REGENXBIO Inc. Q4 FY2020 Earnings Call

Good afternoon, and welcome to the REGENXBIO Fourth Quarter and Full Year 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. As a reminder, this conference call is being recorded. I would now like to turn the call over to Mr. Patrick Christmas, Chief Legal Officer for REGENXBIO.

Good afternoon, and thank you for joining us today. With us are Ken Mills, REGENXBIO's President and Chief Executive Officer; Dr. Steve Pakola, our Chief Medical Officer; Dr. Olivier Danos, our Chief Scientific Officer; and Vit Vasista, our Chief Financial Officer. Earlier this afternoon, REGENXBIO released financial and operating results for the fourth quarter and full year ended December 31, 2020. The press release reporting our financial results is available on our website. Today's conference call will include forward-looking statements regarding our financial outlook in addition to regulatory and product development plans. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ from those forecasted. Any such forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties.

Thank you, Patrick. Good afternoon, everyone, and thanks for joining us. I hope that everyone is staying safe and healthy. On today's conference call, we'll provide a recap of our recent progress, advancing and expanding our NAV technology platform, and discuss expected future milestones for the company. Steve and Olivier have joined us to discuss our pipeline, and Vit will provide an update on financial results for the fourth quarter and the full year 2020. We will then open up the call for questions. Throughout 2020 and already in 2021, I believe we're making great strides toward achieving our goal of realizing the curative potential of gene therapy. We've advanced and broadened our internal pipeline of programs in several important ways. I'll touch on just a few pipeline highlights before turning the call over to the team. Starting our first pivotal program is an important and exciting milestone that we're proud to achieve. This program is to evaluate our gene therapy candidate for Wet Age-related Macular Degeneration, a retinal disease that is a leading cause of total and partial vision loss, affecting more than 2 million people in the United States. Our treatment called RGX-314 is a novel one-time gene therapy that is designed to work by delivering therapeutic genes to the retina of a patient to interrupt the pathway of the disease. The sub-retinal delivery technique that we are using in our pivotal program is an established and targeted route of delivery for gene therapy for retinal disease. Little program builds on data that we have seen from our ongoing Phase 1/2 study, where we have observed that RGX-314 has been generally well-tolerated, and durable effects of the one-time gene therapy are now out to three years after dosing patients in the trial. In 2020, we also initiated new clinical trials evaluating RGX-314 using a different delivery approach. These trials are the first to evaluate the delivery of any gene therapy to the super parietal space of the eye. This form of delivery is a non-surgical approach that can be administered in an office setting, and potentially allow for targeted delivery to the retina. Overall, our RGX-314 programs are evaluating these two routes of administration because we believe we can provide these one-time treatments to the largest population of patients with Wet AMD, and diseases of similar origins like diabetic retinopathy, by providing access to gene therapy in all settings of care. Our RGX-121 candidate is being studied as a single administration treatment for neurodegeneration associated with Hunter syndrome. This treatment is designed to work by delivering a new gene to patient cells in the brain's central nervous system. RGX-121 is administered directly into the cerebrospinal fluid. We've shown evidence of consistent biomarker reductions and continued neurocognitive development for patients in the RGX-121 trial. And we're encouraged by new data suggesting that after treatment is delivered to the cerebrospinal fluid, it may be able to address disease in patients in other parts of their body, including data from patients who were not treated with standard care enzyme replacement therapy. We also recently announced the development of our RGX-202, a potential single administration gene therapy for the treatment of Duchenne Muscular Dystrophy. Olivier has been spearheading the development of this program, which is based on a novel advanced microdystrophin construct. He'll provide further details, but we're excited to bring this program forward this year. In addition to our pipeline progress and potential, we're well-capitalized with the resources to achieve our next planned milestones. We have completed two recent transactions that have added over $400 million to our balance sheet, enabling us to continue to advance our programs and support investment in our manufacturing platform and facility. Overall, I wish to express my sincere appreciation, especially this year, from me and the REGENXBIO leadership team to our dedicated employees, clinical investigators, partners, and most importantly, patient communities for their unwavering support. With that, I'll turn the call over to Steve for a more detailed update on the active clinical programs.

Thanks, Ken. I'll begin with our pivotal program, RGX-314 for the treatment of Wet AMD, which we announced in January. Our End of Phase 2 meeting with the FDA was primarily focused on establishing the pivotal program design, which we believe will support a potential BLA filing in 2024. The pivotal program is expected to include two randomized, well-controlled clinical trials to evaluate the efficacy and safety of RGX-314, and we expect to enroll approximately 700 patients in total. We have already begun enrolling patients in the first trial named ATMOSPHERE, for RGX-314, using subretinal administration. The key design elements of the trial were informed by data from our Phase 1/2a dose escalation trial of RGX-314. ATMOSPHERE is expected to enroll approximately 300 patients across two RGX-314 dose arms, versus ranibizumab, and will evaluate non-inferiority to ranibizumab, based on the change from baseline in Best Corrected Visual Acuity at one year. We intend to initiate our second pivotal trial in the second half of 2021, which is expected to be designed similarly to ATMOSPHERE. We recently presented additional long-term data from our Phase 1/2 trial of RGX-314 for the treatment of Wet AMD, and the long-term follow-up study demonstrated that RGX-314 continued to be generally well-tolerated across all dose cohorts. Patients have demonstrated durable treatment effects up to three years after one-time dosing of RGX-314. In our rare disease portfolio, we are pleased with the continued progress and recent expansion of our gene therapies targeting rare genetic diseases and look forward to further advancements in 2021. We plan to evaluate a higher dose of RGX-121 in Cohort 3 and expect to begin enrolling patients in this cohort in the first quarter of 2021.

Thank you, Steve. In January of 2021, we announced the development of RGX-202, a one-time gene therapy for the treatment of Duchenne Muscular Dystrophy. DMD is caused by mutations in the DMD gene, which encodes dystrophin. Without dystrophin, muscle degenerates and becomes weak, eventually leading to loss of movements, the need for breathing support, cardiomyopathy, and premature death. RGX-202 is designed to deliver a novel micro-dystrophin transgene, equipped with an extended coding region of the C-terminal domain found in naturally occurring dystrophin, which we believe can bolster key cell signaling pathways and muscle membrane integrity, leading to improved muscle strength and resistance in patients with DMD. We're currently completing IND enabling studies and expect to submit an IND to the FDA in mid-2021.

The construction of our new corporate research and cGMP facility continues as planned. We expect to move into our new offices in the coming months, and the new production facility is expected to be fully operational next year. The cGMP facility is expected to allow for the production of NAV vectors that scale up to 2,000 liters using our platform suspension cell culture process.

Thank you, Ken. REGENXBIO ended the year on December 31, 2020, with cash, cash equivalents, and marketable securities totaling $522.5 million, compared to $400 million as of December 31, 2019. The increase was primarily attributable to gross proceeds of $200 million received from the monetization of our royalty rights. Revenues were $154.6 million for the year ended December 31, 2020, compared to $35.2 million in 2019. The increase was primarily attributable to Zolgensma royalty revenue, which increased by $40.8 million in 2020. Research and development expenses were $166.3 million for the year ended December 31, 2020, compared to $124.2 million in 2019. The increase was primarily attributable to personnel costs and expenses associated with manufacturing services and conducting clinical trials for our lead product candidates. Net loss was $111.3 million for the year ended December 31, 2020, compared to a net loss of $94.7 million in 2019. On January 12, 2021, REGENXBIO announced the closing of an underwritten public offering of 4.260 million shares of its common stock at a price of $47 per share.

The progress we've made at REGENXBIO throughout 2020 has been significant and has brought us closer to bringing our therapies to patients in need. We look forward to further advancing the entirety of our internal pipeline and supporting our capabilities for that mission.

Thank you, Presenters. Your first question comes from the line of Geoff Meacham with Bank of America. Your line is open.

Hey guys. This is Alex on for Jeff, thanks for taking our question. And congrats on the progress in 2020. I have one question on the design of the Phase III study for 314. Is there a range of change in visual acuity expected based on the published studies for the control arms? Would you expect Eylea to perform slightly better than Lucentis in additional patients in the second study?

Thanks, Alex. Steve, I think you can probably best handle the powering question about vision for the Lucentis Eylea control arm.

Sure. Great. Hey, Alex. Yes, great question. It's one of the benefits of drug development in this space, where there's a plethora of historical data, including very well-controlled trials with active control arms. We took that into account in terms of thinking of the powering.

All right. Your next question comes from the line of Matthew Harrison with Morgan Stanley. Your line is open.

Hello, everyone. This is Kostas on for Matthew. Two questions from us on the RGX-202 program. One is, what do you need to do prior to the IND filing in mid-2021? The second one is around the improvement in the micro dystrophin transgene that you described. Can you please give some color around how do you expect these improvements to differentiate in clinic versus other investigational treatments?

Thanks, Kostas. Olivier, this sounds like a great question for you.

Yes, great question. Thank you. So before we file our IND, we're finalizing the preclinical data package. We're also in the final phases of designing our clinical trial. We were having a micro dystrophy which is slightly bigger than the other micro dystrophins out there being tested in the clinic. This extra domain allows for recruiting additional proteins at the membrane, which is key to the full function of dystrophin.

Thanks, Olivier.

Your next question comes from the line of Esther Rajavelu with UBS. Your line is open.

Hey, guys. Thanks for taking my question. Can you talk about the BCVA OCT distinctions between Cohort 3 and Cohort 4? It looks like Cohort 3 had better BCVA but not OCT.

Yes, I can take that one. So, yes, at angiogenesis, we were excited to present the latest results we had in terms of 1.5-year follow-up and the three-year data for Cohort 3.

Thank you. Your next question comes from the line of Gena Wang with Barclays. Your line is open.

Hi, this is David on for Gena. Thanks for taking my questions. Could you remind us the retreatment criteria for your Phase III trial design?

Sure. Going into our controlled Phase III program, we felt it was important to have a standardized retreatment criteria. Our retreatment criteria for our pivotal study are a worsening in visual acuity of at least five letters compared to the average of the prior two visits, or a decrease of ten letters compared to the best prior visit.

Your next question comes from the line of Mani Foroohar with SVB Leerink. Your line is open.

Hey, good afternoon. This is Rick on line for Mani. Can you comment on any potential learnings from the clinical readout of your competitor and if it helped inform any aspect of trial design for your upcoming trial?

We're not going to comment on data from someone else's study. We think our robust preclinical program will inform our trial design.

Thank you. There are no further questions at this time. I'd like to turn the call back over to Ken for closing remarks.

Thank you very much. We look forward to providing further updates soon and throughout the year. Have a great night.

Ladies and gentlemen, this concludes today's conference. Thank you for your participation and have a wonderful day. You may all disconnect.