Conference Transcript - RGNX 2026-09-16

Judah Frommer, Analyst — Morgan Stanley

Thank you. Good morning, everyone. Welcome to Day 3 of the Morgan Stanley Global Healthcare Conference. We're very excited to kick off with the Regenexx team. We have Karen, Mitch, and Steve with us. Just before we get started, I'm going to read a quick disclosure. For important disclosures, please see the Morgan Stanley Research Disclosure website at www.morganstanley.com forward slash research disclosures. With that, I'm Judah Frommer, one of the SMID Biotech Analysts. Like I said, we have Regenexx, and it's been an eventful year for Regenexx. the coming 12 months will certainly be exciting. But maybe before we dive into the program, maybe give the audience a quick intro to the company, your gene therapy platform, for those who may be a bit less familiar. Sure.

Curran Simpson, COO

We've been in AAV gene therapy for 15 plus years at this point. Our base technology is based on AAV8 and AAV9 as the capsids that we've put into clinical studies over time, and I think in the first few years, mainly did a lot of out-licensing of the technology, and that's one of the programs that came from that was Zolgensma, so a long lineage of success in scaling these technologies up. About 12 years ago, we decided to internalize programs and develop our own, and now we sit here today with a retina franchise that's got a significant partner with AbbVie and some late stage data coming soon. And then the rare disease side, which I think our primary asset is the Duchenne program, RGX202, alongside the Hunter program as well. So a lot going on. And I feel like we're just at the last edge of late stage development, hopefully heading into commercialization next year. Okay, great.

Judah Frommer, Analyst — Morgan Stanley

So maybe let's start with 202, the gene therapy for DMD. You're currently working on a BLA submission. So can you tell us how your gene therapy differs from others that are approved or in development in this space?

Curran Simpson, COO

Yeah, I think there's some significant differences. We went into the program several years back with the idea of a differentiated product. I think the primary, from a molecule standpoint, it's the addition of the C-terminus to the microdystrophin, and the C-terminus, all the way back to Elevitus' ADCOM, you can see FDA referencing that addition as making microdystrophin more like natural dystrophin. Our preclinical studies show a differentiation in basically muscle repair because of that C-terminus, and so that was incorporated. I think also two other key elements of it are a very modern manufacturing process. We can make very significant quantities of the product with a future low cost of goods, and most importantly, 80% full capsid, so very high purity as well. And then the last piece that Steve can certainly speak to later is the immune suppression regimen. So that's what allows us to deliver the maximum dose safely and gives patients, we think, the best opportunity for benefit.

Judah Frommer, Analyst — Morgan Stanley

Great. And the BLA submission would be for accelerated approval, supported by data from Affinity Duchenne. You reported top-line results from that study earlier this year. What did we see on the surrogate endpoint in that study, and how consistent was microdystrophin expression across patients?

Curran Simpson, COO

Yeah, I think we're showing a couple of areas of significant differentiation. Certainly in patients that are, I'd say, seven and older, we're seeing levels of microdystrophin four to five times greater than what was shown previously on Elevitus. And then I think on the consistency side, 80% of the patients have been measured to have 40% or more microdystrophin as a percentage of normal. And so we feel like the delivery and the methodology we're using is giving people the maximum chance and significant levels of biomarker. One other aspect of that is very high vector copy numbers. And what do we think that's important for is long-term durability. And, of course, that takes time to adjudicate and see if that manifests in the clinic, but we're really hoping that that leads to the ability to treat young patients and sustain that benefit longer.

Judah Frommer, Analyst — Morgan Stanley

And maybe just remind us of the range of ages that were enrolled in Affinity.

Curran Simpson, COO

Yeah, we're enrolling one and older. We've dosed patients that were 12 at the time of dosing, so we've got a really broad range. And interestingly, in the recruitment of the Pivotal study, a pretty balanced level at each age group, so one to four, four to seven, and seven and older, a nice balance across all three. So we can see, because there is an age dependency to the manifestation of the disease, we can see, you know, the clinical benefit more pronounced in the older children.

Judah Frommer, Analyst — Morgan Stanley

Okay, great. And you reported a statistically significant correlation between microdistribent expression and changes in NSAA. So maybe just walk us through that analysis and its significance. You know, we can get into the various analyses used, such as CTAP. Great. I'll let Steve cover that.

Steve Pakola

Sure. Thanks. So, you know, as some backdrop, correlation of a surrogate biomarker to an actual benefit or a functional outcome measure is one of the key central tenets that you can think of for accelerated approval. And there's a historical reference point, if you think of a Levitus, where we know from the adcom, the briefing book, and the discussion that that was one of the aspects that was an issue for the review team in that, yes, with certain types of cuts, there was some potential correlation, but it was a very weak correlation. And the FDA really called that out, and actually in the label that was finally approved, it specifically points out the lack of demonstration of correlation. So one of our goals, of course, from all of the differentiation that Curran mentioned was to have translation into functional benefit, and then also the stronger benefit you have, the more likely you can actually show that correlation. So we've always had that in our analysis plan right from end of phase two meeting, both, of course, the primary endpoint and the key secondaries, but also correlation. So at top line, since that was the top line time point with the N of nine subjects, we did the correlation analysis with an SAA and, in fact, saw a highly statistically significant correlation. But I think what was particularly telling was how strong that correlation was. The correlation coefficient was about 0.9, which is quite remarkable, I think, for any surrogate. So for us, we feel like we're ticking all the boxes for what you would want to do to go in with a package for accelerated approval.

Judah Frommer, Analyst — Morgan Stanley

Okay, great. And maybe just walk us through the observed correlation utilizing the CTAP-predicted values. Could CTAP provide support from a regulatory perspective, or is FDA more focused on external controls with propensity score weighting? This seems to be a topic of conversation in this space.

Steve Pakola

Yeah, so our pre-specified from the beginning has been propensity score weighting, consistent with precedent. We have thought that totality of evidence is very important to add more confidence in the robustness of any finding. So CTAP is also something we look at, and it's actually one of the things we raise with the FDA, not to change anything as far as the primary and the key secondary, but really to have an additional way of assessing the actual change from baselines that we see on NSAA, since CTAP is really a recognized way to actually evaluate that. Okay, great. And we've seen, as hoped for, very consistent findings across propensity score weighting and CTAP.

Judah Frommer, Analyst — Morgan Stanley

Okay, perfect. And we've seen safety become a significant overhang for the approved gene therapy, certainly. But maybe just walk us through safety comparison for 202 versus the approved therapy or others. And maybe, you know, we can talk about the immune modulation measurement at the same time.

Steve Pakola

Sure. So I think a lot of what Curran mentioned was not just differentiation on efficacy, but also safety. And you mentioned that's been a very big overhang in the space, given the unfortunate deaths that have occurred. And one of the historical aspects of those is that there were those severe fatal liver failure cases, but those really were presaged by very high liver injury rates, approximately 40%. So from our standpoint, one aspect was, well, let's have higher purity, so much higher purity in terms of full capsid. And Curran mentioned the preclinical data where we saw definitely a dose response going from 1E14 to 2E14. So I think we, and really the field, have always wanted to get to that optimal dose, but you've got to be able to do it safely. And we know the community, they have one shot at gene therapy for their child. So they wanted to take the best swing at that shot. So for us, safety and being able to get to that optimal dose preclinically, So the higher purity, and also we implemented a proactive immune regimen, which included steroid, sirolimus, and ecolizumab. And that's important because we're specifically targeting the key safety issues that exist in the space, so complement activation and, of course, liver injury. And importantly, we've had that from the very beginning. So all our patients have had that now, over 60 patients between our pivotal and confirmatory. So I think that allows the FDA and the clinical community to really consider that whole data package, not just for efficacy, but for safety. And we're seeing that safety benefit translate in the clinic, where we have less than a tenth, literally, of the liver injury rate that's been seen with existing therapy. So that, combined with the functional results that we're seeing that Curran mentioned, is showing that translation of theoretical preclinical differentiation into the clinic.

Judah Frommer, Analyst — Morgan Stanley

Maybe just to follow up on that, maybe a year or two ago we sensed some hesitation around serolimus specifically. in that modulation regimen, but clearly there's more comfort with that product today. I mean, maybe just talk about the evolution and maybe how others have adopted a similar regimen.

Steve Pakola

Yeah, so we were ahead of the field in thinking about it this way and wanting to make sure we had the best safety and the best benefit risk. We've seen others follow, so I think that gives a lot of validation, both within this therapeutic area and others. And at the beginning, you know, I have to say centers hadn't done this, so it was an open question. But the nice thing about doing a trial and expanding to 20-plus centers is you actually get to see how it works, and most importantly the clinicians and their practice setting and the patient families get to see how it's working. And what we saw is a first patient would be treated at a center, and they'd see there was no issue, and then they'd actually pick up. So we'd see on an individual center, pick up. The other interesting thing is going through this experience, not only is there the potential benefit-risk benefit to having this immune modulation standpoint, But interestingly, the overall feasibility, if you look at the net effect, it actually can be better because, yes, up front you're giving these short-term events, but if you're preventing liver injury and complement-mediated activity, without that you're having patients who need extra blood draws when they have abnormalities that are complement activation or if they have LFT increases, you've got to see them more frequently and they're going to have to stay around the center longer. So it's actually a very favorable tradeoff once investigators actually see that balance.

Curran Simpson, COO

I think one thing on safety as well, when we last showed FDA our data, it was in 2024 in our end of Phase 2 meeting. We're planning a pre-BLA meeting at the end of this year, And in that case, we'll have 63 patients on safety, so a much larger data set that will support, we think, a broad perspective on safety and, you know, just a much higher end. We're excited about that.

Judah Frommer, Analyst — Morgan Stanley

Okay, great. So maybe just touching on that, you know, so like you said, expecting to submit to BLA early next year, I believe. So, you know, how many patients' worth of data does FDA want to see, you know, like you said, 60-ish patients for safety? How many patients might have 12-month functional data for the filing?

Curran Simpson, COO

Yeah, so we have roughly 63 patients on safety. We've got the 30 that were in the pivotal study with biomarker data. And then on function, I'd say roughly half of those patients will be at 12-month assessment, give or take a few. And I think that's the key on the timing is the CMC module is the one that will be ready last, but we can take advantage of that with our clinical data and literally give the most recent data cut as part of the filing. So we think that will enhance the ability for FDA to review that.

Judah Frommer, Analyst — Morgan Stanley

Okay, great. And there's been some regulatory surprises and pivots in rare disease under the current administration. So maybe just talk about your level of confidence in the accelerated approval pathway, you know, 202's profile in your FDA interactions. I guess within those, what makes you optimistic about the potential here?

Curran Simpson, COO

Well, I think just our experience, excuse me, with the Hunter program really shows that we received a CRL earlier this year, suggesting we run a different style trial with an RCT-based study, and then appealed that and ended up being asked to file off the existing data set. So I think that's a very concrete example of a single-arm study being accepted by FDA for review. We see other examples recently as well. And we see direct quotes from Kareem McHale supporting regulatory flexibility. So I'm super optimistic that we're on the right path, both our data supporting it and the FDA moving towards that. They know that there's a huge unmet need still in Duchenne, and I think that will drive it. Okay, excellent.

Judah Frommer, Analyst — Morgan Stanley

And you've completed an enrollment in the confirmatory study, which should help give the agency a little more comfort. Maybe just remind us the design of that study and when we can see a readout from the confirmatory.

Steve Pakola

So, importantly, that is a confirmatory. study, and it's always been in there in our protocol and what we had in there from the time of the end of phase two meeting. So really not intended for any kind of statistical assessment at the time of AA since we know longer follow-up and more patients are needed for that. So 30 patients enrolled in open-label approach with the typical functional assessments of NSAA and the three main time function tests with a look at function over time, but with a primary endpoint of two years. And I think the other aspect is we have greater than 60 for safety, but we do know that if you're going to get those typical safety events with gene therapy here, you tend to see it with complement activation in the first month or so and with liver injury in the first several months. So that's really an advantage because with all of our greater than 60 patients, we'll be far enough out to be assessing that even at the time of the AA submission.

Curran Simpson, COO

I think with an AA approval in 2027 you know we dosed our last confirmatory study patient in April of this year right oh right go out two years that there won't be a big lag between the two I think is and then I think that will be helpful for the FDA discussions okay great and and then you're also planning on initiating a placebo-controlled study and in the first half of the year intended to support a global submission so has FDA expressed any interest in this kind of study?

Judah Frommer, Analyst — Morgan Stanley

You know, I figure it'll be some time before we see data from that, but could that come into play with the U.S. submission, do you think?

Curran Simpson, COO

I think pretty much in any communication with FDA, we've had a mention of an RCT-based study. I think that the difficulty of that in Duchenne is known with a product on the market. This is really more targeting EMA and their requirements. I'm sure it will be a consideration as part of the total regulatory plan and a positive one, and we're looking forward to starting the study up. It'll be in recruitment by the time we're sort of at a mid-cycle review, so I think that will help.

Judah Frommer, Analyst — Morgan Stanley

Okay, great. And maybe just last one on 202 before moving to retina, but you've got it to a potential U.S. launch, right? With AA, you could be on the market in the back half of 27. So how many patients do you think could be addressable with 202 at that time and maybe just remind us from a manufacturing standpoint, many doses you could have ready at time of approval. Yeah, it can work backwards.

Curran Simpson, COO

So we can produce 2,500 doses per year in Rockville in our in-house manufacturing capability. We think, you know, the prevalent market is actually growing. Levitas is being dosed below the level of incidence. So I think if you look at the ambulatory population, I've heard estimates in the range of 5,000 patients. A subset of that would be eligible for RGX202, and I think a very significant subset of them. So we expect to have hundreds of doses available at launch, and we're actually, in fact, already building that inventory now.

Judah Frommer, Analyst — Morgan Stanley

So maybe just switching to 314, the anti-VEGF gene therapy for retinal diseases. So you have top-line data, phase three data coming in the fourth quarter for subretinol, 314, and wet AMD. So before we get to that readout, maybe just talk about the opportunity for a gene therapy in VEGF-mediated retinal disease. Speak to that.

Steve Pakola

Sure. So retina has been a great field to be in over the last couple of decades, lots of advances. Really, the majority of those have been with anti-VEGF. And I think the advances show where the unmet need is, which is, yes, anti-VEGF works, but if you have to give it a lot in the real world, patients simply aren't getting what they need. And that's why we've seen, even with incremental benefits, like going from Lucentis to ILEA, going from ILEA now to Babismo and ILEA HD, where these are being rewarded with blockbuster status. So the retina community and patients are showing how important even a few weeks to a month or two of extension of the durability is. So right from the beginning for us, you know, if that's a single or a double, a real home run would be a one-time treatment that can dramatically reduce injection burden. And even in a proportion of patients prevent the need for injection. So I think the marketplace is bearing out, validating why this is such an opportunity for us and AbbVie and why they're excited about this space.

Curran Simpson, COO

We're planning ahead of data later this year, October 20th, a day dedicated to Suravec. And you won't have to listen only to us. There will be KOLs there that have years of experience with the program that we'll talk to, where does this sit in the current standard of care? We're super excited. It's been a long road to get here, but we were just out at AbbVie a week and a half ago talking to their commercial team, and they're getting the tools ready for the launch and beyond. So it's a very exciting time.

Judah Frommer, Analyst — Morgan Stanley

So maybe just on, you know, the phase three, just walk us quickly through design of the program and maybe a bit on powering. And what are the non-inferiority margins? Are they the same in the U.S. and ex-U.S.?

Steve Pakola

Sure. So to start, this is the largest gene therapy program that's ever been executed. So that right off the bat gives us a lot of confidence relative to other programs that are looking to address durability in wet AMD. So we definitely wanted to power these studies very well. And AbbVie, of course, did as well for their interest in a global opportunity. So that allowed us to go with very big studies and also go globally, which was important to AbbVie, and I think also the generalizability of the results. So a lot of de-risking in the design of these studies because there's a long history of treatment of wet AMD and non-inferiority design. So that's exactly the approach that we have. Two pivotal studies, both non-inferiority designs to on-label repeat anti-VEGF, in one study, Lucentis, and the other, ILEA, and ILEA being the global program. So this is non-inferiority on change from baseline and best corrected visual acuity. The key on that is what non-inferiority margin delta you go with. So in both studies, that's 4.5 letters, and that's recognized in the space. And we've met with the MA previously, so we have general alignment on this. I think they'll also look at 4.0 in the reality, So I think there'll be some sense of the totality and the consistency of the studies. So, you know, I think very de-risk when you think of the size of these studies and the traditional ways of powering the study.

Judah Frommer, Analyst — Morgan Stanley

And maybe just as we get closer to that top-line readout, just a sense of kind of what success could look like. Is it being, you know, statistically significant on that BCVA? And, you know, maybe just remind us how safety is trended in this study. Obviously, a big focus in retinology and therapy, given what we've seen from other programs.

Steve Pakola

So, you know, on the first question, of course, hitting the primary endpoint with statistical significance is key. But that's really only part of the goal and the value proposition. It's to do that even with a reduction in injection burden. And that bar, the minimal bar we find and AbbVie finds in each of our independent assessments with the community and working together on this is you want to see over 50% reduction in injection burden. So that's sort of, frankly, the bar. But our goal, of course, we hope to see greater than that. One of the benefits we have is that we've done a lot of, not only do we have these large pivotals, but we've done various studies, even beyond the first in human study, which in that study we saw very good durability, but we have other studies like pharmacodynamic bridging study that allowed us to get to the commercial-ready product. We also have bilateral dosing studies, which is one of the benefits of compartmentalized delivery. And in those studies, we see, you know, 70% plus reduction. So you can kind of think somewhere in that range as a success plus hitting the primary endpoint.

Judah Frommer, Analyst — Morgan Stanley

And then just on safety that we've seen thus far, you know, Adverum, you know, comes up less today than it did previously. But what have we seen on the inflammation front?

Steve Pakola

Yeah, and that's one of the, on top of efficacy, that's one of the other big reasons we chose subretinol. given the historical issues with non-local administration where you can have off-target potentially very significant safety issues. And we have not seen immune-mediated responses or inflammatory responses. And that's also important because that's in a setting where we don't have to give additional supplemental immune suppression, which, you know, in these indications, retina specialists in 80-plus-year-old patients, you don't want to add that burden on where if you're compliant, then you're going to have side effects of the steroids. If you're not compliant, then you're going to potentially have the inflammatory response in the real world. And we've gone through the pivotal study, of course, They're just approaching all the patients, reaching the final one-year time point and DSMB, independent DMC, as you'd expect, and no issues.

Judah Frommer, Analyst — Morgan Stanley

And maybe just walk us through the commercial aspects of subretinal versus going intravitrially, which some other gene therapies are doing. I guess what has been kind of provider and market response to subretinal as the delivery?

Curran Simpson, COO

Yeah, we think there's a meaningful place. You know, the trectomy procedure itself, there's, what, 500?

Steve Pakola

Over 500 virgins that we've trained on this.

Curran Simpson, COO

So we've got broad coverage and ability to dose. We own the bulk manufacturing responsibility for the program, and Abby is managing the fill finish aspect of that under their umbrella. So I think we are now just starting up the joint commercial team. We think payer response to this will be very positive. One thing that was really remarkable was the uptake in Europe when we started opening sites there. So I think this is not just the U.S. only, although that's obviously a huge market, but a global opportunity. So we're excited, and I think one thing that will play into commercial viability is data. we just released that shows five-year durability on the program that's beyond what we might have expected and obviously very welcome. Got it.

Judah Frommer, Analyst — Morgan Stanley

Okay. And you mentioned the excitement from your partner. You recently initiated your study in DR, Navigate, which I believe unlocked a milestone as well. So maybe just talk a bit about the opportunity in diabetic retinopathy relative to wet AMD, you know, and maybe loop in the decision to administer supracoroidally there.

Curran Simpson, COO

Yeah. So I think in this case, right from the beginning, we knew that patients wouldn't adopt a subretinal approach. They're asymptomatic. And the history with approved products with little uptake is that people don't want monthly injections. So I think it is a perfect fit for gene therapy, and our suprachoroidal program advanced a couple of years behind the subretinal program, but the first indication that we've seen proof of concept in was VR, and so we were able to get that study up and running. It generated a $100 million milestone, and I would say just early signs on recruitment are extremely robust. There's a lot of patients out there. You may want to talk Talk about just what type of patients we're going after in the treatment.

Steve Pakola

Yeah, so these are moderately severe to severe NPDR patients before they develop the site-threatening complications of DME or PDR, and that's really the big unmet need for the reasons Curran mentioned, that we know anti-VEGFs work there, and they're even on label, but virtually nobody's signing up for this. given the status of the patients at that time. But if you had an in-office one-time treatment for this set of patients, just to give some context, if you look at the severe and PDR patients, they have a 50% chance in a year of advancing here. So the ophthalmologist and retina specialist can literally show them the picture showing their disease and tell them the risk that they're at. And I think, you know, we talked about the competitive advantages in wet AMD. Here, it's just wide open because you really need a one-time injection. People aren't going to sign up for repeat injections.

Curran Simpson, COO

Right. And in this case, we're showing data out two and a half coming up on three years. So, again, good durability in a different compartment of the eye.

Judah Frommer, Analyst — Morgan Stanley

Excellent. And I want to make sure we touch on hunters and one-two-one. So I guess maybe recent feedback from KOLs or elsewhere regarding the MRI findings and what the path forward could look like here.

Curran Simpson, COO

Yeah, this one is quite perplexing in the sense that as part of the clinical hold on 121 and 111, we are doing imaging of all the patients that were treated in the study, and some of these patients were treated six years ago. So we've been working to find them. Some of them live ex-US, and that's been a bit of a challenge. We image both the brain and the spine, and in the spine we have findings that when we talk to KOLs, they say, I haven't seen these, but I haven't looked for it. So it's very unusual to have a contrast MRI on the spine of these patients. So we're in the process now of looking at the long-term data that we have in hand, which is pretty limited right now, and we need to image all of the patients. But I think we can see from FDA's communications about the hold that I think they're taking a very logical step towards us, working with us on resolving this. This could turn out to be a natural history and a finding that is common when you image in that manner. That all needs to be figured out, And it's probably going to take us six to nine months to get to a point where we have the full data set to evaluate. But I think really importantly, the kids are doing very well. They're asymptomatic. And if you think about the difficulty of that disease and the morbidity that's with it, then I still think this is something that, you know, in a few months we might have a different answer and a better outlook on moving forward.

Judah Frommer, Analyst — Morgan Stanley

And maybe we just round out with, you know, remind us of Cash Runway, what's funded with the Cash Ave on hand. But, you know, I think there are also additional sources of potential non-dilutive capital that we could expect, maybe some additional milestones. So maybe if we could just walk through those aspects.

Mitchell Chan, CFO

Yeah, absolutely. So our Cash Runway right now will get us to Q4 of 2027, which is very important. is well past the key catalyst for both 314 as well as 202 and well past the regulatory fronts. As you have mentioned, it does not include additional non-diluted financing. Upon regulatory success and milestones on 314, that will come with additional ADV payments for us. That will certainly get us into 2028. So with all that in mind, that's funding all our pre-commercial effort for both 314 as well as 202 as we speak. And once we get into 2028, we could actually have two potential commercial products. So commercial revenue will certainly replenish our balance sheet.

Judah Frommer, Analyst — Morgan Stanley

Okay, excellent. With that, we're just about at time. So thank you very much for the time today, guys. Thanks for having me. Thank you.