Passage Bio Inc (PASG) 2021 Q2 法說會逐字稿

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

At this time, I would like to turn it over to Stuart Henderson, Vice President of Investor Relations and Strategic Finance. Stuart, please begin.

[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 at investors.passagebio.com under the Press Releases and Statements section.

On today's call, Bruce Goldsmith, President and Chief Executive Officer, will review our second quarter 2021 financial results and discuss recent business highlights; Eliseo Salinas, our Chief R&D Officer, will review our key clinical updates; and Jill Quigley, our Chief Operating Officer, will also be available for the Q&A portion of the call.

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 its 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 will begin by centering my remarks around our 4 strategic pillars that we believe differentiate our company. These pillars are: our strong partnership with Penn's Gene Therapy Program, or GTP, which is led by our Chief Scientific Adviser, Dr. Jim Wilson; our broad and robust pipeline; our integrated manufacturing supply chain; and our solid corporate foundation, which includes a highly experienced team and a strong cash position. These pillars provide the framework for where and how we continue to focus our efforts as we develop transformative medicines for patients with CNS disorders and establish our company as a leader in genetic medicines.

For our partnership and pipeline, I am excited to report that we have amended our existing strategic collaboration and license agreement with GTP to broaden the scope to include large CNS diseases. We view this as a significant inflection point in the company's evolution. We also believe that this continues to strengthen our positive and productive collaboration with Jim Wilson, his dedicated expert team and the University of Pennsylvania.

Under the expansion into larger populations, the new exploratory research programs, which will be guided collaboratively by GTP and Passage Bio, will support the identification and evaluation of biological targets and generate preclinical proof-of-concept data for these targets. We will be able to evaluate several targets and technologies in parallel to enable quick decision-making. Once a target has reached proof-of-concept, we may then exercise an option to advance the development of a new genetic medicine for the underlying condition but are under no obligation to exercise that option.

We are initiating this effort focusing on Alzheimer's disease and temporal lobe epilepsy, with the opportunity to expand to additional large CNS indications upon mutual agreement. These research programs and our ability to select candidates across a wide range of CNS indications beyond rare monogenic conditions will bolster our already-robust pipeline and provide greater optionality for program advancement.

In our agreement with GTP, we have the option to license 17 total programs. So far, we have exercised 7 of these options in rare monogenic diseases, and we have 10 remaining. In addition to the expansion into large indications, we maintain our current focus on rare monogenic disorders and may exercise additional options in this area as well. When exercising our remaining 10 options, we will continue to do so in a data-driven manner, factoring in patient need, product differentiation and the ability to derisk clinical development programs.

For our manufacturing capabilities, I'm happy to report that we have met our goal to open our new gene therapy research and development lab called Princeton West in Hopewell, New Jersey. With this facility, we have enhanced our analytical development, clinical product testing and assay validation capabilities. State-of-the-art analytics are essential for optimizing vector production and appropriately characterizing our gene therapy products as we advance clinical development and eventually move to commercial scale production.

Our strength across these first 3 pillars: partnership, pipeline and manufacturing, is underpinned by our solid corporate foundation, including the world-class leaders we have successfully recruited. We are proud of the caliber of talent we have attracted to Passage Bio as illustrated in our recent announcement of new executive appointments.

Maria Törnsén joins us as Chief Commercial Officer and is responsible for leading and building out the company's commercial organization and strategy, including determining product positioning and paths to commercialization. Simona King joins us later this month as Chief Financial Officer and will be responsible for finance, accounting, tax, treasury, investor relations functions and information technology. Mark Forman joins us as Chief Medical Officer and is responsible for leading the company's translational and clinical development efforts.

We also have a strong Board of Directors supporting and guiding our company. The recent addition of Dr. Derrell Porter, who brings tremendous experience in corporate strategy, product development and commercialization, is an example of the kind of talent and expertise we're able to call upon at the Board level.

As we build our company around our 4 strategic pillars, we are hyper-focused on the strong execution of our 3 lead clinical development programs in rare CNS disorders for which there are limited or no therapeutic options. We remain on track despite ongoing delays due to COVID-19 to deliver on several important clinical milestones. These include: dosing the first patients in our upliFT-D study for the treatment of frontotemporal dementia with granular mutations and GALax-C for the -- study for the treatment of Krabbe disease in the third quarter of 2021; reporting initial safety and 30-day biomarker data from the first cohort of patients in our Imagine-1 trial for the treatment of infantile GM1 in the fourth quarter of 2021; and reporting initial safety and 30-day biomarker data for the first cohort of patients in our upliFT-D and GALax-C trials in the first half of 2022. Our momentum and execution are supported by a strong balance sheet with $408 million in cash, cash equivalents and marketable securities at quarter end.

I will now turn it over to our Chief R&D Officer, Eliseo Salinas, who will discuss our clinical programs in more detail.

Thank you, Bruce. I will begin with some overarching comments regarding site initiation and patient identification for our 3 lead programs.

First, we pulled out a distinguishing characteristic of our programs is that they are all multisite and international in scope, so that we can be where the patients are. In total, we have a global network of multiple clinic sites across 9 countries and 3 continents.

Despite ongoing challenges due to COVID-19, we have made significant headwinds and expect to continue opening sites in the coming weeks. We are also pleased with our progress through a variety of initiatives, identifying patients for our clinical programs. These initiatives include partnerships with service companies offering genetic testing and counseling for the 3 disease areas targeted by our lead programs and collaborations with a broad network of patient advocacy and physician groups.

Now to our specific lead programs. As many of you know, we announced in April 2021 that we dosed the first patient in our Imagine-1 trial for the lead program PBGM01 for the treatment of patients with GM1 gangliosidosis. The global Phase I/II trial is focused on the infantile form of the disease, which is the most severe form, with a very rapid disease course and no current treatment options beyond support with care. I am pleased to report that the Imagine-1 trial is progressing as planned. We have completed the initiation of additional clinical sites and expect to activate them to begin enrolling in the coming weeks in those sites.

As we have discussed previously, Imagine-1 is an open-label study that will enroll 4 distinct cohorts divided by age and dose level, with the first cohort being composed of late-onset infantile patients receiving the initial dose level of PBGM01. The primary goal of the cohort is to assess safety and tolerability to allow for dose escalation and progress into our early infantile cohorts. We are also measuring beta-gal enzyme activity levels in the CSF and serum. We look forward to reporting initial safety data and 30-day biomarker from cohort 1 of the study in the fourth quarter of this year and expanding our GM1 trial globally.

Turning to our global Krabbe program. As we discussed on our prior call, we have received regulatory clearance to initiate our global Phase I/II clinical trial called GALax-C from the FDA, the U.K.'s MHRA and Health Canada. We continue to advance site initiation processes at multiple sites and expect to dose the first patient in the third quarter.

As a reminder, GALax-C is an open-label dose escalation study of PBKR03 in patients with early infantile Krabbe disease. Similar to our Imagine-1 trial, we will first evaluate an initial dose of PBKR03 in late-onset patients and then progress into early-onset and higher-dose cohorts. Those ascending-dose cohorts will be followed by a confirmatory expansion cohort that will include both age groups. The primary goal of this study is to assess the safety of PBKR03 in patients with early infantile Krabbe disease, with the secondary goal of assessing GALax-C activity in both CSF and serum.

Next, let's discuss our third global clinical trial program for PBFT02 for the treatment of frontotemporal dementia with granular mutations or FTD-GRN. FTD is one of the more common causes of early-onset dementia, causing impairment in behavior, language and executive function, and occurs at similar frequency to Alzheimer's disease in patients younger than 65 years old. The rapid progression of FTD results in an average survival of 8 years after onset of symptoms. We are specifically focused on FTD-GRN where the disease occurs because of mutations in the GRN gene, causing a deficiency of progranulin. It is estimated that about 10 -- 5% to 10% of FTD is caused by a GRN mutation.

Our global Phase I/II clinical trial upliFT-D is an open-label dose escalation study of PBFT02 in FTD-GRN patients, and we have received regulatory authorization to initiate clinical trials in the United States and Canada.

Additionally, PBFT02 received orphan designation for the treatment of FTD-GRN from the European Commission in July 2021. The designation provides Passage Bio with certain potential benefits, including clinical product assistance, reduced regulatory fees, research grants and up to 10 years of market exclusivity following regulatory approval. We're advancing site initiation processes at multiple sites, and we remain on track to dose the first patient in the third quarter.

Like our other 2 programs, our 2 key goals for the Phase I/II study are to assess the safety of PBFT02 and to evaluate its impact on biomarkers, specifically potential increases in progranulin levels in the CSF and serum.

As we look ahead to the near-term data readout, we are incredibly excited by their potential to shape, not only the future of the patients we serve but the future of gene therapy in the CNS space. I will end my comments by saying it is a known with the caregivers, physicians and other health care markets in the GM1, Krabbe disease and FTD communities. We are grateful for the ongoing support of our clinical programs.

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

Thank you, Eliseo. As I shared earlier, Simona King, our new CFO, is joining us later this month, and she will be present for our next quarterly earnings report.

For this quarterly report, I will provide the financial update. First, I want to reiterate our strong cash position. As we reported in our press release this morning, we ended the quarter with cash, cash equivalents and marketable securities of approximately $408 million as compared to $305 million as of December 31, 2020. We expect these cash, cash equivalents and marketable securities to fund our operations for at least the next 24 months.

R&D expenses were $33.1 million for the quarter ended June 30 compared to $19.9 million for the same quarter in 2020. The increase was primarily due to an increase of $13.9 million in clinical manufacturing costs, a $1.7 million increase in clinical development costs, a $4.8 million increase in personnel-related and share-based compensation expense due to an increase in employee headcount in the R&D function and a $0.4 million increase in other research costs. These increases were partially offset by a $7.6 million decrease in research and development costs associated with the Penn agreement, which relates to additional costs incurred in the 3 months ended June 30, 2020, for preclinical work performed in preparation for IND filings for our lead programs and certain pass-through clinical manufacturing costs.

G&A expenses were $15.4 million for the quarter ended June 30 compared to $7.4 million for the same quarter in 2020. The increase was primarily due to a $6.0 million increase in personnel-related and share-based compensation expense due to increases in employee headcount. Our professional fees and facility costs also increased by $2 million as we expanded our operations to support our research and development efforts.

Net loss was $48.4 million for the second quarter of 2021 compared to $27.2 million in the same quarter of 2020. Net loss per basic and diluted shares was $0.90 in the second quarter of 2021 compared to a $0.60 net loss per basic and diluted share in the second quarter of 2020.

With that, I will end my remarks by underscoring that our successes to date are a direct result of the tireless effort put forth by our strong team at Passage Bio, who, guided by our strategic pillars, are working hard every day to deliver transformative therapies for patients with CNS disorders. We are especially excited about our expanded strategic agreement and collaboration with GTP and the opportunity it presents to address a broader population of patients with both rare and large CNS disorders. We specifically look forward to initiating discovery research for Alzheimer's disease and temporal lobe epilepsy, 2 diseases that affect large adult patient populations and where the need for new treatment options is significant.

We also want to emphasize that we are maintaining our focus on rare monogenic CNS disorders. As Eliseo described, our clinical team, manufacturing team and patient engagement teams are all extremely focused on our studies for patients with GM1, Krabbe disease and FTD. We are committed to advancing our early-stage programs and continue to evaluate other potential options in the rare monogenic CNS space.

As a reminder, our key near-term milestones are: one, to dose the first patients in our upliFT-D and GALax-C trials in the third quarter of this year; two, to report initial safety and 30-day biomarker data for cohort 1 of the Imagine-1 study in the fourth quarter of this year; and three, to report initial safety and 30-day biomarker data from our upliFT-D and GALax-C trials in the first half of 2022. We are proud of the progress we have made in building our company and advancing our pipeline as we establish ourselves as a leader in genetic medicines.

With that, I will open it up for questions. Operator?

(Operator Instructions) Bruce Goldsmith will provide brief remarks prior to taking the first question.

Yes. Thank you, operator, and thank you all for joining us this morning. Before moving to questions, I did want to take this opportunity to say a few words about Tachi Yamada, who, as you likely know, has by now, from all the global outpouring, passed away suddenly on August 3. And as I think you also know, Tachi cofounded Passage Bio, along with Steve Squinto, and Jim Wilson. And I wanted to talk a few minutes about the impact that he's had. So this is obviously all very fresh for us and very devastating, but I did want to say a few words.

Tachi, to me, was an incredible inspirational leader, and we knew him as a founder and chairman and mentor. But of course, he had a massive impact across the industry and the globe, and it's really demonstrated by what we're seeing in terms of all the press releases and comments honoring his contributions. And speaking with both our management team and the Board late yesterday and today, I can tell you that we're all very deeply shocked and incredibly saddened, and we're all extremely grateful for the opportunity to have both known and worked with Tachi.

While having such a massive impact for patients and innovation across the globe, for Passage Bio, he helped obviously set the strategy in motion with Jim and Steve and guide the strategy, but also as a partner, work to think about and help the operational build-out and set the strong foundation of the company, including the announcements that we made today. And they were certainly very much with Tachi's guidance and wisdom in terms of pursuing the various opportunities we have. And we really do remain committed to Passage Bio's mission for patients, and we will also constantly think about Tachi's guidance and insights as we continue.

The company has an incredibly strong foundation with a deep Board who I talked to, as I said, over the last few days. We've made management additions. And as I've talked to everybody, we just are unified in our both grief and commitment to the company and do so, I think, partially or totally with Tachi's commitment to patients in mind.

And finally, I do want to mention that we absolutely have Tachi's families in -- family in our thoughts. We often talked about his family, and we really do hope that the memory of Tachi gives comfort to them today and over time.

With that, I will now turn the call back over to operator for questions.

And our first question comes from the line of Tessa Romero with JPMorgan.

A clarifying question for me. You've noted that you go to the first patient in the Phase I/II infantile 1 GM1 study in April. How do you dose the second patient? And if not, have you identified the patients that will be dosed? And then, can you just remind us where you are specifically on site activation? How many sites do you have up and live now? And what is that target number that you're hoping to get to?

Sure. I'll make a few comments and then also turn it over to Eliseo. Thanks for the question. So we are -- we did announce the first patient dose, as companies often do. We are -- we have not got into any more details about the other patients that we hope to dose or really details of the forward-looking perspective on exactly when the other sites will come on. I do note and reemphasize what Eliseo said, is that we hope across all of our studies and plan to open additional sites in the coming weeks.

For GM1, what we're really focusing on is that we will -- we have reiterated our guidance on reporting data out from the first cohort, which is just 2 patients, for safety and 30-day biomarker data by the end of the year.

And I think your other questions were about kind of how many sites were moving forward and kind of the overall overarching strategy around that in terms of the activation over time. And Eliseo, do you want to add any comments?

Yes. One important consideration is that all the trials we're doing, which is typical for gene and cell therapy, are dose escalation studies where you dose 1 patient at a time. In our case, we're dosing 1 patient at a time with the space in patients with at least 60 days between the patient and the next one. That sequential enrollment is -- determines a sequential opening of sites. I'll get back to that in a second.

An important aspect of our program that sometimes doesn't get recognized or identified is that it's a vast program, high number of countries, high number of continents, high number of sites. You could technically do these studies with just 1 site, but we elect to do -- to take a different strategy to be where the patients are. And it's in the public domain in clinicaltrials.gov that we plan to open many sites. But it would be futile and ineffective to open all those sites at the same time because Site No. 8 would have to wait 16 months to enroll their first patient, so you would lose momentum.

So our strategy of opening -- activating site is also sequential. We focus on those sites that are ready to go, have a patient identified and could start immediately, and then we move to the second and the third tier of sites. We have initiated sites in the last few weeks. Those sites will become active in the next few weeks. And overall, we're very happy with the progress so far.

That was helpful, and so sorry to hear about Tachi's passing.

Thank you, Tessa.

And our next question comes from the line of Neena Bitritto-Garg with Citi.

So I guess, kind of a similar question, but in regards to the other 2 studies. I think last quarter, you noted that there was a potential to get the first patient in the FTD study dosed maybe by the end of the second quarter or early third quarter. So I guess, is there -- should we perceive this as any sort of a delay per se? Or I guess, yes, if you can kind of help characterize the site activation progress you've made there and whether or not you've kind of had any unexpected delays kind of on getting that study up and running.

Thanks, Neena. The way I would characterize this is that there are idiosyncratic changes and differences in every site that we're trying to interact with. And a lot of them, I mentioned before, were IRB timing as well as seemingly simple negotiations that are getting hung up because of either lack of staff or backlogs of the study initiations, such as other studies kind of moving ahead of us because they just simply filed earlier.

So when we said -- when we updated the guidance, we were kind of saying either second quarter or third quarter because that's what we anticipated based on the progress we were making. And as Eliseo said, we are now having site initiation activities, and part of it was also just getting those scheduled, et cetera. And now that those are -- those have been either scheduled or completed, we have better and better insights along the way in terms of when the activation of those sites, which is the second step. And then obviously, enrollment of the patients is the third step. So I don't think it was a specific -- any one specific issue. It's just basically the environment we're living in right now and trying to move the programs forward.

And our next question comes from the line of Yaron Werber with Cowen.

This is Brendan on for Yaron. Congrats to the team on the progress and our condolences to everyone on the news from yesterday. Just a quick one from us. Actually, looking ahead to the upcoming programs in MLD, ALS, Charcot-Marie, actually, just looking to see when you think we might get to see some more preclinical or some new preclinical data from those. Maybe what's your sense of timing and cadences for moving them forward relative to each other? And actually, really just on MLD there, kind of just hoping to get your thoughts on your approach there versus others who seem to have pretty solid efficacy with like an ex vivo lentiviral approach and kind of what advantages you think you might have specifically in that space.

Sure. I'll make a few comments, and then I'll turn it over to Eliseo as well. So one of the things that we've been, I think, very upfront about is that when data is available and presented by the group that's moving this forward, which is obviously Jim Wilson and the gene therapy program, we're happy to share that, and the programs continue to move forward in his groups, but we don't have any specific updates. Obviously, there was a really nice update on the MLD model back at GTP earlier this year, and we shared that, and we'll do so in the future.

And I think the way we're approaching this and certainly, the exploratory programs that we just announced today in Alzheimer's and TLE is that as the program is mature enough to give more detailed insights, we will certainly do so. And I don't think we're in a position to do that at this point. But each of these programs, the way we're thinking about this is points of differentiation.

And so maybe I'll turn it over to Eliseo to talk about how we think about MLD and to your point, about the cell therapy and potential differentiation.

Yes. Definitely. So the -- we start these programs with the end in sight. So at the end of the day, how our construct could -- what our construct could add to the existing or potentially existing armamentarium at that time. And of course, we follow with interest and, I would say, even excitement, the development around Libmeldy. And of course, we have that in mind when we think about the program and the potential benefits of our gene therapy approach.

I would say 2 things. Well, it's a very exciting development. An autologous stem cell transplantation is a type of approach that has its benefits and risks, and it's a balance. The second is that, as you know, the data on Libmeldy is very strong in certain populations, at certain ages and with a certain degree of symptoms and less so in others. So overall, we think that there is still a high medical need. And of course, we are keeping an eye on that specific medical need, taking into account what Libmeldy brought to the equation and what gaps exist even with Libmeldy in the market.

And our next question comes from the line of Debjit Chattopadhyay of Guggenheim.

Condolences on Tachi's passing. So given that the first GM1 subject was dosed in April, what should be the expectations beyond safety? And from an assay perspective, do you have the assay squared out from a biomarker measurement perspective?

Thanks, Debjit. So what we've committed to delivering at the -- in the fourth quarter of this year is safety updates and 30-day biomarker data. And obviously, we'll have to look at that data. And as you probably know from other programs, it requires getting the data in-house, cleaning the data, and then we can subsequent some steps and share that as appropriate in the fourth quarter. We just have to look at what is available and what we believe is appropriate to share at that time. So we can't commit to a specific follow-up. But obviously, we are -- the study and the endpoints run for -- with several years of follow-up, and we will continue to follow patients as appropriate and then report the data also as appropriate. So I don't think we can get into exactly what we're going to present in the fourth quarter.

Your second question, on the assays. Yes, we -- I think we've mentioned before that both CSF assays and serum assays were being developed because of the required sensitivity and the differences in levels that were found from adult patient samples and kind of extrapolating to children. And I will tell you that the group that is here working on the biomarkers has done a fantastic job advancing those. So yes, those are all developed and in-house.

Great. And then the new licenses from Penn that you announced today, could you provide more color on the likely choice of vectors and delivery routes? Do you plan to leverage on the existing vectors? Or would this need separate investment in vectors? And is it going to be via the ICM?

All fantastic questions. And I'm sure this is not going to be a very satisfying answer, but the real answer is it depends. And I'll expand on that by saying that, as you know, we've been -- we and others have been investing with Jim on discovery programs, and part of those discovery programs is certainly to pursue new vectors and capsids and also optimization of promoter transgene, et cetera, just from a gene therapy perspective. So that is certainly contemplated in this agreement to essentially, first, do an exploratory research program. And part of that is really to identify and characterize and evaluate the targets and obtain in vivo proof-of-concept, hopefully, or some -- in vitro and/or in vivo proof-of-concept.

Once we reached that stage, you're absolutely right that there might be further optimization on the 2 areas that you said, both the vector and the route of administration. It very well may be ICM. There may be other approaches that we will have to develop or would be developed along the way and maybe not we have to develop, they may be available.

And I think Eliseo wants to add another comment to that as well.

Yes. As Bruce said, it would be a bit early to speculate about a target. We just signed this agreement, and we're happy initiating the work. But when you look at Alzheimer's disease and temporal lobe epilepsy, it's plausible that they might require a different approach: one probably intraperitoneal and the other probably intrathecal with a broad distribution. So we are open to exploring the necessary modalities and routes of administration that might be necessary.

And our next question comes from the line of Laura Chico with Wedbush.

My condolences on the loss here. I think 2 questions. First, with respect to the expanded UPenn collaboration, you mentioned a few of the larger-scale CNS applications that you're considering. My question is, why now? Why is this a good time to layer in the larger-scale opportunities? And I think you mentioned this in the prepared remarks, but strategically, how do you think about the balance versus the focus on some of the orphan indications? And then I have a quick follow-up.

Sure. Thanks, Laura. Thank you for the question. The way we thought about this and -- is actually not -- I'm going to make a brief comment, and then I'll turn it over to Eliseo. This is not an abrupt consideration. This is a -- what we believe is a natural extension of what we've built and what the partnership has delivered.

I'll first talk about what our pipeline looks like. We are moving into the clinic with certain programs. And in rare -- in the rare monogenic space, and Eliseo can expand on this, we believe, more generally, when you pick a target, it links to a gene, and it links to the indication. And so there potentially is less need for exploratory work to characterize and -- identify and characterize those targets.

So the way we think about this is, it is earlier stage. It will start with the exploratory research plan. And as we do that, to your point, Laura, we are going to continue to prosecute the clinical programs. Jim will continue to advance the discovery stage programs. And we are very interested in adding to that, and so it is a balanced portfolio approach. And we think right now is the opportunity to do this for both where Jim is in his interest in expanding this and also the team that we've built here. And Eliseo can comment on this as well, but we've brought some clinical team members and overall team members that are expert at doing exactly these programs.

Eliseo, do you want to add a few comments?

Yes. Just to -- there are 2 aspects to this decision. One is the desire to balance and diversify our pipeline. When you look at our pipeline, it's very strong in rare monogenic diseases, in particular, pediatric leukodystrophies. We have 1 adult indication now in the clinic, and we felt that it would be appropriate moving forward to add complement indications that are non-monogenic, non-pediatric and non-rare to provide diversity of opportunities.

The second aspect is that this reflects the quality of the partnership and the increased confidence that Passage and Penn discover working together. This collaboration started about 2 years -- later than 2 years ago. And the confidence and the strength of working together translated into this desire to approach, what I would call, less leading targets, where you have 1 faulty gene that you need to replace. So those are the 2 aspects that explain the why now.

Okay. That's helpful. And then maybe 1 quick follow-up question. So at the virtual MPS meeting in July, it seemed like 1 trend that was emerging was increased improvement in younger patients versus older patients in a couple of different disease settings in the context of gene therapy. So as we're thinking about GM1 and some of these other applications, I'm curious how you anticipate the phenomena kind of replicating here and kind of the therapeutic window for intervention. Any thoughts there?

Yes. Yes. That's -- the more we advance in the treatment of these pediatric diseases, the more that axiom tends to be confirmed that earlier intervention seems to be better. So we remain very humble. We know that what we're doing is research, now clinical research. But we agree that, in general, it's -- what seems to emerge is that the earlier the treatment, the better the outcomes.

But on the other hand, as you know, patients whose symptoms appear later in life tend to be less severely affected, opening for more compensatory mechanisms. So while accepting what you said as a reality, I remain humbly optimistic about exploration of the effects in later-onset patients for the reason I mentioned.

And our next question comes from the line of Yun Zhong with BTIG.

This is [Xian] for Yun, and we are really sorry about the pass of Dr. Tachi Yamada. So my first question is about the competitive landscape of the FTD program. Your competitor had recently reported the Phase II readout on their program, and the data actually shows some positive biomarker and the slowing disease progression compared to the natural history. I just want to know your thoughts on that because the investors seem to be like reacting a little bit negative to it. And what part of the dataset do you think have not met with investors' expectation? And how can your programs do better?

Yes. No, thank you. Thank you for the thoughts and the question. So I'll make some introductory comments. And if Eliseo wants to add anything, I'll turn it over to him. So the mechanisms for the data generated you mentioned are completely different. And I think that that's one of the outstanding questions that we've always raised. But we're also balanced in our, I think, excitement, I think, for the field of patients with -- that are suffering from frontotemporal dementia and hope that this would move forward.

So the data you mentioned is specifically around a monoclonal antibody that is delivered at a relatively high dose every 4 weeks, and that blocks a receptor that uptakes progranulin intracellularly, and then the site of action for progranulin is intracellular. So one of -- and what the data showed from those studies and earlier studies is that the level of progranulin that was achieved was about double the starting level in both preclinical models as well as in CSF as well as in serum. And that means that the progranulin levels are essentially getting back to relatively normal.

And that raise -- that further raises the question about where the progranulin is. Is it outside the cells? Or is it intraneuronal? And I think your point is that how does that -- the investors, I think, and some of the questions we've seen are how does that translate into clinical benefit biomarkers, neurofilament light marker, et cetera. And those are very complex questions to answer. And perhaps, the Phase II data is not mature enough to understand that, and they are running a Phase III study to try to fully characterize it.

The last point I'll make, and I'll turn it over to Eliseo for further comments, is our approach is a gene therapy to increase progranulin, and what we've seen in preclinical models is that we can get over 50x the level of normal progranulin. And so that gives us the opportunity to really drive progranulin, exogenous new progranulin to potentially much higher levels. And so that, I think, is the major differentiating point and perhaps some of the questions that involve this monoclonal antibody.

So Eliseo, any other thoughts?

No, I think you covered it.

And our next question comes from the line of Danielle Brill with Raymond James.

First, allow me to extend my condolences about Tachi's passing as well. So I have a couple. First, I'm curious about how you're defining early symptomatic FTD in the upliFT study. Do you have a maximum NFL cutoff for inclusion? Or do CDR scores correlate with NFL and FTD? And then I'm curious about your thoughts on FDA's upcoming AAV vector AdCom meeting. Are you at all aware of the agenda? And any thoughts on potential implications for your programs?

Yes. So yes, on the FTD program, it's a great question. And actually, I think I'll reframe it slightly. So we do look at early-onset symptomatic patients. And this is defined -- I believe, it's on clinicaltrials.gov. If I'm a little bit wrong, please refer to that for the final numbers. But I believe it's around 0.5 to 1 in terms of the CDR scores. And the NFL level is actually a high level of NFL in serum. The reason those 2 things are combined is that we are taking early onset, but there have been some studies that showed higher NFL levels are correlated with a faster progression. That's obviously not great for the patients. But from a clinical study perspective, it does tend to select the patient population that is optimal to study potentially.

And so I'll pause there and ask Eliseo if any other comments or is that captured generally. And again, I may have the cutoff on CDR slightly incorrectly. But no, that's perfect.

No, that's correct. And the concept is that -- and remember that this is a first study in patients where the objective is to pick up hopefully strong signals. And therefore, that's why the emphasis on patients that are already demented and not presymptomatic as reflected by the CDR of 0.5 to 1, and the higher level of NFL that might indicate a faster evolution of the disease.

One quick comment about the data that has been shared here recently, which is great for the field, great for patients and great for all of us. I mean one of the most difficult things to predict in dementia in general, including in FTD, is the future rate of decline of a population of patients. When you look back and you can see what this population of patients decline at this rate, but then taking the same patients, putting them in a trial and observing them might bring surprises as we have been seeing in the last 20 years of trials in dementia so far.

And so on the second question, yes, we're obviously very focused on the Advisory Committee that will come up. Our understanding is that there will be 5 types of toxicities -- potential toxicity risks that will be focused on, on the genicity, so generation of oncology, hepatotoxicity, thrombotic events and then 2 types of neurotoxicity: one is kind of an MRI and the other is generally related to DRG. We're absolutely in discussions here internally and also with Jim and his group who have obviously been on the leadership area in many of these potential areas.

And I'll just mention on DRG, for example. I think we're 1 of the only companies that are right now proactively monitoring nerve conduction velocity or sensory neuron activity in all of our studies to try to evaluate whether ICM for these patients has some kind of clinical or subclinical manifestations. We've never seen these, but we do believe that it's the right thing to do to continue to study.

But we've also talked about that the amount of experience in any one of these toxicities is actually still vanishingly small. So there have been, for example, MRI, no toxicities that have been noted. But they're also in patient populations in the tens, not in the thousands or hundreds of thousands. So this is evolving, and so I guess, our general comments are we absolutely are aware of this. We want to be at the forefront of thinking about these potential toxicities. But also using ICM, obviously, does limit some of these systemic tox and focuses us now on kind of the DRG area, which we've been very clear about for the past couple of years and built into our design. So that's our current perspective. We're obviously going to be looking at that AdCom very carefully.

Thank you. This does conclude today's question-and-answer session as well as today's conference. Thank you for participating, and you may now disconnect.