Regenxbio Inc (RGNX) 2018 Q2 法說會逐字稿

Good day, ladies and gentlemen, and welcome to REGENXBIO's Second Quarter 2018 Earnings Conference Call. (Operator Instructions)

I'd now like to turn the conference over to Patrick Christmas, Senior Vice President and General Counsel. Please go ahead.

Good morning, and thank you for joining us today. With me this morning 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 morning, REGENXBIO released financial and operating results for the 3 months ended June 30, 2018. 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 quarterly report on Form 10-K -- on Form 10-Q for the quarter ended June 30, 2018, 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 being provided only as of the date of this call, August 8, 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.

Thank you, Patrick, and good morning, everyone. Thanks for joining us. Our agenda for today's conference call will provide a recap of our recent progress, including a presentation of the interim trial results released this morning from the RGX-314 and RGX-501 clinical trials. Vit will provide an update on financial results for the second quarter of 2018. We will also review anticipated upcoming milestones for REGENXBIO and then open the call to questions.

At REGENXBIO, our mission is clear. We aim to improve lives through the curative potential of gene therapy based on our proprietary NAV Technology Platform. Our NAV Technology Platform consists of over 100 novel adeno-associated viral vectors, or AAV vectors, including AAV7, AAV8, AAV9 and AAVrh10.

Our gene therapy product candidates are designed to be single-administration therapies that deliver genes to cells to address genetic defects or that enable cells in the body to produce therapeutic proteins that are intended to impact disease. Our product candidates are designed to provide long-lasting effects for patients with significant unmet medical needs, potentially changing the course of a disease and delivering improved patient outcomes.

We are currently advancing an internal pipeline to address retinal diseases, metabolic diseases and neurodegenerative diseases. These areas of focus have been strategically selected because we believe they can be uniquely 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 ours.

I want to take a moment to emphasize that for us, this work is about more than our technology platform. While our company in the field of AAV gene therapy has grown and evolved, there is one constant that will never change, our commitment to patients. Our ultimate goal is to address unmet medical needs, and we're optimistic about the progress being made to improve lives through gene therapy. We are actively engaged with patient advocates to ensure an understanding of the patient experience, and these insights guide development of each of our product candidates. We strive to be a reliable and compassionate partner to these patients, as we believe single-administration gene therapy treatments that significantly alter the course of disease could transform the lives of those facing serious disease.

Additionally, before we begin the review of the interim trial results, I want to make some further acknowledgments. Today, I wish to acknowledge the excellent work by all of the REGENXBIO employees and our network of partners and clinical trial investigators for their contributions and intention to the conduct of our clinical trials. I'd also like to acknowledge all of the people who choose to participate as subjects in our clinical trials and their support networks of people who make this possible. We are grateful for your engagement, commitment and trust in us.

So this morning, we're very encouraged by the positive interim data for RGX-314 and the potential of NAV gene therapy as a onetime treatment for wet AMD, particularly as this is a nonrare patient indicate population with a significant treatment burden. In the Phase I clinical trial, RGX-314 was well tolerated at all doses. We observed dose-dependent increases in protein expression. We also observed dose-dependent reductions in the need for rescue anti-VEGF injections following administration of RGX-314 with maintenance of retinal thickness and visual acuity. We have expanded our current Phase I trial to include a cohort 4 at a higher dose for which the first subject has already been dosed this week. REGENXBIO looks forward to applying what we are learning from this trial to expand the RGX-314 clinical program into a Phase II trial and bring this novel therapy to patients as quickly as possible.

I will now turn it over to Stephen for the presentation of the interim trial results and development updates for our lead product candidates.

Thanks, Ken. I would like to begin today with our RGX-314 program for the treatment of wet AMD, with a focus on the data we released this morning. As a quick reminder, wet AMD is a disease affecting more than 2 million patients in the U.S., Europe and Japan and usually requires continual anti-VEGF therapy to prevent vision loss. Continual therapy is a burden to the patients and families affected. Many patients struggle to comply with the recommended therapeutic regimen for current anti-VEGF therapies and lack of compliance can lead to reduced therapeutic effect and ultimately, vision loss.

RGX-314 utilizes the NAV AAV8 vector, which includes a gene that encodes for a therapeutic anti-VEGF protein, which is designed to be continually made by retinal cells after injection. The expressed anti-VEGF antibody fab is designed to neutralize VEGF activity in a continuous fashion after a single administration. Continuous inhibition of VEGF activity would be something new to the treatment of wet AMD. 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 and the ability to produce high levels of therapeutic protein.

On the next slide, we see a depiction of the current RGX-314 clinical trial. This is a Phase I multi-center open-label multiple cohort dose escalation study in adults with wet AMD in the United States. The study to date has included 18 previously treated wet AMD subjects who have had at least 4 anti-VEGF injections in the previous 8 months. We observed the majority of enrolled subjects in the study have demonstrated a high need for regular and frequent anti-VEGF therapy. Most of the subjects were treated with many years of previous therapy with over 35 injections on average prior to entry. In addition, the subjects' responsiveness to anti-VEGF therapy was confirmed through measurement of response by OCT after administration of an anti-VEGF injection. The study was designed to evaluate 3 doses of RGX-314, 3 x 10^9, 1 x 10^10 and 6 x 10^10 genome copies per eye. To date, subjects have been followed for an average of 11 months for cohort 1, 9 months for cohort 2 and 6 months for cohort 3.

Turning to Slide 9. I would like to highlight the primary objective of the study is to evaluate the safety and tolerability of RGX-314 at 6 months after a single-dose administered by sub-retinal delivery. Secondary endpoints are also being evaluated to assess for potential meaningful signals and clinical outcome measures, including ocular examinations and imaging, such as BCVA and SD-OCT. In addition to the need for additional anti-VEGF therapy, which could be given at investigators' discretion for new or persistent fluid or loss of vision. The data released today covers the first 3 cohorts of -- as of July 27, 2018, from a total of 18 previously treated wet AMD subjects who have enrolled in the study.

I'll start here on Slide 10 by discussing the safety data. We reported today that RGX-314 has been well tolerated with no drug-related adverse events to date. Most adverse events in the trial have been mild, and there have been no observed immune reactions, drug-related ocular inflammation or postsurgical inflammation beyond what is expected from a routine vitrectomy. Five SAEs were reported in total to date. We are encouraged by the safety profile of RGX-314 to date.

I would like -- now I'd like to turn attention to some of the secondary objectives of the study to assess for signals and clinical outcome measures in this first-in-human Phase I clinical trial. We announced today initial results around several efficacy parameters in the study, including RGX-314 protein expression, supplemental anti-VEGF injections, retinal thickness as measured by SD-OCT and visual acuity as measured by BCVA. We are pleased to observe dose-dependent protein expression levels, dose-dependent reduction in anti-VEGF injections, maintenance of retinal thickness and maintain to improved visions across all dose cohorts. I'll walk through this data in the following slides.

Let's begin with a summary of the protein levels by cohort shown here on Slide 11. RGX-314 levels have been detected in all subjects treated to date. Ocular samples taken from the front of the eye were measured for protein levels by ELISA at approximately 4 weeks after administration of RGX-314. We're encouraged of this evidence of dose-dependent protein expression across all dosing cohorts.

Moving to Slide 12. We present the data regarding the number of anti-VEGF injections required post-administration of RGX-314. We observed at 6 months after RGX-314 administration, the number of rescue injections has decreased across all dosing cohorts. You can see here in the slide the average number of injections at 6-month post-dosing in the 3 cohorts. In the 6-month post-dosing, cohort 1 required an average of 4.7 injections, cohort 2 required an average of 3.8 injections and cohort 3 required an average of 1.3 injections. Since this trial was a Phase I first-in-human open-label study with no control arm, we wanted to understand how the frequency of anti-VEGF injections has changed for these subjects by comparing the number of anti-VEGF injections each subject received post-314 administration to each subjects history prior to enrolling in this study. We did this by comparing the number of anti-VEGF injections each subject had received during the 6 months prior to their most recent anti-VEGF injection preceding their enrollment in the study to the number of injections received in the 6 months following RGX-314 administration. In cohort 3, the mean number of anti-VEGF injections received following RGX-314 administration was reduced by 53% when compared to this prior history. Additionally, I'd like to mention that 50% of subjects treated in cohort 3 have been free of anti-VEGF injections since the administration of RGX-314.

On the next slide, we present central retinal thickness values as measured by Heidelberg SD-OCT. Maintenance of CRT from baseline to 6 months has been observed in all 3 dosing cohorts. The data from large Phase III wet AMD studies in naïve subjects show that subjects typically experience the greatest reduction in CRT in response to anti-VEGF therapy in the first few months of treatment. For subjects who entered this study with many years of previous therapy, we would expect the goal to be maintenance of CRT with regular injections. The CRT data indicate that these subjects who've demonstrated a high need for anti-VEGF therapy are receiving enough anti-VEGF therapy to maintain their central retinal thickness while in the study. In cohort 3, we're encouraged that subjects were able to produce enough anti-VEGF protein to maintain their central retinal thickness while reducing the number of anti-VEGF injections.

Similar to changes in CRT, in Phase III studies of naïve wet AMD subjects, the greatest gain in visual acuity in response to anti-VEGF therapy is in the first few months. On Slide 14, we can look at the mean BCVA from baseline through month 6. We observed maintenance of vision in cohort 1 to improved vision in cohort 2 and 3. Subjects in the third cohort experienced a mean gain of 8 ETDRS letters, with this cohort also receiving fewer anti-VEGF injections on average. Although the number of subjects treated is small, it is encouraging that subjects with previous therapy in cohort 3 have experienced further improvement in BCVA at 6 months post dosing. Furthermore, we note that all subjects in cohort 3 have maintained or gained vision at 6 months.

On the next slide, we've graphed values over time for all 3 cohorts to illustrate the trends in vision in OCT. The vision is graphed in orange with the values on the left Y-axis. The OCT values are represented in the blue bars with the values in the right Y-axis. This overlay illustrates the maintenance of CRT as measured by Heidelberg SD-OCT with the maintenance of vision in cohort 1 and improvement in vision in cohort 2 and 3. We're encouraged that there is a maintenance of CRT with improvement in vision with a reduction of anti-VEGF injections in cohort 3.

On Slide 16, I'd especially like to highlight that 50% of subjects in cohort 3 were free of anti-VEGF injections through 6 months. As a reminder, subjects in the study had previously required significant anti-VEGF therapy, and these subjects have received no anti-VEGF injections following RGX-314 administration. There is evidence of clinically meaningful maintenance of mean CRT with a reduction of 21 microns and mean improvement of 8 ETDRS letters in BCVA at month 6 versus baseline. These subjects also generally had a higher oculus protein expression level as measured at 4 weeks post-RGX-314 administration.

So in summary, on the next slide, of the data through 6 months shows there is a dose-dependent protein expression level, dose-dependent reduction in anti-VEGF injection received following 314 administration and maintenance of CRT by SD-OCT across all cohorts. Additionally, through month 6, BCVA assessments have shown maintained to improved mean changes in visual acuity. In particular, cohort 3 shows a combination of a reduction in anti-VEGF injections, while maintaining central retinal thickness and improvement in BCVA with 50% of the cohort subjects receiving no anti-VEGF injections through 6 months. We're encouraged by the evidence of biologic activity based on the observation that subjects with the highest levels of measure protein expression are also the subjects who are showing the best clinical response.

The study results we released today, along with additional study results over the next couple of months, are expected to be presented at the American Association of Ophthalmology conference in 2018 at the Annual Meeting in Chicago, Illinois.

Now I'll turn to Ken to discuss next steps for RGX-314.

Thanks a lot, Stephen. And as we describe in the next slide, positive signals from clinical measures at 6 months indicate that cohort 3 dose may be clinically meaningful, and we expect to use this dose in a Phase II trial for wet AMD. We plan to engage with regulatory authorities to support a Phase II clinical trial design before the end of 2018 and hope to bring this novel therapy to patients as quickly as possible. Now based on RGX-314 being well tolerated and the dose-dependent effects observed on protein expression, reductions in anti-VEGF injections and improvements in visual acuity, we plan to evaluate the potential benefits of an additional dose 1.6 x 10^11 genome copies per eye in a new fourth cohort of an -- of the existing Phase I trial.

Now in terms of some of the immediate next steps, as we're showing here on Slide 19, an amendment to add the fourth cohort has already been approved by FDA and several site institutional review boards. I'm happy to share that the first subject in this new cohort was dosed this week.

I'll now turn back to Stephen to provide an update on our RGX-31 -- RGX-501 program.

Thanks, Ken. I'll now turn to Slide 20 to discuss our metabolic franchise and the results shared today from our RGX-501 program for the treatment of HoFH, a rare genetic disorder caused by mutations in the gene encoding the low-density lipoprotein or LDL receptor.

Current standard of care therapies for HoFH are often insufficient to lower LDL cholesterol to normal levels. RGX-501 has the potential to address the underlying genetic defect responsible for HoFH by correcting the LDL receptor deficiency with a one-time therapeutic administration. RGX-501 uses the NAV AAV8 vector. We announced today an update from the Phase I/II trial of RGX-501 for the treatment of HoFH being conducted at the University of Pennsylvania and funded by REGENXBIO.

As you can see here on Slide 21, in the trial, a total of 6 subjects with HoFH has received a single administration of RGX-501 across 2 dose cohorts, 3 participants in each cohort at doses of 2.5 x 10^12 and 7.5 x 10^12 genome copies per kilogram of body weight, respectively. The interim update announced today include safety and efficacy assessments as of July 27, 2018, for the 2 dose cohorts and subjects in each cohort have been followed for an average of 53 weeks for cohort 1 and 23 weeks for cohort 2.

Moving to Slide 22. As of July 27, 2018, there have been 4 SAEs reported during the 52-week active study period, 2 of which were reported as drug-related. As previously reported in January 2018, 1 subject in cohort 1 experienced a mild transitory activation of the innate immune system accompanied by hypotension and elevated transaminases. This was approximately 22 hours post dosing and resolved within a day. A second subject in cohort 2 experienced transient asymptomatic elevations in transaminases with a peak ALT of 1,469 international units per liter. This patient was briefly hospitalized to manage the transaminases and to perform additional assessments. Additionally, all 3 subjects in cohort 2 have experienced an elevation in transaminases 4 to 6 weeks post dosing. The peak ALTs were 165, 388 and 1,469 in the 3 subjects. All 3 subjects were asymptomatic and responded rapidly to the initiation of prednisone followed by a slow taper, with normalization in the transaminases.

For LDL-C levels at 12 weeks, the 3 subjects in cohort 1 did not show a clinically meaningful change in LDL-C levels. We believe that the ability to assess LDL-C at 12 weeks in the 3 subjects in cohort 2 is potentially confounded by the effects on the liver reflected in the elevation in transaminases and by the corticosteroid therapy. After review of the interim data from both cohorts with an independent DSMB, a protocol amendment is expected to include changes, such as introduction of steroid prophylaxis in the primary evaluation of LDL-C at a later time point to ensure that steroid therapy has been discontinued. Based on the protocol amendment, REGENXBIO expects Penn to expand the second dose cohort with additional subjects, including steroid prophylaxis. A third cohort dose is planned also including steroid prophylaxis and will be initiated after the additional subjects in cohort 2 reach approximately 20 -- 12 weeks and an independent DSMB review is completed. We expect to provide an update on these plans in the fourth quarter of 2018.

We also announced that we expect further results for both cohorts will be presented at a scientific meeting in the fourth quarter of 2018 by Dr. Marina Cuchel, Research Associate Professor of Medicine in the Institute for Translational Medicine and Therapeutics at the University of Pennsylvania Perelman School of Medicine and primary investigator for the trial.

Moving to Slide 23. 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. RGX-111 for the treatment of MPS I and RGX-121 for the treatment of MPS II. MPS I and II are lysosomal storage disorders caused by defects in IDUA and IDS genes, respectively. In both diseases, the defective genes result in enzyme deficiencies that lead to an accumulation of intracellular waste products, which would normally be broken down by these missing enzymes. This accumulation leads to cell damage -- cell and tissue damage, causing 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 systemic symptoms of both MPS I and II, treatment 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. We're employing a one-time 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 121. In both programs, sites are active and patient recruitment has started. Dosing of the first patient in the RGX-111 Phase I clinical trial and RGX-121 Phase I/II clinical trial is now expected in the fourth quarter of 2018.

We're excited about the continued progression in our lead candidate program -- 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. So we have a lot going on at REGENXBIO, and we're certainly very encouraged by these updates and the progress we continue to make as we develop our lead product candidates. But in parallel, with these advancements, we've continued to strengthen our team and capabilities in a number of important ways. I'm pleased to announce this morning that we strengthened our management team with the appointment of Ram Palanki as Senior Vice President of Commercial Strategy and Operations. Ram brings more than 15 years of experience in ophthalmology and commercial leadership roles. Prior to joining REGENXBIO, he was Senior Vice President of Commercial for all of Americas at Santen Inc. Previously, he was Global Head of Marketing and Sales at Thrombogenics and began his career in a variety of new product commercialization and commercial marketing roles with companies, including Genentech and Novartis.

We've also made great progress in our build-out of our new state-of-the-art research and development facility in Rockville, Maryland. The site is nearing completion and is expected to be fully operational later this year. We're looking forward to having a consolidated facility for our steadily growing research and early development group together with our process development and manufacturing teams.

Moving on to Slide 24. Beyond our internal programs, the NAV Technology Platform continues to advance through the efforts of our licensed external partners. Our technology is currently being employed in the development of more than 20 partnered product candidates by our NAV technology licensees, 12 of which have advanced to clinical stage. As licensee programs progress achieving efficacy and safety milestones, we believe that 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.

The strength of our platform was highlighted by Novartis' recent announcement of its intention to file a BLA by the end of third quarter of 2018 for AVXS-101 for the treatment of spinal muscular atrophy, or SMA, Type 1. As we know, AVXS-101 uses the NAV AAV9 vector under license from REGENXBIO. This milestone by Novartis would represent the first BLA filing for a product using NAV technology. Novartis has stated that the Phase I data in the SMA type 1 will be the basis for the BLA submission with data from an ongoing Phase III study included as well. Under the terms of our previously announced amendment to our license agreement with AveXis, we received $100 million in accelerated payments when Novartis completed the acquisition of AveXis, bringing the total received REGENXBIO under the license amendment to $180 million. We are still eligible to receive an additional $80 million in potential commercial milestones. And additionally, for any product developed for the treatment of SMA using an AAV vector, we are eligible to receive certain milestones and royalties on net sales.

The broad reach of our platform is underscored by numerous additional NAV technology licensees entering the clinic and advancing into the clinic. Recently, Bayer announced that the IND for DTX201 for the treatment of Hemophilia A, which is being developed in collaboration with Ultragenyx is active. The DTX201 program uses the NAV AAVhu37 vector. This is the first instance of the AAVhu37 being used in a clinical trial, and we look forward to seeing another NAV vector from our platform progress into the clinic.

Last month, Ultragenyx also announced that the first patient was dosed in the Phase I/II clinical trial for DTX401 for the treatment of glycogen storage disease type 1a and a fast track designation for this program was announced as well. DTX401 uses the NAV AAV8 vector, and we wish to congratulate Dr. David Weinstein and the teams at Ultragenyx and University of Connecticut for this great effort and accomplishment. This treatment approach could profoundly improve the lives of patients with GSD1a.

In summary, we had a busy and productive second quarter with 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 will turn the call over to Mr. Vasista for a review of the financials.

[Foreign language) Moving to Slide 25. REGENXBIO ended the quarter on June 30, 2018, with cash, cash equivalents and marketable securities totaling $306.3 million as compared to $176.4 million as of December 31, 2017, an increase of $129.9 million. Cash, cash equivalents and marketable securities as of June 30, 2018, include $180 million received in 2018 in connection with the amendment to our license agreement with AveXis for the development and commercialization of treatments for SMA.

Revenues were $40 million for the 3 months ended June 30, 2018, compared to $6.6 million for the same period in 2017. The increase was primarily attributable to an accelerated sales-based milestone of $40 million, which was recognized as revenue during the 3 months ended June 30, 2018. Due to the recognition of nonrecurring license revenue during the 3 and 6 months ended June 30, 2018, REGENXBIO expects license revenue for the remainder of 2018 to be substantially lower than the first half of 2018.

Research and development expenses were $21.5 million for the 3 months ended June 30, 2018, compared to $13.9 million for the same period in 2017. The increase was primarily attributable to increased headcount, laboratory and facilities costs and expenses associated with conducting clinical trials and externally sourced manufacturing-related services.

General and administrative expenses were $8.3 million for the 3 months ended June 30, 2018, compared to $6.4 million during the same period in 2017. The increase was primarily attributable to increased headcount and professional fees for advisory services.

Net income was $10.6 million or $0.33 per basic and $0.30 per diluted common share for the 3 months ended June 30, 2018, compared to a net loss of $14.5 million or $0.47 per basic and diluted common share for the same period in 2017. Net income in the second quarter was primarily driven by the nonrecurring license revenue recognized under the amended license agreement with AveXis.

As of June 30, 2018, we had 32.3 million common shares outstanding. Based on its current operating plan, REGENXBIO now expects that its balance in cash, cash equivalents and marketable securities will be between $250 million and $260 million as of December 31, 2018, which will be used to support the continued development of its lead product candidate programs.

Earlier this year, we announced that we expected full year 2018 cash burn to be between $85 million and $95 million. We have changed our guidance to be end of year cash balance, cash equivalents and marketable securities in an effort to provide more transparency to the investor community and remove any potential confusion created by the AveXis transaction. The revised guidance reflects an increase in expected 2018 cash burn to be between $90 million and $100 million. Net of payments received under our amended licenses with AveXis and any related sub-license fees we incurred to our licensors on those proceeds.

With that, I will turn the call back to El Presidente to provide final thoughts and review our upcoming 2018 milestones.

Thanks for that wonderful update, Vit. 2018 is shaping up to be a momentous year for AAV gene therapy sector as a whole, and we're enthusiastic about the continued clinical advancement of our internal product candidates, our partnered pipeline and the further validation of the NAV Technology Platform.

So to summarize what we've presented today. In the Phase I clinical trial, RGX-314 was well tolerated at all doses. We observed dose-dependent increases in protein expression. We also reported dose-dependent reductions in the need for rescue anti-VEGF injections following administration of RGX-314, with maintenance of retinal thickness and visual acuity. We've expanded our current Phase I trial to include a cohort 4 at a higher dose, for which the first subject has already been dosed this week. In the Phase I/II trial for RGX-501, subjects experienced transaminase elevations in cohort 2, a phenomenon not observed in cohort 1. Administration of steroid appears to mitigate these elevations and related effects. The expected next steps will be to amend the Phase I/II trial protocol to enroll additional subjects using steroid prophylaxis. We look forward to sharing updates on additional data from the RGX-314 Phase I clinical trial for wet AMD in October as well as updating you on the RGX-501 Phase I/II clinical trial for HoFH in the fourth quarter of 2018. We're also very much looking forward to dosing subjects in the RGX-111 and RGX-121 clinical trials for MPS I and MPS II in the fourth quarter of this year.

At REGENXBIO, our mission is to improve lives through the curative potential of gene therapy based on our proprietary NAV Technology Platform. With our innovative science, inspired employees and partners and strong cash position, we feel we are well positioned to achieve future milestones as we advance therapies for patients with significant unmet medical needs.

With that, we covered a lot of positive and important updates this morning, and I'd like to open the call for potential questions. Operator?

(Operator Instructions) Our first question comes from Gbolahan Amusa with Chardan.

Congrats on the wet AMD results. I have a few questions there. First of all, with cohort 4, is the plan to report the -- to the market results from there once all patients have achieved 6 months of data, and will that be the time when you inform the market as well as to how you will change or go forward with your Phase IIs? And then secondly, I noticed that protein expression in cohort 3 in your Phase Is, so it was about 67x that of cohort 1 when the dosing was about 20x higher. Is that within the noise expected in the trial? Or given the confidence intervals shown, does it imply that there is some other phenomenon, such as evolution of the surgical approach that might have driven the difference?

Gbola, thanks for the great questions. In terms of reporting plans that we have going forward as Stephen mentioned, the next opportunity for updating on results from the clinical trial is going to be at AAO in October. And then, in addition, I think, we will plan to have an update for everyone concomitant with our corporate update at the beginning of 2019 on how our plans and development of RGX-314 are going forward. Other than that, right now, I don't think we have anything else clearly planned. But as we continue to accrue data throughout the entire -- entirety of the study and including cohort 4, we'll be planning to provide those updates. With respect to our plans for moving forward with a Phase II, we feel that we have the support with the data that we've observed in cohort 3 to begin that planning and process immediately, and that's what our intention is with respect to engagement of regulators between now and the end of 2018 is to begin the design of the Phase II program for 2019. I think it's a great question about protein expression. Obviously, what we demonstrated today is that we saw dose dependency across the cohorts. As you could see from the press release and Stephen's overview, we just locked this data within the last 12 days, and so we're still evaluating and developing an understanding of what we're seeing. But we feel certainly that there's a lot of positive takeaways from the protein expression that we're seeing in cohort 3, and we're going to continue to evaluate that.

Great. And I just want to press my luck and ask one more question just on manufacturing. For this trial, you're requiring orders of magnitude less vector per patient and other -- than in other gene therapy trials and indications. But wet AMD is a market that has orders of magnitude more patients to dose for an overall market. So what's the balance of those 2 factors in assessing how much manufacturing and capacity you need going forward?

Yes. Thanks for pressing your luck, that's a good question, and we'll answer it. We have developed a process internally that we think will meet the needs of the continuing clinical development. We already have both drugs successfully produced for our intents and purposes around clinical development of RGX-314. And in addition, we expect that the current manufacturing process is capable of meeting the future and anticipated potential commercial demand. So you're right, and I think everyone's understanding is that we're certainly applying smaller amounts of iris to individual patients than we may be in some of the other programs, like the liver-directed programs. But we feel that because the company has a broad and diverse pipeline and portfolio, we put a lot of thinking into the CMC planning, particularly with RGX-314, we think that we have what we need.

Our next question comes from Gena Wang with Barclays.

My first one is regarding the protein level. Just wondering have you checked the protein level beyond 1 month? And how has the protein level maintained throughout 6 months?

Gena, yes, this is Ken. I'll start there. So as you can tell from what I said to Gbola, some of the data that we're reporting here is very new, given that July 27 data lock date. So for instance, in cohort 3, some of those patients have only recently made their 6-month visits and that would be another point in time where typically in the protocol, we would be drawing aqueous samples to be able to evaluate protein levels. So we don't currently have those for the cohort 3 patients as of today. In the patients in the earlier cohorts, what we're seeing is that the more patients require administration of anti-VEGF agents in the trial, which is a higher propensity of patients in cohort 1, for instance, that does have an interference with our ability to interpret the RGX-314 protein expression at later time points. And that's why we're showing to everyone today what we think is the absolute cleanest, comparative measure of protein expression levels across all 3 cohorts. So what we're looking forward to doing on a go-forward basis is establishing some more of our understanding of protein levels at later time points, particularly in patients who haven't been receiving any anti-VEGF injections since the administration of RGX-314. I think we can expect to provide information like that at the future update points that I alluded to with Gbola later this year and at the beginning of next year.

Okay, great. And then my follow-up question is regarding cohort 3. Their total reduction of the injection is a 53% and 3 patients were free of any injection. Can you share with us the other 3 patients, how many reductions they received?

So that's noninformation that we're sharing today, Gena. But we expect that at the AAO conference, the investigators are going to be thinking about the opportunity of showing more individual patient data. The exercise that we're able to go through in the last 1.5 weeks or so allowed us, we think, to sort of provide a high level of quality data based on the averages of what we were seeing across the cohorts.

Okay. And my last question is regarding the cohort 4. I think also a previous question also asked a little bit about the protein level, the -- it now seems completely linear. And I think based on the first 3 cohorts, it seems like we're falling to 800 nanogram per micro -- milliliter range for the 1.6E11 dose. And what is your goal of anti-VEGF level? And also do you think that that will be enough? Or just wondering if you should explore additional dose since the enrollment won't be an issue and you could save a lot of time waiting for the data, if it's not optimal?

Yes. So that's a great and very important question. And again, I think with that dose 3, what we're seeing is very encouraging. We're seeing protein levels that correlate to clinically meaningful measures with respect to reduction in anti-VEGF injections as well as maintenance of retinal thickness and even improvement in visual acuity measures in many of the patients. So we feel, Gena, strongly that we have a dose that we want to take into a Phase II study to expand our understanding of it in a larger population. In addition with cohort 4, what we believe is that we have an opportunity to expand on the value of RGX-314 program by looking at an additional dose. We're obviously beginning to see the picture of the pharmacology here of RGX-314. And I think our target isn't a specific protein expression level. Our target is to continue to provide a safe and well-tolerated profile that continues to show really good and clinically meaningful outcomes for patients. And we think that a cohort 4 dose could allow for a broader understanding of that in a wet AMD population and also allow us to start to think about how RGX-314 as an anti-VEGF agent could apply in general to a number of populations with respect to VEGF inhibition.

Our next question comes from Matthew Harrison with Morgan Stanley.

So I just wanted to ask about -- I guess, 2 PK-related questions. So one, can you just talk about what you believe are the appropriate dose levels for VEGF -- for -- sorry, for VEGF PK? And sort of what you think the median PK is that you get from VEGFs and how that compares to the protein expression that you're seeing with cohort 3? And then given whatever you expect with cohort 4 in terms of the dose where you think that will compare? And then I have a follow-up.

Matthew, this is Ken. Thanks for the question. So I think that what's been interesting about the development of RGX-314 is that we've really been exploring a novel PK profile compared to what the existing anti-VEGF treatments have presented for physicians as well as patients. So we're moving to something that is focused on the sustained suppression of VEGF. And I don't think that it's been an easy thing to do to sort of understand and establish on an apples-to-apples basis, how to think about things like peaks and troughs and midpoints of the PK profiles of existing anti-VEGF treatments will compare to sustained suppression of VEGF. So I think, again, what we're encouraged about today is we're presenting what we think is a very robust and encouraging picture about what sustained suppression of VEGF with an anti-VEGF treatment is telling us about clinical measures, including reduction and the need for additional injections, but also maintenance of retinal thickness and visual acuity. And so I think at this point, again, as I said to Gena, the target here we have is, number one, we're encouraged that we're seeing protein expression in all patients. Number two, that we're exploring the pharmacology and seeing dose dependency across doses, and we expect and hope to continue to see that. But importantly, we're now focused on the clinical measures, and we're seeing clinically meaningful improvement in patients, we think this is what is going to define sort of the application utility of a treatment like RGX-314 where the paradigm is about continuous suppression of VEGF.

Okay. And then, I guess, the follow-up is just on safety. Could you just walk us through in the footnote for the 3 patients with the SAEs. I think you said, one died from a preexisting condition and the other had a retinal detachment, I believe. Can you just walk through the specifics surrounding those cases?

Yes, I'm going to hand that over to Stephen.

Sure. So for the subject who had the 3 SAEs, all of those SAEs were unrelated to RGX-314 or to the procedure. And that subject had a preexisting condition of chronic obstructive pulmonary disease and had an exacerbation and was -- the death was related to basically the preexisting COPD. In terms of the retinal detachment, retinal detachment is a known complication of vitrectomy, which is a part of the surgical procedure that we use for RGX-314. Repair of retinal detachments from vitrectomy is also commonly done in clinical practice. And in this particular case, that particular detachment was repaired immediately and without any significant sequelae. The patient's recovered their vision and is doing well after repair of the detachment.

Our next question comes from Ying Huang with Bank of America.

This is Qian on behalf for Ying. So I have a couple questions, if I may. So first of all, I just wanted to know about the baseline about the AMD trial in terms of the OCT and BCVA? I guess the reason why I ask it is because you had a screening period where you used anti-VEGF, just wanted to see like where they were by before you inject the vector? And also wanted to see the severity of the diseases when you put the contacts comparing these parameters to the other anti-VEGF trials. So -- and particularly, obviously, it's on cohort 3, if you look at the 2.8 medium injection frequency, it's kind of lower than the other cohort. Second question is also related with the VEGF expression, and you mentioned previously that the rescue injection may impact your measurement. I'm just wondering whether you can comment on the time of the injection of rescue in the cohorts relating to the full 1-month that you just mentioned in the press release? And the third question is on the HoFH trial. I know you saw some immunogenicity. Just wondering whether you can comment on whether that was related to the LDL receptor or it's related with a vector? And given that LDL receptor is expressed on the surface, I'm wondering whether that could be the reason contributing to higher immunogenicity that you're seeing?

Qian, thanks for those great questions. I'm going to take them in the reverse order and hand part of it off to Stephen. So in the HoFH trial, I think that this is still some new observations that we're sharing with the investigators at Penn, and I expect that Marina will have an opportunity to discuss a little bit more what we're seeing on the individual patients in cohort 2 with respect to the transaminase elevation. So I'm going to leave that to her. With respect to your question about the timing of injection around particularly the 1-month data that we showed on VEGF -- on RGX-314 protein level. So absolutely, in the case of 1-month, we did protein measures in all of the patients before they would have received an injection and additional anti-VEGF injection under the protocol. So that's, again, why we feel like right now this is the absolute cleanest comparative data that we have across the cohorts for RGX-314 protein expression levels. And on the first, I'll let Stephen address a little bit about how the patients in the RGX-314 trial were included in baseline.

Thanks, Ken. So Gena (sic) [Qian] great question on the patient population, and I think that's an important point to understand about the clinical trial. So this particular trial sought to enroll patients who were -- basically had a high need for frequent and regular anti-VEGF injection. And so we had the entry criteria of requiring at least 4 injections in the previous 8 months, which all subjects met. And as I shared earlier, all -- when we looked at the mean number of prior injection subjects had received before entering into the study, it was over 35 injections on average for the subjects. And so what we take away from that is that these were really subjects who had been treated for their wet AMD with anti-VEGF injections for long periods of time and had long-standing disease. And I think you alluded to how do we interpret some of the outcome measures when we look at the patient population, and I think that's important because as we shared earlier in the Phase III studies in naïve patients with wet AMD, a lot of the benefit of visual acuity gain and reduction in retinal thickness occurs within the first few months of initiating therapy. And we know that these subjects have come in with long-standing history of wet AMD and received a lot of injections coming in. And so when we think about subjects who have been on regular treatment and converting them to gene therapy, maintenance of retinal thickness and maintenance of vision are good outcomes for these particular subjects. I think anything -- when we can get a gain in vision is an additional bonus that can potentially be impacted by the different PK profiles or the history of injections, but again, maintenance here in terms of retinal thickness and vision are really good outcomes for these subjects who have had a long-standing history of disease. So again, I think just to summarize, these are patients with -- who've demonstrated a high need for anti-VEGF injections, they've come in with years of long-standing therapy. And I think that's important to think about when you look at the results for retinal thickness and for visual acuity.

Our next question comes from Reni Benjamin with Raymond James.

Can we maybe just talk a little bit more, again, about cohort 3 and this difference, I guess, in anti-VEGF injections that's noted here. Is there anything else regarding this patient population like are they younger patients? Were they relatively newly diagnosed and just started the therapies? I guess, kind of related to that as far as the trial design goes, is there a washout period prior to the RGX-314 administration? Or could they have gotten an anti-VEGF injection relatively close to that administration?

Thanks for the question. So yes -- so in terms of the baseline characteristics of the subjects in the 3 cohorts, they all really came in on average with the same years of therapy prior to coming in. So these subjects in cohort 3 really did demonstrate also a high need for anti-VEGF injections with long-standing history. So I think, when we look at the results in terms of the comparison, I think it needs to be looked through with a lens that these are all similar types of subjects. They all had similar ages in terms of the demographics across the 3 different cohorts. And so we're looking -- this is a small study with 6 subjects per arm. So I think there is -- you need to consider that in terms of looking at the demographics. But again, similar age, similar years of therapy coming in into the trial. In terms of washout, there was no washout that was required as part of the entrance into the clinical trial. We did require an injection with an anti-VEGF therapy before entering -- upon entry into the trial to confirm responsiveness to anti-VEGF therapy. And so on study day number 1, they were provided an anti-VEGF injection and brought back a week later to look for a response on OCT imaging. And so we did confirm that these subjects continued to be responsive to anti-VEGF therapy. That particular injection that they receive as part of the study is not included in terms of their medical history or how we've characterized the historical number of injections.

Great. Yes, okay. That makes sense. And then just related, can you help us understand the CRT results a little bit more? I guess, you see this change, but you guys are saying that it's still stable. So how much -- I guess, how much of a change would you typically see among these patients where you would continue to classify it as stable versus when it starts becoming a potential problem?

Yes. So in general -- and it's a great question. And I think, again, this goes back to the patient population that we're evaluating here in the clinical trial. In general, when we think about changes in CRT, we're using a cut-off of about 30 microns in change to determine something that might be a more significant change whether an increase or decrease in retinal thickness. And again, these subjects, especially in cohort 3 have come in with CRT levels that are within the range of normal or close to kind of normal ranges using the methodology that we've used in terms of the imaging machine and measuring CRT thickness. So again, these are subjects who have received lots of anti-VEGF therapy in their history and have really received benefit in terms of reducing their retinal thickness from regular therapy. And so when we think about converting them from regular anti-VEGF injections into a gene therapy, maintenance of retinal thickness is really a good outcome for these subjects in terms of maybe outcomes that we're looking for therapy.

Got it. And then just 1 final one from me. Regarding the Phase II, I know, Ken, you had mentioned that you guys are just in the planning kind of phases. But maybe just taking a step back, could this potentially be used for an accelerated path to approval? And do you have any thoughts regarding -- or could you summarize just the latest FDA guidance for an indication like wet AMD?

Ren, so we really have just started to accumulate a deeper understanding within the company and with our investigators of the trial data that we're seeing. The work now that's going to start in the second half of the year is preparing the program for the type of thinking about how do we advance into our next study in 2019. And I think we see a lot of options based on what we see as encouraging data here for RGX-314. So we'll begin those discussions, and we'll be able to update the market and investors along the way.

Thank you. I show no further questions in queue. So I'd like turn it back over to Mr. Mills for closing remarks.

That's great. Well, thanks, everyone, for your participation and listening this morning. We're highly encouraged and positive about the updates that we provided today and look forward to seeing everyone very soon. Thank you.

Thank you. Ladies and gentlemen, that does conclude today's conference. Thank you very much for your participation. You may all disconnect. Have a wonderful day.