Regenxbio Inc (RGNX) 2022 Q2 法說會逐字稿

Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Second Quarter 2022 REGENXBIO Inc. Earnings Conference Call. (Operator Instructions). At this time, I would like to turn the conference over to Mr. Vit Vasista, Chief Financial Officer, REGENXBIO. Sir, please begin.

Good afternoon, and thank you for joining us today. With us today are Ken Mills, REGENXBIO's President and Chief Executive Officer, and Dr. Steve Pakola, our Chief Medical Officer.

Earlier this afternoon, REGENXBIO released financial and operating results for the second quarter ended June 30, 2022. 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 sections of REGENXBIO's annual report on Form 10-K for the full year ended December 31, 2021, in comparable risk factors sections in REGENXBIO's quarterly reports on Form 10-Q, which are 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, August 3, 2022, 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 like to now turn the call over to Ken Mills. Ken?

Thank you, Vit. Good afternoon, everyone, and thanks for joining us. I'm pleased to begin today's call with a recap of our recent business highlights as well as an update on our corporate goals. Steve will then provide an update on our clinical programs, and Vit will provide an overview of financial results for the second quarter ended June 30, 2022. At the end of the call, we will open up the line for questions.

Before Steve gets into the pipeline progress in detail, I'd like to provide some context on the gene therapy industry. Last quarter, I mentioned how encouraged I was about the future of the industry. And this past June, I believe we witnessed the impact of many effects, including with the FDA advisory committee unanimously endorsing 2 new gene therapies for the treatment of rare diseases. Clearly, this is great news for the gene therapy industry and most importantly, for patients needing these potentially life-saving therapies. I believe the panel's approach to reviewing the risk-reward profile of these products and the community's acknowledgment for the product's construct and its role in both safety and efficacy highlights the willingness of these experts to take a more flexible approach when evaluating products for patients with large unmet need.

In addition, in the past couple of months, the European Commission has granted marketing authorization for 1 AAV therapeutic and the EMA has also adopted a positive opinion recommending conditional market approval for another AAV therapeutic, both indicated for rare diseases. So overall, I find these endorsements encouraging for the industry as well as for REGENXBIO as we advance our AAV therapeutics for patients with large unmet needs.

Moving on to some of our internal highlights for the quarter. We continue to make excellent progress advancing RGX-314 using both subretinal and suprachoroidal delivery. With RGX-314 for the treatment of wet age-related macular degeneration using subretinal delivery, we remain on track for a BLA filing in 2024 based on 2 pivotal trials, ATMOSPHERE and ASCENT. We've also progressed our RGX-314 trials using suprachoroidal delivery for the treatment of wet AMD and diabetic retinopathy or DR. And in May, we announced completion of enrollment of a Phase II ALTITUDE trial evaluating RGX-314 for the treatment of DR and more recently, in July, we announced completion of enrollment in Cohort 5 of our Phase II AAVIATE trial evaluating RGX-314 in the treatment of wet AMD.

We plan to present additional suprachoroidal data later this year, and we're pleased with the progress we've made across the entire RGX-314 program this quarter. We continue to take full advantage also of our global partnership with AbbVie to bring RGX-314 to market.

Taking a moment to update on RGX-202, our candidate for the treatment of Duchenne. Last quarter, we announced that we made the difficult decision to delay dosing of patients in our first-in-human Duchenne clinical trial. This decision was due to an unexpected isolated observation in the final mile filling stage of the manufacturing process at a third-party contract manufacturer that didn't meet our quality criteria.

The unexpected delay, among other things, reinforced the importance of investment towards in-house GMP manufacturing capabilities and the facility. This is why I would like to highlight that this past quarter we celebrated the opening of our new cGMP manufacturing facility called the REGENXBIO Manufacturing Innovation Center. This 21,000 square foot facility is located in our headquarters building in Rockville, Maryland. This marks our successful expansion into a company with full end-to-end capabilities from research and development to commercial scale infrastructure. We are one of only a few gene therapy companies worldwide with a cGMP facility capable of production at scales up to 2,000 liters.

The first run in our Manufacturing Innovation Center support our clinical supply for the RGX-202 program. New process improvements that we plan to use in our facility are expected to produce, for example, in RGX-202 and approximately fivefold improvement in vector yields per patch than previously used processes. I want to reiterate our strong commitment to the Duchenne community preparation for the initiation of our first-in-human trial with RGX-202 continues including ongoing manufacturing of additional clinical supply for the trial. We continue to anticipate dosing the first patient in this trial in the first half of 2023.

Finally, our newest update comes from earlier this morning when we announced that the pivotal program in MPS II is now active in enrolling patients. And our intention to file a BLA in 2024 using the accelerated approval pathway. MPS II or Hunter syndrome is a debilitating disease with a large unmet need that significantly impacts the child's daily life and life expectancy and is inadequately treated by any drugs on the market today. We are developing RGX-121, a potential first-in-class onetime AAV therapeutic for the treatment of MPS II to treat the CNS manifestations of MPS II, for which there are currently no available treatment options.

Recent discussions with the FDA support this plan. The accelerated approval pathway was created to allow for expedited development of drugs that treat serious conditions and provide a meaningful advantage over available therapies based on a surrogate endpoint.

I would note that following our announcement in November 2021 at the launch of the pathway development consortium co-founded by REGENXBIO and Solid Biosciences, which brings together key stakeholders including the FDA with the goal of expediting patient access to AAV therapeutics. We've seen an increased interest in the accelerated approval pathway across the gene therapy industry. This is an important advancement for rare disease communities and especially those like the MPS II community.

Our pivotal program will measure GAGs in the CSF, which we believe can be considered a surrogate biomarker that is reasonably likely to predict clinical benefit in MPS II disease under the accelerated approval pathway as the buildup of GAGs or glycosaminoglycans in the central nervous system of MPS II patients leads to clinical manifestations, including neuro developmental deficits. We believe the accelerated approval pathway will allow us to advance RGX-121 as quickly as possible with the aim of providing a much-needed new treatment option for the MPS II community.

So with that, I will now turn the call over to Steve to talk in greater detail about the internal programs.

Thank you, Ken. I'll begin with an update on RGX-314, which is being developed in collaboration with AbbVie to treat multiple ocular indications, including wet AMD and diabetic retinopathy. RGX-314 uses the NAV AAV8 vector to deliver a gene encoding a therapeutic antibody fragment to inhibit vascular endothelial growth factor, or VEGF. Wet AMD is the leading cause of vision loss in people over 60, affecting more than 2 million patients in the U.S., Europe and Japan.

The current standard of care for wet AMD patients are anti-VEGF treatment, which require patients to receive frequent injections into the eye. Real-world evidence shows that patients with wet AMD are severely undertreated due to the unsustainable treatment burden of these frequent injections. As a result, the majority of wet AMD patients experienced significant vision loss over time. RGX-314 is being developed as a onetime treatment for wet AMD that has the potential to reduce the frequency of anti-VEGF treatments and preserve vision for wet AMD patients.

We continue to enroll patients in the ATMOSPHERE and ASCENT, our 2 pivotal clinical trials evaluating the efficacy and safety of RGX-314 in patients with wet AMD using the subretinal delivery approach. Combined, these 2 pivotal trials will enroll approximately 765 subjects and evaluate for noninferiority, the mean change in BCVA for RGX-314 compared to repeated intravitreal injections of anti-VEGF treatment at 1 year. These 2 trials are expected to support a BLA submission for RGX-314 in 2024. Overall, we believe RGX-314 represents a significant potential advancement for the treatment of wet AMD.

We are also advancing 2 additional RGX-314 programs that are part of our collaboration with AbbVie for the treatment of wet AMD and diabetic retinopathy using in-office suprachoroidal delivery approach. In wet AMD, we recently announced that we completed enrollment in Cohort 5 of our Phase II AAVIATE trial, a randomized dose escalation study evaluating the efficacy, safety and tolerability of RGX-314 in 95 subjects with wet AMD.

To date, we have presented 6-month data for the first 2 cohorts that demonstrated evidence of the emerging clinical profile of RGX-314 using suprachoroidal delivery with the most recent data from Cohort 2 showing stable visual acuity and retinal thickness as well as a 72% reduction in anti-VEGF treatment burden compared to the mean annualized injection rate during the 12 months prior to receiving RGX-314.

The safety profile for RGX-314 across all cohorts as of the last update from November 4, 2021, was reported to be well tolerated in 50 patients with no drug-related serious adverse events. Mild intraocular inflammation was observed on slit-lamp examination at similar incidents across both dose levels in cohorts 1 and 2, in 4 out of 15 patients in Cohort 1, and 3 out of 15 patients in Cohort 2, and resolved quickly with topical corticosteroids. Patients in this trial did not receive prophylactic steroids before or after administration of RGX-314.

Moving to RGX-314 for the treatment of DR. DR is a complication of diabetes and is the leading cause of blindness in adults between the age of 24 and 75 worldwide. An estimated 27 million patients are affected by this debilitating disease worldwide. DR is a slowly progressing disease that can lead to vision-threatening complications, including diabetic macular edema or DME, and neovascularization that can lead to blindness. Like in wet AMD patients with DR can be treated with anti-VEGF therapy, which is proven to reduce the risk of developing vision-threatening complications.

However, due to the unsustainable treatment burden using anti-VEGF therapies, primarily the result of the frequent injections required with today's available treatment, many people with this condition either elect to forgo treatment or put off receiving any treatment until symptoms become unavoidable. We believe that gene therapy like RGX-314 could potentially overcome this hurdle and provide an important therapy for patients to significantly alter their disease progression.

We recently completed enrollment of the Phase II ALTITUDE trial, a randomized dose escalation study in 60 subjects across 3 cohorts, to evaluate the efficacy, safety and tolerability of RGX-314 in subjects with DR. The trial's primary efficacy endpoint is the proportion of patients achieving at least a 2-step improvement in DR measured by the DRSS scale at 1 year. 6-month data from Cohort 1 demonstrated after a single suprachoroidal RGX-314 administration, a clinically meaningful 2-step improvement from baseline on the DRSS scale in 47% of the 15 treated patients compared to 0% in the observational control.

As of the data cutoff of January 18, 2022, RGX-314 was reported to be well tolerated in the 15 patients dosed with RGX-314 in Cohort 1 with no drug-related SAEs and no intraocular inflammation observed. We are encouraged by what we are seeing at this stage.

Shifting to our rare disease portfolio, RGX-202, our potential onetime gene therapy for the treatment of Duchenne, is being developed as a highly differentiated product designed to deliver a transgene for a novel microdystrophin that includes the functional elements of the C-Terminal or CT domain found in naturally occurring dystrophin.

In preclinical studies, the presence of the CT domain has been shown to recruit key proteins to the muscle cell membrane, leading to improved muscle resistance to contraction induced muscle damage in dystrophic mice models. Additional design features, including codon optimization and reduced CPG content, which has the potential to improve gene expression, increase translational efficiency and reduce immunogenicity.

RGX-202 is designed to support the delivery and targeted expression of genes throughout skeletal and heart muscle using our NAV AAV8 vector and a well-characterized muscle-specific promoter, Spc5-12. The affinity Duchenne Phase I/II trial will measure safety and tolerability of RGX-202 as well as microdystrophin protein expression levels, muscle strength and functional assessments including the North Star Ambulatory Assessment and muscle MRI. Preparation for this trial is ongoing, including readying clinical trial sites for the upcoming trial, which we anticipate dosing in the first half of 2023.

Finally, as Ken mentioned earlier, we are pleased to announce that the ongoing Phase I/II trial of RGX-121 has been expanded into a pivotal Phase I/II/III trial, called CAMPSIITE. The CAMPSIITE trial, which is now active is a multicenter open-label trial enrolling boys with MPS II aged 4 months up to 5 years of age. The trial is expected to include up to 10 MPS II patients to support the BLA filing using the accelerated approval pathway with the potential to enroll additional patients.

These patients will receive a dose of 2.9E11 GC per gram of brain mass of RGX-121 using commercial-scale cGMP material, which is the same dose being evaluated in cohort 3 of the Phase I/II trial. The BLA filing is expected to be supported by endpoints in the pivotal program, including changes from baseline of glycosaminoglycans or GAGs in the cerebrospinal fluid, CSF at 4 months. The trial will also continue to collect neurodevelopmental data and caregiver reported outcomes.

The CAMPSIITE trial is a global trial and is expected to include sites in the U.S., Brazil and Canada. We have begun dosing patients in this pivotal program. Behind RGX-121, we are developing RGX-111 for the treatment of severe MPS I or earlier syndrome, where we continue our ongoing Phase I/II open-label trial. We continue with plans to enroll additional patients in a Cohort 2 expansion arm of this trial.

And tomorrow, our team is proud to join the National MPS Society 36th Annual Family Conference taking place in Nashville. This is one of the largest MPS advocacy conferences and it is held each year to support research, education and awareness for this debilitating group of diseases. We look forward to connecting with the MPS community and discussing our RGX-121 pivotal program plan with more physicians, caregivers and patient stakeholders.

So to conclude, we have made significant progress in the first half of 2022, and we look forward to further progress over the course of the rest of the year. Now I turn the call back to Ken.

Thank you, Steve, for the good updates and to the entire team for the progress over this past quarter and throughout the entire year so far. I'm really proud of how our company has been advancing our pipeline, and I believe that the fundamentals that REGENXBIO have never been stronger. We've put into place our 5x25 strategy to progress 5 AAV Therapeutics from our internal pipeline and license programs into pivotal stage or commercial product by 2025. With Steve's update, I hope you can all see how important progress we've made in executing on this plan.

And beyond the internal programs, 5x25 may also include programs being developed to our NAV Technology licensees. Our NAV technology platform is driving the field of AAV gene therapy forward with over 60 clinical trials utilizing NAV vectors registered in the National Institutes of Health Clinical trial database since 2015.

Overall, I believe we've laid out a clear and definable path to achieving this goal by advancing our key programs that have the potential to treat very high unmet need in areas where our NAV technology platform can be used to develop and potentially commercialize AAV Therapeutics as soon as possible.

So with that, now I'm going to turn the call over to Vit who will review our financials and guidance.

Thank you, Ken. Quarter ended on June 30, 2022, REGENXBIO with cash, cash equivalents and marketable securities totaling $682 million compared to $849.3 million as of December 31, 2021. The decrease was primarily the result of cash used to fund operating activities and capital expenditures as well as temporary unrealized losses on marketable debt securities during the first 6 months ended June 30, 2022.

R&D expenses were $61 million for the quarter ended June 30, 2022, compared to $45.9 million for the quarter ended June 30, 2021. The increase was primarily attributable to personnel costs and expenses associated with clinical trials and manufacturing-related activities for our lead product candidates and was partially offset by REGENX-314 development cost reimbursable by AbbVie under our eye care collaboration.

In accordance with the collaboration agreement, REGENXBIO will continue to fund certain ongoing clinical trials for RGX-314 through the end of 2022, while other 314 development costs are shared with AbbVie. Beginning in 2023, AbbVie will be responsible for funding the majority of all RGX-314 development expenses.

Based on our current operating plan, we expect the balance in cash, cash equivalents and marketable securities of $682 million as of June 30, 2022, to fund our operations into 2025. Ken, I will turn over to you.

Thanks, Vit. Overall, I'm incredibly encouraged about how REGENXBIO continues to perform at a very high level. And I'd like to take this time to thank our entire REGENXBIO team, our investigators in the patient communities for their commitment and involvement in the development of our innovative AAV Therapeutics.

To summarize what you've heard from us today. We continue to be a leader in gene therapy. There are thousands of patients who have been dosed with AAV Therapeutics derived from our NAV technology platform and hundreds more receiving treatment every quarter. We have an amazing team of scientists and engineers dedicated to expanding the understanding and applications of AAV vectors, applying differentiated capabilities of NAV technology platform and exploring the potential to generate new innovative AAV Therapeutics for diseases that have the potential to significantly impact patients' lives.

Our global eye care collaboration with AbbVie continues to advance and is on track for the first BLA filing in 2024. Progress in trial enrollment and emerging clinical trial data supports excellent progress in our suprachoroidal delivery programs. Preparation for the initiation of the first-in-human trial for RGX-202 continues. We're readying the clinical trial sites and manufacturing additional clinical supply for the trial, including the first batches to be produced at our manufacturing innovation center in Rockville. We continue to anticipate dosing the first patient in this trial in the first half of 2023.

Our manufacturing innovation center and our GMP capability remains a key differentiator for REGENXBIO and the key element of our strategy. Our in-house facility is cutting edge, allows us to move quickly from candidate selection to the production of clinical-grade material, which supports accelerating the early development of AAV Therapeutics. Additionally, we believe our approach focuses on early product quality and process control, which lessens the need for changes during clinical development to enable efficient transition from clinical trials to commercial readiness.

We're excited to be advancing RGX-121 into pivotal stage, making this our second active pivotal program and another opportunity for a BLA filing by 2024. We feel that our intention to use the accelerated approval pathway for RGX-121 as positive implications for the rare disease community. It signifies the ability to leverage FDA's regulatory tools to facilitate and expedite drug development and offers hope for rapid access to new therapies for patients living with the more than 7,000 rare diseases.

Our plan for accelerated approval is supported by our NAV Express process and our manufacturing innovation center designed for the high-yield manufacturing quality of AAV Therapeutics at scale necessary to support clinical development and commercialization. And as required under the accelerated approval pathway, we are and will continue to be committed to conducting post-approval confirmatory trials to verify that RGX-121 provides the expected clinical benefit.

And lastly, as you heard from Vit, we have a foundation of capital, over $680 million to fund our mission and operations into 2025 and through multiple filings and other anticipated data milestones that leave us well positioned to execute our 5x25 strategy of advancing 5 AAV Therapeutics to late-stage development and commercialization by 2025.

So with that, I will turn the call over to operator for questions.

(Operator Instructions) Our first question comes from Gena Wang from Barclays.

This is Tom for Gena. I have 2 questions. 1 for RGX-121 and the other for RGX-314. So for the 121, since you announced the pivotal program, have you aligned -- fully aligned with FDA on the primary endpoint like GAGs and follow-up duration and comparator arm for the Phase III trial. And if not, what's your base case assumption?

And for the 314, since you have dosed a few NAV patients like positive patients. Have you seen the toxic profile any different than what we have seen like what has been reported so far?

Tom, it's Ken. Thanks for the question. I'll take 121, and maybe turn the 314 question over to Steve. So as we alluded to the announcement this morning about moving into a pivotal phase following the accelerated approval pathway we've done in concert with communication with FDA and the trial design that Steve outlined for CAMPSIITE doesn't include a comparator arm. It involves the measurement of GAGs and CSF at 4 months, which we believe is an opportunity to represent a surrogate endpoint in the accelerated approval pathway. So really excited to make this announcement today and that the structure of the CAMPSIITE study is not only an amendment to the existing IND, but also is active and we've been enrolling patients as part of our pivotal program.

Great. And thanks for the question on RGX-314 regarding NAVs or neutralizing antibody status and any impact in the 2 trials that we're running with suprachoroidal delivery. As you know, with subretinal delivery, we already know that neutralizing antibody status of patients doesn't impact the safety and efficacy that we see. We are excited that we're able to characterize suprachoroidal delivery of gene therapy with our NAV technology with RGX-314, where we can answer the question that you've asked. And we've gone about this very methodically, both in terms of dose escalation but also looking at both NAb negative and NAb positive cohorts of patients at dose level 2 and dose level 3 in the AAVIATE wet AMD study and at dose level 2 in the ALTITUDE DR study.

And in the data releases that we've discussed previously, we've actually not seen any evidence of impact. We're not seeing, for example, any greater safety or inflammatory findings in patients who are NAb positive and in the data cuts where we can look at NAb negative and NAb positive like in AVA, we're able -- we're going to be able to assess this over time. But to date in the releases that we've had, we've been very pleased with the lack of any clear differentiation in terms of safety between NAb negative and NAb positive.

Our next question or comment comes from the line of Dane Leone from Raymond James.

Congrats on the progress. Just 2 kind of easy things to confirm for me. Can you just confirm that you'll have an update on AAVIATE and ALTITUDE in the back half of this year? And then secondly, can you just slow walk us through the CAMPSIITE requirements from the FDA in terms of the primary endpoint. I think I misheard, but I thought you said the requirement is 10 patients in the primary analysis that with a measurement of GAG reduction in the CSF at month 4. Again, I probably misheard that, but if you could just clarify.

Dane, it's Ken. I can take both of these, actually, you can expand that if you want. The -- that's right. We plan -- we announced that we'll have suprachoroidal data from the ongoing trials later this year that would include AAVIATE and ALTITUDE updates. With respect to 121, no, you were being a great listener. I think you actually heard the information that we communicated that CAMPSIITE is a trial that is a pivotal phase expansion of what was the ongoing Phase I/II trial, where we continue to collect a number of endpoints across the entirety of the trial with boys that enroll. But with respect to the accelerated approval plan, we've been focused on and have alignment that GAGs in CSF at an endpoint of 4 months would have the opportunity to support an accelerated approval as a surrogate endpoint. And so that's what we're executing on now in order to achieve what we think is an exciting time line for BLA in 2024.

Okay. I guess if I can ask a follow-up to that. I mean, can you rank your level of confidence here? I guess why you're getting this question is, this doesn't seem to be in line, again, a different mechanism, but it doesn't seem to be in line with what JCR [devotedly] understand to be the requirements of Hunter for a regulatory approval.

Obviously, I can't speak to other people's programs, Dane. And as you pointed out, we don't know of another program that uses AAV Therapeutic technology to focus on Hunter syndrome delivered directly to the CNF. What we can communicate is, what we -- in terms of an understanding of the opportunity for accelerated approval for RGX-121 and our degree of confidence is such that we announced this morning and follow up this afternoon in that we're going to execute on this plan, and I think this is a really encouraging thing for patients.

Our next question of comment comes from the line of Alec Stranahan from Bank of America.

This is John on for Alec. Just a short one from us. In terms of manufacturing, what did the economics look like right now in terms of moving things in-house versus still going with the contractor. If you can put like a specific percentage of cost savings, moving things in-house, that will be really helpful.

And second part to that would be what are we looking at in terms of expecting all the pipelines to fully and completely move in-house? And how long are we expecting still going partial external production to continue?

John, thanks for the question. So as we've announced, we have opened the facility here in Rockville, and we started to make the first batches to support program work here at REGENXBIO, and we highlighted the fact that we prioritized the first batches to support the clinical supply for RGX-202. We continue to have material need at bulk material, in particular, made at the CDMO sites that we use, principally FUJIFILM down in Texas.

And I think that your question about kind of the future focus here is a good one, but we're still in the early phases of kind of utilization of the new facility. And the planning overall is something that is as you can expect, sort of multivariable, we've got clinical supply needs in the immediate for RGX-202. I should point out that we actually have the inventory that we need in place made with the NAVXpress bioreactor process to support the RGX-121 pivotal phase. And we have a lot of inventory in place. Of course, we've been continuing to expand the inventory and then use it with respect to execution of ATMOSPHERE and ASCENT as well as AAVIATE and ALTITUDE. So when it comes to RGX-314, that's a very dynamic process and now one that's starting to include AbbVie with respect to that planning.

So I don't know that we have a finite answer at this point, John. But what I can say is that the plan in terms of the investment was to rely more and more on ourselves to deliver materials for all the needs that we have across the pipeline as well as through commercialization. And we think that -- the capacity is there in Rockville to achieve that. The absolute time line, I rely on sort of the expertise of our highly capable technical operations team to work on those transitions of processes here to support our needs and balance that with continuing to have sort of backup options in the CDMO space.

So in terms of the cost component of it, I don't know that we would project right now any sort of material changes to our P&L and R&D expenses with respect to how we're thinking about use of our new facility in addition to the ongoing CDMO relationship use.

What I would say is, we're making a lot of material. We have a lot of programs. We have 2 programs that are now in pivotal phase. And so I think we probably have among the sort of highest use of any of the gene therapy companies that I can think of, particularly on a diversity of program basis. I feel really well positioned with where we are right now for our needs.

Our next question or comment comes from the line of Ellie Merle from UBS.

Just on RGX-111 and MPS I. I guess, after the update on the registrational study for MPS II, how are you thinking about the potential path in MPS I? And if the design would look relatively similar and any initial FDA feedback on that or any time frame under which we can expect to learn more feedback. And then just a follow-up question on the MPS II study. I guess in terms of the endpoint, any sort of magnitude of effect or effect size that was discussed on those endpoints with the regulators? And then just last question on 314. I know you haven't given sort of direct guidance in terms of the timing. But any kind of high level how we should think about certain medical meetings that could be good candidates for learning more? Just anything to help us think about when we could kind of learn more about some of these higher dose and NAb positive cohort?

Thanks, Ellie. Good robust set of questions there. So I'll try to tick through a few of them. And certainly going to involve Steve here as well. The focus with respect to 121 juxtaposed with 111 for MPS I, had certainly been affected by the fact that we've accumulated more patients in the 121 Phase I/II trial. We've gone through additional dose escalation being able to go through additional longer-term safety assessments for certain of the patients with MPS II. And so conversations around the concept of the accelerated approval pathway were frankly just supported by more data particularly on the safety side, but also on kind of the dose responses that we saw with respect to the biochemical markers.

And as we've reported, the emergence of kind of understanding of correlations in certain patients with respect to the clinical outcomes as well. And I think speaking to the point that Dane had raised, and I think you're bringing up again with respect to some of the robustness of that data and where we were. I mean, we were beginning to report as early as February of this year, that was the dose level 3 in the Phase I/II study, which is the pivotal dose now. It's part of the pivotal program expansion Steve alluded to the 2.9E11 dose is one where we began to see normalization of certain GAGs in the CSF.

And so I think as we're thinking about these diseases, thinking about surrogate biomarkers for approvable endpoints in things like the accelerated approval pathway, thinking about how to make not just the logical scientific arguments, but the scientific arguments connect with a biomarker argument that's going to connect with confirmatory studies that we also believe are part of the process of kind of dynamically engaging in accelerated approval pathway program, we really saw the totality of that with respect to RGX-121.

We know and acknowledge that RGX-111 and MPS I is a closely related disease adjacent to MPS II. But we're not where we were with 121 or are with 121 with respect to the level of enrollment and the robustness of the data set at this time. So we'll continue to expand the 111 program. But absolutely right now, the focus for us is on accelerating the 121 program against this new time line, which we're really encouraged about. On 314, Steve?

So on your question about any more granularity on updates on AAVIATE, ALTITUDE on the back end of this year and medical meetings or not. As you mentioned, we're not able to give any more specifics and it's the type of thing that we work on planning with our strategic partner, AbbVie, as well. But we do share the view that it is good to be opportunistic and try to take advantage of the typical big meetings that happen on the usual cadence around the year. So those -- that would be in the mix of what we're thinking about. But certainly, we look forward to giving an update on both programs in the second half of the year.

And our next question or comment comes from the line of Lisa Walter from RBC Capital Markets.

Perfect. This is Lisa on for Lucas. So 3 for me, relating to this accelerated approval or potential accelerated approval path for RGX-121. First, we know the new FDA commissioner has been supportive of reforming the accelerated approval pathway, partially so that approvals can only occur once the confirmatory Phase III is already ongoing. So just wondering how confident are you that this will not apply to RGX-121?

And question #2, assuming you can file RGX-121 early, how are you thinking about the actual primary endpoint for a confirmatory Phase III trial later on? And one last question, just on CAMPSIITE. Just wondering if you could provide more color on the trial design. Will patients be allowed to be on background enzyme replacement therapy?

Good set of questions there. Steve, do you want to start?

Yes. So I think one of the benefits here as Ken mentioned is, right from the beginning, we are committed to a confirmatory study for complying with the accelerated approval pathway. And with the goal of 2024 BLA, the accelerated approval pathway we're now just approaching second half of 2022. I think that gives a lot of time in terms of fine-tuning the actual confirmatory aspect. I think the benefit is, we believe in the reasonably likely to predict clinical benefit, particularly in this disease with replacement of the enzyme via gene therapy directly to the CNS. And that's really going to put us in a good position to, as rapidly as we can get this product to patients in need and in parallel plan for that confirmatory study.

One of the realities we know with this disease and a lot of these rare diseases for which accelerated approval pathway is intended that the actual demonstration of the clinical benefit just takes up more patients and longer follow-up, given the inherent variability in these different diseases, including MPS II. But certainly we feel confident we can do a confirmatory study, but with more patients and longer follow-up where we'll be able to look at neurocognitive outcome measures like the ones that we do include in our ongoing study.

So we feel very good in terms of the first 2 parts of your 3-part question. So I think we're in a really good place now that we have CAMPSIITE ongoing and hitting the pivotal part of the program.

Yes. And I think that as I addressed with respect to some of the earlier questions. This is an accelerated approval plan approach. We want to sort of accelerate the use of the biomarkers that we think have shown evidence of correlating to clinical outcomes that we've shown in our data. We also believe that those biomarkers have been strongly associated with good scientific understanding, including in animal models of the disease.

And we think that at this stage, we have a really robust safety data set, not just frankly, in patients that are an extension of the Phase I/II into the CAMPSIITE study, but we also -- I have to acknowledge that we've -- over the last year or so also stood up additional Phase I/II study for boys 5 and older with respect to MPS II as well.

So there was a lot to draw from in terms of the communications and the interactions that we had with stakeholders, both in the patient communities. We brought our investigators forward. We talked to physician experts who were not investigators in currently RGX-121 studies to bear on conversations with the FDA and others about how to accelerate the development of RGX-121.

And I would say one point, Lisa, I mean I'm not sure that I have heard or hear the same thing that you're kind of representing about what the new commissioner of the FDA is saying about confirmatory studies. We certainly have a commitment to running confirmatory studies. We expect to bring confirmatory evidence for -- as Steve alluded to. I think it's pretty straightforward with respect to Hunter syndrome. We need to see the neurodevelopmental outcomes. And we want to see a lot of important caregiver reported outcomes as well.

When you talk to the feel, there's not just sort of a singular perspective on what are the outcomes because there's so much heterogeneity in a small population. And I think those types of conversations falling on the years of leadership at FDA and regulators has a profound impact on sort of how they think about the need and the kind of interest behind accelerating in gene therapy for Hunter syndrome.

So for us, it's more dynamic than saying we're going to run a confirmatory study and we have to figure out what that design is going to be. It's actually, in my view, built into the development plan and the programs even through CAMPSIITE. As Steve alluded to, we're still collecting all of these other measures. We're going to be relying most heavily on the surrogate biomarker to support the accelerated approval plan.

But the boys that have already been enrolled, boys that are enrolled through this accelerated approval plan phase. And the trial is actually open to enrolling boys in addition to the 10 that we would associate with the accelerated approval plan to be able to continue to collect evidence and have that apply as part of the confirmatory evidence. So I think there's no reason to sort of put any of this into a box.

My view is that what's been most encouraging about these discussions is that, there's a lot of confidence in the data that we brought forward in terms of the safety, the correlation of the potential of surrogate biomarkers in animals, in the human data we've shown to the disease process, to the outcomes that we've shown with respect to things like the neurodevelopmental outcomes and the caregiver reported outcomes already.

And so it's just shepherding that to something that makes it accessible to patients in an efficient way as possible. And I think that's been what we've seen over the last quarter or 2 emerge in conversations with all stakeholders.

Very thorough answer, Ken. And then I guess just on the enzyme replacement therapy, are you going to be including or excluding patients?

Yes. We've -- as we've done in the Phase I/II study, we've always continued to enroll patients on ELAPRASE. We acknowledge that -- the background of ELAPRASE doesn't affect and is known not to have any effect on neurodegenerative pathology associated with MPS II. So we've shown that in the data that we presented to date in the Phase I/II study from Cohort 1 to Cohort 3. Occasionally we have had enzyme-naive patients enrolled in the study from certain sites. But in general, especially in the U.S., Lisa, we see patients coming in on ELAPRASE IV and they get RGX-121 on top of it, and that's been the expected continued approach on CAMPSIITE.

Our next question or comment comes from the line of Andreas Argyrides from Wedbush Securities.

Can you guys hear me? The operator cut out?

Yes, we got you.

Okay. Great. Congrats on the progress as well. So for the MPS II program, just a couple of follow-up questions here and along with the same lines of the previous question. And this has to do with the interactions with the FDA. I mean, how important where -- did they consider this correlation between biomarkers and I guess, the functional measures? I don't believe we saw the functional measures from Cohort 3 in the February update. So when might we get that data? Has the FDA seen that data?

And can you remind us of what you've seen to be what's really informed the Phase III dose? And then on 314 suprachoroidal, just to clarify on the press release, it says that no patients were treated -- previously treated or treated after dosing. Is that from all of the remaining cohorts as well?

I'm not sure I understood the last part of the question, Andreas. Vit, did you?

Yes. I'll clarify, sorry if that wasn't clear. But so the way it was worded is implied at least from my reading of it, that you have not seen -- none of the patients have received prophylactic steroids prior to or after being dosed in all of the cohorts.

Yes, that's correct. So as we've discussed previously for both studies, both AAVIATE and ALTITUDE in all the cohorts, we have not included prophylactic steroids, either before or after the administration of RGX-314.

Okay. And does that have -- I mean I'm trying to understand if that's -- if that has anything to do with or any read-through to any observations inflammation in these additional cohorts? If you can speak to that.

Well, right from the initial cohorts in both studies, we did not have prophylactic steroids either before or after. And as we dose escalated in both studies, given excellent tolerability, we did not institute prophylactic steroids at the higher doses.

And so with respect to the 121 program question, I think just continuing to support the understanding here that the dynamic conversations with FDA have certainly included the data that we have presented on podium as well as information that we've included in both the amendment with respect to the CAMPSIITE study and conversations that we have multiple of these designations, including things like Fast Track that allow for a dynamic interaction with respect to FDA on this topic. And it's something that also has been part of multiple, I'd say, interactions that we've had with stakeholders, including FDA on the topic of accelerated approval for things like Hunter and [Rett] syndrome, I think I alluded to in my remarks.

Our initiation with Solid Biosciences in the formation of the Pathway Development Consortium just something that we announced late in 2021 actually started out with working group focused in Duchenne and talking about concepts of how to accelerate AAV Therapeutics in the background of Duchenne, later that group came together and issued a white paper that was more broad spectrum. But identify categories of different types of diseases and how you would come forward and think about acceleration of development based on the science or the pathology of the disease or kind of the residency with respect to tissue type.

And some of that white paper work landed on MPS diseases or neurodegenerative diseases, including MPS diseases, where evidence from those discussions. And I think validated through kind of the announcement today is that there's support for accelerated approval to rely on a justifiable endpoint something like GAGs and CSF based on the emergence of -- I've seen FDA leadership allude to animal data and supportive. We've certainly seen them be supportive of human clinical data and the reconciliation of those things.

In terms of the correlation to where the confirmatory evidence is going to come from, I think it's inherent in the biomarker from my perspective that when -- especially in the case of GAGs and CSF when you're talking about the substrate of the enzyme that's deficient in the disease that it's going to -- has correlated with changes in pathology and animal models and is going to correlate with changes in pathology in the humans and eventually be confirmed in things like the neurodevelopmental outcomes and the caregiver reported outcomes.

So I think there is a unique space in my view for the MPS CNS diseases in their relationship with respect to AAV Therapeutics that has been part of many discussions, including for diseases that are more rare than the MPS diseases as well, of course, REGENX and many other companies are part of this other paradigm approach for bespoke AAV gene therapies, where I've observed there have been similar conversations about how do we speed the -- and accelerate the development of AAV therapeutics once we have safety and sort of stable manufacturing capabilities for patients.

So for me, I think we've been talking with all of you about our involvement in a lot of those different consortiums and groups. We've been talking about the interest that we've had in sort of finding pathways for acceleration of rare disease. Obviously, we've announced work in Duchenne. But most of our clinical data, of course, in rare diseases, in RGX-121, in Hunter syndrome. And I think just based on a very mature kind of -- and sort of longitudinal set of conversations and regulatory interactions that have gotten us to this point from -- and really encouraged and pleased with this outcome because it sets us up to file the BLA in as fast the time line as probably our team can handle, and we're up to the task for executing.

Our next question or comment comes from the line of Mani Foroohar from SVB Securities.

A lot of the colleagues at other firms have dug in on our clinical data, et cetera. I wonder is it another topic that's been discussed a little bit on this call around the wholly owned manufacturing and the value of manufacturing for AAV specifically. The specific question I have is that is how you see the expansion in capacity, obviously, there's been tremendous investment amongst the CDMO community into the face of slowing investment into AV development in venture and large-cap pharma. Give us a sense of where we are in terms of the available capacity and what that means about the value of investments in wholly owned manufacturing?

Mani, I don't know that we are the company that sort of may be best to kind of give the overview of what the entire CDMO landscape is like at this moment. I think -- and we've talked with you for a while, and I think others on this call about our journey. We started 4 or 5 years ago when we had need for high-quality clinical material. And we experienced a lot of things with a lot of different CDMOs. And up to and most recently, including our experience with this final fill finish third party in the CDMO network.

I think with respect to capacity, it may be there, it may not be. I don't know. It's a really hard thing to establish when I think about the CapEx investment in particular because like you, I think we see a lot of announcements about new facilities being invested in and builds perhaps.

But what I can say about our interest in our approach and this really came from kind of the leadership team here and some of the most experienced people that we have in the company when it comes to manufacturing is that really to be able to scale, high-quality manufacturer, especially in a new area, you need real continuity with respect to the quality team, and with respect to the floor operations team, and that was something that I would say we certainly observed with respect to this dynamic change in demand for the CDMO space is that there's been -- there's been the potential for a lot of movement in people and in expertise.

And that was something that I would say was a driver for our investment in something that was making us uncomfortable. Now we are more comfortable with. And I think one that we are prideful about that we have an excellent quality team, an excellent operations team and a team that we think is really connected to the mission of REGENXBIO and on net peer in our building, where the research labs are where I work and others work.

And having that type of opportunity at this time and place, I think establishes that it wasn't just about the CapEx investment, but it was about the people investment, making it something that was going to last in a sort of continuous way for us.

And look, we've got designs on taking now 2 pivotal programs to BLA in 2024, and we've got the 5x25 strategy, we want to commercialize. So having that responsibility means having a stable, not just a set of equipment, but a set of people as possible as well. And I think that's been -- if it's fair, kind of one of the big priorities of our focus on investment.

Great. And if I can ask a separate question. I know it's been discussed earlier, but I'm not sure if the answer was complete or maybe I missed it because the quality of audio is a little weak. Could you give us a little more detail on where you think exactly the requirement for milestones is on the daily [score] in a little bit of detail and maybe quantitative?

We didn't address any sort of specific quantitation with respect to the neurodegenerative outcome requirements on a confirmatory study. I think the way that I address that is, when we've engaged with the physician clinical experts in MPS when we talked with the patient family stakeholders and brought them together in circumstances where we're able to do so with the FDA and with our own data and own assessment, there is no absolute hard cutoff on any one measure or domain for any of that.

So what we've seen and what we've continued to do in our clinical program is to collect all of that data, collect all the domains of things like Bailey and the sort of equivalent assessments on an age-adjusted basis, include caregiver reported outcomes, includes the biochemical measures and the other measures that are sort of evidence of the gene therapy turning on gene therapy having both biochemical and sort of cellular and morphological changes occurring.

And that the confirmatory evidence is actually going to be something that's going to be, I think, a journey that is going to -- it involves a lot more patients to sort of grow that understanding against the heterogeneity of the disease in general.

And so what I can say is that we're really encouraged about everyone recognizing that and recognizing that there are sufficient changes occurring in the boys on the basis of our gene therapy approach for something like MPS II, that there's an interest in an opportunity wanting to accelerate its access to more families in boys and that our commitment to continue to sort of grow that understanding, that understanding of what are the different types of neurological outcomes that we're going to see in different types of boys and different ages against the heterogeneous disease is going to be something that I think is also going to leave its mark. But that's not going to be something that can be achieved by 2024. That's something that is going to take many more years of confirmatory commitment to achieve, and we'll be there to do that as well.

Our next question or comment comes from the line of Caroline Palomeque from BCM.

I just had a quick question on -- if you could provide some guidance on the R&D and G&A expenses. Just wondering if you just expect them to keep trending up just in the near term. Can you just give a little more color on that?

I think we've seen R&D expense grow as we've expanded into a pivotal phase of development and sort of increased manufacturing and supply requirements for things, including the Duchenne muscular dystrophy program, which obviously is larger quantities of AAV that we need on a per patient basis. So moving into continuing first-in-human development of RGX-202 pivotal phase with RGX-121 is going to have some increased costs. We're going to have increased costs with respect to the expansion of all the work around RGX-314. Yes, we would continue to see R&D increase although, as Vit alluded to, there is going to be some continued offset as AbbVie continues to shoulder more and more of the clinical trial and development expense.

However, with the 2024 BLA filing to your G&A point, we'll also be transitioning into pre-commercial readiness modes with things like RGX-314 subretinal. So I think that sort of added growth will be something that on a year-to-year basis, we'll continue to see increases in as we head towards the BLA filings for 2 pivotal phase programs.

We continue, though, to support the guidance that the cash on hand will afford us the opportunity to execute on all these milestones, the regulatory achievements as well as the clinical development milestones into 2025. And as part of our 2025 strategy, I think this is all rather consistent.

I show no additional questions in the queue at this time. I would like to turn the conference back over to Mr. Ken Mills for any closing comments.

Thanks, everyone, for listening today. Thanks for all the great questions. We really are excited about the advancement of all of the programs, particularly the event of the announcement of the active pivotal program for RGX-121. Looking forward to engaging with all of you more on updates throughout this year and have a good rest of your summer.

Ladies and gentlemen, thank you for participating in today's conference. This concludes the program. You may now disconnect. Everyone, have a wonderful day.