Greetings and welcome to the Taysha Gene Therapies Second Quarter 2024 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Hayleigh Collins, Director and Head of Corporate Communications and Investor Relations. Thank you. You may begin.

Thank you. Good morning and welcome to Taysha's second quarter 2024 financial results and corporate update conference call. Earlier today, Taysha issued a press release announcing financial results for the second quarter ended June 30, 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 the patients dosed to date in the clinical trial to positively impact the quality of life and also the course of disease in the patients we seek to treat, our research, development and regulatory plans for our product candidates including timelines for our clinical trials and reporting results therefrom, and our current cash resources supporting our planned operating expenses and capital requirements into the fourth quarter of 2026. These statements may include but are not limited to 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 to obtain patent protection for our discoveries, limitations imposed by patents owned or controlled by third parties, and the requirements of substantial funding to conduct our research and development activities. For a list and description of the risks and uncertainties that we face, please see the reports we have filed with the SEC, including our Annual Report on Form 10-K for the full year ended December 31st, 2023 and our quarterly report on Form 10-Q for the quarter ended June 30, 2024 that we filed today. This conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, August 12, 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 second quarter 2024 financial results and corporate update conference call. Today, I will begin with a brief update on our recent activities and then Suku, our President and Head of R&D, will provide an update on our lead TSHA-102 program and clinical evaluation for Rett Syndrome. Kamran Alam, our Chief Financial Officer, will follow-up with a financial update, and I will provide closing remarks and open the call up for questions. In the second quarter of 2024, we made strong progress across the TSHA-102 program and clinical evaluation for pediatric, adolescent, and adult patients with Rett Syndrome. This included reporting encouraging safety and efficacy data from the low-dose cohort in both our REVEAL Phase 1 and 2 trials, initiating the high-dose cohort, expanding our pediatric trial into Canada, and strengthening our balance sheet. With this progress, we believe we are well positioned to execute across key value-creating milestones in our TSHA-102 program. Our goal is to develop potentially transformative therapeutic options for all patients suffering from Rett Syndrome. We remain steadfast and focused on clinical trial execution and data collection across a broad range of ages and stages of patients with Rett Syndrome, which will further inform our discussions with regulatory authorities on the development plan for the next phase of our studies. As a reminder, Rett Syndrome is a rare neurodevelopmental disorder that afflicts an estimated 15,000 to 20,000 patients in the United States, European Union, and United Kingdom. Currently, there are no approved disease-modifying therapies that treat the genetic root cause of the disease, and there is significant unmet need. Rett Syndrome is caused by mutations in the X-linked MECP2 gene, which results in neural network dysfunction and leads to multi-system complications. It is characterized by loss of communication in hand function, slowing and/or regression of development, motor and respiratory impairment, seizures, intellectual disabilities, and shortened life expectancy. Individuals with Rett Syndrome typically require round-the-clock care and lifelong assistance with daily activities, resulting in high caregiver burden and significant impact on quality of life. Our TSHA-102 gene therapy candidate is a one-time intrathecally delivered treatment designed to address the underlying cause of the disease. Rett Syndrome is challenging to treat with traditional small molecule and gene therapy approaches due to the random X inactivation and subsequent mosaic expression pattern of MECP2 that results in a mixture of cells that are either deficient in MECP2 or express MECP2 normally. We believe TSHA-102, equipped with the novel 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. Recall, we have two ongoing Phase 1/2 REVEAL trials evaluating TSHA-102. An adolescent and adult trial taking place in Canada and the U.S. for patients 12 and older with Stage 4 Rett Syndrome, which is the most advanced stage of the disease. And a pediatric trial taking place in the U.S. and UK with recent clearance in Canada for patients five to eight years of age with Stage 3 Rett Syndrome. We are currently enrolling patients in Part A, the dose-escalation portion of both trials, which is evaluating two dose levels of TSHA-102. Part B of the pediatric trial, the dose expansion portion, will evaluate TSHA-102 in two age cohorts, an expanded five to eight years of age cohort and the three to five years of age cohort. Two patients have been dosed in Cohort 1, which is evaluating the low dose of TSHA-102, 5.7x10^14 total vector genomes in each trial. At the 2024 Rett Syndrome foundation and Rett Syndrome scientific meeting in June, we reported encouraging preliminary data from Cohort 1 in our pediatric trial and longer-term data from Cohort 1 in our adolescent and adult trial, which demonstrated a well-tolerated safety profile and improvements across consistent clinical domains impacting daily activities in the adult and the pediatric patients treated with the low dose of TSHA-102. We are pleased by the consistent clinical response demonstrated across multiple areas of disease, including autonomic function, seizures, gross motor skills, fine motor skills and hand function, and communication and socialization in both adult and pediatric patients with different genetic mutation severity. We look forward to continuing to evaluate the clinical impact of the low dose of TSHA-102 over time. Following a review of these data, the Independent Data Monitoring Committee, or IDMC, approved our request to dose-escalate early in both REVEAL trials. Therefore, dosing in Cohort 1 of both trials is complete. Expediting dose-escalation is an important step in our development plan as advancing to the high dose accelerates our ability to further inform our clinical development and regulatory strategy for the next phase of our studies. With Cohort 1 complete, we turn our focus to dosing patients from the high dose cohort across both our REVEAL trials and building on our promising preliminary low dose data set from both adult and pediatric populations. We dosed the first patient in Cohort 2 of our adolescent and adult trial, which is evaluating the high dose of TSHA-102, which is one use of 15 total vector genomes. We are pleased to share that the high dose of TSHA-102 was generally well tolerated with no serious adverse events or dose-limiting toxicities as of the patient's initial six-week assessment. Following a review of these data, the IDMC provided clearance to proceed with dosing the second patient in Cohort 2 of the adolescent and adult trial and the first patient in Cohort 2 of the pediatric trial earlier than planned. Subsequently, we enrolled the second adolescent adult patient and the first pediatric patient in Cohort 2 across both trials. Dosing of both patients is scheduled to occur in the third quarter of 2024. Lastly, we strengthened our balance sheet with the recent completion of a public follow-on offering that resulted in total net proceeds of $76.8 million. We expect the net proceeds to extend our anticipated cash runway into the fourth quarter of 2026 to support the continued development of our TSHA-102 program. Importantly, this capital infusion allows us to build on our preliminary TSHA-102 clinical data set in the adult and pediatric patients and enables us to focus on execution as we endeavor to deliver on key value-creating milestones. We are moving forward reporting cohort-based updates with more mature data sets in order to provide more comprehensive updates on our clinical data. In line with this decision, we plan to report safety and efficacy data from the high dose cohorts and an update on the safety and efficacy from the low-dose cohorts in both our adolescent and adult trial and our pediatric trial in the first half of 2025. With our balance sheet strengthened and cash runway extended, we believe we are in an excellent position to execute on our key upcoming milestones. I will now turn the call over to Suku to provide a more in-depth discussion of our TSHA-102 program.

Thank you, Sean, and good morning, everyone. I'm pleased to provide an update on our TSHA-102 gene therapy program in clinical evaluation for Rett Syndrome. We will start with our REVEAL Phase 1/2 adolescent and adult trial. As Sean mentioned, we have completed dosing in Cohort 1, which included two adult patients who received the low dose of TSHA-102. TSHA-102 demonstrated an encouraging safety profile with no serious adverse events related to TSHA-102 or dose-limiting toxicities as of the week 52 assessment for the first patient and the week 36 assessment for the second patient. Additionally, long-term efficacy data showed a continued durable response with sustained and new improvements across multiple clinical demand and efficacy measures at week 52 following the completion of the steroid and sirolimus taper for the first patient and at week 25 following the completion of the sirolimus taper for the second patient. Both adult patients demonstrated partial restoration of function or improvement in areas of disease that were lost in early childhood, which is not typically observed in the natural history of Rett Syndrome. While the disease severity differed between the two adult patients, the improvements were demonstrated in consistent clinical domains as early as four weeks post-treatment in both patients, which was sustained through longer-term assessments. This included improvements in autonomic function, seizures, gross motor skills, fine motor skills, hand function, and communication and socialization, which can translate to beneficial impacts on quality of life and daily activities for patients and caregivers. We look forward to continuing to evaluate the patients over time for potential further improvements. These improvements are supported by clinical observations reported by the principal investigator, video evidence, and multiple clinical and caregiver-reported efficacy measures. The well-tolerated safety profile and durable response in both adult patients with the most advanced stage of disease is encouraging and supports the transformative potential of TSHA-102 across multiple genotypes of patients with Stage 4 Rett Syndrome. Now let's turn to our ongoing REVEAL Phase 1/2 pediatric trial evaluating the safety and preliminary efficacy of TSHA-102 in females, 5 to 8 years of age with Stage 3 Rett Syndrome. While this trial captures an earlier stage of disease, it is important to understand that most of these patients require lifelong caregiver dependence and present with hallmark symptoms and many advanced manifestations. Enrollment criteria require patients to be post regression and have entered the stage of stabilization, meaning there have not been any identified loss of skills in the last six months prior to treatment. Cohort 1, evaluating the low dose of TSHA-102 completed, and TSHA-102 demonstrated an encouraging safety profile with no serious adverse events related to TSHA-102 or dose-limiting toxicities as of the week 22 assessment for the first pediatric patient and week 11 assessment for the second pediatric patient. Similar to the adult patients, the pediatric patients possess different disease severity and genetic backgrounds. Importantly, both pediatric patients demonstrated initial improvements across the same clinical domains we observed in the adult patients with early evidence of developmental gains following treatment at week 12 and 8 respectively. This included improvements in autonomic function, seizures, gross motor skills, fine motor skills, hand function, and communication and socialization, which can translate to beneficial impacts on quality of life and daily activities for patients and caregivers. We look forward to continuing to evaluate the patients over time for potential further improvement. These improvements are supported by clinical observations reported by the principal investigator, video evidence, and multiple clinical and caregiver-reported efficacy measures. Rett Syndrome is a highly complex syndromic disease. The critical takeaway is that we believe these early improvements and signs of developmental gain observed across consistent areas of disease in the adult and pediatric patients are very encouraging and support the potential of TSHA-102 to bring meaningful benefit to patients and caregivers. We look forward to collecting longer-term data on the low dose and moving to the high-dose cohort across both REVEAL trials, where the totality of the data we collect will further inform our developmental plan for the next phase of the study. I will now turn the call over to Kamran to discuss our financial results.

Thank you, Suku. Research and development expenses were $15.1 million for the three months ended June 30, 2024 compared to $19.8 million for the three months ending June 30, 2023. The $4.7 million decrease was primarily due to a milestone fee payable to Abeona Therapeutics during the three months ended June 30, 2023 following the dosing of the first patient in the REVEAL Phase 1/2 adolescent and adult trial. General and administrative expenses were $7.3 million for the three months ended June 30, 2024 compared to $6 million for the three months ended June 30, 2023. The increase of $1.3 million was primarily due to $0.9 million of higher noncash stock-based compensation expenses and $0.4 million of higher consulting, professional fees, and other expenses. Net loss for the three months ended June 30, 2024 was $20.9 million or $0.09 per share compared to a net loss of $24.6 million or $0.38 per share for the three months ended June 30, 2023. As of June 30, 2024, Taysha had $172.7 million in cash and cash equivalents. The company expects that its current cash resources will support planned operating expenses and capital requirements into the fourth quarter of 2026. I will now turn the call back over to Sean for his closing remarks.

Thank you, Kamran. Overall, we are encouraged by the well-tolerated safety profile in patients who received the low dose of TSHA-102 and the clinical effect being demonstrated across consistent clinical domains in the pediatric and adult patients with Stage 3 and 4 disease treated with the low dose of TSHA-102. We believe these Cohort 1 data validate our novel construct and support the potential of TSHA-102 to address the significant unmet medical need in Rett Syndrome for a broad range of ages and stages of patients. We are pleased the high dose of TSHA-102 was generally well tolerated as of the initial six-week assessment in the first patient treated in Cohort 2 of the adolescent and adult trial. IDMC approval to proceed with dosing the second adolescent adult and the first pediatric patient earlier than planned in the high-dose cohort of our REVEAL trials enables us to build on the promising preliminary low dose data that demonstrated relevant clinical effects across key clinical domains impacting activities of daily living in the adult and pediatric patients treated with TSHA-102. As we move to the high dose, we continue to look for a similar pattern of consistent improvement across adult adolescent and pediatric patient populations. Looking ahead, we remain focused on clinical trial execution and data collection. The totality of the data we collect from the low and high dose in Part A will further inform our discussions with regulatory authorities on our development plan for the next phase of the trials. We look forward to reporting safety and efficacy data from the low dose and high-dose cohorts in both adolescent and adult trials and the pediatric trial in the first half of 2025. With that, I will now ask the operator to begin our Q&A session.

Thank you. Our first question comes from the line of Kristen Kluska with Cantor Fitzgerald. Please proceed with your question.

Hi, good morning everyone. Thanks for taking my question. So when you report the high-dose data next year, what in your opinion is going to be the best way to determine if there is a dose response? We already did see some profound changes from the low dose, and the definition of improvement really differs from patient to patient, given the heterogeneity in different domains impacted. Is there a clear way that you're looking to try to measure this?

Thanks, Kristen. I'll take that initially, and Suku feel free to jump in on this. First of all, when you take a look at the preclinical data, at the high dose, there was an increase in survival, and there was an improvement in gait abnormalities, just kind of a surrogate for overall health. Obviously, when you go into the high dose, you're going to be pushing more volume, which should have greater bio-distribution and greater transduction. We would expect, first and foremost, that we see consistent effects across all the clinical domains that we've talked about. The low dose has effectively established a high hurdle bar. I think we're in a good place with the high dose, and we expect that this would effectively build on that. Based on the preclinical data and the challenging translation of exactly what that's going to look like in adults, it's difficult to predict the overall magnitude and the temporal aspect of things. We expect that there should be an observed improvement, but the question is really, do we see it early on, or does it take more time to manifest? Ultimately, we will need to run the experiment to fully answer your questions. From a comparative perspective, we are utilizing the same endpoints, the same clinical observation mechanisms, and the same ways to capture the data, trying to keep all that as consistent as possible. Once we have enough data in patients over a longer duration, we feel confident we'll be able to determine whether there is a drug effect. Suku, do you have anything else to add?

Yeah, thanks, Kristen and Sean. You've raised a very interesting question because usually, in drug development, right, you look for the highest dose that gives you the greatest efficacy and safety, and that seems to apply for gene therapy and in Rett Syndrome. As you point out, Kristen, with such a heterogeneous disease, a lower dose is showing consistent response, which I think parents and patients will appreciate. But at the same time, though, if you look at some of our preclinical data and some of the work done by Sir Adrian Bird and others, there is justification to go to the higher dose to see if the higher dose will also give us a consistent and better response than the lower dose. It's a complex situation, and I think the data will ultimately drive the endpoints that will get approved by the regulators and show significant clinical impact for this patient population.

Thank you.

Thank you, Kristen.

Thank you. Our next question comes from the line of Elizabeth Webster with Goldman Sachs. Please proceed with your question.

Hey, good morning and thank you for taking my question. This is Elizabeth on for Salveen. Wondering on the regulatory front if you could comment on how the dialogue is going with the regulatory authorities and if there's any additional color you can share about the nature of those conversations to date? Thank you.

Thanks, Elizabeth. On the regulatory front, we do have an upcoming Type B meeting as a result of the RMAT designation. There would be subsequent updates on that in the future. Our goal at this meeting is to align on the cadence of how we're going to interface with the agency and focus on priorities that we want to continue discussing based on historical data. We want to ensure that they’re seeing the data in a timely manner, plus the additional work that we're doing on natural history, which will inform our discussions and the design of Part B.

Thank you.

Thank you. Our next question comes from the line of Chris Raymond with Piper Sandler. Please proceed with your question.

Hey, thank you. Just a question on what you're going to present in the first half of next year in terms of time on therapy. Looking back at the last update, I think the low-dose pediatric update had some variability. I think one patient was 12 weeks post-dose, another one was 8 weeks. Are you looking to standardize that follow-up, and what is that time point if you can tell us? Thanks.

Yes, Chris, I'd say it's encouraging that we were seeing signs of preliminary efficacy at those early time points. To provide more clarity, we aim to generate more data over time for a more comprehensive update. For the high dose, we plan to have three patients in each cohort, with a minimum of six months of data to report. We feel this will give everyone more confidence and help ensure consistency.

Yes, very much. Thank you.

Thank you. Our next question comes from the line of Gil Blum with Needham & Company. Please proceed with your question.

Good morning, and thanks for taking our question. As it relates to discussions that you are going to have with the FDA over time, is there a situation in which a potential endpoint may depend on what the patients have at baseline? For example, if patients have a significant seizure burden, could they be assessed on that? I'm just trying to understand how to view a heterogeneous disease like that. Thanks.

Gil, great question. I would say a couple of things and certainly turn it over to Suku for his insights. In a disease that's heterogeneous, we are always trying to think of the best way to standardize what you're capturing. I can see a world where if you're able to restore or partially restore a lost function, it would be highly impactful to the agency and payers. We are refining our endpoint selection and thinking about how we can measure consistent improvements, potentially focusing on certain clinical measures while also capturing the restoration of function. Suku, would you like to add anything?

Yes. The complexity of the disease brings about challenging questions about assessments. As we gather natural history data, we look at various clinical features that may provide good comparatives, regardless of the clinical trial design. We want to assess the clinical impact consistently and ensure that the endpoints we use will provide a clearer picture of our therapy's benefits.

Thank you.

Thank you.

Thank you. Our next question comes from the line of Joon Lee with Truth Securities. Please proceed with your question.

Hey, thanks for taking our questions. Can you help us understand your change in the data disclosure strategy? As we see from your first patient, the one with the best efficacy so far was shared at week six, yet the data from the second high-dose cohort passed the six-week mark but you're reserving that for later. Anything you can share on efficacy will be helpful there? And also, clarify what you mean by 'fulsome.' How many patients' worth of data do you think is sufficient to get a clear picture, and how much data would you have by 1Q that passes that definition?

Just to clarify, you're talking about the fact that we reported on the very first patient at six weeks and now we're planning to report long-term data for the high dose. There have been some changes in our reporting strategy, particularly given the company's improved financial position. When we reported the first patient, we needed to maintain transparency, and now we feel it's beneficial to present data on a cohort-by-cohort basis. We want to ensure a minimum threshold of three patients in the high-dose cohort for more robust updates. We hope this will better demonstrate consistency and durability over time.

Yes, that makes a lot more sense. Thank you so much.

Of course. Thank you.

Thank you. Our next question comes from the line of Maury Raycroft with Jefferies. Please proceed with your question.

Hi, thanks for taking my question. Does the timeline change to your data impact your timeline for an under Phase 1 meeting with the FDA for the randomized pivotal study? Could that still happen in the first half of 2025 or is it more likely the second half of the year? And do you anticipate the first half 2025 data would be sufficient to bring to the FDA for alignment on a randomized Phase 2 pivotal, or would you need additional follow-up?

Great question. We aim to sit down with the FDA and have a full discussion around the design of Part B. To do this, we want to complete Cohort 2 dosing as well as our natural history analysis. These are key data points needed for discussions. We intend to have a meeting in the first half of 2025, but we're not yet certain of the exact data level needed for a comprehensive discussion.

Yeah, very helpful. Thank you.

Thanks.

Thank you. Our next question comes from the line of Yanan Zhu with Wells Fargo. Please proceed with your question.

Great, thanks for taking our questions. Based on what you just articulated about the maturity of the data, it feels like the first half 2025 guidance is probably going to be more in the second quarter than the first quarter. Is that the right takeaway? And given that you have dosed just one of the six patients today across the two high-dose cohorts, do you think you could have timely enrollment and dosing to ensure the data could be available in the first half of 2025? Can you comment on the safety waiting period? Is that 42 days across all six patients in those two dose cohorts?

Two things, Yanan. We guide to the first half to maintain flexibility. Regarding the 42-day stagger, we have that in mind, and we're confident in our current timeline. We still feel good about the data collection process based on what we know today.

Got it, thank you.

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

Hi, thanks for taking the questions and congratulations on the progress. My first question was on the high-dose patients that have been enrolled in the study today. It seems like there are about three patients that have been enrolled. In low-dose cohorts, we noticed a difference in the severity of patients depending on their deletions. I was wondering if you could comment as it relates to the baseline characteristics of these high-dose patients?

Yes, so the CGIS, these patients for protocol fall into a range of 4% to 6%. Disease severity may drive the response, but there will always be common clinical features such as autonomic dysfunction, vascular abnormalities, seizures, hand function loss, etc. It's important to keep assessing these features as they can help gauge the therapy's impact.

Thanks so much for the color.

Thank you.

Thank you. Our final question this morning comes from the line of Silvan Tuerkcan with Citizens JMP. Please proceed with your question.

Hey, good morning and thanks for taking my question. Are there any more details on the serious adverse event that you observed in the pediatric patient that was related to the immunosuppressive regimen that we haven't heard before? And then regarding the safety committee, clearly they accelerated your ability to dose into a higher dose. At what point could they adjust or get rid of the stagger, the 42-day waiting period between patients? Thank you so much.

Suku, can you address the first part about the serious adverse event, and then I can touch on the stagger. We've shared all relevant disclosure about the SAE that resolved, and now we are moving forward from a dosing perspective. The discussion about the stagger really involves the company and the IDMC, and it will be based on the data we continue to collect.

Yes, the safety profile is continually assessed, and I want to emphasize that the serious event was declared non-treatment related. We're progressing with the dosing as planned. Regarding the stagger, IDMC's guidance will depend on the continued safety results, and there could be adjustments based on upcoming data.

That seems to cover it. Thank you, Silvan.

Thank you. Ladies and gentlemen, that concludes our question-and-answer session. I'll turn the floor back to Mr. Nolan for any final comments.

Just appreciate everyone calling in and always happy to follow up with any additional questions offline. Thank you all and have a good day.

Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.