Passage Bio Inc (PASG) 2021 Q4 法說會逐字稿

Good morning, and welcome to the Passage Bio Fourth Quarter and Full Year 2021 Financial and Operating Results Conference Call. (Operator Instructions) Please be advised that this call is being recorded at the company's request.

At this time, I'd like to turn the conference over to Stuart Henderson, Vice President of Investor Relations and Strategic Finance. Stuart, please proceed.

Thank you, operator. This morning, we issued a press release that outlines the topics we plan to discuss today. This release is available on the Passage Bio website under the Press Releases and Statements section of the Investors and News.

On today's call, Bruce Goldsmith, President and Chief Executive Officer, will review our recent and 2021 business highlights. Eliseo Salinas, our Chief Research & Development Officer, will review our pipeline programs including the GM1 data recently presented at the WORLDSymposium. And Simona King, our Chief Financial Officer will review our fourth quarter and full year 2021 financial results.

Before we begin, please note that today's call may include a number of forward-looking statements, including, but not limited to, comments on our expectations about timing and execution of anticipated milestones, including the initiation of clinical trials and the availability of clinical data from such trials; our expectations about our collaborators and partners' ability to execute key initiatives; the ability of our lead product candidates to treat their respective target CNS disorder; manufacturing plans and strategies; trends with respect to financial performance and cash flows; the company's ability to fund research and development programs; impacts of the COVID-19 pandemic on the company's operations; and its ability to manage costs, along with uses of cash and other matters.

These forward-looking statements are based on assumptions that are subject to risks and uncertainties that could cause the company's actual results to differ significantly from those suggested by these statements. Given these risks and uncertainties, you should not place undue reliance on these forward-looking statements.

Please refer to the company's filings with the SEC for information concerning risk factors that could cause actual results to differ materially from expectations, including any forward-looking statements made on this call. Except as required by law, the company disclaims any obligation to publicly update or revise any forward-looking statements to account for or reflect events or circumstances that occur after this call.

It is now my pleasure to pass the call over to CEO, Bruce Goldsmith. Bruce?

Thanks, Stuart, and thank you all for joining us this morning. I would like to first reflect on the significant evolution of our company over the last year.

During 2021, we advanced 3 programs into the clinic, reported our first in-human data and substantially grew our pipeline, enhanced our executive leadership team and Board, and scaled our organization to support clinical and commercial success.

We continue to be guided by our 3 strategic pillars, which are our strong partnership with the University of Pennsylvania's renowned Gene Therapy Program; our broad and robust pipeline; and our dedicated manufacturing and analytics. Through our partnership with GTP, we are creating sustained value for our company as well as the patients we serve by employing a diversified pipeline strategy. As a result, we now have a robust and differentiated CNS pipeline that stands pediatric and adult as well as rare and large disorders.

Today, we have a total of 9 pipeline programs and 2 additional exploratory research programs. That leaves us with the option to license 8 additional CNS programs from GTP. As our pipeline advances, our primary focus continues to be on the execution of our 3 lead programs.

For our lead program, Imagine-1, for GM1 gangliosidosis, we were excited to recently share positive safety, biomarker and clinical efficacy data from Cohort 1. Eliseo will review this interim data in more detail shortly. But in summary, for the low-dose late infantile cohort, we have observed a positive safety profile with no serious adverse events and no complications related to intra-cisterna magna or ICM delivery. There was also no evidence of dorsal root ganglion or DRG toxicity. The data showed functional transgene expression and meaningful gains in developmental milestones for both patients, including regaining lost milestones.

With these early results, we are experiencing strong interest and momentum in our GM1 program. So much so, we recently reported that we have already achieved one of our key 2022 goals, which is the dosing of the first patients in Cohort 2 -- Cohorts 2 and 3 for the Imagine-1 trial. We expect to report interim safety and biomarker data for each cohort in the second half of 2022.

Our focus for each of our clinical programs is selecting, in partnership with GTP, an optimal AAV capsid, expression cassette and delivery method, which is ICM for our first 3 clinical trials. The positive interim data reinforces our confidence as we advance our additional global trials for Krabbe disease and frontotemporal dementia with granulin mutation.

We are also pleased with our progress in activating multiple clinical trial sites in multiple countries. Thus far, we have activated sites for our 3 clinical programs in the United States, Brazil, Canada, U.K. and the Netherlands. We accomplished this despite the challenges we have faced related to COVID-19, and we continue to bring remaining sites for those programs online.

In addition to advancing our clinical programs, we are also excited about progressing our robust and differentiated pipeline. As I mentioned, we have exercised options for 9 programs from GTP, most recently adding programs for Canavan and Huntington's disease. We also have 2 ongoing exploratory research programs in Alzheimer's disease and temporal lobe epilepsy that we continue to advance. We also plan to submit an IND application for our MLD program in mid-2022. And we look forward to sharing additional data in our pipeline throughout the year, including at scientific meetings.

In addition to our robust pipeline and strategic partnership with GTP, our third key strategic focus is manufacturing and analytics. We continue to invest in our manufacturing and CMC capabilities to ensure product supply from clinical development through commercialization in a capital-efficient manner. We currently have a dedicated GMP suite at Catalent for clinical product manufacturing.

In mid-2021, we opened a Passage Bio CMC research and development lab focused on analytics, process development and clinical product testing. Since then, our team has made significant progress in developing and advancing differentiated analytics using the latest technologies and methodologies. At this time, we are now investing in a pilot manufacturing suite to add scale up capability to support our R&D pipeline as well as future development plans. We expect that our pilot suite will be operational by year-end.

Lastly, we ended the year in a strong cash position, which allows us to deliver on multiple value drivers throughout 2022 and 2023. We are pleased with our progress over the last year, and we could look forward to an execution-focused and data-rich 2022 on our path to developing transformative therapies for patients with devastating CNS disorders with significant unmet need.

With that, I will now turn it over to Eliseo, who will discuss our clinical programs, including our recently presented data for GM1.

Thank you, Bruce. I will start by discussing our GM1 program. GM1 is a fatal neurological lysosomal storage disease caused by a GLB1 gene mutation that results in low activity of the beta-galactosidase enzyme. This leads to rapid neurological decline and in the most severe forms, unfortunately, a relative rapid death.

Life expectancy for children with infantile GM1 ranges from 2 years to 10 years. Also, after initially gaining milestones, children with late infantile onset typically plateau at 12 months to 13 months of age, meaning that they stop gaining normal milestones before they regress. Patients with GM1 are a rare and an underserved population. Currently, there are no disease modifying treatment for the disorder.

Our Imagine-1 trial focuses on the early and late infantile forms of GM1, which are the most severe forms of the disease. The global Phase I/II trial is an open label dose escalation study with PBGM01 enrolling 4 distinct cohorts divided by age and dose level.

As a reminder, our approach uses our next-generation proprietary AAVhu68 capsid administered via the cisterna magna to deliver a codon-optimized GLB1 transgene to increase beta-galactosidase enzyme activity in the brain and peripheral tissues.

We recently shared positive interim safety, biomarker and clinical efficacy data from Cohort 1, consisting of 2 late infantile patients treated with a low dose of PBGM01. This interim data showed that PBGM01 was well prorated and had a safety profile -- a positive safety profile with no serious adverse events and no complications related to ICM delivery. Demonstrated also no evidence of DRG toxicity based on nerve conduction studies and substantial increased beta-gal enzyme and activity in both the CSF and serum after ICM delivery.

In terms of clinical efficacy, we presented developmental milestone data using 2 standardized nonreference scales, the Bayley III a formal assessment tool used by trained health care providers and the Vineland-II, a scale for caregiver assessment. Today, I will review assessment results for each patient.

Patient one had a chronological age of 14 months and a developmental age of 12 months at baseline. It's important to know that for the Vineland, we were able to share up to 9-month assessment for this patient after dosing conducted by the health care provider, but that was not the case for the Bayley III assessment as the patient was not able to be scored due to a potential COVID-19 exposure.

Let's review the Bayley assessment for patient one first. There was improvement in all developmental areas through the 6 months observed following administration of PBGM01 gene therapy. Overall development age progressed consistently and track closely to chronological age.

The Vineland scale assessments at 9 months documented that following PGM01 administration, there was also improvement in all developmental areas for this patient with notable progress in the domains of fine motor skills, receptive language and interpersonal relationships.

Overall, the development age for patient one progress from 12 months at study start to 23 months at the 9 months interim assessment, approaching the patient's chronological age of 24 months.

Turning to patient 2. He got a severe developmental delay at baseline with a chronological age of 31 months and a development at age of 13 months on the Vineland scale and 7 months on the Bayley. For this patient, it was a single follow-up available at 3 months. Improvements in the Bayley assessment were documented in patient 2 in motor, receptive language and cognitive domains. The overall development age progressed during the 3 months following administration of the product from 7 months at baseline to 9 months.

For the Vineland assessment, significant improvements were also observed notably in expressive language and interpersonal relationships despite a severe developmental delay. The overall development age progressed from 13 months at baseline to 16 months of the 3-month assessment following administration of PBGM01. Importantly, patient 2 not only acquire new milestones, but also regained previously lost milestones, in particular, the ability to walk and to use specific words.

In summary, we believe the increase in beta-gal enzyme activity observed in both CSF and serum after ICM delivery are positive indicators that PBGM01 is exerting a biological effect. We were also pleased to see meaningful improvements in development milestones for these children, including the regaining of lost milestones.

While we remain cautious in the context of an open-label study and a small number of patients, we are very encouraged by these initial reports of clinical improvement and about the potential of PBGM01 for patients. We look forward to further follow up and continue with additional cohorts in the Imagine-1 study.

As Bruce said, following this positive interim safety and biomarker data for Cohort 1, the Imagine-1 study has progressed to enroll additional cohorts. We are enrolling Cohort 2 with 2 late infantile GM1 patients receiving the high dose of PBGM01 and Cohort 3 with 2 early infantile GM1 patients receiving the low dose of PBGM01. Thus far, the first patient in each of these cohorts has been dosed. We look forward to being able to share initial safety and biomarker data for these 2 cohorts in the second half of 2022.

Moving on now to our global PBKR03 program in Krabbe disease called GALax-C. Krabbe disease is a condition that progresses rapidly, damaging both the brain and the peripheral nervous system and resulting in a life expectancy of only 2 years in the severe cases. Krabbe disease result from decreased enzyme activity of galactosylceramide or GALC. Like GM1, this is also a pediatric leukodystrophy and lysosomal storage disease with an underserved population with a very devastating disease progression.

GALax-C is an open-label dose escalation study of PBKR03 in patients with early infantile Krabbe disease. PBKR03 uses the same proprietary AAVhu68 viral vector to deliver a functional GALC gene that goes for GALC. PBKR03 will be delivered directly to the CSF by ICM delivery with the goal of increasing activity of the GALC enzyme in both the CNS and the peripheral nervous system.

The study will run similarly to our Imagine-1 trial, with the first cohort evaluating an initial dose of PBKR03 in late onset patients and then progressing to early onset and high-dose cohorts after an assessment of Cohort 1. Additionally, there will be a confirmatory expansion cohort for both age groups once the dose escalation phase of the study is completed.

The main goal of the initial part of the study is to assess the safety and tolerability of ascending doses of PBKR03 in patients with early infantile Krabbe disease as well to assess the impact of -- on GALC in CSF and serum.

We have the privilege of having the clinical trial designed for GALax-C as well as Imagine-1 presented at the WORLDSymposium last month. We are grateful for the interest and support we are seeing from both the research and the patient advocacy community for our programs. And we look forward to soon dosing the first patient in our GALax-C trial.

Turning to our third clinical program. PBFT02 for frontotemporal dementia with granulin mutation. FTD is a devastating form of early onset dementia affecting patients between the ages of 40 to 65. The form of the disease we are seeking to treat with our therapy is caused by granulin or GRN gene mutation, which results in the deficiency of progranulin.

It is estimated at 5% to 10% of all FTD is caused by a GRN mutation. In the most typical forms of FTD with GRN mutation, patients experienced significant speech alterations and severe behavioral changes culminating in dementia. This is an underserved population with no disease modifying therapies approved and an average survival of 8 years after the onset of neurocognitive deterioration.

Our global Phase I/II clinical trial, upliFT-D is an open-label, dose escalation study of PBFT02 in FTD-GRN patients. PBFT02 uses an AAV1 viral vector to deliver a modified DNA, including the granulin gene to a patient's cell. Based on pre-clinical data, PBFT02 has the potential to increase progranulin levels to more than 50x normal human levels.

In the clinical study, the concept will be administered into the CSF by ICM delivery. The goal of this treatment and delivery approach is to potentially provide higher than normal levels of the progranulin improved into the CNS to overcome the progranulin deficiency in GRN gene mutation carriers.

We plan to enroll 2 cohorts of 3 patients each receiving 2 different ascending doses of PBFT02 with an option of third cohort treated with a higher dose depending on safety and biomarker results observed in the first 2 cohorts. Like our other lead programs, our 2 key goals are to assess the safety and tolerability of ascending doses of PBFT02 as well as its impact on progranulin levels. We anticipate that we will be dosing our first patient soon.

Turning now to our preclinical program for MLD or metachromatic leukodystrophy. Infantile MLDs are fatal inherited disease characterized by muscle weakness, rigidity, gait disorder and developmental delays. It is caused by a mutation in the ARSA or the arylsulfatase A gene, which reduces the enzyme activity. Children typically die by the age of 5, and the worldwide prevalence is one in about 100,000 live births.

As Bruce noted earlier, we plan to submit an IND for our MLD program by midyear. Our approach here is very similar to our GM1 and Krabbe programs, where we are using a next-generation proprietary AAVhu68 capsid to deliver a functional ARSA gene via cisterna magna injection. Advancing program for CNS diseases requires tremendous support from a variety of stakeholders.

I would like to conclude by recognizing and thanking the caregivers, health care providers, advocacy organizations and patients in this community.

With that, I will now turn the call over to Simona to review our financials.

Thank you, Eliseo. As we reported in our press release this morning, we ended the year with approximately $315.8 million in cash, cash equivalents and marketable securities compared to $304.8 million as of December 31, 2020.

R&D expenses were $33 million and $117.7 million for the quarter and year ended December 31, 2021, compared to $27.9 million and $81.8 million for the same quarter and year-end 2020.

The increase for the year was primarily due to a $19.7 million increase in personnel-related expenses, including share-based compensation due to higher employee headcount, an $18.7 million increase in clinical manufacturing expenses, a $10.9 million increase in clinical operations expenses to support the clinical trials for our clinical product candidates and a $3.7 million increase in facility and other expenses.

These increases were partially offset by a $2.5 million decrease in professional services and consulting expenses and a $14.6 million decrease in research and development expenses with Penn, which relates to expenses incurred for preclinical work performed in preparation for IND filings for our clinical programs.

Acquired and process R&D expenses were $1 million and $8 million for the quarter and year ended December 31, 2021, compared to $1 million for the quarter and year ended in 2020. The increase for the year was primarily due to an expansion of the research collaboration and license agreement with Penn, additional option exercises and the achievement of certain clinical milestones occurring in 2021.

G&A expenses were $17.2 million and $60.1 million for the quarter and year ended December 31, 2021, compared to $10.1 million and $30.1 million for the quarter and year ended in 2020. The increase for the year was primarily due to a $21.8 million increase in personnel-related expenses, including share-based compensation, resulting from an increased employee -- in employee headcount.

Professional fees and other expenses also increased $8.2 million as we expanded our operations to support our research and development efforts and incurred expenses operating as a public company.

Net loss was $51.2 million and $185.4 million for the quarter and year ended December 31, 2021, compared to $38.9 million and $112.2 million for the quarter and year ended in 2020.

As we continue to advance our pipeline and invest in our capabilities, we are supported by the strength of our balance sheet. We expect our cash, cash equivalents and marketable securities to fund our operations through year-end 2023.

Let me now turn it back to Bruce for closing remarks.

Thank you, Simona. We look forward to continuing to deliver on multiple clinical and corporate milestones, including enrolling additional patients across our clinical studies and providing more data throughout 2022.

Now with the first patients dosed in Cohorts 2 and 3 for the GM1 trial, we expect to report interim data in the second half of 2022. Our patient engagement team also has built productive partnerships with the advocacy community, which has helped tremendously in raising awareness of our clinical trial programs.

Our clinical operations team is executing well as we continue to open clinical trial sites around the globe. Our clinical pipeline is also expanding as we plan to file an IND in mid-2022 for MLD. We continue to invest in our in-house CMC capabilities, and we expect our pilot plant suite to be operational by year-end.

Before taking your questions, I'd like to thank the incredible Passage Bio team and Jim Wilson and his team at GTP for our many accomplishments over the last year. I'd also like to echo Eliseo by personally thanking the patients as well as the caregivers, health care professionals, scientists and advocacy groups who share and support our mission of developing transformative therapies for devastating CNS disorders.

With that, I would like to open the call up for questions. Operator?

(Operator Instructions) Our first question comes from Tessa Romero with JPMorgan.

I wanted to ask about the Krabbe and FTD-GRN study. You've reiterated the guide now to dose the first patients in early 2022. I'm just curious, what underscores the conviction here of achieving this milestone for both trials? And have these patients have been identified, screened and/or enrolled yet? And is there any queue of patients in either of the indications that's building?

So we continue to do several things that are leading indicators of our progress. One is to continue to work through the site openings. We've obviously had challenges in the past doing that, and we are pleased that the Krabbe study sites are continuing to open, and we believe that additional FTD sites will open in the coming weeks or months. So that's certainly areas of progress that we're very happy with. But we definitely recognize the challenge that we've had in moving the patients from identification into the studies.

So we've not announced and we don't typically announce enrollment status because for all of these programs, there is a significant amount of work for each patient, not only pre-identification but once patients are enrolled, they have to go through a several week screening process, which is typical for gene therapy programs as well as for neurology programs, CNS programs. So what we will do is once a patient is dosed to make that first patient dose announcement. And we certainly hope to do that in the early part of this year.

We do have an ongoing effort to identify patients across all of our studies. One of the things that we pointed out in the frontotemporal dementia space is that while there are patients that are identified with FTD, because there have been no traditional treatments, the genetic genotyping to identify patients with GRN mutations hasn't traditionally been done. With the start of multiple studies, including our own, that is increasing, and we've also gone to sites where there are patient populations identified through various programs such as the GENFI program and the ALLFTD database. So those are some of the areas that we're focused on.

And then for Krabbe, we're also doing -- we're replicating what we've done in the initial stages of the GM1 study for reaching out for both patient advocacy as well as patients that may be on those -- at those sites. The difference there is that, obviously, similar to GM1, the patients with Krabbe disease do progress very, very quickly. So we have to move fast once we identify those patients and get them into the centers. So those are all the initiatives that we're working on, and we continue to make progress, and we certainly look forward to not only enrolling, but dosing our first patients in both of those studies.

Our next question comes from Madhu Kumar with Goldman Sachs.

This is Omari on Madhu. So for our first question, we're wondering how do you think about quantifying the clinical improvements observed in month 4 in the last patient described in your [cohort]? And also, like, do you think these improvements could translate over into the early infantile cohort?

I'm going to make an introductory comment and then turn it over to Eliseo. So to your point, we're extremely happy to -- for these 2 patients for the initial data, one with a 3-month follow-up and one with longer follow-up up to 9 months. That we've actually not only seen improvements in the milestones, but for patient 2, for example, we saw a restoration of previously gained milestones that have been lost. So really exciting. This is obviously early data in 2 patients. So maybe Eliseo can add some comments about what we -- what we interpret that to be and also how that may translate into the early infantile population.

Right. Regarding the first part of your question, the quantification. Fortunately, the Bayley, in particular, give you a very precise quantification of the patient status. The Bayley has more than 300 items, and on the motor it's more than 140. So very specific items that are assessed during the interview.

Patient number one, at the Bayley had a developmental age of 12 months and chronological age of 14. It was at the beginning of this plateauing. And that patient grew from 12 months to 17 months on the 6 months of observation period. So significant and quantifiable benefit.

Patient 2, also on the Bayley, the clinician-rated scale, was much more severely delayed with an overall developmental age of 7 months for a baby with a chronological age of 31 months. And that patient also gained 2 months of developmental age in the 3 months of the treatment. And as I said, these are very specific. This is not an overall assessment, [guest] type of assessment. These are specific things that the child does or doesn't do in the interview. So yes, we are confident that those developmental milestones have been documented very clearly.

Regarding extrapolation in early infantile, well, it's the same enzyme, it's the same disease, and it's a more aggressive disease on the earlier infantile. So we can't make promises, but we think that what we observed in these first 2 patients is a very reasonable basis to be cautiously optimistic about the rest of the study.

Great. And for the second question, what are the gaiting events for starting the FTD Krabbe trail?

So we have -- yes, thanks for the question. So we have the sites that can enroll and dose patients open. It's really getting those patients into the centers that have both the appropriate mutations as well as entry criteria and then enrolling them in screening. And the screening, as I said, does take quite some time to both establish the -- there's a prescreening when patients are initially identified at various centers when they get actually to the site, then there is an on-site screening as well to confirm final eligibility. And then once they're there all of the baseline assessments occur. So the real gaiting item is getting -- identifying those patients and getting them enrolled in the study.

They're slightly different considerations for both. For the patients with Krabbe disease, similar to patients with GM1, it is a rapidly progressing disease. We're actually focusing on an earlier population than initial for GM1, and these patients, the Krabbe children are 4 months to 9 months old. In the second part of the study, that will even go down to 1 month to 4 months because this is a very rapidly progressing disease.

And some patients with Krabbe disease and their families do opt for the potential for going for a stem cell transplant. That's appropriate for patients that are not symptomatic and have a donor and are qualified for stem cell. So that is all of the considerations that go into the Krabbe disease patient population and moving those patients into the study.

For frontotemporal dementia, really, it is having the patients identified and moving to the sites. We have identified patients previously and there, unfortunately, have been considerations that have precluded them for moving on to the study such as comorbidities or unfortunately, side effects that have occurred for their current interventions prior to actually enrolling in the study. So that's just a really challenging time for us to identify the patients and move them onto the study. So to back to your earlier point, the real gaiting item is simply moving those patients to identification and enrollment.

(Operator Instructions) Our next question comes from Neena Bitritto-Garg with Citi.

Just kind of a follow-up to some of the questions already asked around the FTD study. I know that some of the sites that you're using, like you said, are associated with some of the major registries for FTD. And so I'm just curious, are some of the challenges that you're seeing with getting the patients actually into the study. Do you think that those are kind of similar challenges that are being seen by other studies in FTD that are being run? Or is there something unique here, I guess, in terms of the screening process that's maybe making it more difficult for patients to get enrolled in the study?

It's a great question. What we've done over the last 6 months to 12 months is really look at our protocol other protocols as well as feedback from our investigators. And we have adjusted the protocol to your point, to make sure that we are as appropriately broad as possible while ensuring that we -- both the patients that we're treating as well as the therapeutic PBFT02 has an opportunity to provide therapeutic benefit. And that's always the challenge, I think, for all studies, nothing unique to what we're trying to do. And so that is certainly one consideration.

I think the other consideration that we've certainly seen is that the -- as we've entered the program, we obviously have come on to the clinical development with 2 other companies enrolling, one gene therapy and obviously, one a much larger patient population looking at a Phase III study for the sortilin antibody. And what -- the challenge that presented is that the immediately available patients, maybe 12 months ago, were obviously, if possible, that is a viable alternative because there are no treatment opportunities. So what we're focusing on is really the patient population that was not addressed by those opportunities or identifying new patients.

So I don't think there's anything idiosyncratic about our enrollment criteria or our process that we've seen or, in fact, gotten feedback from our various sites. But it is just the challenge, I think, of enrolling patients in this patient population where there is not typically screening from a genetic perspective. So that's why we -- and just to go back one further step, that's why we and others are investing quite a bit of time and funding for genetic testing and for FTD awareness.

Got it. So just to clarify, when you say that you're looking kind of for a population that's not addressed by some of the other programs, that's not something necessarily built into the actual inclusion criteria, right? It's just patients that haven't been identified yet, so you have to do a little bit more light work to kind of identify them first?

Correct. And just to clarify, it's not that we have entry criteria that's different or a different patient population. We wanted to make sure that we have as broad a population as feasible and appropriate for studying the therapeutics. So we looked at the other protocols, and we looked at -- and we've discussed with investigators to make sure that we were as aligned as possible, taking into consideration our own goals as well. But also the timing, I think, has just made it so that the population has changed because the available previously identified patients may have gone to other studies. So we are -- that's why we and others are focusing on the genotyping and identifying additional patients and moving those patients into therapy.

Our next question comes from Yaron Werber with Cowen.

Bruce, I actually wanted to shift to MLD. You're going to be filing the IND sounds like midyear. I assume you're targeting the arylsulfatase A enzyme. Are you -- can you comment a little bit what kind of an AAV vector are you planning on using? I assume it's obviously going to be ICM. Are you going to be doing late infantile or early juvenile? What kind of endpoint? And how is the approval of Libmeldy in Europe admittedly sales and so far, fairly small impact enrollment?

Thanks, Yaron. Yes, great question, and I appreciate it. And we're really excited about the potential of moving forward with MLD because of the synergy we have across the GM1 Krabbe experience as well as the alignment with MLD. So to your point, we are using the exact same capsid, which is hu68 Obviously, the synergy is with GM1 that is a lysosomal storage disease. In addition, it is ICM as well.

So one of the things that we are certainly interested in is the GM1 program continues to develop as well as the Krabbe disease is that there's a lot of synergy both between the research and development ideas and also the potential market to your second question.

The way we're thinking about this is actually quite similar to the approach for Krabbe disease. Libmeldy has had absolutely remarkable effects on patients with MLD. Obviously, that's a patient population there that takes a stem cells, ex-vivo, has gene therapy and then reinfused so -- and with myeloablation as well. So it has similarities to a stem cell approach for Krabbe disease, in that there is a focused on patient population, which are largely asymptomatic and -- in MLD as well as Krabbe disease. So the way we're thinking about this is potentially moving earlier in the disease treatment for presymptomatic or asymptomatic as well as potentially initial signs of those diseases -- the disease for MLD.

And most likely, we will also -- we haven't gone into a lot of detail about MLD. But what we're thinking about is also going after an infantile population first, similar to GM1 and Krabbe for initial clinical proof of concept. So it's been sometime since we brought for the initial programs. But what we prefer to do is have the discussions with FDA as we file the IND and then go into more details about the actual clinical protocol because, as you know, based on feedback from FDA that can change over time. So that's the way we're thinking about it is really just an alignment with where Libmeldy may have benefit or may have benefit, obviously, in Europe and in the U.S. and then treating patients that doesn't quite meet or earlier in the patient population. So really excited about the IND and again the synergy between the various programs.

Our next question comes from Debjit Chattopadhyay with Guggenheim.

So just a follow-up on MLD program. How should we think about reconstitution of glial cells and its implication for the disease reversal versus the B-cell in conditioning that's used for antiviral gene therapy?

That's a great question. I'm going to ask Eliseo to jump in.

Okay. So yes, so we have a decent knowledge of the mechanism of action of MLD and how it achieves the clinical results that we have seen. As you know, the approach with the transgene in our construct is completely different, it's orthogonal to that. And we believe it's more fundamental. So it's early since we're going to have the publications, the pre-clinical publication showing a little bit more detail about your specific question in terms of glial intervention and participation on the mechanism of action. But at this stage, what we can say is that it's a completely different approach that we believe is closer to the core of the site of the action and the disease.

That's helpful. And just a follow-up question on the FTD-GRN program. Could you help us think through where the starting dose could line up versus the GM1 program given that you'll be treating adults versus infantile patients?

Yes, absolutely. So in all of the programs, we dose based on -- or expected or projected brain weight in terms of genome copies per gram. So the starting dose for FTD is 3.3 E10 per estimated gram weigh. And for adults, the estimated gram weight of an adult brain is approximately 1.6 kilograms -- approximately, sorry. Yes. Okay. And the pediatric patients is -- it depends on the age, but it's approximately between 800 grams and 1 kilogram, depending on the age. So in absolute genome copies, it may be double. But in the genome copy per gram, it's basically the same as the GM1 starting dose.

Our next question comes from Laura Chico with Wedbush.

I actually have 2. So first, obviously, early days here for FTD and Krabbe, but wondering how much should we read into whether screening complexities in form of the future addressable market? And then a question on capital allocation, R&D prioritization. What levers do you have available to extend cash runway beyond '23? And I guess kind of related to that, any comments you might be able to provide directionally on how spend could change over that period?

I'm going to make a comment and then turn it over to Eliseo. So I think the entire field for frontotemporal dementia is actually increasing the amount of screening that's going on with the recognition that genotype is actually important in interventions. But up until -- recently, there really haven't been a lot of studies involved in doing that.

So there's certainly a lot of interest in -- for example, we attended the all ALLFTD study group meeting last fall, and there is an increase in the need for genotyping for C9orf for GRN, et cetera. It's really getting that message out there and I think there's a lot -- there are a number of companies trying to do that. So it's really just the -- I think the -- it's like a pediatric disease where there's not newborn screening, there's just a lot of efforts then in terms of getting those patients screened and the subtype identified. So it's really -- it's not I think, read through on the field. I think it's just that it's early days. So with that as introductory comments, Eliseo, do you want to jump on as well?

Yes, Laura. So first, a statement of fact. We are very happy with the momentum on GM1, and we are disappointed with Krabbe and FTD. But that shouldn't cloud the analysis of the facts. The INDs were approved in January and February of last year. That's 14 months ago. In a trial like this one, you need 2 things: identify patients and opening sites. But those are sequential. Before you open the site, identifying patients cannot result in enrollment. In the first 7 months of those 14, we opened one site in the second 7 months, we opened 10 sites. Now we have 6 sites open in GM1 and the momentum is great. As you know, there are fewer GM1 patients that are granulin FTD patients. And yet we're founded it very easily because those sites are open.

In the FTD, we have one site and soon, as Bruce said, there will be more open size that will open up the gates to that funnel that we already initiated. So that's what we are now 100% focused on executing the opening of the sites and continuing the patient identification that Bruce summarized. So that's why we are confident that both for Krabbe and FTD for Krabbe, we have 4 sites open now. That's enough to open the gates to the patients available. So that's why we are confident that soon we'll have patients in both 2 studies.

And Laura, on your second question, Simona, go ahead, please.

Yes, so let me start off addressing that. I think the first part of your question on capital allocation. So I think what's important to note, and you can see that in our historical financials, as we broke down the program-specific expenses by our 3 clinical program spend as well as MLD and the rest being other programs in discovery, so other Penn expenses. So when you look across those investments, it's very true that a lot of our investment, about 85% of that is really targeted towards the 3 clinical programs plus MLD. And within that, we don't break it down specifically around manufacturing and clinical operations, but that's inclusive of spend behind these 2 areas. And we expect that essentially to continue in terms of the focus from an overall investment on those lead programs.

And then in terms of the other question on the cash runway. So as we stated, we feel very confident that we can fund our operations until the end of 2023. But of course, we can continue to focus on cash management and refine how we're investing behind not only our key programs, but there are other expenses that support the company's infrastructure and so forth. Generally, we do expect our cash burn to be relatively consistent with prior quarters and continue to be within the range that we've seen there, about $35 million to $45 million per quarter.

Our next question comes from Danielle Brill with Raymond James.

This is Alex on for Danielle. Forgive me if you've already stated, I've got a granular question and then a zoomed that one. Has UPenn -- with respect to the FTD program, has UPenn permitting -- are they permitting elective procedures now as well as in-person screenings. And if so, could you comment on the cadence of the screening process if COVID is permitting an increased cadence in-person screenings.

And then to zoom out, have you seen any translating the GM1 world results, the increased patient enthusiasm for those results? Do you see -- have you seen those translate to recruitment enthusiasm for your other FTD and Krabbe programs?

Thanks very much for the question. So in general, what we have seen is that the -- and I'll go to your Penn question in particular. But in general, what we've seen is that most of the sites that we have been interacting with the COVID restrictions are starting to lift the elective surgery interruptions that we saw really intensely last summer and somewhat over the fall, have also started to lift. So Penn, for example, was not -- was going for a -- was going through a hybrid on-site visit throughout the winter that is starting to lift as well.

So to your point, we have had difficulty, especially patients with frontotemporal dementia that have both severe speech aphasia and emotional disturbances, just on-site visits have been challenging, not particularly for us, but just we've heard from sites. So we do hope that, that's going to help alleviate things. So Penn has allowed to our knowledge, elective procedures as well as freed up now on-site visits. Those 2 things being very important for final assessments and moving forward with the ICM procedures. So great question and certainly been interrupted throughout the year.

For the other question on GM1 and Krabbe, yes. So it's a great and important question. There hasn't been, I think, so much read-through on necessarily on the frontotemporal dementia, although we've certainly talked to our physicians about this. And one of the pieces of feedback we've heard is certainly very positive that ICM is safe in the pediatric patients. We've also seen at WORLD, I think, up to around 20 or just over 20 procedures using ICM across various studies have been reported with no safety effects. We've been communicating that message as well.

And that helps, I think, from the frontotemporal dementia perspective, just knowing that ICM is gaining in traction, not only in the adult populations but also pediatric. But the real read-through I think, has been in the Krabbe population. We've certainly been in touch with our investigators, but also at the WORLD meeting spoke to a variety of groups that support from an advocacy perspective, the Krabbe community. And the -- again, the ICM, the hu68, it's a lysosomal storage disease. We're treating children. And of course, the developmental gains are all perceived as extremely promising. So we actually have seen quite a lot of positive feedback from the Krabbe community and hope that reads through to accelerating the study and getting patients on the therapy.

Our next question comes from Yun Zhong with BTIG.

So on the GM1 data readout in the second half of 2022, is it reasonable to expect that the data readout will only be coming from one patient from the high-dose cohort and the early infantile patient.

And sorry for asking the same question, although it's on GM1 program. Have you identified the second patient for each cohort? And just wanted to confirm that the dosing of the second patient, it's not dependent on data from the first patient, is that correct?

So first, what we expect to report by the end of the year is a cohort level data on Cohorts 2 and 3, which would be, again, 2 patients in those cohorts each. And that's -- and the anticipation is that we are going to be able to enroll the second patient in both cohort with as quickly as possible. And to your point, each patient right now under the FDA guidance has a 60-day interval in between dosing. That allows for the biomarkers at 30 days, similar to Cohort 1 as well as the safety follow-up through the end of day 60. So that would -- that's required before we dose our second patient in each of these cohorts. And then any subsequent cohort, Cohort 4, for example, would require an IDMC and then moving forward. So what we're expecting to report out is 2 patients from the high-dose late infantile and 2 patients from the low dose early infantile.

We do -- and your last question is the "identification of patients." So we are -- I think, as we mentioned at some point, we are having a significant interest in the study, which is fantastic. And we're trying to get patients identified adjudicated for the potential of enrolling and then enrolling as quickly as possible after that 60-day interval.

So the press release had safety and biomarker. But given the fast disease progression, maybe in the early infantile patients, do you think, for example, the 6-month data could allow you to report some efficacy signal as well by year-end?

It's a great question. So similar to what we did in Cohort 1, we will make that decision kind of when we see what the data is and the data maturity. Similar to what we said in December, we had 6-month follow-up on 1 patient and only 2 months follow-up 60 days on the second patient. Then we reported clinical efficacy data on both when we actually got to that 3-month time point, which was the first evaluation of both the Bayley and Vineland. So we don't want to commit to that, but we're certainly -- we just have to let the data mature.

It is possible that we would have data by the end of the year that's longer-term follow-up. It really just depends on when those visitors are scheduled, when those databases come in-house and when we can get enough comfort that we understand the data. So we're committing only to 30-day biomarker and 60-day safety. Stay tuned, and we'll update you as we go through the year.

And I'm currently showing no further questions at this time. Ladies and gentlemen, thank you for participating in today's conference. You may now disconnect. Everyone, have a great day.

Thank you.