Voyager Therapeutics, Inc. Q4 FY2024 Earnings Call

Good afternoon, and welcome to Voyager Therapeutics Fourth Quarter and Year-End 2024 Financial Results Conference Call. At this time, all participants are in a listen-only mode. There will be a question-and-answer session at the end of this call. Please note that today's call is being recorded. A replay of today's call will be available in the Investors section of the company website approximately 2 hours after the completion of this call. I would now like to turn the call over to Trista Morrison, Chief Corporate Affairs Officer at Voyager.

Good afternoon. We issued our fourth quarter and year-end 2024 financial results press release this afternoon. The press release and 10-K are available on our website. On today's call, Dr. Al Sandrock, our Chief Executive Officer, will briefly review key recent and upcoming milestones, and we will reserve most of our time for your Q&A. Joining us for Q&A are Dr. Toby Ferguson, our Chief Medical Officer; Dr. Todd Carter, our Chief Scientific Officer; and Dr. Nathan Jorgensen, our Chief Financial Officer. Before we get started, I would like to remind everyone that during this call, Voyager representatives may make forward-looking statements, as noted in Slide 2 of today's deck. These statements are based on our current expectations and beliefs. They are subject to risks and uncertainties, and our actual results may differ materially. I encourage you to consult the risk factors discussed in our SEC filings, which are available on our website for additional detail. Now, I will turn the call over to Al.

Good afternoon, everyone, and thank you for joining us. As Trista said, we plan to keep our remarks brief and prioritize your questions. On Slide 3, I want to remind you of why we're so excited about Voyager. Our pipeline includes four wholly owned and 13 partnered programs. We have already begun to generate clinical data, and we have multiple opportunities to generate more in the coming years. We are particularly excited about our two wholly owned programs targeting tau, which we view as the most important target in Alzheimer's disease. We also have two platforms to enable CNS delivery. I think most of you are familiar with our TRACER capsid platform for IV-delivered, CNS-targeted gene therapies. We are also generating data with our ALPL-based non-viral shuttle. I am hopeful we will be able to share some of that data with you later this year. Finally, our partnerships have been a significant source of non-dilutive revenue for us. That's the big reason we are able to report $332 million in cash as of the end of 2024. And with $8.2 billion in potential future milestone payments, we believe partnerships will continue to contribute significantly to our bottom line. As I always say, we are open for additional business. We are always discussing new partnership opportunities. While we are building a multimodality neurotherapeutics company here, I want to make a comment about gene therapy, which comprises much of our current pipeline. Despite continued setbacks in the field, it is possible to create a gene therapy that drives value for patients and investors. Zolgensma proves this. I want to emphasize that many of the foundational principles behind Zolgensma's technical and commercial success are principles Voyager also adheres to. This includes focusing on genetically validated targets in severe diseases with high unmet need. It also includes IV delivery, which we view as critical to commercial viability. We believe IV delivered AAV capsids will be required to enable gene therapy in most CNS diseases, given the limitations of localized delivery. The potential of our IV capsids to efficiently deliver across the blood-brain barrier, not only in infants, is presumably why Novartis came to us for an SMA gene therapy partnership. I'm not going to belabor this point, but I do think it is important to differentiate Voyager's approach from the broader gene therapy field. On Slide 4, you can see our pipeline. I won't go into a lot of detail here, other than to point out that our SOD1 silencing gene therapy program did move back into the research stage, as we announced last month. The payload did not meet our target profile, and we are going to need to identify a new payload to advance that program. At the same time, I will note that VY1706, our tau silencing gene therapy, has moved forward into IND-enabling studies and is advancing toward IND in 2026. On Slide 5, I will note a few more quick highlights from the quarter and upcoming milestones to watch. I mentioned that VY1706, which was selected as a development candidate in Q4 2024, has now advanced into IND-enabling studies. We are really excited about the data from our three-month non-human primate studies, where we are seeing 50% to 73% knockdown of tau messenger RNA, quite broadly across the brain. We have previewed a little of this data in our corporate deck on our website, and we will share more at the ADPD conference in April. Our anti-tau antibody, VY7523, performed well in a recently completed single ascending dose study. There were no serious adverse events, and we saw dose-proportional pharmacokinetics as well as a CSF to serum ratio of 0.3%, consistent with other monoclonal antibodies approved for the treatment of Alzheimer's disease. We initiated a multiple ascending dose study in Alzheimer's patients, and we expect initial tau PET data in the second half of 2026. Finally, I want to point out that in Q4 2024, UCB's bepranemab demonstrated for the first time that an anti-tau antibody can impact tau accumulation in the human brain and that this may correlate with clinical benefit. It's important to acknowledge the study didn't meet its primary endpoint of the CDR sum of boxes, but our team walked out of the CTAD meeting feeling better about our anti-tau antibody than when we walked in. Looking forward, I think there are several opportunities this year for third-party data to continue to build excitement for tau. Merck has antibody data expected in mid-2025, and I look forward to seeing what we learn at ADPD in April, AAIC in July, and CTAD in the fall. Okay, I promised I would keep it short. I just want to thank all of our employees for their hard work, especially pushing to achieve those end-of-year goals like getting the development candidate for the tau silencing program, working on the VY7523 single ascending dose analyses, and initiating the multiple ascending dose study. With that, we will open the call for questions. Operator?

Thank you. Our first question comes from Jack Allen with Baird. You may proceed.

Thanks so much for taking the questions and congratulations to the team on the progress. I guess, Al, maybe I'll start where you left off your opening remarks there. You mentioned some external readouts that could be interesting in the tau space. Any additional color you'd like to provide ahead of ADPD as it relates to things people should be looking out for? And then I have a quick follow-up as well on your partnered programs.

Yes. Hi, Jack. At ADPD, I hope to see data from bepranemab regarding the exposure PD relationship, which they didn't have a chance to share at the CTAD meeting last year. I'm also looking for more data on the decrease in tau spreading needed to observe a clinically relevant effect. Additionally, I would like more information about subgroups where greater efficacy can be achieved. They began discussing this at CTAD, such as the effects of APOE4 carrier status and initial tau burden. We may learn more about which patients might be ideally treated with an anti-tau approach. Other companies have started sharing data on their anti-tau programs, including some on fluid-based biomarkers targeting the MTBR region. I'm also aware of tau silencing approaches, such as those from Biogen, and I look forward to any updates on that. Toby, would you like to add anything?

Al, I think I certainly agree with your comments and sort of echo the comments on exposure response, both initial PK/PD, but also in particular the tau PET to clinical relationships. I do think on the subpopulations, for example, I'd like to see details on the low tau or APOE group they described previously. Curious what they think the pull through of APOE is. Is it just that those individuals without an APOE allele have low tau? Or is there some other defining characteristics of that population?

Got it. Great. That's a very helpful color. And then more on the finance side, but I just wanted to ask, it seems like the two programs with Neurocrine on the gene therapy front are expected to enter the clinic or at least an IND is filed this year. Any additional color you can provide as it relates to thoughts on upcoming milestones from either Neurocrine or additional external partnerships that you've forged as well over the years.

Okay, thanks for the question, Jack. This is Nate Jorgensen, the CFO. And so, what we have said is that there's $2.9 billion of developmental milestones. So these are milestones I think are not just bio bucks like some companies report, but if you add all the bio bucks together, it's over $8 billion as Al mentioned. So there are some I think pretty meaningful milestones over the next few years that could help extend our cash runway past the mid 2027 guidance that we talked about externally.

Got it. And are those milestones at all accounted for in your guidance or are they additional upsides…

No, they're not. So that's all upside to the mid-2027 cash runway guidance.

Perfect. Thanks so much. Those are my first questions. Let me now hop back in the queue. Congrats again on the progress.

Thanks, Jack.

Our next question comes from Phil Nadeau with TD Cowen. You may proceed.

Good afternoon. Thanks for taking our questions. A couple from us. First on the tau gene silencing IND, can you give us some details about what needs to be completed before that IND can be filed next year?

Well, I mean, the main thing is that, we have to complete the GLP tox study that we just started, and then we need to be sure that we have a therapeutic window. As we said, our initial non-human primate study shows 50% to 73% knockdown, which is exactly in the range that we want. We just have to be sure that now we don't have any safety issues that allow for that dosing for the right dose to produce that level of silencing.

Perfect. And then second question on the ALPL shuttle. Can you discuss where that could be most applicable? What indications are you thinking that would be most useful for and any sense on when one of those candidates could advance?

We are exploring a wide range of diseases and targets. This receptor facilitates the penetration of one of our main classes of capsids across the blood-brain barrier, enabling access to the central nervous system quite broadly. This opens up possibilities for various diseases, including those affecting the spinal cord, cerebral cortex, and even subcortical areas. The types of drugs we are considering transporting across the blood-brain barrier include proteins like enzymes or antibodies, and we are also evaluating the transport potential for oligonucleotides. This presents numerous opportunities. Furthermore, we are contemplating which antibodies or enzymes may be most effective for oligonucleotides. As we mentioned regarding the anti-tau antibody, we achieved a CSF to serum ratio of 0.3%, meaning that 99.7% is not utilized properly, which limits our efficacy. Increasing the amount of antibody that can reach the brain would be beneficial. Currently, all antisense oligonucleotides are administered intrathecally for central nervous system disorders, which creates a burden for patients and results in a significant gradient in the CNS that we believe is a limitation. Therefore, there are many avenues to explore. Todd or Toby, would you like to add anything to that?

I think you've captured most of it, Al. The other part of your question was moving things forward and while we haven't shared any data, we're hoping to share more of our early work later this year.

That's very helpful. Congrats again on the progress.

Thanks, Phil.

Our next question comes from Pete Stavropoulos with Cantor Fitzgerald. You may proceed.

Good afternoon and congratulations on all the progress. And thank you for taking our questions. First question I have, as we look forward for the tau silencing gene therapy, I'm wondering if you can talk about the key differences we should expect from tau silencing versus targeting antibodies. And thinking about the Biogen data for 080, what's your view on the combination of – meaning, a tau silencing or knockdown with a monoclonal approach.

Thanks, Pete. This is Toby. Good to hear from you. So I think fundamentally that our belief on the knockdown approach with 1706 is a couple of key points. One, as we've highlighted, it will use our second-generation TRACER capsids, and so it will be injected IV once, and that gives us a couple of clear advantages. I think one is that, it allows for better biodistribution accessing the vasculature via ALPL. And so that's quite distinct from the grade you get with intrathecal injection, the lumbar space with an ASO. So I think that presents an opportunity for broader tau knockdown. And so that is, I think, quite an important point. And then in addition, the fact that it's IV in one time, we think, is clearly some benefits, both for the patient and potentially for the healthcare system in terms of ease of uptake. I think the other point I'd make is that, of course, the Biogen data which comes out in, we think, in mid Q3 of 2026 will be an important inflection point. And of course, we have an IND for our program in 2026 as well. So we think that's an important pairing. In terms of the antibody, I think fundamentally the premise of the antibody is slightly different than you're trying to impede spread. And so the idea there is that you would want to target that to a population in which tau has not yet spread. On the other hand, for the knockdown approach, you look at the data that Biogen has shared. In that case, you can remove preexisting tau. And that was shown by some studies, which is quite a remarkable observation. So there may be some broader latitudes. There may be space for sequencing of a beta-amyloid therapy with an antibody and then a tau knockdown approach as well.

All right, thank you for that, And just one more question. The way that we viewed the SOD1 gene silencing program, it would provide proof of concept for the capsid and its ability to cross the blood-brain barrier efficiently by looking at changes in the NFL, which we would hope to have seen similar to Tofersen. How are you thinking about establishing the human proof of concept? Which program will likely help you do so? Is there any agreement or expectation of a partner sharing some data or allowing you to, once it's generated?

So Pete, this is Toby again. So I think you've rightly keyed in on the fact that the next opportunities to generate capsid proof of concept really sit with the Friedreich’s ataxia and/or the GBA program which are partnered with Neurocrine. I'll just remind that the INDs for those programs are coming up this year. And I think what I'd say holistically is Neurocrine is running those programs, but we have a strong collaboration with them across the development teams. And in both cases, in Friedreich’s there's an opportunity for biomarker measurement in terms of protection levels, and then in GBA, there's an opportunity for biomarker measurement in terms of both enzyme G case levels and substrate levels. So, in both cases, both programs offer the opportunity to understand if the capsids are working. Todd, anything to add?

I think you've got it, Toby.

All right. Thank you for taking our questions, and congratulations on the progress.

Thanks, Pete.

Our next question comes from Lili Nsongo with Leerink. You may proceed.

Hi. Good afternoon. Two questions from my side. So, the first one being on maybe comparing and contrasting the two approaches for tau. So, preclinically so far, can you give us a little bit of perspective in terms of potential differences you've seen between the two approaches in preclinical studies?

Todd, do you want to touch that in the preclinical study?

Sure. On the preclinical side, we've seen positive results from both. One aspect that we have discussed with the tau antibody program is that, we do see differences targeting different epitopes. So for example, our C-terminal targeted epitope works quite well. In terminal targeted antibodies that have failed in the clinic failed in our seeding models. This is a model where we inject Alzheimer's patients derived pathological tau into the brain of a mouse expressing human tau and look at the ability of a treatment to stop spreading. So the in terminal failed antibodies didn't work, our antibody does, many other antibodies do not. I will say that the tau knockdown also shows efficacy in similar type models. We aren't driven by specific epitope with a tau knockdown approach. So for the tau knockdown, we think we might be hitting a mechanism in two ways. One, we're reducing the amount of tau and subsequent pathological tau to spread cell to cell. And then we're also reducing the amount of tau on the recipient cell to then receive that pathological pre-existing material. So we think that there are interesting similarities, but also some key differences in the fundamental mechanisms of those two approaches.

Thank you. And as a follow-up, maybe could you provide a little bit of color in terms of the MAD study design? So, I know you haven't shared the whole design at this point, but maybe could you give us a little more in terms of how the study design has been impacted or informed by the results that we've seen with the bepranemab?

Thank you, Lili. This is Toby. That's an excellent question. Fundamentally, there are a couple of points to consider. We've learned from our antibody, including preclinical work and the SAD, that the antibody for MAD binds to pathological tau, which sets it apart from some other antibodies, including UCB's for PK. We have good penetration in cerebrospinal fluid. In this context, we believe the MAD study will effectively determine if we can observe a signal on PET, especially given what we've seen so far, which is important. Regarding the population, we've learned from bepranemab that lower tau levels may be significant in this context and/or related to APOE status. Accordingly, we've adjusted our focus based on these data to emphasize the earlier MCI and AD populations, which typically have lower tau levels. I think we will need to remain open to insights as they continue to develop. We’ve already pointed out that we’re looking forward to discussions about ADPD concerning these two subpopulations and/or exposure response. Additionally, we’ve highlighted other potential readouts within the field. We will continue to monitor developments and adjust as necessary. That’s where I’ll conclude.

And I might want to add that in the case of Alzheimer's, the history of Alzheimer's clinical trials, sometimes multiple ascending dose studies, for example, with the anti-amyloid antibodies have provided some really meaningful information in terms of the effect on PET imaging. And here in this case, wouldn't it be fair to say, Toby, that given the data with bepranemab, particularly the safety, and also our single ascending dose results. We're planning to push the dose pretty high, right? And at the highest dose, we're going to really take a look at how much we can impede the spread of tau by PET imaging and also look at fluid-based biomarkers. And so that's the plan. And as Toby says, we'll be monitoring the situation with all the other data coming out.

Certainly, Al.

Thank you for the color.

Our next question comes from Samantha Semenkow with Citi. You may proceed.

Hi, good afternoon and thanks very much for taking the question. Just sort of a forward-looking question for me. I'm wondering if you can share anything about how plug-and-play you think your ALPL shuttle, non-viral shuttle could be? And based on what you've learned so far in your discovery work, is it feasible that you could see shorter delivery times once you've worked through development, say, for each type of molecule you're looking to transport? Or is it more expected that, say, every enzyme or every oligonucleotide you're looking to transport would have its own set of unique challenges that you would need to optimize for? Any color you can share that would be very helpful. Thank you.

Well, that's an interesting question. I mean in some ways the TFR-based shuttles have been a sort of plug and play in the sense that it worked for multiple different kinds of modalities and we're starting to see data emerging that even beyond proteins that oligonucleotides may also be transported. You know, look, I mean, but even Denali, who are the leaders in PFRs, are also looking at CD98, right, as another shuttle, another shuttle vehicle. So why would that be? And I guess it's because every receptor is going to have its own safety distribution and kinetics. And so it could be that for certain targets and certain diseases, it's more optimal to use one shuttle over another. I think time will tell. Right now, I think the field really only has one or really two shuttles that they can turn to, so everybody's using those. But as time goes on, we may be able to be more selective. So it could be plug-and-play, but as we learn more about these various shuttles, we may start to tailor them to the right disease and the right target. That's how I see it now. Of course, it'll be great to get more data to see whether we're right about that.

That's very helpful. And just as a follow-up, is there anything you can share about what that preclinical data set could look like sometime later this year for the non-viral shuttle? Thanks very much.

We will begin by presenting data from animal studies, focusing on in vivo data as it is the most significant. We aim to compare ALPL to some of the TFR-based shuttles to understand its differences and potential advantages. We also hope to demonstrate the use of more than one payload to assess its plug-and-play capabilities. We are diligently working towards this goal and will see if we can achieve it.

Great. Looking forward to it. Thanks very much.

Thanks, Samantha.

Our next question comes from Joon Lee with Truist Securities. You may proceed.

Hi, good afternoon. This is Mehdi on for June and congrats on the progress. A couple on capsids for us as well. So given that for the SOD1 ALS program, the recap Gen 2 is going to be the same for VY1706, what are the data points that gives you the confidence that the neurotox that you have seen is not related to the capsid?

There are two main reasons for this. First, the timing of the adverse events is significant. In the SOD1 program, we observed a slight increase in liver function tests and neurofilament levels shortly after the injection, which aligns with what has been seen in similar programs using IV delivered AAD. This initial reaction is expected as the capsid clears from the bloodstream within a few days. However, we noticed a rise in neurofilaments approximately three months later, which coincided with some neurological adverse events observed at that time. Histological examination revealed signs of neurodegeneration. This delay suggests that the adverse events are linked to the payload's expression rather than the capsids themselves. Secondly, we utilized the same capsid in four other constructs with different promoters and payloads, and we did not observe any similar adverse events in non-human primates, even at comparable doses and at the two to three month time point. Both of these observations give us strong confidence that the issues we encountered were related to the payload and not to the capsid.

Maybe I'll just add that when Al talks about what we're looking at, we're examining histopathology, using NFL as a biomarker, and considering clinical science. We do not observe any of that with the capsid and these other payloads.

Thank you very much.

Our next question comes from Ry Forseth with Guggenheim Securities. You may proceed.

Hey, this is Ry from Debjit's team. Back to the third-party readouts. I'm sure the decision matrix is very large, but we wanted to get a grasp on the particular outcomes and how those outcomes would be actionable for your either preclinical gene therapy or 7523 MAD efforts. Maybe outline how adjustments could be made to these programs in response to the data.

Are you talking about the third-party data with antibodies?

Either silencing efforts or antibodies.

I see, yes. So, I think one of the biggest pieces of data is going to come in terms of antibodies from the J&J study, which we'll read out next year. And I say that mainly because it's a large study, well controlled and large and long enough to get a pretty good idea of whether or not, first of all, do we see an effect on the spread of tau with a different antibody. In other words, reproduce what UCB has shown, but then also get a much better handle on whether or not there's a clinically significant consequence to that impeding of tau spread, which we hope to see. So I think that will have to wait for the J&J data, which I think is next year. In terms of the knockdown approaches, what's remarkable about the data for me anyway is the fact that you actually reduce the tau PET signal, which I didn't think would be possible because I always thought that the pathological tau was in neurofibrillary tangles, which is pretty much not going to be reduced by simply reducing the synthesis of new tau. But that's exactly what Biogen has shown. And what's intriguing is that, they seem to see a pretty big clinical benefit of that. Now, the flaw there is that, there was no control group in that study, but they've done a great job comparing it to natural history and to the control groups of other trials. And it does look like a large effect. I would think that with the passage of time, we will know even better whether or not that clinical effect is real and durable. And so those are the kinds of things I'm going to be looking at. Of course, we always want to know, answer the question, does epitope matter? In the case of the anti-amyloid antibodies, epitope did really matter. He's now speaking about the antibody programs, of course. And then the only other question is, is it important to be specific for pathological forms of tau versus all forms of tau? UCB was not specific for the pathological forms of tau. Ours is. And I believe many of the other antibodies are as well that are coming down the pipe. In the case of anti-amyloid antibodies, it was important to be specific for pathological forms of amyloid, so we'll see if that also applies to the tau. Toby, Todd, what did I forget?

I would like to emphasize the Merck readout. This involves a C-terminus epitope pathologic antibody. It's a brief study that focuses on biomarkers but provides an initial opportunity to explore whether a C-terminus epitope can produce total tau. This is an important concept to consider.

Thanks for that. And maybe just one more question from us. With the April ADPD NHP gene therapy data, will you provide distributional data in terms of the percent of vector that goes to the brain relative to the liver? And if not, maybe you could frame for us Voyager’s thinking on the utility of those kinds of measures.

At ADPD, we will present on the tau knockdown program. We will describe data showing delivery in terms of the amount of vector and the pharmacological knockdowns achieved in the brain as well as in peripheral tissues. While we may not present this data in a percentage format, we will discuss delivery to key locations, including both target and what we consider off-target tissues.

Thank you. Our next question comes from Jay Olson with Oppenheimer. You may proceed.

Oh, hey, thanks for providing this update. We have a question about the new preclinical data for the tau silencing program to be presented at ADPD. Can you talk about the target level of tau mRNA knockdown that you plan to achieve? And are there any particular brain regions that are more important for tau mRNA and protein reduction?

Well, I'll start with the last question. And maybe, Todd, you can answer the first question. So when I think of Alzheimer's disease, it's a cortical disease, the cerebral cortex, and it starts in the temporal lobe, but then it spreads to all the other major cortical regions. So to me, the key region in the CNS that we need to look at for tau silencing is the cerebral cortex, pretty broadly.

Al mentioned earlier the general range we are targeting, which is between 50% and 73%. This is the overall range of knockdown we are aiming for. We are demonstrating substantial knockdown in some key areas, particularly in the cortex of the non-human primate, which we believe is necessary to achieve these levels of knockdown and make an impact on the disease.

Okay, great. Thank you. And then can you comment on how you're thinking about indications for the tau silencing program? Would you start with Alzheimer's disease or are there other tauopathies that you would start with?

Assuming we don't establish a partnership, our intention is to partner, and it may ultimately be up to our partners to decide which indications to pursue. You raise a valid point about the variety of tauopathies we could target. The most recognized ones include progressive supranuclear palsy and frontotemporal dementia caused by tau mutations. There are also other conditions, such as chronic traumatic encephalopathy, we may consider. However, if we retain control, our primary focus will likely be on Alzheimer's disease first, as many believe tau is a crucial target for it. Furthermore, we have extensive knowledge about the natural history of Alzheimer's and how to make both fluid-based and imaging measurements. We plan to leverage this knowledge fully and prioritize Alzheimer's disease in our approach. What do you think, Toby?

I agree, Al. And maybe I'd sort of amplify that fundamentally, I mean, we've seen with the data how critical tau PET can be. And this is best worked out in Alzheimer's disease. Looking at some of the other tauopathies, use of tau PET and in some cases, flu biomarkers, is less well settled. And so one of our core tenets is that you go into diseases where you can get critical concepts around the biomarker tools relatively quickly. In this case, for the tauopathies, we think that really sits with Alzheimer's. I certainly think the other indications are interesting once you've shown that.

Great. Thank you. Maybe if I could ask one follow-up on ALPL. Have you done any experiments to compare the ALPL shuttle to other blood brain barrier shuttles like transferrin receptor and see what the differences are?

We haven't shared that data, but we are in the process of comparing to TfR.

Okay, great. We'll look forward to that. Thanks for taking all the questions.

You're welcome.

Our next question goes from Patrick Trucchio with HC Wainwright & Company. You may proceed.

Thanks. Good afternoon. Just a couple of follow-up questions on the VY7523. Just the first, I'm wondering how the SAD data influence selection of dose levels and frequency for the MAD study? And then separately, just given the competitive readouts in the anti-tau space and those that are upcoming, I'm wondering how the MAD study design may position VY7523 for differentiation? And then separately, I'm wondering, the cash runway extending into mid-2027, how will you balance investment in internal programs versus potential licensing or business development opportunities?

Maybe I’ll start and then turn it over to Nate. So, I think in terms of the SAD data, just to reiterate, we saw dose-proportionate PK, an acceptable safety profile for a molecule in the single-sending dose study, and we saw a CSF serum ratio of 0.3%, which is quite consistent with approved molecules. And then I think I'd lay on top of that the sort of the observed safety and the broader studies didn't highlight any risk of toxicity. So really what the SAD data gave us was the confidence in the MAD study to move forward with our planned doses. And frankly, as Al highlighted earlier, to try to push those doses to levels where we can clearly test the hypothesis of whether or not this antibody will impede the spread of pathologic tau. In terms of differentiation for the competitors and what are we looking for. I think fundamentally the study will be designed to look for tau PET signals. And so really what we're trying to do, I think frankly, is see where we compare to the other antibodies that are modulating tau PET signals, particularly UCB. And I think our simple aspiration here would be that we are at least as good as, if not better than that, given our specificity for pathologic tau.

We aim to differentiate ourselves by putting our best antibody forward. We understand the necessary doses to impede the spread of tau in the animal model Todd mentioned, where we inject human pathological tau into P301S transgenic mice. Our goal is to exceed those levels necessary for that effect. We are confident that we can achieve this with the doses we have selected based on the single ascending dose studies we conducted. Nate, would you like to address the second part of the question?

We understand the financing market and the importance of having a cash runway until mid-2027. We will be very careful about any transactions that could shorten that timeline, and we would need to bring in compelling assets that offer near-term clinical catalysts. Regarding other types of deals, Al has mentioned that he is open to them. I believe there are opportunities for us to pursue additional business development deals that could potentially bring in funding or allow us to partner some of our pipeline assets, but only for the right price.

We have a history of engaging in various types of partnerships, from simple licenses where the partner uses our capsid independently to collaborations on programs we may initiate and continue working on together. This demonstrates our flexibility in forming partnerships that benefit both us and our partners, and I hope we can maintain this approach moving forward.

Thank you. Our next question comes from Yun Zhong with Wedbush Sciences. You may proceed.

Hi, good afternoon. Thank you very much for taking the questions. The first question is on the MAD study. Was the initiation earlier than you had expected? Because I believe the original guidance was very broadly in 2025? And the second question is, I know that you compared the antibody approach versus the knockdown approach and compared the mechanism of action. Given the timing, do you think it's possible that the knockdown program could potentially catch up to be a more promising approach as compared to the antibody approach?

This is Toby. We started the study earlier than we initially guided, which reflects that our clinical team is actively engaged and making progress.

Got it. Thanks.

And then, Yun, can you clarify your second question for me, please?

Oh, I know that the antibody approach is ahead of the knockdown approach, but given, I think, Al talked about this mechanism and also the Biogen data, do you think eventually the knockdown approach could potentially be more promising than the antibody approach for AD?

I mean, what I'd say here is, we have two different approaches, and I think one, we have some early data from Biogen suggesting that knockdown could be quite clinically efficacious. Al highlighted that this was a natural history comparator and another study with effect on CDR sum of boxes that was maybe 2 to 3 times greater than sort of what is a class of observed for other approaches. So essentially a very large effect with a knockdown approach. So that's very exciting within the constraints of an intrathecally administered ASO. Antibody-based approaches, I think the data we have there is the UCB data, which is the main clinical data sets. And that effect was slightly different. And so I think the potential there is potentially different. But fundamentally to me, the question is more going to be of the appropriate sequencing and the appropriate risk benefit and what is appropriate to the disease stage of individuals as we previously discussed. So really there may be a point in time when you want to stop spread in a low-tau population early in disease. Or there may be a population of time when someone has a broader spread of tau when you want to take a knockdown approach. Or you may learn their differential responses across different patient populations. So I think fundamentally Alzheimer's is complex and physicians and patients are going to need options in terms of fully treating this disease.

I would add that I believe we're still on the very early stages of learning about how and how to best approach this target. If you look back at the anti-amyloid field, it took us decades to learn from each other and to get to the point where we finally had some drugs that were approved. We're just in the very beginning stages. We're only just now starting to see biological effects that are starting to be seen in humans. And I think there's going to be a lot to learn. And I think for right now, the prudent thing to do is to pursue both programs and we will make data driven decisions. Internal data as well as external data. We will learn from those and we will make data driven decisions.

Sounds good. Thank you.

Our next question comes from Yanan Zhu with Wells Fargo Securities. You may proceed.

Thanks for taking the questions. First, I wanted to ask about maybe a follow-up on the brain shuttle approach. I think, Al, you touched on this. What is the limitations of the TfR-based brain shuttles that you see at your vantage point and therefore areas that you might hope to differentiate it in? And then I have follow-ups on the tau program. Thank you.

From my observations, there are indications of hematologic adverse events, which isn't surprising considering the role of the transferrin receptor. Even when using ligands for different sites on the transferrin receptor, some adverse events still occur. This happens because, even without blocking the receptor, its internalization can lead to a loss of function type adverse events. Analyzing the human genetics database shows that humans are not very tolerant of loss of function mutations in transferrin receptors, which are vital for this pathway. In contrast, humans appear to be more tolerant of loss of function mutations in ALPL. This could be advantageous, but we will need to wait and see. I believe this is one potential advantage, and as we continue to learn, there may be more.

Great. Thanks for…

Let me add 1 more piece, Yanan, and I think is that, we sometimes forget about the fundamental properties of drugs, such as PK and half-life. And so I mentioned kinetics and distribution previously. And so we'll be looking at those things too. That's not to say that the TfR based approaches are not promising, they are promising. The fact so promising that that's why we're so excited about the idea of using a shuttle-based approach to improve delivery of other modalities beyond gene therapies.

Got it. Yep. Yep. Thank you for the insight. On the tau antibody program, I was wondering if it's fair to say that the Merck antibody is even more similar to your antibody than the UCB antibody is? Have you compared in your tau animal model directly your antibody against Merck's antibody and what might be the findings? And lastly, I was wondering about your thoughts on effector function for the general tau antibody approach, if you can comment on whether yours is a factor null or not and why does that matter, if it does? Thank you.

Yes, I can address this. This is Todd. I believe you’re correct. In many respects, the Merck antibody is more akin to our C-terminal antibody. We have not released any data comparing our C-terminal Merck antibody with ours, so we don't have that information to provide. Regarding effector function, it's an intriguing question. We have opted for a known human IgG4 for our antibody. Current evidence suggests that, to have an impact in these spreading models, it seems that you might not require effector function. Additionally, eliminating it could reduce some risks associated with neuroinflammation, in our view. Therefore, we've chosen an IgG4 for our antibody.

Great. Thank you very much for the color.

Our next question comes from Sumant Kulkarni with Canaccord Genuity. You may proceed.

Good afternoon and thanks for taking my question. Apologies if this was asked before. And Al, I know you gave a quick history lesson there on anti-amyloid products for Alzheimer's, but what are the key results you need to see or learning from external programs that might lead you to making a firm go-no-go decision on your anti-tau antibody program or would you need to see internal results in order to make that decision and what might those internal results look like?

That's a challenging question. What I am trying to understand is the level of effect on tau spreading necessary to observe a minimally clinically significant impact. For the anti-amyloid antibodies, it’s important to analyze how much change in amyloid PET imaging correlates with the CDR sum of boxes, which is critical for approval. We can plot the data from various antibodies and see that without achieving a specific level of amyloid reduction, we won't observe a significant change in the CDR sum of boxes. I would like to see a similar analysis for anti-tau antibodies. In my opinion, any effect less than approximately 30% on the CDR sum of boxes is likely not clinically meaningful. Therefore, I'm interested in determining what effect on tau PET imaging correlates with that 30% change in the CDR sum of boxes. Once we establish this, we can evaluate our antibody accordingly. However, I believe it will require more time to obtain this data. It took over ten years to gather similar information for anti-amyloid antibodies, with various companies contributing their findings. As I mentioned, we are still in the early stages of researching tau-directed antibodies.

Got it. Thanks.

Thank you. I would now like to turn the call back over to Dr. Al Sandrock for any closing remarks.

Thank you everyone for joining us today and we look forward to speaking with you again soon.

Thank you. This concludes the conference. Thank you for your participation. You may now disconnect.