Regenxbio Inc (RGNX) 2017 Q4 法說會逐字稿

Good morning, and welcome to the REGENXBIO Fourth Quarter and Full Year 2017 Earnings Conference Call. (Operator Instructions) As a reminder, this conference is being recorded.

I would now like to turn the conference over to Ms. Sara Berl, Vice President, Law and Policy for REGENXBIO. You may begin.

Good afternoon, and thank you for joining us today. With us today are Ken Mills, REGENXBIO's President and Chief Executive Officer; Stephen Yoo, our Chief Medical Officer; and Vit Vasista, our Chief Financial Officer.

Earlier this afternoon, REGENXBIO released financial and operating results for the 3 months and full year ended December 31, 2017. The press release reporting our financial results is available on our website at www.regenxbio.com. Today's conference call will include forward-looking statements regarding our financial outlook in addition to regulatory and product development plans. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ from those forecasted and can be identified by words such as expect, plan, will, may, anticipate, believe, should, intend and other words of similar meaning. Any such forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties. These risks are described in the risk factors and the Management's Discussion and Analysis section of REGENXBIO's annual report on Form 10-K for the fiscal year ended December 31, 2017, which is on file with the Securities and Exchange Commission and available on the SEC's website. Any information we provide on this conference call is provided only as of the date of this call, March 6, 2018, and we undertake no obligation to update any forward-looking statements we may make on this call on account of new information, future events or otherwise.

Please be advised that today's call is being recorded and webcast. In addition, any unaudited or pro forma financial information that may be provided is preliminary and does not purport to project financial positions or operating results of the company. Actual results may differ materially.

I would now like to turn the call over to Ken Mills, President and Chief Executive Officer of REGENXBIO. Ken?

Thank you, Sara, and good afternoon, everyone. Thanks for joining us. On today's conference call, we'll provide a recap of our recent progress and update on our product candidates and financial results for the fourth quarter and full year ended 2017. We will also review anticipated upcoming milestones for REGENXBIO and then open the call for questions.

At REGENXBIO, our mission is to improve the lives through the curative potential of gene therapy based on our proprietary NAV Technology Platform. As a reminder, our AAV gene therapy product candidates are designed to deliver genes to cells to address genetic defects or to enable cells in the body to produce therapeutic proteins that are intended to impact disease. Through a single administration, our AAV gene therapy product candidates are designed to provide long-lasting effects, potentially significantly altering the course of disease and delivering improved patient outcomes. We are currently advancing an internal pipeline of product candidates that employ our proprietary NAV Technology Platform within 3 disease areas: retinal diseases, metabolic diseases and neurodegenerative diseases. These areas of focus have been strategically selected because we believe they can uniquely be addressed by our vectors. And within each focus area, there are many diseases with significant unmet medical need.

Beyond our internal development programs, we selectively license components of our NAV Technology Platform, most typically single vectors for single indications to third-party companies whose vision and commitment to gene therapy is aligned with our own.

Our NAV Technology Platform consists of over 100 novel adeno-associated viral vectors, or AAV vectors, including AAV7, AAV8, AAV9 and AAVrh10. Our vectors are the result of research efforts aimed at discovering and developing safer and more effective gene delivery vehicles than earlier generation AAV vectors. The resulting AAV vectors, the foundation of our NAV Technology Platform, were found to have had the following significant and differentiating attributes as compared to earlier generation AAV vectors: higher expression and increased durability; broad and novel tissue selectivity; reduced immune response; and improved manufacturability.

REGENXBIO has an exclusive worldwide license to the NAV Technology Platform. Our goal is to utilize these vectors to enable the development of onetime disease altering gene therapy treatments.

Before we review the past quarter and summarize our upcoming milestones, I'd like to say a bit more about our commitment to patients in all that we do. Since our inception, our patient-focused mission has remained the same, even as our company, our platform and the field of gene therapy has continued to evolve, our support of patient communities we work with is unwavering. We are actively engaged with patient advocacy organizations to ensure that we have an acute understanding of the patient experience. And we are using these insights to guide the development of our product candidates and to allow us to be a reliable and compassionate partner with our patient communities.

We believe single administration gene therapy treatments that significantly alter the course of disease will create a meaningful impact for the heroes we work for every day: the patients and the families living with disease.

Last week, in honor of rare disease day, I shared an update with some of our friends in the rare disease community on our progress, and our employees were able to connect with advocates and people living with rare diseases during an all-staff event. I was struck by the optimism and excitement we heard, even from those most affected by serious illness. Their stories and determination left all of us feeling deeply inspired and reinforced our passion and focus on what we do. Our NAV Technology Platform has the potential to apply to a broad range of genetic diseases, many of which are rare, and we are honored to continue to support those patients in this capacity.

I'd now like to turn the call over to Stephen Yoo, our Chief Medical Officer, to give an update on our lead product candidates. Stephen?

Thank you, Ken. So as a reminder, our product development pipeline is currently focused on diseases in the retinal, metabolic and neurodegenerative disease areas. Our lead product candidates are currently targeting the following indications: wet age-related macular degeneration, or wet AMD, homozygous familial hypercholesterolemia, or HoFH, and Mucopolysaccharidosis type I and type II, or MPS I and MPS II.

I will begin with RGX-314, the lead product candidate in our retinal disease franchise. Last month, we announced the completion of dosing with the third cohort in our Phase I clinical trial, evaluating RGX-314 for the treatment of wet AMD, a disease that we believe affects more than 2 million patients in the U.S., EU and Japan. Wet AMD is characterized by loss of vision due to excess fluid accumulation from new blood vessel formation. Fluid leakage following this excess fluid accumulation can result in physical changes in the structure of the retina causing diminished, distorted or even total vision loss. Standard-of-care therapies for wet AMD inhibit vascular endothelial growth factor, or VEGF. The neutralization of VEGF both prevents the proliferation of new abnormal blood vessels and reduces the fluid accumulation and leakage from these vessels, effectively controlling the disease state and yielding an improvement in visual acuity. While efficacious standard-of-care dosing regimens require frequent and inconvenient administration, typically monthly or bimonthly injections into the eye. This treatment regimen imposes a significant burden on patients and caregivers, often leading to poor compliance. Poor compliance has a direct impact on the disease state and it -- as it impedes the efficacy of the therapeutic regimen and allows for progression of vision loss. For physicians and patients, there remains a significant need for long-lasting effective therapies for wet AMD due to the burden of this frequent treatment and the associated reduction in efficacy. In contrast of the standard of care, RGX-314 is administered with a onetime subretinal injection. Utilizing the NAV AAV8 vector, RGX-314 is designed to encode a gene for a monoclonal antibody fragment in the cells of the retina. The expressed antibody fragment is designed to neutralize VEGF activity, employing a similar mechanism as standard-of-care therapy. The NAV AAV8 vector has been selected for this product candidate because it has demonstrated effective transduction of retinal cells in multiple preclinical animal models. We believe a onetime administration of a highly efficacious gene therapy product encoding inhibitor of VEGF has the potential to address the challenges associated with existing therapies. As mentioned earlier, last month, we were pleased to announce the completion of dosing of the third cohort in our phase I trial, evaluating RGX-314 for the treatment of wet AMD, and we have now treated a total of 18 patients in the study. The primary objective of the trial is to evaluate safety of a onetime subretinal delivery of RGX-314 at 24 weeks. Additionally, we'll be evaluating several efficacy parameters, including best-corrected visual acuity and retinal thickness as measured by OCT. The clinical trial is currently being conducted at 6 leading retinal surgery centers across the United States. We reported in January that based on the first 12 patients dose, we had observed RGX-314 to be generally well tolerated. At that time, we also shared an interim look at the RGX-314 protein expression data at the 4-week time point on the first 2 cohorts of patients. In these first 2 cohorts, evidence of dose-dependent RGX-314 protein expression, as measured by enzyme-linked immunosorbent assay, or an ELISA, was observed. We remain encouraged by this observed dose-dependent expression, coupled with the favorable preliminary safety and tolerability as well as continued investigator and patient enthusiasm, which resulted in rapid enrollment of this trial. We remain on track to present top line data from the Phase I clinical trial in late 2018, which will include both primary and secondary endpoint data.

I'll now turn to our metabolic franchise and the development of RGX-501 for the treatment of HoFH, for which we are currently enrolling patients in a Phase I/II clinical trial with 5 patients currently enrolled. As a reminder, HoFH is the rare genetic disorder caused by mutations in the gene encoding the low-density lipoprotein, or LDL, receptor. The LDL receptor is responsible for removal of LDL cholesterol from the bloodstream. When mutations occur in both LDL receptor genes, the LDL pathway severely disrupted, resulting in an accumulation of LDL cholesterol in the bloodstream secondly to coronary artery disease at a young age, a severe and ultimately fatal condition. Current standard-of-care therapies for HoFH are often insufficient to lower LDL cholesterol to normal levels, requiring many patients to receive regular apheresis, a treatment associated with significant burden for both patients and caregivers, yet one that does not ultimately correct the underlying cause of the diseases.

RGX-501 has the potential to address the underlying genetic defect responsible for HoFH by correcting the LDL receptor deficiency. As with all of our product candidates, RGX-501 is designed as a onetime therapeutic administration, an approach that has a potential to alleviate the treatment burden and address the urgent unmet needs in HoFH.

RGX-501 uses the NAV AAV8 vector, a vector that has demonstrated a highly efficient transduction of hepatocytes in both clinical and preclinical studies. In our RGX-501 trial this past month, we dosed the second patient in the second dose cohort, the fifth patient overall. The primary objective of this Phase I/II dose-escalation trial is to assess the safety of a onetime intravenously administered dose of RGX-501. We will also evaluate the preliminary efficacy as measured in change in LDL cholesterol from baseline. The trial is being conducted at the University of Pennsylvania with a number of U.S. and international sites being utilized for patient recruitment and follow-up.

We reported in January based on the 3 patients dose as of December 1, 2017, we have observed RGX-501 to be generally well tolerated. One patient in the first cohort experienced SAE of hypotension, associated with a mild inflammatory response within 24 hours of dosing, which resolved within a few hours of onset. The nature and time frame of SAE was distinct from expected and known immune responses to AAV therapy and the subject recovered quickly from the event without significant sequela and the assay was determined to be unrelated to RGX-501. We remain on track to present top line data from the RGX-501 Phase I/II clinical trial in late 2018, which will include primary and secondary endpoint data.

I would now like to share an update on our neurodegenerative franchise where we have 2 product candidates in development for diseases of the central nervous system, or CNS. RGX-111 for the treatment of MPS I, and RGX-121 for the treatment of MPS II. MPS I and II are rare genetic disorders that belong to a family known as lysosomal storage disorders. MPS I and II are caused by defects in the IDUA and IDS genes, respectively. In both disease states, the defective genes result in enzyme deficiencies that lead to an accumulation of glycosaminoglycans, or GAGS, which would normally be broken down by these missing enzymes. Intracellular GAG accumulation leads to cell and tissue damage, causing a severe disease pathology associated with a wide range of physical symptoms and in severe patients, significant cognitive deficits.

While there are approved and marketed enzyme replacement therapies to treat the peripheral nervous system of both MPS I and II, treatments for the CNS symptoms of the disease are severely limited or nonexistent. Our programs are designed to address this area of significant unmet medical need.

Both RGX-111 and RGX-121 utilize the NAV AAV9 vector, selected for its affinity for CNS cells. As with all of our product candidates, we are employing a onetime administration approach. The therapy will be administered directly into the cerebrospinal fluid via an intracisternal administration. The route of administration was selected to optimize the exposure of the target CNS cells to RGX-111 and RGX-121.

Site activation is continuing in the Phase I clinical trial, evaluating RGX-111 for the treatment of MPS I. Patient recruitment is anticipated to begin this quarter, and the first patient is expected to be dosed in mid-2018.

In addition, at the end of 2017, we are pleased to announce that the investigational new drug application, or IND, for the Phase I/II clinical trial of RGX-121 for the treatment of MPS II is also active. Site activation is continuing for RGX-121 clinical trial as well, and patient recruitment is anticipated to begin this quarter. We expect to dose first patient in the RGX-121 clinical trial in mid-2018. We are excited about the continued progress in all of our lead product candidate programs and look forward to sharing more updates with you throughout the year.

With that, I'll turn the call back over to Ken to discuss additional progress on building our capabilities and our licensee programs. Ken?

Thanks, Stephen. Beyond the advancement of our lead product candidates, we expanded the breadth and depth capabilities and development this quarter by entering into an agreement with FUJIFILM Diosynth Biotechnologies, securing access to long-term dedicated cGMP suite capacity and resources capable of manufacturing REGENXBIO's lead product candidates at up to 2,000 liter scale.

FUJIFILM facilities are capable of supporting the global development and commercialization of our internal pipeline candidates. This partnership enhances our existing internal capabilities, through which we were able to produce NAV AAV at up to 200 liters scale, and it fortifies our position of leadership in AAV manufacturing.

We continue to advance and leverage the NAV Technology Platform through efforts of external partners and licensees. And as of December 31, 2017, our technology has been licensed to 10 NAV Technology Licensees and is currently employed in the development of more than 20 partnered product candidates, 8 of which have advanced to clinical stage. As licensee programs continue to move forward and achieve efficacy and safety milestones, we believe they further validate the versatility of the NAV Technology Platform and provide additional data that collectively drive the advancement of the AAV gene therapy space. One example that showcases the strength of our platform is the recent progress that AveXis' AVXS-101 spinal muscular atrophy, or SMA, type I program, which uses the NAV AAV9 vector. AveXis has announced that this program is currently in pivotal stage, and AveXis is actively screening for remaining patients following the review of preliminary data from the first 3 patients in this trial. We continue to be encouraged by the progress and data from AveXis. And at the beginning of this year, we amended our original license agreement with AveXis for SMA. Under the terms of the amended agreement, REGENXBIO could receive up to an additional $260 million, including an upfront payment of $80 million, $60 million in additional guaranteed annual payments and potential commercial milestone payments of up to $120 million. And AveXis acquired exclusive rights to the entire NAV Technology Platform for the development of treatments for SMA. Additionally, the amended agreement permits the assignment by AveXis upon a change of control without REGENXBIO's consent.

Another area where the breadth of our platform continues to be highlighted across NAV Technology Licensees entering and advancing the clinic is, in January, Audentes Therapeutics reported encouraging preliminary data on 3 patients in their Phase I/II clinical trial evaluating AT132, which uses the NAV AAV8 vector for the treatment of X-linked myotubular myopathy. And additionally, AveXis reported in February that they had dosed the first patient in their Phase I/II trial evaluating AT342, which also uses the NAV AAV8 vector for the treatment of Crigler-Najjar Syndrome.

In summary, we had a productive fourth quarter in 2017. As we continue to see meaningful advancement of our internal and externally partnered product candidates while progressing toward our goal of bringing novel gene therapies through the clinic and ultimately to patients.

With that, I'm going to turn the call over to Vit for review of our financials. Mr. Vasista?

Thanks, KTM. REGENXBIO ended the quarter on December 31, 2017, with cash, cash equivalents and marketable securities totaling $176.4 million as compared to $159 million as of December 31, 2016, an increase of $17.4 million. Cash, cash equivalents and marketable securities as of December 31, 2017, exclude the $80 million we received from AveXis in January 2018.

Revenues were $2 million and $10.4 million for the 3 months and year ended December 31, 2017, respectively, compared to $1.7 million and $4.6 million for the 3 months and year ended December 31, 2016, respectively.

Research and development expenses were $14.2 million and $57.2 million for the 3 months and year ended December 31, 2017, compared to $16.1 million and $45.5 million during the same periods in 2016. This increase was primarily due to personnel costs, including stock-based compensation expense as well as manufacturing and facility-related expenses.

General and administrative expenses were $4.8 million and $27.2 million for the 3 months and year ended December 31, 2017, compared to $5.7 million and $23.6 million during the same periods in 2016. This increase was primarily due to personnel costs, including stock-based compensation expense.

Net loss was $16 million and $73.2 million or $0.51 and $2.45 net loss per basic and diluted common share for the 3 months and year ended December 31, 2017, respectively, compared to $19.6 million and $63 million or $0.74 and $2.38 net loss per basic and diluted share for the 3 months and year ended December 31, 2016, respectively.

As of December 31, 2017, we had $31.3 million common shares outstanding.

REGENXBIO reiterates that it will expect full year 2018 cash burn to be between $85 million and $95 million, which will support the continued development of its lead product candidate programs. Full year 2018 cash burn guidance excludes the effect of $80 million we received from AveXis in January 2018.

With that, I will turn the call back to KTM to review our upcoming 2018 milestones.

Thank you, Vit. So just one closing statement. I think, in general, our reflection on 2017 is that it certainly proved to be a landmark year for gene therapy in many ways. And within REGENX, we thought it proved to be a pivotal year for both the clinical advancement of our internal product candidates as well as our partner pipeline and the validation of the NAV Technology Platform overall. With significant progress in the Phase I clinical trial of RGX-314 for wet AMD and the Phase I/II trial for RGX-501 for HoFH, we're looking forward to reporting top line data for each trial by the end of 2018. And we're also eagerly looking forward to the initiation of 2 trials in our neurodegenerative franchise. With trials for RGX-111 for MPS I and RGX-121 for MPS II expected to initiate by mid-2018. With our strong cash position, we look forward to executing on these upcoming milestones.

And with that, operator, I'll turn the call over to you for Q&A.

(Operator Instructions) And the first question will come from the line of Matthew Harrison with Morgan Stanley.

This is Vikram on for Matthew. So our only question is around manufacturing capacity. Could you just talk a bit about some of the work you're doing with FUJIFILM? And how much scaleup work will be required over the next couple of years?

Vikram, thanks for the question. So what we announced in the first quarter so far this year is that we have established a relationship with FUJIFILM that has a facility that can support bioreactor scale up to 2,000 liters, and we think that, that scale, which is taking processes that are developed at our facilities here in Rockville by the team here, REGENX employees in Rockville, and bringing it down to the FUJI facility is going to support our needs for the remaining work we have to complete clinical development of the lead product candidates as well as early-stage commercialization. So by forging that relationship with FUJI, we think that we've established the supply chain that we need in place to complete our work with existing trials, initiate any additional trials that we may needed for registration and support early-stage commercialization.

And the next question will come from the line of Gbolahan Amusa with Chardan.

I've a couple of questions related to your AveXis collaboration. Since one scenario for AveXis includes the potential to file AVXS-101 for approval in SMA in 2018. And so one question is, just given the rapid ramp of genetic medicines in recent years, including Spinraza and Exondys 51. To the extent AVXS-101 ramps rapidly in 2019 and proves to be a sizable drug, are there any limitations or constraints in REGENX reaching peak royalties in 2019 or 2020 in such a scenario? And then secondly, on the amendment to your license agreement with AveXis, could you confirm that REGENXBIO would receive the $0.25 billion or $260 million accelerated upfront if AveXis were acquired?

Gbolahan, this is Ken. I'll take that. And thanks a lot for the question. So I don't think that we have a view that an approval of -- at any time AVXS-101 for the treatment of SMA, in particular, type I, where they're running the pivotal study, would create any sort of constraint in terms of our ability to receive and recognize royalties. Once AveXis starts to sell into the market, we start to receive royalties on a tiered basis from mid-single digits all the way up to the highest tier to low double digits. And I think you're probably read in a little bit more to some of the ramp of other products in the SMA space than we are, but our tiering is going to follow whatever sales ramp AVXS-101 if we were to get approved would follow and there'd be no limitations or constraints on that. With respect to the second part of your question about the amendment, so there is a cortisol associated with the amendment that allows for, at our option, in the event that and this is -- I don't know that I'm commenting whether it's likely or unlikely, but in the event that AveXis were to get acquired that we would have the option to pull certain payments in the milestone payments schedule forward. And so we've already received the $80 million payment, which will be something that will record in the first quarter of 2018. Two additional payments are guaranteed, a $30 million payment in January 2019, another $30 million payment in 2020 and then an additional $40 million milestone payment that's associated with cumulative sales of AVXS-101. Any of those additional payments that we have not received that I outlined, we would have a call on and option to be able to pull those forward to realize that cash in the event of an AveXis acquisition.

And the next question will come from the line of Gena Wang with Barclays.

This is Xiaobin calling in for Gena. So maybe a couple quick questions on RGX-314. Just wondering if you can give more color on the specifics of the timing and venues of presentations? And what might be the gating factors for you to decide that timing? And then second question would be, so what would be your criteria to sort of be comfortable with the highest dose? Would -- do you have room? What will be your consideration to continue to accelerate the dose?

Xiaobin, this is Ken. I'll start and maybe Stephen can back me up if needed. And thanks for the question. So with respect to the timing, we really just announced a few weeks ago that we completed enrollment of the third cohort in 314, so it's pretty fresh for us right now and for the team. But I think also, it's at a really good pace and something that we're really pleased with to have accomplished it early in 2018. It certainly emboldens our confidence in terms of second half of the year reporting as we had guided to even in early January. I think the factors that are going to go into when and where are related to how the data collection goes for the entire trial over the next several months. We've had a target, and our goal for top line reporting on the first 3 cohorts is to have collected robust set of data out to 6 months. This is kind of our first order of expectation for all of the 18 patients that have been enrolled, make sure that we establish the right level of quality with respect to that data. So I would expect that we would be in a position by the middle of the year to sort of update and establish what that progress is looking like internally and coming into the third quarter maybe be in a position to start to give a signal as to when and where in the second half of the year we could look to report that top line data. In terms of the criteria, beyond where we are right now, it's just really hard to say right now, Xiaobin, we have -- again, we haven't even had -- many of the patients in the first cohort have collected all the data even from the very first visit after administration. So we're still in the middle of a trial that we're very encouraged about, that we're very bullish on the timing of reporting in the top line data, which we think is going to help inform how we're going to make decisions, but it's still early for us to be able to establish what criteria we're going to be using to make decisions transitioning from 2018 into 2019 about next steps for this program. Stephen, if you have anything to add?

I think at the end, we're going to have to -- we've outlined safety and tolerability, and we've put out some efficacy measures that we're going to look at and outline those. I think we're going to have to look at the totality of evidence, and I think the data over time will be important. And I think as you've said, Ken, we're still in the middle of this trail, and we continue to collect the evidence in that data, and as we continue to examine that and look at that. I think the totality of evidence will be important in helping us make that decision.

Also just want to confirm that if you want to accelerate the dose, so your preclinical data package would allow you to do that, right?

That's right. Our preclinical data package does have allowance for us to increase doses, and we right now have all 3 cohorts enrolled at the doses that were outlined in the original trial design. So we feel like we're in a really good place.

And the next question will come from the line of Reni Benjamin with Raymond James.

Ken, can you talk a little bit about the doses that are being evaluated? And what kind of expression levels that might translate into -- in terms of how you'd compare to bimonthly dosing versus monthly dosing of something like EYLEA? Just trying to see if we're kind of already there or we should be thinking about even extending the dosing schedule.

Yes, Reni, thanks a lot for the comment and the questions. I think we're doing some things here in the RGX-314 trial, including sampling fluid from patients to make protein measures that have never been done before in gene therapy in terms of assessing early and durable protein expression from a onetime administration. So I -- And I think you've brought up a great point, which is we're trying to establish the pharmacological profile in the dose curve of RGX-314, both based on genome copies that we're putting in, but how that's correlating to protein expression. And I think, in gene therapy, when we engage with the regulators, we're always going through a process of trying to figure out what the right place is to start on that curve based on what we've seen in animals, and there is often support for coming in at doses that we refer to as minimally effective, that they are showing something because these trials epically require treatments that can be administered once, but we suspect, I think, the conventional wisdom these days is that we're only going to be able to do dose patients once and they wouldn't necessarily, right now, based on how we're approaching things, be able to get another administration. So we want to give them a chance with some benefit. So I think coming into the trial, we're thinking that based on the animal data we generated in our preclinical package that we are coming in with doses of RGX-314 that were shown to be effective in the animal models, and we're going across a range of responses and effectiveness as we walk up, obviously, from the first dose all the way up to the third dose in that trial. In some ways that's, of course, probably how Lucentis and EYLEA established themselves, although they likely started at doses that were not efficacious to be a safety profile first and then eventually in humans walked up to things that were efficacious and then established final doses. I think what we can say with confidence is that we're working in this trial and in this program to build that curve, to build that pharmacological profile of 314. So that by the end of the year, we can unequivocally answer that question that you're asking and that's why we're collecting that protein expression data, that's why we're collecting the retinal thickness and OCT data. And as Stephen alluded to, it's the kind of totality of all of these measures that are both going to tell us where does gene therapy need to get to in order to establish the level of responsiveness that current standard of care is or better, and that's what the design in this trial is about.

Got it. Okay. And just switching gears to 501. What kind of data do you need to see to move forward? And what does the registration strategy -- can there be an accelerated registration strategy? Or is there something that kind of needs to go through the paces to get the -- to get to registration and commercialization?

Yes, good question. I'll let Stephen talk to the thoughts about registration. I can say from the target product profile interest that we have for RGX-501, the data needs to show us that this is at least as good, but really an improvement over standard of care. Standard of care, we think of as products that entered the market 5 or 6 years ago to treat HoFH, including things like Lomitapide, Mipomersen to the extent that it's in use. And even in some patients, although it's not thought of to be very effective at all, the PCSK9 inhibitors that have emerged, we are looking for RGX-501 to establish greater reductions in baseline LDL cholesterol than those treatments. That's what we think is a barrier to entry for improvement and a real commercial potential here. For registration, I'll let Stephen speak to, I think, what our thinking is.

Yes, I think our thinking on registration is a single pivotal trial, which is really based on precedent in this area for other sponsors who have gone forward with HoFH and looking at this particular indication with a primary endpoint of overall reduction in LDLC. So our plan is to assess the data and the outputs from the Phase I/II trial and to look at the probability of success and to be able to then leverage that into a single pivotal trial that we believe would support our registrational package.

Got it. And just one final question for me. And it had to do with your founder's comments, right, so Jim Wilson's comments on toxicity with the AAV vectors. I was just kind of curious since you guys are that close, just kind of how you're thinking about on those comments on that publication moving forward. And I know you are very adamant about increased safety testing. Are things that you're considering right now?

Yes, I think -- so Jim's publications and I think his own statements, which he talks a lot to the media and provide a lot of perspective, we'll let those stand on their own. I think internally, we, of course, are very serious about how we approach safety, both preclinically -- and it so happens that the lab at Penn, Jim's lab, has done a lot of the safety and tox work from any of our lead product candidates up till this point. I mean, then we've continued to do work either in association with them or on our own to collect additional data on safety before filing our IND packages. In the clinic, as you heard reported today, our -- these first-in-human studies, our first interest here is to report on and emphasize the safety and tolerability of things like RGX-501 and RGX-314. We think we're in a really good place with respect to the background of the profile of these products right now because what we saw with respect to the preclinical packages and what we submitted to the regulatory authorities and what these lead product candidates are showing us in the clinic resemble one another. And that is that they're safe and generally tolerable. So what we're looking to do going forward is keep being rigorous and robust about that and certainly keeping our eye on data, both internal to REGENX, but outside of REGENX and one of, I think, the great things about REGENX as a company is we have a lot of partners, partners like Audentes and AveXis who we actually talk to and share information with, and it's bilateral. And we work with one another because we want one another to succeed, we want to field to succeed. It's important for all of us to share and to talk about information, especially safety and tolerability information with something that was concerning to people. And I think, Jim, as an academic, obviously, has a voice in that as well. So we're really confident in our approach. We are confident in what we're seeing in terms of the early safety and tolerability of our clinical trials, and we're looking to keep that process going.

And the next question will come from the line of Ying Huang with Bank of America Merrill Lynch.

Just related to the last one. Ken, I noticed that for the MPS II program, you do have 1 year of immunosuppression. Can you remind us why you're doing that? Is that different from, for example, the 501 program in HoFH? And then based on the observation so far, have you seen any immune responses at all in the 501 clinical program, including ART or AST elevation?

Ying, thanks a lot for the question. So yes, we have to identify about the 111 -- RGX-111 and the RGX-121 product candidates and protocols is that they are completely different routes of administration from what we are working with in RGX-501. In RGX-501, we are delivering the treatment intravenously. And in RGX-111 and in RGX-121, we have worked to develop a proprietary delivery technique that we call ICM, intra-cisterna magna, to deliver the AAV9 vector, including encoding genes for the defective genes in the 2 diseases at issue here. This is the first in time use of this route of administration, a first-in-time application of AAV9 using that route of administration into the cerebrospinal fluid by that intra-cisterna magna injection. And as a result, we're taking precautions and we're working through an understanding with the regulators as to what to be aware of in terms of the safety profile with some of these new routes of administration. And we're also borrowing from -- I think, information that we've collected from other partners, both academic and companies, who have initiated clinical trials, including in lysosomal storage diseases using direct CNS administration, and these types of protocols have become common for first implementation and first-in-human studies with respect to things like ICM administration. So it's very different than what we're doing on the intravenous administration side with respect to something like HoFH or things that people have talked about globally and like the hemophilia studies, for instance. The second part of your question with respect to RGX-501, so we have only an update on safety and tolerability from the first cohort of data at this point from the sponsor at University of Pennsylvania as they submitted that package to the Data Safety Monitoring Board for review. And through that period, which we reported on in very early in January of this year, Ying, there were no reported AST or ALT elevations, but we have not yet had a full report on the second cohort because we're only 2 patients into 3 of the patients that have been enrolled.

Just a quick follow-up. Was the immunosuppression in MPS program recommended by FDA or no?

I'm sorry, Ying, can you repeat that?

Yes. I'm just asking if the immunosuppression, the 1-year precaution, was that recommended by FDA as part of the protocol?

Yes, it was something that we brought to FDA and discussed with them. It was our recommendation based on talking with other companies and physicians worked -- who had worked in gene therapies before with CNS administration.

(Operator Instructions) And the next question will come from the line of Difei Yang with Mizuho Securities.

This is actually Alex on for Difei. I have one on RGX-314. I was wondering if you could talk about the profile of the patients -- of those 18 patients you've enrolled so far. Have they been treated with other therapies in the current standard of care like EYLEA or Lucentis? And can these patients eventually go back to these treatments following gene therapy?

Alex, thank you for the question. I'm going to turn it over to Stephen to let him answer that.

Yes, so we actually require that these patients as part of the protocol have been treated with prior anti-VEGF therapy, and we actually put into the protocol a run-in period where we treat the patients with the dose of Lucentis and confirm a biological response as marked by a reduction in retinal thickness on OCT. And so we really want to identify patients who continue to be responsive to anti-VEGF therapy and have shown over the past year continued dependence on anti-VEGF therapy to treat their disease. And as part of the protocol, there are rescue criteria that are available for physicians to treat patients if they need it based on their -- mostly their OCT, but on general clinical criteria, which includes retinal thickness and other criteria. So patients are eligible to receive Lucentis and other anti-VEGF therapies as part of -- primarily Lucentis as part of a rescue criteria within the clinical trial itself. So the treatment with gene therapy does not preclude continued treatment with standard of care.

Okay. And then just another quick one. Have you given, at this point, any thought to any other programs in the retinal area that you might pursue in addition to wet AMD?

Alex, this is Ken, again. So we've said that in the second half of the year we are going to disclose an additional program that we expect we will file an IND for in 2019. But we haven't given specific guidance on that indication. I would say, right now, the work that the teams are doing across R&D, business development kind of precommercial planning, largely has its focus in franchise areas that we already have ongoing development in and that includes retinal diseases. But, of course, metabolic and other neurodegenerative diseases are also part of that list and compilation. So we'll be able to give more clarity on that in the second half of the year when we designate that program.

I'm showing no further questions at this time. I would like to turn the conference back over to Mr. Ken Mills for closing remarks.

Thank you very much. And thanks, everyone, for joining us on the call this afternoon. We have a significant number of milestones on the horizon in 2018, and we look forward to progressing our pipeline and providing everyone with further updates through the end of the year. So have a great evening.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude your program. You may all disconnect. Everyone, have a great day.