Taysha Gene Therapies, Inc. Q1 FY2024 Earnings Call

Greetings, and welcome to the Taysha Gene Therapies First Quarter 2024 Earnings Call. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Hayleigh Collins. Thank you. You may begin.

Thank you. Good afternoon, and welcome to Taysha's First Quarter 2024 Financial Results and Corporate Update Conference Call. Earlier today, Taysha issued a press release announcing financial results for the first quarter ended March 31, 2024. 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 results initially seen in our first and second patients dosed in the REVEAL trial, to positively impact quality of life and course of disease in the patients we seek to treat; our research, development and regulatory plans for our product candidates, including the timeline 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 of and regulatory interactions for our product candidates; our dependence upon strategic alliances and other third-party relationships; our ability and 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 that 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, and our quarterly report on Form 10-Q for the quarter ended March 31, 2024, that we filed today. This conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, May 14, 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 First Quarter 2024 Financial Results and Quarter Update Conference Call. Today, I will begin with a brief update on our recent activities. Then Dr. Suku Nagendran, President and Head of R&D of Taysha, will provide an update on our lead TSHA-102 program in 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. We are pleased with the recent progress that we've made to advance TSHA-102, our lead gene therapy program in clinical evaluation for the treatment of Rett syndrome. This includes reporting encouraging longer-term data for the first 2 adult patients dosed in the low-dose cohort and enrolling the first patient in the high-dose cohort of our REVEAL Phase I/II adolescent and adult trial earlier than planned; dosing the second patient in our REVEAL Phase I/II pediatric trial; and receiving regenerative medicine advanced therapy designation from the FDA for TSHA-102. We believe this progress reinforces the therapeutic potential of TSHA-102 across a broad population of patients with Rett syndrome and supports the continued clinical evaluation of our gene therapy program. We believe that we are well positioned for continued execution across our key upcoming value-creating milestones for our TSHA-102 program, with the goal of generating critical longer-term clinical data across a broad range of ages and stages of patients with Rett syndrome in multiple geographies that will guide the next phase of our studies. The unmet need and burden of care for Rett syndrome is high. As a rare neurodevelopmental disorder caused by mutations of the MECP2 gene, Rett syndrome affects an estimated 15,000 to 20,000 patients in the United States, European Union and the United Kingdom. Currently, there are no approved disease-modifying therapies that treat the genetic root cause of the disease, and there is a significant unmet medical need. The random inactivation and subsequent mosaic pattern of MECP2 expression result in a mixture of cells that are either deficient in MECP2 protein or express MECP2 protein normally, which makes Rett syndrome challenging to treat with traditional small molecule and gene therapy approaches. We believe our TSHA-102 gene therapy candidate, equipped with the novel miRNA responsive autoregulatory element, or miRARE technology, has the potential to appropriately address this challenge by mediating MECP2 expression in the central nervous system on a cell-by-cell basis to overcome the risks associated with both under- and over-expression of MECP2 protein. We are evaluating TSHA-102 in 2 ongoing Phase I/II REVEAL trials, an adolescent and adult trial taking place in Canada and the U.S. and a pediatric trial taking place in the U.S. with clearance in the U.K. As a reminder, our REVEAL Phase I/II adolescent and adult trial is the first human study assessing the safety and preliminary efficacy of TSHA-102 in females aged 12 years and older with 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 1 with the low dose of TSHA-102 of 5.7x10^14 total vector genomes, and dosing in cohort 1 is now considered complete. Following review of the clinical data from the first 3 patients treated with TSHA-102 across the adolescent and adult trial and the pediatric trial, the Independent Data Monitoring Committee, or IDMC, approved our request to proceed to an early dose escalation in the adolescent and adult trial. Data from Part A of the trial will be assessed by regulatory agencies and the IDMC to provide guidance to determine final key elements of the Part B aspect of our trial, the dose expansion portion, including hierarchy of efficacy endpoints, study duration and the maximum tolerated dose or maximum administered dose. Therefore, advancing to cohort 2 evaluating the high dose of TSHA-102 of 1x10^15 total vector genomes earlier than planned accelerates our ability to inform our clinical development and regulatory strategy for Part B. We're pleased to share the first patient in a high-dose cohort has been enrolled in the study, and dosing is scheduled to take place here in the second quarter of 2024. Earlier this year, we announced encouraging longer-term data for the first 2 adult patients treated in the low-dose cohort with late motor deterioration Stage IV Rett syndrome and different genetic mutations and severity of disease. Recall, when we initiated REVEAL, our focus was primarily on safety, with little expectation of efficacy for the adult population among key opinion leaders in the Rett syndrome community due to the advanced stage of the disease. Therefore, it was very exciting last November to announce the encouraging initial impact that TSHA-102 appeared to have across multiple clinical domains in the first 2 adult patients as early as 4 weeks following treatment, despite the trial participants having very different genetic mutations and disease severity. We presented longer-term follow-up data in the first quarter of this year, including a 6-month follow-up assessment for the first adult patient showing a continued durable response with sustained and new improvements in the absence or reduction of steroid levels. As of the 6-month assessment, patient 1 showed sustained improved key efficacy measures at decreased steroid levels with new improvements observed in the Rett Syndrome Behavioral Questionnaire, or RSBQ. Additionally, the second adult patient demonstrated sustained improvements across key efficacy measures with new improvements observed in certain measures, including the Revised Motor Behavior Assessment, or R-MBA, as of the 12-week assessment and significantly reduced seizures as of the 19-week assessment following treatment. Moreover, the longer-term clinical observations reported by the principal investigator showed that both patients had sustained and new improvements across multiple clinical domains impacting activities of daily living, including motor skills, socialization and communication, autonomic function 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. Suku will discuss these observations in more detail. The longer-term safety profile is also encouraging. Data from the first 2 adult patients showed that TSHA-102 was well tolerated, with no treatment-emergent serious adverse events as of the week 35 assessment for Patient 1 and as of the 19-week assessment for Patient 2. We believe the safety profile and continued improvement across multiple clinical domains, even at reduced steroid levels in both adult patients with advanced Stage IV Rett syndrome treated with TSHA-102, supports the durability and transformational potential of TSHA-102 across multiple genotypes of Rett syndrome and further validates our construct. We are also focused on evaluating the therapeutic potential of TSHA-102 in the pediatric population, where we hope to see a similar safety profile and a consistent pattern of response across clinical domains in the pediatric patients with different genotypes treated with the low dose of TSHA-102. Our ongoing REVEAL Phase I/II pediatric trial is evaluating the safety and preliminary efficacy of TSHA-102 in female patients with Rett syndrome aged 5 to 8 years old. We are currently enrolling pediatric patients in Part A of the trial, which will evaluate 2 dose levels of TSHA-102 sequentially. We have dosed the second pediatric patient in cohort 1, the low-dose cohort of 5.7x10^14 vector genomes, following the IDMC's review of the initial 6-week data from the first pediatric patient dose. While this trial captures a younger patient population with an earlier stage of disease compared to our adolescent and adult trial, it is important to understand that most patients with Stage III Rett syndrome have already developed the hallmark symptoms of the disease and therefore present with many advanced disease manifestations. Patients typically approach Stage III of the disease, known as the pseudostationary symptom stage, after a period of deterioration and rapid regression of learned skills, particularly relating to language and hand movement. The regression period is also characterized by partial or complete loss of acquired purposeful hand skills and spoken language, gait abnormalities and stereotypic hand movements, which results in the loss of independence and in most cases leads to lifelong caregiver dependence. Many patients in this age group also suffer from seizures that can significantly impact their quality of life. Similar to the adult population, the heterogeneity among pediatric patients is high due to the broad spectrum of genetic backgrounds that result in variable phenotypic symptoms and severity in Rett syndrome. Part A of the pediatric trial is intended to include patients across a broad spectrum of genetic backgrounds, which will help us generate a robust data set to inform our development plan for the next phase of the study. We hope to see a consistent pattern of response across key clinical domains in the pediatric patients with different genotypes treated in the low-dose cohort, which we believe will bring us closer to our goal of bringing a potentially transformative treatment to all patients with Rett syndrome. Recently, we were pleased to receive Regenerative Medicines Advanced Therapy, or RMAT, designation from the FDA following review of available safety and efficacy data from the first 2 adult patients and the first pediatric patient dosed with the low dose of TSHA-102. A regenerative medicine therapy is eligible for RMAT designation if it is intended to treat, modify, reverse or cure a serious condition and preliminary clinical evidence indicates the therapy has the potential to address unmet needs for such a condition. Sponsored companies receiving RMAT designation can benefit from increased interactions with FDA involving senior managers to help expedite drug development. We believe receiving RMAT designation is important recognition from the FDA that reinforces the high unmet need in Rett syndrome and the therapeutic potential of TSHA-102 to bring meaningful change to patients and families with Rett syndrome. We will work closely with the FDA and other regulatory agencies as we continue to advance our TSHA-102 program. We look forward to the year ahead as we remain focused on further expanding into pediatric patients, executing trials in multiple geographies, evaluating the high dose across age groups and generating critical longer-term clinical data across a broad population of patients with Rett syndrome that will guide the next phase of our studies. We expect to provide an update on clinical data from the completed low-dose cohort of our REVEAL adolescent and adult trial and initial available data from the low-dose cohort of our REVEAL pediatric trial in mid-2024. Additionally, we expect to report initial available data from the high-dose cohort for both of our REVEAL trials in the second half of 2024. I will now turn the call over to Suku to provide a more in-depth discussion of TSHA-102.

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 which encodes the MECP2 protein, an essential regulator of neuronal and synaptic function in the brain. The disorder is characterized by loss of communication and hand function, slowing and/or 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 development, stagnation at 6 to 18 months of age, followed by rapid regression, plateauing, and late motor deterioration. As a reminder, TSHA-102 is self-complementary, intrathecally delivered AAV9 gene transfer therapy designed as a one-time treatment. Because of the risks associated with both under- and over-expression of MECP2, we have combined high-throughput microRNA profiling and expression to create miRARE. Our novel miRNA target panel is designed to mediate MECP2 expression in the central nervous system on a cell-by-cell basis and controls the therapeutic levels of MECP2. With miRARE, endogenous miRNA are activated in the presence of MECP2 protein and are thought to reduce 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 over-expression of MECP2 in healthy cells. Clinical and pre-clinical data continue to support the ability of TSHA-102 to produce and maintain safe transgene expression levels in the central nervous system. As Sean mentioned, we observed a similar pattern of response across multiple clinical domains, impacting activities of daily living in both adult patients treated in the low-dose cohort of our REVEAL Phase I/II adolescent and adult trial. These patients have very different genetic mutations and associated disease stability. The first patient is a 20-year-old female with a large deletion in her MECP2 gene that manifests in our most severe disease phenotype and was completely nonambulatory at baseline, while the second patient is a 21-year-old female with a missense mutation in her MECP2 gene that manifests as a milder phenotype and could walk with prompting at baseline. Per the protocol, prophylactic immunosuppression therapy began prior to TSHA-102 administration. The steroid taper was initiated at week 17 and completed by week 35 for the first patient. At the 35-week post-treatment assessment, the principal investigator observed that the initial improvements across multiple clinical domains had been maintained following completion of the steroid taper, and new improvements observed compared to earlier post-treatment assessments. Basically, 35 weeks following treatment, the first patient showed sustained improvement in motor function, including restored leg movement and the ability to sit unassisted for the first time in over a decade, and hand function, including the gained ability to grasp objects with a nondominant hand and transfer them to a dominant hand for the first time since infancy. Progressive loss of hand function is a hallmark characteristic of Rett syndrome and a key area of concern for caregivers given its limits on communication, daily activities and independence. We believe these sustained improvements in hand function, which are not typically observed in the natural history of Rett syndrome, support the therapeutic potential of TSHA-102 to bring meaningful change to patients and caregivers. Sustained improvement in autonomic function were also observed in the first patient, including improved breathing patterns, circulation and sleep quality, while they gained the ability to sleep through the night for the first time in 20 years, resulting in the patient being more alert and interactive during the day. At week 35 post-treatment, the principal investigator observed new improvements in the first patient in socialization and communication, including increased vocalization and enhanced ability to use an eye-driven communication device. Difficulty in communication, including loss of speech, is also a prominent symptom of Rett syndrome and a key area of concern for caregivers, as it directly interferes with the patient's ability to communicate their needs and express their interests. Based on caregiver input, we believe the ability to communicate could give patients a sense of control and greater independence. The first patient's seizures were overall well-controlled, with stable seizure events through week 35 at lower levels of antiseizure medication relative to baseline, and the patient now no longer experiences unprovoked seizures. Now let's turn to the second patient. At the 19-week post-treatment assessment, while the patient was on decreased steroid levels, the patient showed sustained improvement in motor skills with improvement in hand stereotypies for the first time since regressing at age 3, and in socialization and communication, with increased interest in social, communication and activities, including increased response to spoken words and eye contact. The patient also showed improvements in autonomic function with sustained improvements in breathing patterns and circulation. The principal investigator also observed new improvements with the second patient's seizure frequency at week 19 with a significant reduction in seizures and a 25% lower level of anti-seizure medicine relative to baseline. The patient's pretreatment seizure frequency was approximately 2 to 4 seizures per week, and the patient has been seizure-free for 17 weeks as of the 19-week post-treatment assessment. Additionally, both patients demonstrated continued improvement across consistent key clinical and caregiver-reported efficacy measures based on the 6-month assessment at decreased steroid levels for the first patient and 12-week assessment for the second patient. This includes sustained improvement in Clinical Global Impression Improvement, or CGII; Parental Global Impression Improvement, or PGII; Revised Motor Behavior Assessment, or RMBA; Rett syndrome behavior questionnaire, or RSBQ; and in seizure data. The first patient also demonstrated a sustained improvement in CGIS and the Rett Syndrome Hand Function Scale at 6 months post-treatment relative to earlier post-treatment assessments. These similar assessments across key efficacy measures observed in both adult patients reinforces the clinical observations from their principal investigators. Overall, we are entirely encouraged by the consistent and early responses that were sustained through long-term follow-up assessments and the new improvements that developed in the 2 adult patients with different disease severity. We believe these improvements, even at reduced steroid levels, completed with a well-tolerated safety profile, supports the durability and transformative potential of TSHA-102 across multiple genotypes for Rett syndrome. With the low-dose cohort complete in the adolescent and adult trial, we are currently focused on collecting data with the high dose to further explore the clinical impact of TSHA-102. We enrolled the first patient in the high-dose cohort and dosing is scheduled to take place in the second quarter of 2024. Now let's turn to the first pediatric trial. Its title REVEAL Phase I/II pediatric trial, similar to the REVEAL Phase I/II adolescent and adult trial, was designed primarily as a safety study. Efficacy data being collected across a variety of measures is hypothesis generating and will inform our thinking relative to Part B of the trial. Therefore, Part A of the trial is intended to include patients with diverse genetic backgrounds to evaluate the clinical impact of TSHA-102 across a broad range of pediatric patients. As Sean mentioned, similar to the adult population, the heterogeneity among pediatric patients is high due to the broad spectrum of genetic backgrounds that result in different therapeutic symptoms and severity in patients with Rett syndrome. Genotypic variation commonly occurs between individuals with the same MECP2 mutation and is attributed to differences in the random X-chromosome inactivation that results in a miniature mixture of cells with different levels of MECP2 protein expression. Because of this, the baseline setters and overall disease severity of the patients will continue to be of importance to consider when interpreting the data, regardless of the age or stage of disease. Our hope is that the pediatric patients with different genotypes, while treated with the low dose of TSHA-102, will show a consistent safety profile and recapitulate the meaningful improvement across clinical domains that we have observed in the adult patients. We have discussed the first 2 pediatric patients in cohort 1 evaluating the lower dose of TSHA-102, and expect to report the initial available safety and efficacy data from cohort 1 in mid-2024. We remain focused on completing dosing in part A of both REVEAL trials and anticipate significant data collection in 2024. Our efforts to expand our clinical trials remain underway and we're focused on additional site activation in the U.S. for our REVEAL adolescent and adult trial with the goal of expanding the ongoing trial in Canada into the U.S., and our REVEAL pediatric trial, as we are focused on site activation in the U.K. with the goal of expanding our ongoing pediatric trial in the U.S. into the U.K. as well.

Thank you, Suku. Research and development expenses were $20.7 million for the 3 months ended March 31, 2024, compared to $12.5 million for the 3 months ending March 31, 2023. The $8.2 million increase was primarily driven by an increase in good manufacturing practice, or GMP, batch activities during the 3 months ended March 31, 2024, which is representative of the intended commercial manufacturing process for TSHA-102. Additionally, clinical trial expenses increased primarily due to ongoing activities in the REVEAL, adolescent, adult and pediatric trials. General and administrative expenses were $7.1 million for the 3 months ended March 31, 2024, compared to $8.8 million for the 3 months ended March 31, 2023. The decrease of $1.7 million was due to reduced general and administrative compensation as a result of lower headcount and a reduction in consulting and professional fees. Net loss for the 3 months ended March 31, 2024, was $24.1 million or $0.10 per share as compared to a net loss of $17.6 million or $0.28 per share for the 3 months ended March 31, 2023. As of March 31, 2024, Taysha had $124 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.

Thank you, Kamran. Throughout the first quarter of 2024, we have made important progress on the clinical development of TSHA-102. The sustained new improvements in both adult patients with advanced Stage IV Rett syndrome are very encouraging, and we look forward to moving to the high dose and further evaluating TSHA-102 across a broad population of ages and stages of patients with Rett syndrome. We are focused on completing dose escalation for both of our REVEAL trials and collecting data to inform the next phase of our studies. We will continue to look for similar patterns of improvement across adult, adolescent and pediatric patient populations. In the year ahead, we have many clinical milestones expected, and we look forward to providing additional updates, including reporting initial clinical data from our REVEAL pediatric trial and providing an update on the completed low-dose cohort from our REVEAL adolescent and adult trial in mid-2024. With that, I will now ask the operator to begin our Q&A session.

The first question we have is from Kristen Kluska of Cantor Fitzgerald.

Congrats on the RMAT designation. So you've been very transparent providing all the data you collected, but we continue to get a lot of questions about expectations for the younger patients in the trial. So how should we be thinking about ways to measure some anecdotes, since this population isn't as far advanced? I know heterogeneity with different genetic backgrounds, but for younger patients, are there any domains in particular that stand out?

Thanks for the question, Kristen. I'll address that and ask Suku to provide more details. It's important to recognize that the pediatric patient group we're studying, ages 5 to 8, has very advanced disease. They generally exhibit all the key symptoms similar to adults. While they may not have had the condition for long, it could still be around 6 or 7 years. So, the disease is quite entrenched, and the severity can vary based on genetic factors. From our perspective, a significant response at the low dose would be a consistent outcome similar to what we see in adults, indicating clinical impact across several areas and a quick effect following treatment. This would further support our belief that we might be dealing with a transformative therapy. For pediatric patients, it is reasonable to think that over time they might achieve better outcomes than adults. However, it’s important to remember that substantial improvements take time. For many parents, the first words from their children can come at about 8 to 12 months after birth, so developmental progress requires time. If a child has had the disease and hasn't been able to speak for several years, it’s not realistic to expect a transformational change within the first 3 months. However, if we see consistent improvement in gross motor skills, fine motor skills, hand efficiency, social engagement, communication attempts, and reductions in seizures, those are the indicators that will suggest we’re seeing clinical effects, especially considering we are at the low dose. I'll pause here and see if Suku has anything to add for your perspective, Kristen.

So Sean, I mean, you laid it out very clearly. And what I would also just remind Kristen and the audience is that given that we are treating the root cause of the disease with our gene replacement therapy, the duration of the disease, whether it's a younger patient or older patient, the severity of the genotype and the actual severity of the clinical presentation, this complex syndromic presentation that these patients have, that, I think, will also drive at times the consistent efficacy that we've shown so far in the adult patients. So what I'm saying is, I think this gene therapy will treat the patients across the age ranges fairly efficaciously, but we have to see as we recruit the patients into the pediatric trial and gather that data to confirm this as well.

That was very helpful. For my follow-up regarding the RMAT designation, I understand that you can't share any data from the third patient yet. However, could you provide some insight on the length or the extent of the data the FDA had from this patient when they granted you that designation?

Yes. Thank you, Kristen. Suku, would you like to answer that question?

Yes, sure. Absolutely, Sean. So when we filed for the RMAT designation system, we filed with the data from the 2 adult patients, 2 adults in Canada, and 1 pediatric patient, who was dosed in the U.S. And the FDA reviewed that data set and found that our product has what they would consider significant clinical impact to qualify to receive the RMAT designation. And then as you know, once you get the RMAT designation, the FDA obviously then commits a lot more time in working with the sponsor on its product and program because there is commitment now that this disease that we are trying to address has significant unmet medical need and justifies very close collaboration between the sponsor and the FDA. So overall, we are very excited that we received it, and it's a good thing for patients.

The next question we have is from Salveen Richter of Goldman Sachs.

With regard to the mid-year update on the low-dose cohort, can you just frame this for us in the context of what we've seen so far, where you've had new benefits or basically maintained the benefit thus far? And then secondly, with regard to RMAT, help us understand how you're thinking about the regulatory process from here on the forward?

Sure thing, Salveen. So in terms of what to expect, we are going to provide an update mid-year on the 2 adult patients that we've dosed. So we'll work to share the most recent clinical observations and evaluations that have been done. And again, at this time both patients are off of steroids, as an example. So we'll make sure we highlight the endpoints that we've shared to date, the clinical observations that we've shared to date, and try to give a very fulsome update on how they are tracking over the course of time. With the pediatrics, think of it in the same terms relative to the endpoints; it's possible we could show some additional data that wasn't collected in the adult study as part of this mid-year update as well, and we'll provide the most recent available information we have for both patients. And so what we want to do is really give all of you a good landscape shot over the course of time on adults, detailing what we've been seeing. And again, to date, we have outlined that there's been a consistent effect across multiple clinical domains: gross and fine motor function, socialization and communication aspects, seizures, and hand function; all of that seems to have movement going in the right direction for both patients regardless of their genotype. We want to provide that same type of an overview for the first 2 pediatric patients. In our view, a win at the low dose would be seeing a consistent-type effect across these domains for the pediatric patients. As it relates to RMAT, we're excited about this for a number of reasons. First of all, what's fantastic is that you get very ready access to the FDA, including folks at a senior level. So what's the good of that? You can be very much more collaborative, just because you've got the opportunities to discuss what we're seeing and what we think we might want to do with endpoints and trial design and get their feedback early on. This can help dramatically in terms of reducing the amount of time and increasing the probability of success in a potentially registrational trial. So we are very thankful to the agency for granting that designation to us. What you do is within about 60 days is your initial meeting with them. So again, as we're generating this data, it will be very early on and we will have nice pulse checks with the FDA relative to our thinking and their thinking. We think we're pretty aligned going into it, but this will further enhance things. So I think that the communication aspect and who you're able to talk to are probably the most critical aspects of garnering the RMAT designation. But let me ask Suku if there's additional considerations that I didn't outline that you think are important.

Sean, I mean, based on what you've already discussed with Salveen, the RMAT obviously gives you a much closer contact with senior officials within the FDA, and it allows the sponsor to understand what FDA is thinking regarding the initial data of our product on the program, and what else should be done to accelerate the program if necessary. So essentially, it’s a process designation that the FDA created, allowing the sponsor to truly accelerate our program that we think will make a significant difference in this patient population, especially when there is a significant unmet medical need. As I said, my teams will work closely with the FDA regarding the clinical and CMC meetings and so forth, to move this program forward in an appropriate but rapid manner.

I would like to emphasize that RMAT is granted based on the preliminary clinical data that has been presented. We provided data from two adult patients, and Kristen inquired about the pediatric patient, for which we have four weeks of data. This reflects that a respected third party recognized the potential benefit for the patient population affected by the disease. We are pleased to have this designation and are looking forward to our first interaction under RMAT with the agency.

The next question we have is from Whitney Ijem of Canaccord Genuity.

I want to extend my congratulations on RMAT. My question is about Astellas. Can you remind us how they are being kept informed about the data? Is there a regular quarterly data sharing session, or how does that communication work?

Sure, Whitney. There is a formal structure for quarterly updates with the Astellas team. I want to highlight that Richard Wilson is an observer on our Board, so he is kept informed in real time about any updates we share with the Board. Additionally, when we have regulatory interactions, members of the Astellas team participate. Overall, I would say there is very clear transparency with Astellas regarding the data being generated, key strategic aspects of the program, and communications with regulatory authorities. Hopefully that helps you out, Whitney.

The next question we have is from Chris Raymond of Piper Sandler. It seems to have no response from that line. The next question we have is from Joon Lee of Truist Securities.

Congrats on the data and the progress. You're scheduled to present data on June 19 at a conference. Is that when we can expect initial pediatric data in the low dose? And do you have any plans to host a webcast around the event for the investors?

Yes. That would be the platform where we'd like to give the update on the pediatric data and the update on the adult cohort 1. And we haven't decided the specifics around further investor communication, but there will be some, Joon, yes.

The next question we have is from Maury Raycroft of Jefferies.

Congrats on the progress. Just a clarification question initially. Are you saying which month you dosed the second pediatric patient? Or can you say how much total follow-up you'll have in the mid-year update for the pediatric patients?

I don't believe we gave specific dosing date for the second pediatric patient. But what I would think about is that we would have 4 to 8 weeks of data, most likely, for that second patient.

Got it. And also clarifying for the pediatric data, are there specific measures or any unique efficacy measures that you're going to show for the pediatrics, like the MSLA measure, in the midyear update?

We're still working on the presentation, so I can share the information you've seen in the adults. However, there might be some measures included that we haven't shown yet because they're not part of the adult study. So I suggest staying tuned for that. We're currently gathering data, so more details will be available soon, Maury.

The next question we have is from Chris Raymond of Piper Sandler.

I apologize for the technical issues earlier. If this question has already been asked, I'm sorry, as I got disconnected. We've been hearing some discussions about the relative advantages of intrathecal administration compared to a competitor's program that utilizes ICV. There seems to be speculation that there could be a disadvantage for TSHA-102 regarding brain function. I'm curious about this because you are observing clear early improvements in autonomic functions, some communication enhancements, and even reductions in seizures. Could you remind us of the data showing that the vector effectively reaches the brain and has a wide distribution? I have a follow-up question as well.

Yes. I'll ask Suku to address this question. What I want to emphasize is that it's a combination of biodistribution and the total amount of MECP2 produced. There is a certain threshold that needs to be reached to effectively impact the disease. All the preclinical work we've conducted supports this, and the results for TSHA-102 at a lower dose administered intrathecally are quite impressive. Additionally, we investigated different ages of mice to evaluate effects on those harder to impact phenotypes, and we observed excellent outcomes with the intrathecal method as well. Most importantly, the clinical data must be examined. One reason we've shared our findings so far is to highlight the various clinical domains being influenced, such as gross and fine motor skills, speech and social interaction, seizure effects, and hand coordination; all of these involve different areas of the brain. There must be sufficient distribution and levels to achieve the impact we're witnessing. I would also mention the RMAT designation and the requirement to show preliminary clinical efficacy in a condition with significant unmet needs. I appreciate the academic discussions regarding different approaches, but the weight of the evidence suggests that TSHA-102 has a notable effect on the disease, which we are observing in real time. Suku, feel free to add any insights.

Well, Sean, you provided a solid explanation. I would just add that Rett syndrome is considered not only a neurodevelopmental disorder but also a disorder related to neural network maintenance. The quick response of adult patients to our gene therapy via lumbar puncture raises some questions. With gene therapy, regardless of the specific product, perfect biodistribution may not be necessary. What truly matters is the disease's pathophysiology. When MECP2 is present in the nucleus of every neuron, it activates thousands of genes — some of which are silenced while others are activated. My point is to visualize MECP2 as a compromised orchestra conductor. Once we reactivate him, the entire orchestra begins to play, and brain function starts to improve. This is what we are observing in the adult patients we have treated so far.

Well, I would add that we wanted to highlight in our last update regarding the interaction with steroid tapering and the impacts on RSBQ improvement in patient 1. Any progress here maybe or update on teasing that out as you continue dosing patients?

Not much else, Sean. As you pointed out, I think steroids and other immunosuppressants, what we are learning is the shorter they are used, the more effective it's going to be.

The next question we have is from Gil Blum of Needham & Co.

And again, congrats on the progress. So maybe harping a bit here, but just to help me understand what you guys mean by similar pattern of activity? I mean, there's multi-domain indications, right? Some of these patients are very heterogeneous. Just to help me understand that. And I do have a follow-up.

Yes, sure. I would say very simplistically, if you think about the endpoints like CGII, CGIS, RSBQ, and what those measure, yes, we're going to give updates on those types of scales, but it's also thinking about the domains like gross and fine motor function, hand function, speed and socialization, seizure aspect of things. We've always tried to paint a snapshot of the fact that the disease just hits so many different areas for each patient and that each patient can have more or less severity in one area versus another. It's very heterogeneous, as you know, and so we're just trying to say that it’s the same thing for the pediatric patients. They're going to present in a similar fashion in terms of multiple domains being affected. They've had the disease for, at least this group, 5, 6 years. It's important to show that we're affecting the disease across these domains, similar to what we're seeing in the adults at the low dose. But Suku, if there's something there you want to highlight further, please do.

No, Sean, I don't have much to add. I'll remind everyone that this is a very complex syndromic disease where multiple aspects of human biology become abnormal. I think, as Gil pointed out and as you know, the phenotypic presentation varies. So when it comes to the impact of a therapeutic intervention, my hope is that when you do the gene replacement through the intrathecal approach, you are able to restore function regardless of the syndromic presentation. As we accumulate more data, we hope that proves our point.

All right. That's very helpful. Now is there any reason to believe that potential improvements in the pediatrics will be larger than what we've seen in adults but maybe not in the learned functions that you guys discussed before. How about autonomic functions? I mean, they are younger patients.

That is a tough question. It’s probably safe to say, given that in the 2 adult patients we were rapidly correcting autonomic dysfunction within 10 days; if we are able to do those kinds of automatic corrections in the pediatric population also, within 10 days, it would be a remarkable outcome for this therapeutic intervention. Now the caveat, as you say, is can you do it in half the time? Honestly, I don't know. We have to dose the patients and see what happens. When it comes to autonomic dysfunction, the features we are aware of in Rett syndrome, rapidity of response, like, say, you get it addressed in 2 days versus 8 or 10 days, most likely doesn't make a significant clinical difference.

Great. Since you mentioned the heterogeneity, greater heterogeneity even, in young patients, I was wondering for the 2 patients you treated so far at baseline, what are the severity levels like, i.e., could there be a very mild phenotype and therefore incurring the caveat of potential to see less of an effect? And then I have a follow-up.

So I think the heterogeneity exists across the board when it comes to Rett syndrome, regardless of age. However, having said that, I think if you take a patient-by-patient with Rett syndrome, regardless of age, when you look at the complexities of the syndromic presentation, currently what we anticipate is a consistent response clinically given that the gene therapy has shown rapid response and sustained response to adult patients where one never expected a response. Pediatric patients, obviously we haven't disclosed baseline characteristics or any of the data yet. My hope is that as we go to the higher dose, the effect should be consistent regardless of the clinical features of the syndrome. Additionally, I would add that autonomic dysfunction seen in a young pediatric patient suggests that if your network is youthful, you should respond even quicker.

Yes. The only other thing I would say to that, Yanan, is that per the protocol, basically, you're going to see similar severities in that the CGIS range is between 4 to 6. So it's very similar to the adult trial in severity.

Got it. That's very helpful. As a follow-up, has the IDMC safety evaluation for patient #2 been completed, or is it still pending? Also, for the third patient, is the plan still to administer the low dose, or is there a possibility of assigning a higher dose based on the data you have gathered, similar to what was done for the adult cohort?

Yes, that's a great question, Yanan. The IDMC has not met yet for patient 2, but that will happen in the next couple of weeks. Your inquiry about moving to the high dose after just 2 patients will depend on several factors, including safety and observed efficacy. We haven’t discussed this with the IDMC yet, so please don't interpret my comments too strongly, I'm just providing an example. They might consider that it's a pediatric population and could decide not to dose a third patient simply because they are children. Ultimately, it will depend on the data presented to the IDMC.

The next question we have is from Jack Allen of Bird.

Congratulations on the progress. I have a quick question, similar to the previous ones. I know there was a discussion about the phenotypes of the pediatric patients from whom we will receive data in the next couple of weeks. What can you share about their genotypes? Do you have any information regarding the genotypes of these two patients?

Yes. We haven't disclosed that. But Suku, do you want to comment on that?

So I just want to make sure I got the question. In the 2 pediatric patients, right? So we haven't disclosed the genotypes at this point in time. But what I can tell you is one patient is, I would call, very mild or mild, and the other patient is more towards the severe side. Keep in mind they evaluate CGIS and so forth to see how sick patients are. So that also gives you a feel for what one would anticipate as a response to the therapy. However, there's a caveat: Even if someone with Rett syndrome has a mild phenotype due to a missense mutation, some of their symptomology could be treated remarkably well. If you look at our second adult patient, who had multiple seizures, they are now seizure-free and the anti-seizure medicine doses have been decreased by 25%. My point is, sometimes these patients present with multiple clinical features, and the question is which of these can be controlled or eliminated such that the patient gets much stronger and has a productive life.

The last question we have is from Silvan Tuerkcan of Citizens JMP.

Congratulations on receiving the RMAT designation. I have a question regarding pediatric patients, as they may be more diverse. Is there anything regarding safety that we should take into account? Do they have any comorbidities or similar concerns?

Sure, I would just clarify that the pediatric patient isn't any more heterogeneous than the adult patients.

That's correct. It's the same distribution, to my knowledge, Sean. Yanan, your question: do you mind repeating it?

Yes, sure. I was just wondering in pediatric patients in general if there's anything on the safety profile side that we may have to be aware of. They're smaller livers, anything with toxicities, but also maybe comorbidities that smaller patients have that adolescents don't have.

No, that's a good question because we did discuss that in great detail before we launched this program. Given that the intrathecal dose, about 15% to 20% does get into systemic circulation, and as you know, AAV9 is tropic to the liver, that’s where it goes. But elevation in liver enzymes with an intrathecal dose, which is pretty low, compared to a systemic dose, is highly unusual. Any change in blood count is also highly unusual, and complement activation and the thrombotic events that have been seen in DLT are highly unusual, if ever with intrathecal therapies, purely because we’re giving such a low dose. Let me think. The antibodies and T cells being made are transient, highly unusual. Given all of this, from a gene therapy standpoint, I believe the benefit far outweighs the risk.

Just thank everybody for your time this evening, and we look forward to providing further updates here in the coming weeks on both the cohort 1 adults as well as the available data for the 2 pediatric patients. Thank you all. Have a good night.

This concludes today's conference. Thank you for joining us. You may now disconnect your lines.