Regenxbio Inc (RGNX) 2021 Q2 法說會逐字稿

Good afternoon, and welcome to the REGENXBIO Second Quarter 2021 Earnings Conference Call. (Operator Instructions) As a reminder, this conference call is being recorded.

I would now like to turn the call over to Mr. Patrick Christmas, Chief Legal Officer for REGENXBIO. You may begin, sir.

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

Earlier this afternoon, REGENXBIO released financial and operating results for the second quarter ended June 30, 2021. 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 Discussion and Analysis sections of REGENXBIO's annual report on Form 10-K for the full year ended December 31, 2020, and comparable Risk Factors sections of 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 9, 2021, 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. Ken?

Thank you, Patrick. Good afternoon, everyone. Thanks for joining us. I hope you're all having a safe and nice summer. On today's call, we'll begin with a recap of recent business highlights. Steve will provide an update on our clinical programs. And Vit will provide an overview of financial results for the second quarter of 2021. At the end of the call, we'll open the line for questions.

I'm pleased to report that 2021 has been productive for REGENXBIO, and we've made important progress across our clinical development program and anticipate a busy second half of 2021. Our dedicated team remains focused on bringing the therapeutic potential of our pipeline programs to patients in need, and we look forward to continuing our leadership in AAV-based gene therapy development and manufacturing.

Our focus this year continues to be on execution across our pipeline programs. Our clinical programs evaluating RGX-314 for the treatment of wet AMD and diabetic retinopathy have expanded and continue to be on track. The first trial in our pivotal program evaluating subretinal delivery of RGX-314 in patients with wet AMD, ATMOSPHERE, continues to enroll patients. And our second pivotal trial is expected to initiate in the fourth quarter of 2021.

In addition, we continue to advance our 2 Phase II trials evaluating the suprachoroidal delivery of RGX-314 using the SCS Microinjector. The first interim data from Cohort 1 of AAVIATE, our Phase II trial in wet AMD, will be presented at the Retina Society 54th Annual Scientific Meeting that begins in September in Chicago, Illinois. We're on track to report initial data in diabetic retinopathy later this year in the fourth quarter.

For RGX-121, our onetime gene therapy for the treatment of MPS II or Hunter syndrome, we were pleased to share additional positive interim data from our clinical program at ASGCT in May. We continue to drive this program forward, enrolling additional patients at a higher dose and enrolling pediatric patients over the age of 5 years old.

And finally, our work on RGX-202 also continues. We now expect to file an IND for the treatment of Duchenne muscular dystrophy by the end of this year.

I will now turn the call over to Steve for an even more detailed clinical and regulatory update.

Thanks, Ken. As Ken mentioned, our pivotal program evaluating the subretinal delivery of RGX-314 for the treatment of wet AMD continues to be on track. We are enrolling patients in the ATMOSPHERE, the first of 2 planned pivotal trials expected to support a BLA in 2024. As a reminder, ATMOSPHERE is expected to enroll approximately 300 patients and evaluates RGX-314 compared to repeated ranibizumab intraocular injections, a standard treatment option for patients with wet AMD.

We also expect to initiate the second of 2 randomized well-controlled clinical trials as part of our pivotal program in the fourth quarter of 2021. And we look forward to sharing additional details.

Beyond our pivotal program for RGX-314, we've made progress in our 2 Phase II trials evaluating RGX-314 when delivered to the suprachoroidal space. We have completed dosing of patients in the third cohort of our Phase II trial for the treatment of wet AMD, known as AAVIATE.

This is the cohort of patients that received the same dose of RGX-314 as patients in the second cohort that is 5E11 genome copies per eye, but the patients in the third cohort are neutralizing antibody or NAb positive at entry. This may provide us additional information about the effects of RGX-314 in NAb-positive patients, potentially broadening the patient population that could be treated with this in-office delivery approach.

I am also pleased to announce that we plan to present initial data from Cohort 1 at the lower dose of 2.5E11 GC per eye at the Retina Society 54th Annual Scientific Meeting, which runs from September 29 to October 2. Additionally, we plan to report initial data from Cohort 2 in the fourth cohort -- sorry, in the fourth quarter of 2021.

For ALTITUDE, our Phase II trial to evaluate RGX-314 suprachoroidal delivery in patients with diabetic retinopathy, we have completed enrollment of Cohort 1 and we expect to report initial data in the fourth quarter of 2021. We have also begun enrolling patients in Cohort 2 at a higher dose and are pleased to announce that we will be expanding into a third cohort of patients in this trial.

As with AAVIATE, Cohort 3 of ALTITUDE will evaluate efficacy, safety and tolerability in up to 20 patients who are NAb positive, and the same dose evaluated in Cohort 2 will be evaluated in Cohort 3. As in previous cohorts, patients will not receive prophylactic immune suppressive corticosteroid therapy before or after administration of RGX-314.

In addition, we are making great strides in our rare disease portfolio and are well positioned to provide key clinical updates in the second half of 2021 and beyond.

From our ongoing Phase I/II trial of RGX-121 in MPS II patients up to 5 years old, we were pleased to share additional positive interim data from Cohorts 1 and 2 at ASGCT in mid-May. As reported, RGX-121 continues to be well tolerated, with no drug-related serious adverse events. Biomarkers and measures of neurodevelopmental function indicated CNS activity following RGX-121 administration, with continued evidence of systemic enzyme expression and biomarker activity observed.

We also began dosing patients in Cohort 3 at an increased dose level of 2E11 GC per gram brain mass in the second quarter of 2021. We continue to enroll patients in this cohort. Our Phase I/II trial of RGX-121 for the treatment of MPS II in pediatric patients over the age of 5 years old also continues to enroll patients, and we look forward to keeping you updated across both of our RGX-121 Phase I/II trials.

Enrollment is ongoing in Cohort 2 of our Phase I/II trial of RGX-111 for the treatment of MPS I at a dose of 5E10 GC per gram brain mass as we are focused on realizing the therapeutic potential of RGX-111 for MPS I patients in need.

Our team is preparing to submit the IND for RGX-202, a potential onetime gene therapy, for the treatment of Duchenne. We plan to submit this IND package by the end of 2021.

Lastly, we remain on track to provide program updates for RGX-181 for the treatment of CLN2 disease and RGX-381 for the treatment of ocular manifestations of CLN2 disease by the end of 2021. Our team has made significant progress in the first half of this year, and we look forward to driving this momentum throughout the second half of 2021.

With that, I turn the call back over to Ken.

Thanks for the great overview, Steve. I'm excited to share just a few more business updates. In July, we officially moved into our new headquarters in Rockville, Maryland. It's been tremendous to watch this lab and office space come online, and I'm glad to have our team move into this space.

The headquarters include the GMP facility, which is expected to allow for production of NAV vectors at scales up to 2,000 liters, and we're focused on integrating our capabilities to ensure adequate supply is available across all of our programs. We anticipate that the manufacturing facility in this space will be fully operational starting in the first half of 2022.

Our proprietary NAV Technology Platform also continues to be the foundation of development of gene therapies outside of the walls of REGENXBIO. Our licensee partners have made significant advancements in their respective programs, utilizing NAV AAV delivery, with several in late stages of development.

Our partners at Novartis have reported they have treated more than 1,400 patients with IV, intravenous ZOLGENSMA, which uses the NAV AAV9 for the treatment of SMA. We've also been pleased to see the initiation of Novartis' new pivotal study of intrathecal delivery in patients with Type 2 SMA.

In addition, Ultragenyx recently reported plans to begin dosing patients in 2 pivotal studies for DTX301 for the treatment of OTC deficiency and DTX401 for the treatment of GSDIa. We also note the reinitiation by Astellas of the pivotal trial for AT132 for the treatment of X-Linked myotubular myopathy. All of these candidates use our NAV AAV8 vector.

Corlieve Therapeutics is a company that we helped form in 2020. And in June 2021, Corlieve announced definitive agreement for uniQure to acquire Corlieve and its lead program for the treatment of temporal lobe epilepsy, now known as AMT-260. This utilizes REGENXBIO's NAV AAV9 vector.

This transaction closed in July of 2021. Under the license and collaboration agreement, REGENXBIO received equity in Corlieve and is eligible to receive milestones as well as royalties on the net sales of AMT-260. As a result of the acquisition, REGENXBIO receives a portion of the EUR 46.3 million in upfront cash uniQure paid to acquire Corlieve and is eligible to receive a portion of the over EUR 200 million in additional milestones -- EUR 200 million that -- of additional milestones that may be paid to Corlieve shareholders by uniQure.

We look forward to the continued collaboration with all of our licensee partners to bring AAV gene therapies forward using our proprietary NAV Technology Platform to patients in need.

With that, I'd like to turn the call over to Vit for a review of our financials.

Thank you, Ken. REGENXBIO ended the quarter on June 30, 2021, with cash, cash equivalents and marketable securities totaling $593 million compared to $522.5 million as of December 31, 2020. The increase was primarily due to the $216.1 million of aggregate net proceeds received from our follow-on public offering of common stock completed in January 2021, including the full exercise of the underwriter's option to purchase additional shares in connection with the offering.

The increase was partially offset by net cash used in operating activities of $71 million, cash used to purchase property and equipment of $50.9 million and ZOLGENSMA royalties paid to Healthcare Royalty Management of $22 million during the 6 months ended June 30, 2021.

Based on our current operating plan, we expect the balance in cash, cash equivalents and marketable securities of $593 million as of June 30, 2021, to fund our operations, including the completion of our internal manufacturing capabilities and clinical advancement of our product candidates into the second half of 2023.

With that, I will turn the call back to Ken to provide final thoughts on (inaudible) and REGENXBIO.

Thanks, Vit. The hard work, experience and commitment of our entire team has enabled significant progress across our entire gene therapy portfolio. We're focused on building on our momentum from the first half of 2021 to execute on clinical and preclinical development for the remainder of this year and beyond.

With that, we'll open up the call, operator, for questions.

(Operator Instructions) Your first question comes from the line of Geoff Meacham from BofA.

This is Alec on for Geoff. Just a few from us. Since Cohort 1 from the suprachoroidal study is comparable in terms of the dose level to Cohort 5 from the subretinal study, I guess, could you just remind me of the thought process behind starting at this dose and whether sort of the bioavailability is expected to be comparable between the 2 administrative techniques? Or could it maybe be a little bit less, just in terms of expectations for the data?

And then as a follow-up to that, I'm just trying to frame the update at the conference in terms of the length of follow-up. Is it safe to say that it could be somewhere in the 6-month range given the study opened about a year ago, obviously, maybe not enough to reach the 40-week BCVA end point? And then, just lastly, a quick one. Do you think it would be appropriate to apply readthrough to what we might see in the DR update in 4Q given it's obviously different patient populations?

Thanks, Alec. Steve, would you like to handle this?

Sure. Great. Thanks, Alec, for those questions. So why start Cohort 1 dose level with suprachoroidal with the same GC per eye that we had in our Phase I/II Cohort 5? Basically, we had the benefit of a full dose range that we had gone through with the subretinal delivery, plus the overall preclinical package, including GLP tox studies, where we had the ability to start that high and also to be able to go higher. So we felt that it was important to already, right out of the gate, start with the dose, where there could be equipoise of actually being able to look for some type of pharmacodynamic signal.

To your second question of how might we think of that translating, I think the reality is these are -- and we've always said this, these are different routes of administration. Fortunately, we chose suprachoroidal because like subretinal, it allows us to administer locally where we're -- unlike with intravitreal administration, we can give that dose where it spreads close to the target retinal tissue.

But it is a different route where you get a broader spread than, say, the more intense transduction in a smaller area that you expect with subretinal delivery. So it's really hard, Alec, to say more than that, and that's why we do the dose ranging with a different route of administration. But here, we have the benefit because of all the experience we have to be able to start a little higher.

As far as the data that we're going to be able to look at, at Retina Society and what we're going to be able to come out, again, very consistent with what we've said from the beginning, where in the wet AMD disease setting, we've always felt even in our subretinal Phase I/II study, and we've signaled the same in our suprachoroidal wet AMD study, AAVIATE, that 6 months is a more fulsome time point to really evaluate the key biomarkers that we care about, including functional outcomes. So the typical outcome measures that we've talked about in the past and that we have experience looking at, at 6 months are we're going to look for and what we'll be able to present at Retina Society.

Your question on diabetic retinopathy. Yes, you're spot-on. That's a different patient population. However, we do have the body of evidence across many different anti-VEGF repeated injection programs that have looked at treatment of different patient populations, including diabetic retinopathy as well as wet AMD, where there is the general belief of a range of doses that has effect in one disease setting of VEGF-driven retinopathies, that by targeting anti -- targeting VEGF with similar doses in other VEGF-driven retinopathies, that you have the potential to detect the signal.

It's just in that patient population, where the signal is something different, albeit just as important, it's just that in diabetic retinopathy, we have the ability to look at the severity of the underlying diabetic retinopathy and actually grade that and actually see can we improve the diabetic retinopathy severity with onetime administration in the office with RGX-314.

Next question comes from the line of Gena Wang from Barclays.

I have one question with 3 parts on RGX-314 suprachoroidal program. The first one is a clarifying question. Across all the cohorts in AAVIATE and ALTITUDE trials, is the volume the same for each injection?

And my second question is for AAVIATE Cohort 1 data at the Retina Society. Should we expect meaningful information for -- from the [actual] release? And also, for the full presentation, will you include the protein level, in addition to visual acuity, retinal thickness and injection frequency data?

And third, the last part of the question is you started Cohort 3 for both AAVIATE and ALTITUDE. Any concerns on safety since you increased the concentration and also any concern of efficacy since you enrolled the patients with existing neutralizing antibody?

Gena, this is Ken. I'll start and then maybe Steve can provide more color if needed. In terms of the volume question -- and thanks for your questions, by the way, especially in [August]. The 100 microliters is the standard volume that's injected with our suprachoroidal device that we've selected for delivery of RGX-314. And that's been the dose volume that we've used in the initial cohorts of both of the studies.

When we dose escalated in the AAVIATE study, the first transition was with going from 2.5E11 to 5E11 was to go from 1 single injection of 100 microliters of volume to 2 separate injections in the same visit. So in that case, we were using 2 different injection sites, 2 different injectors. So we were technically injecting 200 microliters into those patients.

As we continue to move forward with ALTITUDE, we've standardized though on the 100-microliter volume for higher concentrations now. And we would expect to continue to do that in Cohort 3 and cohorts that we would plan to move forward for further study.

On the data, I think I heard the back end of your question, maybe not the front end. So we're approaching -- we're a month or so away from bringing together data with investigator on podium at the Retina Society Meeting. Our approach here is similar, if not identical, to our approaches that we've had on our study of the subretinal data, which is to bring the full package of information that we're collecting from the study forward. And I think Steve mentioned in response to Alec's question that we've always used the cutoff of 6 months as the time point that's been important to us to collect all the different measures.

The things we're measuring are the same as what we've measured in the past when it comes to these outcomes, including safety, of course, and the functional outcomes Steve referred to and protein levels. We haven't done the data cut right now. We'll be transitioning into that in the next 30 to 60 days to prepare for that announcement. And we'll bring as much data as we can to that podium presentation based on what we have from the clinical study.

And the final question was about Cohort 3. And it has to do with safety and efficacy. Steve, do you want me to comment?

Yes, I can jump in there. Gena, yes, so the aspect of increased concentration by being able to go to a single 100-microliter injection that Ken referred to that we're able to do in C3 of AAVIATE and also in C2 and C3 -- Cohort 2 and Cohort 3 of ALTITUDE, whether we have any safety concerns there. We felt comfortable to advance to using that higher concentration in both NAb-negative, but then also NAb-positive patients based on the data we have and also the higher concentration data that we have from our preclinical package that was included in our IND. And all of that was what made us feel comfortable to go there.

Your second related question was what about efficacy issues of evaluating in NAb-positive patients as we're doing now in both AAVIATE and we'll be doing in ALTITUDE. Here, this is why we do these cohorts. Here again, from the beginning, even before starting the initial cohorts in NAb-negative patients, our plan had always been and we've always communicated that we were going step-wise first, looking in NAb-negative patients. And these were the first-ever studies looking at suprachoroidal gene therapy.

But now that we have done that at 2 different doses in the wet AMD population, that's what gave us the comfort to advance there. And this is why we're so excited to make these significant milestones for this space to not only be able to assess NAb-negative patients, but also to look at both safety and efficacy in patients who are NAb-positive.

Next question comes from the line of Dane Leone from Raymond James.

I guess first question for me, when do you think you would consider getting a bilateral study for RGX-314, either suprachoroidal or in the subretinal procedure? And then, secondly, can you maybe give some color in terms of the IND around DMD, if there's -- what -- I think, originally, you had that (inaudible) slated to begin in the mid part of the year, that's now back towards the latter part of the year. Any color there would be appreciated as well.

Sure, Dane. I'll take the second part of that question, which is for 202, the IND deliverables in the process for sort of finalizing and starting to author and prepare the IND is what's ongoing right now within the company. And I think we had given guidance at the beginning of the year that we thought we could have that all prepared by midyear. And what we're seeing is a little bit of change to that into the fourth quarter of this year.

But nothing in terms of the process internally that has changed materially for us in terms of getting that IND filed and the study up and running. It's just been a little bit of adjustment to the original plan based on the work that needed to be done and has been done.

Maybe with respect to the bilateral consideration, I'll ask Steve to weigh in there.

Sure. Dane, it's a good question. It's actually one we get anecdotally, not surprisingly, from, for example, patients in our Phase I/II subretinal study who had good success with treatment in one eye and interest in wouldn't this be great if I could have both my eyes treated.

So I'll take each route separately. For subretinal delivery, the benefit of all the experience that we have here, both in terms of the relative immune-privileged status of the subretinal space and also the precedent of LUXTURNA bilateral administration, it does make sense that, going forward, we would consider the potential to treat the fellow eye of patients who had one eye treated as a study eye in our trial. So we haven't announced plans there, but that is something that we think makes a lot of sense from a clinical development standpoint and also, of course, in the real world going forward to fully realize the value proposition for RGX-314 gene therapy treatment.

For suprachoroidal delivery, as we've often said, that's in much earlier innings in terms of evaluation. So first things first, we evaluate how study eye treatment goes in terms of safety and efficacy and overall tolerability. And based on the results that we see there and the accumulated data also that we have from subretinal as of that time point, we would also be in a better position to evaluate treatment of the fellow eye of study patients.

Next question comes from the line of Mani Foroohar from SVB Leerink.

This is Rick on the line for Mani. Congrats on all the progress, and just 2 questions from us. First, so the data in the Hunter program has been pretty impressive to date. I was hoping if you could just share some of your most recent thoughts on the pathway to approval here. And if you can comment specifically on approvable end points in Hunter syndrome and expectations for a single-arm registrational trial versus placebo-controlled.

And then the second question is just around financials. I know the cGMP facility is expected to be fully operational during the first half of 2022. If you could just elaborate on some of the expected changes in distribution of CapEx versus OpEx as the facility is completed and if we should expect any meaningful increases in spend as the vector manufacturing scales up.

Thanks, Rick. I'll start with the first one. On Hunter, we've also, as you mentioned, been very encouraged by some of the outcomes that we've seen from the initial study work. And the first 2 doses in particular have, to us, shown evidence of changes in biochemistry that represent that the gene therapy is working the way that it is designed and is tracking towards having a meaningful effect in these kids.

We're always wanting to reconcile that with other functional data and clinical assessment data, which we know historically can take longer to reconcile for baseline. What we like and we've been able now to collect from Cohort 1 and Cohort 2, what we think are meaningful understandings of relationships between some of those early biochemical changes and some of the longer-term progress of the assessments.

And so I think that's our plan as we continue to steer this program forward is to bring that evidence forward with all the stakeholders, including regulators, show evidence of the connection between early biochemical changes and long-term changes in clinical outcomes. And we're also going to a higher dose, which we think should even further power and amplify that strategy because I think we are expecting and have seen evidence of increased dose effect and while we maintain a good safety profile.

So for us, like in any rare disease program, we're patient enough to want to take in all the data, but our team is really focused on pathway towards acceleration where there's this great unmet need. So we will look at this program going forward as leaning as heavily as we can on early evidence of biomarker changes to justify the clinical changes that we want for these kids and their families and that, I think, regulators should fairly expect as well.

On the financial side, I'll start, and Vit, if you have any more color. I think we have -- the CapEx investment, as you mentioned, has been ongoing across the spectrum of this year. When we finish and have the manufacturing suite operational, it will complete that phase of investment.

We will also be bringing additional programs online over the next several months and into the middle of next year, including our RGX-202 program. And as we talked about expanding our RGX-314 program with additional dose levels and an additional study, the requirements are still there operationally for increased utilization of any GMP space overall.

I think that more what we're going to see is some reduction of CapEx in the transition from '21, '22 and beyond, at least as it relates to the GMP facility, but probably a steady continued increase in the operational expenses associated with an expanding platform of clinical studies, including and especially DMD, later stages of RGX-314 with more patients coming onto the second pivotal and potentially new programs as well.

Anything to add, Vit?

Yes. No, thanks, Rick. Yes, we expect that from a CapEx perspective, we'll have to continue spending just to get to the final completion of the manufacturing suite. And then, in 2022, a lot of the work will be more focused on just standing up the suite and a lot less focus on additional CapEx.

And then to echo Ken's point, there will be a change in OpEx, but the change in OpEx is a shift from using external CMOs once our facility is up online to bringing more of that in-house. But with the expanded programs and expanded need for drug product in the clinical stages, we assume that it's going to be a little bit higher than what we currently see.

Next question comes from the line of Matthew Harrison from Morgan Stanley.

I guess 2 follow-up questions, one on 314 and one on Hunter. So on Hunter, I guess, my question here is can you just help -- or let us think about a little bit how you compare and contrast your program, which obviously is a gene therapy versus some of the antibodies that are in development, especially the ones that seem to cross the blood-brain barrier better. And how you think about the relative GAG reductions between those 2 treatments and just the competitiveness of development there?

And then, secondly, on 314, I know there's been a lot of questions people have asked about that. I guess what I was really hoping for was, you have a couple of cohorts here. We're only going to see the first dose. I mean what -- as you think about developing suprachoroidal, do we need to wait for all 3 cohorts? Or if you see data that you think is good enough from this first cohort, could you move that forward quickly? Maybe you could just give us sort of the scenarios on how you might develop that given the first set of data we're going to see.

Yes. Matthew, thanks for the question. Look, we've always, I think, established that we're disciplined and we're focused on building good pharmacological understanding of product candidates. And product candidates include a treatment candidate with a new route of administration.

We tested 5 different doses with our subretinal route of administration, working through an understanding of safety, pharmacology, functional clinical responses in protein level, made a very educated and, I think, thoughtful decision about how to move that into pivotal phase.

We'll take the same type of disciplined approach with respect to a suprachoroidal except -- and an important exception here, we're starting obviously already with a baseline of pharmacological understanding that we can relate and correlate some to subretinal.

Especially on safety, we've had evidence already. We talked about with all of you that we're starting at higher dose levels. And we're able to continue to dose escalate based on the preclinical data and our clinical understanding overall. The true answer is, we will know when we're able to accelerate, when we see the entirety of data from the cohorts that we choose to start to enroll and escalate to.

And I think that we certainly want to have a dose curve before moving on to a later stage of development with any route of administration and any pharmacological candidate profile. Typically, when we have conversations with regulators and groups like FDA, more is better, especially when you're moving into a patient population that's about hundreds of thousands, if not millions of patients. It can be a very different conversation when you're talking about a rare disease or an ultra-rare disease with an unmet need that is so severe that warrants a different type of thinking.

But I think that's why we've been so encouraged overall so far this year that we're basically on track with enrollment. We've been on track with including expansion of our Phase II studies to higher doses into NAb-positive patients. We're on track to report that first data at 6-month time points for Cohort 1 and AAVIATE. I think as important, we're on track because of that enrollment and expansion for relatively fast follow-on with respect to those additional cohorts as well.

So that's going to be our approach. We'll keep sharing the data at the time points that we think are important and meaningful to all of you and all of the stakeholders here as we get it and make sure that we have the right amount of data to make decisions about where the programs go next, which we have always wanted our programs to move as quickly as possible and into late stages of development, especially with wet AMD and DR.

I think on the Hunter program side of it, I think we were very conscious and excited about the landscape of interest that people have in lysosomal storage diseases like Hunter to bring something, especially to these diseases that have enzyme replacement therapy to treat systemic or peripheral symptoms, but nothing that is addressing the central nervous system disease here that exists in these kids that we all know exist.

What's unique for us about gene therapy and our approach is I kind of characterize it often as an inside-out approach, right? So when we see changes in biomarkers, when we see evidence of biochemistry changing in the CSF of kids, it symbolizes -- or represents, doesn't symbolize, it tells us the scientific story that we have transduced, transcribed and expressed protein intracellularly. And that's where the problem is.

And so when we see that change happening with something like a substrate of the enzyme in the CSF, and we've seen that correlation in animals to those intracellular changes, for us that's very meaningful and very important and why we've done a lot of characterization of these substrates and their direct correlation to those gene therapy changes, those intracellular changes. That could only occur if our treatment is transducing and transcribing -- transducing cells and transcribing protein.

Other treatments, other mechanisms of action show and have shown changes in biochemistry. They have different mechanisms of how they operate. They're often outside-in approaches using proteins that are bound to the enzyme or as you mentioned, antibodies or antibody fragments or things that can help those proteins, those enzymes transport across the blood-brain barrier, et cetera. That's not our area of expertise. And I don't want to speak beyond what we focus on and where our science has taken us.

But I think that we view that onetime treatment for gene therapy that is showing changes, that preclinically and clinically, are meaningful and correlate to the fact that the gene has gotten into the brain cells and is on, is about as meaningful a dataset as we can show in these important diseases. And now we need to back it up with the clinical evidence as well. So that's what gets us excited about onetime gene therapy for things like Hunter syndrome.

Your next question comes from the line of Esther Rajavelu from UBS. (Operator Instructions)

So let's open the line for Luca Issi from RBC Capital.

And congrats on the progress. Maybe just a few here. So maybe on the Phase III for wet AMD, I think you mentioned in the past that your rescue injection criteria was going to be more stringent in the Phase III versus prior trial. Wondering if that is still the case and maybe if you can expand a little bit more on it.

And then the second, on the bridging study, do you have any update there? I know you're pivoting from (inaudible) cell line to suspension cell line. So wondering if you have started that trial and probably, most importantly, if that trial is gating to start the second Phase III or any other trial. And maybe third, any update on the clinical hold for Batten disease, that would be great.

Thanks, Luca. I'll start back to front there. No, we don't have any updates on the Batten study. We're expecting to provide more updates on that program between now and the end of the year. Overall, for the RGX-314 pivotal program, we announced that we are initiating the second pivotal study that we expect that to start in the fourth quarter of this year.

We have announced that we have continued to enroll in the ATMOSPHERE study, and that overall enrollment is occurring across all of the studies, including the bridging study. So we're on track with respect to ATMOSPHERE, the bridging study and the plans that we have for initiation of the second pivotal study.

And there's not an interrelationship between the staging of the bridging study and the start of the second pivotal. Those were things that we had planned already and are happening according to the time line and are on track.

I guess with respect to the first part of your question, I'll put this back in Steve's court to talk about the criteria for retreatment in ATMOSPHERE.

Yes. Thanks, Ken. Thanks, Luca. Yes, you're exactly right. We have taken advantage of the learnings from the Phase I/II study, which was the first in-human study, where we had a very low bar for retreatment, where investigators could retreat based on any amount of fluid without any requirement for increase in fluid or a decrease in visual acuity. And as we presented before, we were still able to show a dramatic reduction in treatment burden in those patients, though a lot of the injections that were given were given for very little fluid or even in some cases no increase in fluid.

So for our pivotal studies, we are incorporating a stricter rescue or retreatment criteria where we use objective data that is requiring either a reduction in best-corrected visual acuity and/or a certain amount of increase in the central retinal thickness. And these criteria are very much in line with the precedent of what's out there in terms of other studies that are looking at increasing the treatment interval or treatment duration. So we're in that same basic range. It's just that in our case, we're looking at a potential onetime treatment in these trials.

(Operator Instructions) Your next question comes from the line of Dane Leone from Raymond James.

Just one specifically. We have gotten questions and a good amount of questions given the issues with a peer company and patients experiencing severe reactions that had diabetic macular edema to their gene therapy.

I just wanted to give you guys the chance to comment in terms of having the first cohort that you expect to report out in diabetic retinopathy, which is a different indication in the fourth quarter. Just maybe compare and contrast your expectations for the biology of these diabetic retinopathy patients versus diabetic macular edema patients. And then any specific points of interest that you may be able to make around how you view the safety of your program?

Thanks, Dane. We're letting you back in again. We do that. Steve, do you want to answer that?

Yes. Yes, glad to have the follow-up question from you, Dane. Similar to how Ken talked about other programs in another space, like we're really not in a position to go into any pontificating of what could be going on in another setting that we're obviously aware of the findings. That's a totally -- that's a different program with a different vector, different transgene and importantly, a different route of administration, where there is obviously known the risk of inflammation that exists with that route of administration and why we've been excited about and selected subretinal initially and then suprachoroidal, where unlike with intravitreal administration of any vectors, including AAV2 or modified AAV 2 vectors and NAV vectors, where with intravitreal, you can get inflammation.

With suprachoroidal in both small animal models and also large animal models, including multiple nonhuman primate studies, we have not seen inflammation. So that's why we were excited to go into both wet AMD and diabetic retinopathy in dose-ranging studies of both those indications without prophylactic steroids and why we're excited based on initial data from the initial cohort in both studies to be able to go up in dose in both wet AMD and also DR and also importantly, felt comfortable to advance also in NAb-positive patients in both settings with that higher dose.

So we go where the science leads and the data. So we're -- again, we can speak to our data. We're aware of the context in the whole field. But each program is specific based on inspector, transgene and other factors and importantly, route of administration.

Your next question comes from the line of Esther Rajavelu from UBS.

And I apologize for missing the queue before. I was jumping between calls. But just kind of touching again on the suprachoroidal delivery, can you help us understand how widely it's used right now and in what context it's used and how much -- what the economics could be for suprachoroidal delivery versus intravitreal for ophthalmologists? And then I have one other follow-up.

Yes.

I can -- yes.

Go ahead, Steve. You're good.

Okay. All right. Yes. So I'll take the front end of that, Esther. So suprachoroidal space or delivery to that space more broadly than just gene therapy, the most extensive experience is with Clearside and their SCS Microinjector, where they've dosed well over 1,000 eyes mostly with a steroid preparation, triamcinolone preparation, for treatment of noninfectious uveitis, though it's also been used in other treatment settings.

And based on the safety and tolerability and feasibility of administration, they're continuing to advance also in partnership with other companies such as Bausch for their lead program. So that's actually one of the reasons we chose to partner with Clearside, to use the most validated clinically device for delivering an infusion to the suprachoroidal space for our onetime in-office gene therapy approach and why we're excited to advance on that.

We, like Clearside and their partners, have seen very good feasibility in terms of administration of RGX-314, utilizing the SCS Microinjector. This is a different route of administration with the benefit that you don't have to go to the operating room to perform. And these are retinal surgeon specialists, so this is a very simple and straightforward in-office approach that we've seen. So we're very pleased and excited to continue to advance with suprachoroidal delivery.

The aspect we still need to see is whether neutralizing antibody status is important or not in terms of the potential expansion of the use of the suprachoroidal injection route.

Ken, did you have anything else to add on the back end of that question?

No, Steve, just that we're not prognosticating on pricing of suprachoroidal right now. We're initiating our first in-human investigation of what we think is an exciting route of administration and approach and have the opportunity to evaluate that and take inventory of it, look more to the future, to talk about next steps of the program and ultimately happy to have conversations about commercialization of this high potential approach.

There are no further questions. At this time, I will turn it over back to Mr. Ken Mills for any closing remarks.

Thanks, operator, and thanks, everyone, for participating today. For those of you who are still hanging on, I say we had an exciting quarter. We have 3 data updates that we've communicated between now and the end of the year, starting with Retina Society and Cohort 2 wet AMD and diabetic retinopathy Cohort 1 between now and the end of the year for RGX-314, an IND filing for our DMD program and more updates on 121, looking to continue to chart a course for how that program moves forward.

So thanks for the great questions. We touched on a lot of these topics, emphasized that the first half of this year has been a great period of execution at the company and looking forward to more updates for the rest of the year. Have a good afternoon.

This concludes today's conference call. Thank you for participating. You may now disconnect.