be a greater increase? Or what is your hope for the higher dose here?

I'll start and ask Suku to opine as well. But first of all, when you look at the preclinical data, there is a dose response. So you would expect there to be a greater response moving to the higher dose. What's driving that? You anticipate that by giving roughly at 75%, 80% more dose, that you'd be transducing more cells, you'd be generating more MECP2 in the cells that need more MECP2 and that, overall, you should have a more significant clinical effect than what was seen in the low dose.

That is all the time we have for questions. I would like to hand it back to management for closing remarks.

Okay. I just want to thank everyone for taking the time, and I appreciate you listening to the story. And we're eager to continue to progress in 2024 and generate additional data and, hopefully, more value-creating milestones for the investors and care for the patients. So thank you, and have a good night.

Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time, and have a wonderful day.