Taysha Gene Therapies, Inc. Q2 FY2022 Earnings Call

Greetings. Welcome to the Taysha Gene Therapies Second Quarter 2022 Financial Results and Corporate Update Conference Call. At this time, all participants are in listen-only mode. Following management's prepared remarks, we will hold a brief question-and-answer session. As a reminder, this call is being recorded today, August 11, 2022. I'll now turn the call over to Dr. Kimberly Lee, Chief Corporate Affairs Officer. Please go ahead.

Good morning, and welcome to Taysha's Second Quarter 2022 Financial Results and Corporate Update Conference Call. Joining me on today's call are RA Session II, Taysha's President, Founder and CEO; Dr. Frederick Porter, Chief Technical Officer; Dr. Suyash Prasad, Chief Medical Officer and Head of R&D; and Kamran Alam, Chief Financial Officer. After our formal remarks, we will conduct a question-and-answer session and instructions will follow at that time. Earlier today, Taysha issued a press release announcing financial results for the second quarter ending June 30, 2022. A copy of this press release is available on the company's website and through our SEC filings. Please note that on today's call, we will be making forward-looking statements, including statements relating to the safety and efficacy and the therapeutic and commercial potential of our investigational product candidates. These statements may include the expected timing and results of clinical trials for our product candidates, our expectations regarding the data necessary to support regulatory approval of TSHA-120 and the regulatory status and market opportunity for those programs as well as Taysha's manufacturing plans. This call may also contain forward-looking statements relating to Taysha's growth and future operating results, discovery and development of product candidates, strategic alliances and intellectual property, as well as matters that are not of historical facts or information. Various risks may cause Taysha's actual results to differ materially from those stated or implied in such forward-looking statements. These risks include the uncertainties related to the timing and results of clinical trials and preclinical studies of our product candidates, dependence upon strategic alliances and other third-party relationships, our ability to obtain patent protection for discoveries, limitations imposed by patents owned or controlled by third parties, and the requirements of substantial funding to conduct our research and development activities. For a list and description of the risks and uncertainties that we face, please see the reports we have filed with the Securities and Exchange Commission. This conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, August 11, 2022. Taysha undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call, except as may be required by applicable securities law. I would now like to turn the call over to our President, Founder and CEO, RA Session II. RA?

(RA Session's content is not provided in the original transcript.)

Thanks, RA, and good morning, everyone. In the next few slides, I'll review our manufacturing progress for the GAN program and our comparability package that supports the transition to our final commercial manufacturing process. Next slide. Our manufacturing development program for TSHA-120 was kicked off in mid-2021, when we initiated our partnership with our CDMO partner to deliver our commercial-ready manufacturing process. We've rapidly executed several tech transfer runs leading up to the production of our 500-litre pivotal batch in April of this year. In parallel, we progressed several key analytical development efforts internally to deliver a comprehensive data package to support product release and comparability in line with agency guidance for pivotal stage programs. Next slide. Our commercial grade manufacturing run was highly productive, yielding over 200 vials of finished drug product filled into two separate lots that are currently undergoing release testing. After inspection and testing, over 50 patient doses are available for clinical use. In addition to supporting the ongoing clinical study, these lots were enrolled in a comprehensive stability study to provide critical shelf-life data in support of our BLA filing. The 500-litre production also represents our final commercial scale, which aligns with our commercial projections. We believe this high-yielding process supports a favorable cost of goods and ensures that we will be able to meet commercial demand with a reasonable number of batches annually. Next slide. In considering the analytical panel for product release and comparability, there are four key areas of importance for gene therapies: strength, purity, potency, and safety. These important attributes have informed the panel of assays that were in the process of validating at our CDMO partner to support both product release and comparability. The analytical method selected aligned with agency expectations in terms of accuracy, precision, and robustness for measuring each product attribute. Next slide. In order to assess comparability of our clinical trial material and the newly manufactured material from our commercial manufacturing process, we've applied this panel of release assays for side-by-side testing with our comprehensive assay panel. Shown here are eight of the most critical attributes that reflect on the purity, potency, and safety of our product. First, all results demonstrated that both clinical trial material and commercial-grade material are of high purity and lack significant levels of host cell or process contaminants such as protein and DNA or aggregated species. Vector purity was in excess of 95% for all three lots, and host cell protein contamination was below detection. Aggregation of all lots was also very low. Both cell and plasma DNA contamination are also important attributes to discuss with regulatory agencies since carryover represents a theoretical immunogenicity or oncogenicity risk. Residual plasma and whole cell DNA were similar for all lots indicating a consistent product profile for both lines. Empty capsids are a key attribute for AAV vectors since empty capsids can stimulate immune responses to the vector and reduce potency. All three lots were highly enriched in full particles and meet recent FDA draft guidance in terms of analytical methodologies and present full capsids. Finally, potency of AAV vectors is a key measure that is intended to correlate with clinical efficacy. We developed several product-specific potency assays to measure the functional activity of our product, which is reported relative to a reference standard. These assays recapitulate the biological activity of TSHA-120 where the AAV transduction process of cell entry, DNA packaging, gene transcription, and translation occur in an immortalized mammalian cell line. Functional activity is measured by quantitation of TSHA-120 transgene RNA levels or gigaxinin protein expression as two independent and complementary readouts. We observed good agreement with both methodologies and the activity of all three GMP lots against our reference, which gives us confidence that the lots are of high and comparable activity. Overall, these results support our view that our early clinical trial material and commercial-grade material are biochemically and biophysically similar and should perform identically in a clinical study. We plan to present these final study results with additional regulatory agencies and anticipate regulatory feedback by the end of this year. Next slide. Recently, regulators have encouraged sponsors to conduct deeper analyses of product contaminants not covered by standard release assays to better assess product safety and comparability. To comply with this guidance, we have added PacBio next-generation sequencing to our product characterization panel to better understand the nucleic acid composition of our products. This method not only allows us to identify the source of nucleic acid but also the fragment size and sequence variability, which also need to be considered when assessing AAV safety and efficacy. Our analysis of clinical trial material and commercial-grade pivotal batches demonstrates that the source and composition of transgene and contaminating host and plasma DNA is nearly identical and provides further support that the nature of our product is unchanged between our early clinical and commercial-grade batches. Next slide. In summary, we have successfully executed six batches of TSHA-120, our pivotal 500-litre scale GMP batch was productive, yielding over 50 doses for the high-dose cohort, which positions us for future BLA-enabling activities and commercial production. Importantly, our comprehensive comparability analysis demonstrated that the clinical grade material and commercial-grade material are nearly identical by key critical quality attribute measures, including next-generation sequencing analysis. We've also made rapid progress developing a product-specific potency method, which is on track for validation and product release, aligning with regulatory expectations. We feel this progress supports a strong regulatory package that we will discuss with additional regulatory agencies this year, including the FDA. I'll now turn over the call to Suyash to discuss additional program updates for GAN. Suyash?

Thank you, Fred, and good morning, everyone. As RA noted earlier, we continue to make notable progress in advancing our clinical programs for GAN and Rett Syndrome and expect exciting milestones throughout the remainder of the year. I'll begin with recent updates on TSHA-120 for GAN. Building on the positive clinical efficacy and safety data and long-term durability data that we reported earlier this year, we are pleased to report new nerve conduction study data for TSHA-120 in GAN. We are grateful to our partners at the NINDS for leading the GAN natural history study and the interventional trial under the leadership of Dr. Carsten Bonnemann, principal investigator at the NIH. Next slide. Nerve conduction studies are a neurophysiological measure and the specific measure of relevance to GAN is the sensory nerve action potential or SNAP, which is considered a definitive clinical endpoint. The test is performed by applying an electrical stimulus to the sensory nerve fibers and recording the actual potential at a point further along the nerve. There are three main parameters. The first is the amplitude of the action potential, which is the peak-to-baseline measurement and functional significance is that this is related to the number of axons in a nerve. With axonal degeneration neuropathies, the primary feature is a markedly reduced SNAP amplitude. The next parameter is latency, which is the time from stimulus to an initial electrical deflection. This can be compromised in the demyelinated neuropathies. Lastly, conduction velocity is the speed with which the electrical signal travels down the nerve and can be affected by axonal loss, but more so with demyelination. The NIH natural history study suggests rapid and irreversible decline in sensory function early in life in patients with GAN. SNAPs are within the normal range early in life and then undergo a rapid reduction in SNAP amplitude around the age of symptom presentation. This graph depicts the median SNAP amplitude per age for the natural history population in the NIH study. The horizontal black line represents the lower limit of normal. As you can see, the youngest chart on this graph is approximately 2 years of age, and as a SNAP well within the normal range. As children reach the ages of 3 or 4 years, which is the usual age of symptom presentation, the SNAP deteriorates markedly. You may recall that the initial symptomatology in the 3- to 4-year-old includes unsteadiness and a wide-based gait, reflecting the fact that they lose the ability to feel the ground beneath their feet. It is, therefore, unsurprising that the nerve conduction studies reflect this symptomatology. The first green line depicts the fact that every patient with GAN has an abnormally low SNAP amplitude by the age of 4 years, reflective of compromised sensory neural function. The second green line indicates that 100% of patients have a fully absent SNAP by the age of 9 years, which will be considered to be irreversible. Next slide. This image is the same data as the previous slide, but with a line of best fit added to demonstrate the rapid decline in SNAP amplitude from normal to absent at an early age. Next slide. Of the patients treated in the efficacy dose for the study, 42%, or 5 of 12 patients, had a positive SNAP past the age of 9 years at the last patient visit, which is remarkable considering that none of the natural history patients had a positive SNAP past the age of 9 years. The specific values for the 5 patients in question are shown in the graph on the right, where one of the patients demonstrated near-complete recovery and continued on an upward trajectory from a baseline of 0 at the time of treatment. Next slide. Many of the patients who were dosed in the interventional trial had an absent SNAP response and would not be expected to recover. From this graph, you can see that 100% of patients treated with TSHA-120, who had a positive sensor response initially maintained a positive response after treatment rather than continuing to decline to 0 as would normally be expected. Notably, 100% of these patients, which is 3 of 3, have a positive value at baseline and maintained a positive SNAP at the last study visit. The longest span is 3 years to date, and the patients continue to maintain an upward trajectory. Next slide, please. These five graphs demonstrate individually plotted patient SNAP changes from baseline and importantly include the patient running data from the natural history study. There is continuing improvement in SNAP amplitude from either a declining SNAP or an absent SNAP. Importantly, and remarkably, 2 patients had an SNAP amplitude that had been absent for over a year in the natural history study and after dosing, demonstrated consistent and sustained improvement. This recovery of function in a neurophysiological measure that is definitive and consistent over time is contrary to natural history and exciting to see. Next slide. Earlier this year, we shared positive pathology data from nerve biopsies which confirmed that treatment with TSHA-120 can stimulate active regeneration of axons. We now have the entire data set demonstrating that 100% of TSHA-120 treated patients had regenerative nerve clusters present 1 year after treatment in the biopsies. Peripheral nerve biopsies were obtained at baseline and a 1-year post-gene therapy transfer in superficial and radial sensory nerve. Analysis of 11 of 11 evaluable samples completed to date consistently demonstrates an increase in the number of regenerative clusters at year 1 compared to baseline. The remaining two samples were unable to be assessed due to biopsy limitations. Collectively, these data confirm the presence of regenerating node clusters, suggesting active regeneration of nerve fibers and improvement in disease pathology. This, coupled with the nerve conduction study data provides evidence that the peripheral nervous system can not only respond to treatment but actually improve as opposed to just stabilize. Here, we have included a representative patient case study showing the superficial radial sensory nerve at baseline and 1 year post-treatment with TSHA-120. At baseline on the left, the arrow identifies a giant degenerating axon and the star identifies a regenerating cluster. On the right is what the nerve looks like 1 year after treatment. The yellow arrows are indicating regenerative clusters, which as you can see, are notable in number. This pathology data and the neurophysiology are suggestive of recovery of neuronal tissue after administration of TSHA-120, and such endpoints, given their unbiased and definitive nature, are often viewed favorably by regulatory agencies. Next slide. We believe our GAN program includes a comprehensive set of evidence generated across diverse disease manifestations, supporting a robust clinical package. These include MFM32 motor function assessment of TSHA-120 treatment demonstrating clinically meaningful slowing of disease progression across all therapeutic dose cohorts compared to natural history decline with a durability of effect. Electrophysiologic nerve conduction studies provided definitive clinical endpoint and support recoverability, stabilization and, in some cases, improvement in sensory response in patients treated with TSHA-120. Nerve biopsy histopathology confirmed that treatment with TSHA-120 detected the presence of regenerative nerve clusters, suggestive of active regeneration of nerve fibers. Pathological biomarker measurements of rectal nerve fiber layer thickness, as assessed by optical coherence tomography, demonstrated stabilization and prevention of visual loss following TSHA-120 treatment. Visual acuity, as assessed by LogMAR also stabilized after treatment. And lastly, we heard from Fred earlier about how an extensive panel of release assays demonstrated that the clinical and commercial-grade material were comparable across key quality attributes and confirmed by next-generation sequencing. Next slide, please. Now let's review the MHRA regulatory feedback we have received to date for our GAN program and discuss how this feedback supports our continued regulatory discussions. We believe this initial feedback, coupled with the CMC comparability data that Fred discussed, positions us well to further advance TSHA-120 through regulatory approval. Next slide. A number of recent product approvals and positive regulatory opinions for therapies targeting rare CNS indications and indeed non-CNS gene therapies, especially in the context of unmet clinical need, points to flexibility in the current environment from a regulatory filing perspective. This includes a number of agreements from regulatory agencies for the use of accelerated or conditional pathways to approval. Some examples include EliCell with treatment of cerebral leukodystrophy, or STARZ, the treatment of AADC deficiency, SRP-9001 for Duchenne muscular dystrophy, and tofersen SOD1-ALS. Next slide. Our discussions with the MHRA have been collegial, collaborative, and helpful. The MHRA agreed with our commercial manufacturing and release testing strategy, including potency assays. They recommended dosing a few patients with commercial-grade material, which will be released in September 2022. Lastly, it was supportive of our proposal to perform validation work, including patient and family feedback, which is ongoing on the MFM32 as a key clinical endpoint. We believe this positive feedback from the MHRA, in conjunction with the totality of preclinical data generated to date for TSHA-120, represents a robust package supporting additional discussions with regulatory agencies. We expect additional regulatory feedback, including from the FDA by year-end. Next slide. We continue to work with regulatory agencies with the goal of achieving conditional approval in Europe and accelerated approval in the United States based on EMA and FDA industry guidance for gene therapies in neurodegenerative diseases. Based on key registrational requirements from regulatory agencies, including the FDA and EMA, we have outlined some possible scenarios for approval. With the EMA, we believe there is potential to file for conditional approval based on the current dataset for EMA guidance documents. For the FDA, the first scenario is immediate filing for approval based on the current dataset and comparability. Alternatively, we may need to dose a few more patients to demonstrate comparability of clinical effect between clinical and commercial-grade material, which is a similar approval pathway for Zolgensma in spinal muscular atrophy. The last scenario is to perform a new pivotal trial, which we think is unlikely, given the recently published FDA guidance document on gene therapies for neurodegenerative diseases and the extensive long-term safety and efficacy data set available. MHRA feedback further aligns us with scenario 2, which is our base case. We expect to have additional regulatory guidance, including from the FDA by year-end. As a reminder, TSHA-120 previously received orphan drug and rare pediatric disease designations from the FDA. Next slide. Now let's turn to the late-breaking preclinical data we reported today for TSHA-102 in Rett Syndrome. Next slide. As a reminder, Rett Syndrome is an X-linked neurodevelopmental disorder that is characterized by mutations in MECP2, a protein essential for neuronal and synaptic function in the brain. Female heterozygous patients with Rett syndrome are mosaic carriers of normal and mutated MECP2. The challenge in gene replacement therapy of MECP2 is finding the appropriate balance of sufficient physiological expression to correct the deficiency while also avoiding overexpression and associated toxicity. The estimated prevalence of Rett Syndrome is 350,000 patients worldwide with an incidence of 1 in 10,000 female births worldwide. Next slide. Because of this spectrum and the risk of toxicity, the development of a gene therapy for Rett Syndrome requires regulated expression of MECP2. Previous MECP2 gene therapy approaches have shown dose-dependent side effects after intra-CSF administration in wild-type and Rett syndrome knockout mice. We have developed a novel mRNA responsive target sequence called miRARE to regulate the expression of the MECP2 transgene and prevent the risk of overexpression toxicity. We believe our approach provides a superior therapeutic profile to that of unregulated MECP2 gene replacement. Next slide. TSHA-102 regulates the expression of MECP2 through a novel microRNA responsive auto-regulatory element platform, known as miRARE, that is exclusively licensed to Taysha, developed by Dr. Sara Sinnott and Stephen Gray of UT Southwestern Medical Center. miRARE provides sophisticated regulation of transgene expression genotypically on a cell-by-cell basis, ensuring controlled expression that avoids excessive levels. miRARE is a targeted panel for endogenous microRNAs, which regulate MECP2 expression. In the presence of high levels of intracellular MECP2, endogenous down-regulatory microRNAs are secreted as part of the cell's normal feedback inhibitory process which then bind the miRARE platform on the construct and reduce output and expression of MECP2 from the construct. This ensures that intracellular levels of MECP2, whether in a wild-type cell or a mutated cell in immune mosaic patients, stay within appropriate physiological levels. Next slide. Today, we are excited to share near normalization of survival in neonatal mice models of Rett Syndrome following Taysha administration. Survival was significantly extended in MECP2 knockout male mice following a single CSF injection after day 2 of TSHA-102 at 8.8 E10 VG per mouse, which is the human equivalent dose of 2.86 E14 total VG, a little lower than planned for the human clinical trial. Preliminary data demonstrated approximately 70% of the treated knockout males survived to study conclusion at 34 weeks of age versus 9 weeks in vehicle-treated mice. All cohorts, including vehicles, were sacrificed at 34 weeks. Next slide. We then looked at the Bird score, which is a composite measure of six different phenotypic abilities that relates to Rett syndrome. These include breathing, gait, general condition, hand classing, mobility, and tremor. Over the course of the study, TSHA-102 appeared to normalize behavior, as assessed by the Bird score. Next slide. The totality of preclinical data generated to date for TSHA-102 represents the most robust package supporting Rett syndrome clinical advancement for gene therapy. I've just reviewed the recent preclinical study in neonatal Rett knockout mice, demonstrating near normalization of survival, normalization of body weight, and normalization of behavior as assessed by the Bird score. We have previously discussed the pharmacology data demonstrating significant improvement in survival, body weight, motor function, and respiratory health across treatment ages in knockout mouse models, and while we were able to ascertain a minimally effective dose. We've also previously discussed toxicology data supporting a favorable safety profile of TSHA-102 in Sprague Dawley wild-type rats up to a 6-month time point and the human equivalent doses fourfold over the clinical starting dose. The nerve conduction studies performed remain in the normal range for all groups at all time points, signifying no evidence of dose or ganglia inflammatory change. Lastly, toxicology data supporting TSHA-102 was well tolerated at human equivalent doses of up to 2 E15 total VG and demonstrated broad distribution to the brain, spinal cord, and systemically in non-human primates. Perhaps most importantly, the toxicology studies have demonstrated that the down-regulatory miRARE platform is working well and that there was minimal expression of MECP2 in a wild-type cell with normal preexisting levels of MECP2. These four preclinical studies together represent a comprehensive and robust package supporting the clinical advancement of TSHA-102 for Rett syndrome. Next slide. Our first-in-human Phase I/II study of TSHA-102 for Rett syndrome, also known as the REVEAL study, is ongoing. Centas you've seen, at the Mother and Child University Hospital Center in Montreal, Quebec, Canada, is the initial clinical site for the study, which is under the direction of principal investigator Dr. Elsa Rossinyol. Target recruitment is up to 18 adult females. It has a 3+3 study design with three randomly selected delayed treatment control participants in each dose cohort, and each cohort may be expanded with up to three additional participants. Next slide. We look forward to preliminary Phase I/II clinical safety and efficacy data in adult females by year-end 2022. We have completed GMP manufacturing for Rett using our commercial process. Lastly, a study in the pediatric female Rett population and the rescue study in Rett males are planned for 2023. As a reminder, TSHA-102 has been granted rare pediatric disease designation and orphan drug designation from the FDA and more recently orphan drug designation from the European Commission. With that, I'll turn the call over to Kamran to review our financial results.

Thank you, Suyash. This morning, I will discuss key aspects of our financial results for the second quarter ended June 30, 2022. More details can be found in our Form 10-Q, which will be filed with the SEC shortly. Next slide. As indicated in our press release today, research and development expenses were $23.1 million for the three months ended June 30, 2022, compared to $30.6 million for the three months ended June 30, 2021. The $7.5 million decrease was primarily attributable to a decrease of $3.8 million in third-party R&D primarily related to GLP toxicology studies, a decrease of $3.2 million in R&D manufacturing costs, and lower employee compensation expenses of $0.5 million. General and administrative expenses were $9.9 million for the three months ended June 30, 2022, compared to $10.1 million for the three months ended June 30, 2021. The decrease of approximately $0.2 million was primarily attributable to a decrease of $1.1 million in professional fees related to market research, recruiting, accounting, and patient advocacy activities. This was partially offset by $0.9 million of incremental employee compensation expenses. Net loss for the three months ended June 30, 2022, was $33.9 million or $0.84 per share as compared to a net loss of $40.9 million or $1.09 per share for the three months ended June 30, 2021. As of June 30, 2022, the company had cash and cash equivalents of $66.2 million compared to $149.1 million on December 31, 2021. Taysha continues to expect that its current cash and cash equivalents, in addition to full access to its existing term loan facility, is sufficient to fund operating expenses into the fourth quarter of 2023. And with that, I will hand the call back to RA.

Thank you, and at this time, we'll be conducting a question-and-answer session. Our first question comes from Joon Lee with Jo Securities. Please proceed with your question.

Good morning, thanks for taking questions. My name is Joon. I'm just wondering, have there been any discussions with the FDA on regulatory matters for TSHA-120, just thinking mostly in terms of the three scenarios that you've previously laid out on whether or not the FDA might have to redose patients with GMP material? Also, if such discussions have occurred, will the safety data be sufficient? Or has the FDA made or indicated additional need for efficacy biomarkers or clinical data? Thank you.

I think you said it all, all right.

Thank you, and then if I could just ask the yield of the 50 doses that you've already manufactured, will that support the highest dose that was tested in clinical trials for all 50 of the doses that are ready to go? Thank you.

And our next question comes from the line of Gil Blum with Needham & Company. Please proceed with your question.

So just a question to clarify and make sure that I fully understand this. The additional regulatory feedback that we will be getting by year-end 2022, is this a change from previous estimates? Okay. Can you clarify how SNAP was established as a surrogate endpoint for function and GAN? It's impressive to see something go from nothing to something, but I would like to understand the functional benefits better.

Sure. Hi Gil, I think this is really the first time SNAP amplitude data, and SNAP data in general, has been presented for a large group of patients with GAN, and it's quite impressive. What's notable is the consistency observed in the natural history, which aligns with the clinical progress of these patients. Earlier, we discussed how around the age of 2, the SNAPs are normal, but they decline rapidly between the ages of two and a half to three, and by the age of four, every child has an abnormal SNAP. By age nine, all have an absent SNAP. This pattern is consistent with other axonal neuropathies and similarly hereditary centroneuronal neuropathies, where nerve conduction studies are significantly affected. The important aspect of GAN is that it closely reflects what's happening clinically and correlates well. We've mentioned before that patients typically are symptom-free during the first few months of life, but may experience some delayed motor milestones around two or two and a half years. At this stage, these children start to show unsteadiness and a wide-based gait because they can't feel the ground beneath their feet, and this is exactly what these conduction studies demonstrate. I want to point out that there are three key components to consider in a nerve conduction study: amplitude, which indicates the height of the electrical deflection; latency, which measures the time it takes for electrical stimulation to begin; and velocity, which refers to the speed of electrical transmission along the nerve. Neuro studies in earlier times focused on demyelinating disorders like multiple sclerosis, where latency and velocity were more impacted. However, in axonal neuropathies, the loss of axonal amplitude is the key parameter, and it's clear how this correlates with the natural history. More importantly, it's impressive to see that this stabilizes or even improves, with a few patients improving from zero and continuing on an upward trajectory, which is also reflected in the biopsy data showing an increasing presence of regenerating clusters. I'll stop there, as I could continue, but let’s leave it here.

Thank you. That was very helpful. Lastly, regarding Rett, what would you need to begin the male rescue study? The timing for that seems quite important. If you can, please share your thoughts on it.

The key point is that the males are completely lacking MECP2 due to the X-linked nature of the disease. In contrast, females are mosaics, with half having normal levels of MECP2 and the other half having mutated or absent MECP2. Clinically, males are significantly more severely affected, with most not surviving past gestation. A few survive into early infancy, but many do not make it beyond the first few months, with some living until the ages of two or three, often succumbing to respiratory infections or complications. This represents a severely debilitating form of Rett Syndrome, and there are only about 200 male knockout patients surviving worldwide, who have largely been overlooked. The Rett patient community is excited that we are including this underserved group in our clinical development program. As previously mentioned, we will begin our studies with males in 2023, followed by pediatric studies for girls and boys. The community appreciates our focus on this population. Regarding dosing, it’s an interesting question. There’s a case for using a higher dose since we are starting the girls' study at 5 E14 total VG. Our previous studies indicated that the minimum effective dose was about 3 E14 total VG, so we are exceeding that amount. We plan to maintain the same dose of 5 E14 total VG for the boys' study, which we expect will significantly enhance the phenotype. We might also consider a second dose of 1 E15.

All right. Thank you for taking our questions. Good luck. Thank you.

Our next question comes from Salveen Richter with Goldman Sachs. Please go ahead with your question.

Hi thanks for taking our question and congrats on the progress. This is Tommy on for Salveen. We had a follow-up on the SNAP question. Could you help us gauge the expected consistency in SNAP across treated patients? For example, if there's characteristics at baseline that might impact the response after treatment? And on the MHRA feedback, how many patients do you think will need to be dosed with the commercial-grade material? And how does this affect the timeline? Thank you.

It's a good question about the statistics. It's difficult to pinpoint the specific characteristics of patients that would predict a favorable response, largely because we haven't dosed enough patients to determine this with high accuracy. However, it seems logical that the earlier treatment is initiated, the higher the likelihood of a positive response. Treating younger patients also appears to increase the chances of a good outcome. Additionally, treating before the SNAP is lost or absent tends to correlate with improvements in both the hard endpoint and functional outcomes. Interestingly, we observed unexpected improvements in nerve conduction SNAP amplitude in a number of patients who had previously lost SNAP for some time. Regarding the MHRA, this was a significant topic of discussion. They indicated a desire for us to dose more patients, which aligns with our strategy of option 2, involving a few additional patients with clinical trial material. Our discussion, which lasted over two hours, included in-depth dialogue about both preclinical and clinical data, as well as the CMC aspects. They did not commit to a specific number of patients but suggested a few over a set period, prompting us to consider a proposal for around three to five patients over six months. We also need to engage with other agencies and incorporate their feedback to finalize the specific patient number, but my estimation is that it will be approximately three to five patients over six months.

Our next question comes from the line of Mike Ulz with Morgan Stanley. Please proceed with your question.

Just on GAN, you mentioned doing some additional validation work on the MFM32 endpoint. Can you just give us a sense of your plans there and maybe how long that validation work might take? Thanks.

Thank you for the question, Mike. The RA is correct that MFM32 has been validated in pediatric neuromuscular diseases and has been previously used as supporting evidence in regulatory discussions. However, it’s important to formally validate it for the specific disease in question. Our plan has always been to validate MFM32 for Giant Axonal Neuropathy, and we discussed this with the MHRA, who were supportive and pleased that we have started this work. There are three components to this work. The first is validation through qualitative feedback from patients, families, clinicians, and therapists in structured interviews. That work is complete, and we are currently writing it up for publication, which we expect to submit in about six to eight weeks. The second part involves analyzing this qualitative data for content validation. After that, there will be a psychometric validation process where we analyze data from the natural history study and the interventional study to see how MFM correlates with other disease endpoints and the qualitative feedback we gathered. This will culminate in a formal sacramental validation, resulting in a report that will accompany our BLA filing and other regulatory interactions. In terms of timing, this process can typically take 12 to 18 months. However, due to the large natural history study with data from 50 patients who have completed MFM, we anticipate the timeline to be around 9 to 12 months from now.

Our next question comes from the line of Eun Yang with Jefferies. Please proceed with your question.

Thank you for taking my question. I have two inquiries. First, regarding the Rett Syndrome data we expect, you began the study in Canada likely in the second quarter. How many patient data will be available? For my second question, you've indicated before that scenario number two is the most probable regulatory outcome, which suggested a potential launch by the end of 2023 in the U.S. Is that still on track? Thank you.

Our next question comes from the line of Jack Allen with Baird. Please proceed with your question.

Hi. Thank you so much for taking the questions, and congratulations on all the progress. Just two quick ones. One's really quite straightforward. I guess I'll start with that. Do you have a meeting with the FDA on the books for the second half of this year as you look to gain that guidance in GAN? And then I just wanted to ask on the SNAP results on GAN. Any comments you can make with regard to the doses those patients received and a dose-dependency you saw on the SNAP results would be great. Thank you so much. Yep. Thank you so much for the call on the first question. That does a great job of answering that. The second question is really briefly. Any comments you can make around the dose dependence of the SNAP result? I realize there's a limited cohort there, but I'd love to hear about what doses those patients received.

Sure, it's consistent with our observations from the various endpoints. There were four different dose cohorts in the study. The first dose of 3.5E13 was primarily a safety dose and did not demonstrate much efficacy, although some families reported qualitative improvements. The second cohort was 1.2E14, the third was 1.8E14, and the fourth was 3.5E14 total VG. The three higher doses are fairly close in range. If we were designing the study now, we would likely use only two dose cohorts instead of four to expand the range between them. Overall, the data from the test scores in cohorts two, three, and four were generally similar. This was also true for the SNAP results. We observed no effects from the very low dose cohort but noted improvements in the higher doses. There is some indication of a stronger dose response in the SNAP results, suggesting that the highest dose may lead to greater improvements in amplitude compared to cohorts two or three. However, all three higher dose cohorts showed positive improvements in both SNAP results and in areas without clusters.

Our next question comes from the line of Yun Zhong with BTIG. Please proceed with your question.

Hi. Thank you very much for taking the question. So I wanted to confirm that the feedback that you received from MHRA does not change your confidence that you will be able to file based on available data when you talk to the EMA and also want to confirm that by year-end when you provide feedback, would that feedback include EMA feedback as well? Because EMA sometimes can be less flexible in terms of clinical endpoint versus surrogate endpoint that you talked about on the call. Thank you very much. Yes, it did. Thank you very much.

Our next question comes from the line of Sami Corwin with William Blair. Please proceed with your question.

Hi, everyone. Congratulations on your progress, and thank you for taking my question. Do you believe that the additional GAN patients you plan to dose will meet the FDA’s requirements for more clinical material? Also, could you provide an update on how the dosing in the Rett trial is proceeding? Do you think the additional GAN patients you plan to dose in September once the commercial materials are released, along with the quantity of patients and duration of follow-up, will also satisfy the FDA if they wanted more patients dosed?

Not really to add, but just to emphasize the fact that we'll look at all the regulatory agency feedback in totality and conduct the study on an ongoing basis in order to meet all the needs. And my guess is, yes, it'll be three to five patients, six months' worth of data. That should meet the needs of the MHRA, the EMA, the FDA, and any other agency we're in discussions with.

And our last question comes from the line of Kristen Kluska with Cantor Fitzgerald. Please proceed with your question.

Good morning. This is Rick on for Kristen. Thank you for taking our question. Just a question on the individual patient SNAP data. It looks like patient A appeared to show little change from baseline. Could you talk about how you're thinking about the specific case and what it might be telling us potentially about baseline characteristics or time of dosing? Thanks.

I understand your concern. Patient A's situation aligns with our expectations. We would have been quite pleased if all patients had stabilized, especially considering this is a child. Based on the dosage, the score is around six microvolts, which is significantly below the normal threshold. Historical data shows a rapid decline, meaning it likely would have disappeared around six months post-dosing if the treatment hadn't been administered. We did see stabilization, which is what we anticipated. The main reason it might not appear as favorable is that the other patients are performing significantly better. We remain pleased with our patients' progress, particularly when compared to historical trends, but the improvements of other patients overshadow Patient A. I want to highlight that going from a zero SNAP, as observed in patients B and D—who had no SNAP amplitude for over a year—to significant improvement, particularly for patient B who is nearing normal levels after three and a half years and still improving, is quite remarkable and not something typically seen in neurodegenerative diseases. This is compelling data.

And we have reached the end of the question-and-answer session. I'll now turn the call back over to Mr. RA Session for closing remarks. And this concludes today’s conference, and you may disconnect your lines at this time. Thank you for your participation.