Cartesian Therapeutics Inc (RNAC) 2021 Q4 法說會逐字稿

Good morning, and welcome to the Selecta Biosciences Fourth Quarter and Full Year 2021 Financial Results and Corporate Update Conference Call. (Operator Instructions) This call is being webcast live on the Investors and Media section of Selecta's website at www.selectabio.com, and it is being recorded.

For opening remarks, I would like to introduce Kevin Tan, Chief Financial Officer of Selecta. Please go ahead.

Thank you, and good morning. Welcome to our fourth quarter and full year 2021 financial results and corporate update conference call. The press release reporting our financial results is available in the Investors and Media section of Selecta's website worldwide web, selectabio.com, and our annual report on Form 10-K for the year ended December 31, 2021, which will be filed today with the Securities and Exchange Commission, or SEC.

Joining me today are Carsten Brunn, President and Chief Executive Officer; and Peter Traber, Chief Medical Officer.

During today's call, we will be making certain forward-looking statements including, without limitation, statements about the potential safety, efficacy and regulatory and clinical progress of our product candidates, financial projections and our future expectations, plans, partnerships and prospects. These statements are subject to various risks that are described in the filings made with the SEC, including the most recent annual report on Form 10-K. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of today, March 10, 2022, and Selecta disclaims any obligation to update such statements even if management's views change.

I would now like to turn the call over to Carsten Brunn, Carsten?

Thank you, Kevin. Good morning. I appreciate everyone joining us today. Before we begin, I'm thrilled to announce that on March 9, the FDA cleared the investigational new drug or IND application for a Phase I gene therapy clinical trial of SEL-302 to treat methylmalonic acidemia, or MMA, a serious and life-threatening metabolic disorder. This clinical trial is a critical step in our efforts to treat MMA and enable redosing of AAV-mediated gene therapies. We expect to initiate the Phase I trial in the second half of 2022, and we look forward to bringing hope to all those patients and families affected by this terrible disease.

2021 was a very busy and transformational year, and we're extremely pleased with the significant progress to propel our business forward. Over the past year, we advanced our pipeline of wholly-owned and partnered programs. We entered a number of key strategic partnerships and are close to catalyzing an evolution of our precision immune tolerance platform.

By combining ImmTOR with a Treg-selective IL-2 molecule, we've observed synergistic effects in the induction and expansion of antigen-specific regular T cells or Tregs. We believe this transformative combination, which we call ImmTOR IL has the potential to enhance the induction and durability of antigen-specific immune tolerance, a substantial lead forward for our ImmTOR platform. I would now like to walk you through key updates and recent strategic partnerships pertaining to the 3 pillars of our pipeline: reimagining immunotherapy for autoimmune disease, unlocking the potential of, adeno-associated virus or AAV gene therapy and amplifying the efficacy of biologics.

The current standard of care for autoimmune diseases is broad immune suppression, which is associated with side effects that often leaves patients vulnerable to serious infection and malignancies. By reimagining immunotherapy for autoimmune diseases, we have taken important steps to address the significant need for antigen-specific therapies without chronic and systemic immunosuppression. I want to start out with our most exciting finding from the last 12 months.

In recent preclinical data generated by our scientific teams, we observed that ImmTOR showed profound synergistic activity when combined with engineered IL-2 molecules that are selective for Tregs. Mice harboring transgenic antigen-specific T cells were dosed with a target antigen and then treated with ImmTOR IL, a combination of ImmTOR and Tregs selective IL-2. We observed ImmTOR alone to induce antigen specific Tregs and from an extensive clinical experience with ImmTOR find this level of Tregs reduction to be clinically meaningful.

Interestingly, the administration of ImmTOR IL, combined with the target antigen, led to a substantially greater increase in antigen specific Tregs. In contrast, mice dose with the engineered IL-2 plus antigen only an expansion of total Tregs but little or no expansion of antigen-specific Tregs. We believe ImmTOR IL is a transformative evolution of our precision immune tolerance platform with implications across our entire pipeline. Importantly, ImmTOR IL has the potential to unlock treatments for patients with a variety of autoimmune diseases.

We also tested ImmTOR IL in an animal model for the ability to induce durable immune tolerance to a co-administered AAV gene therapy. In this study, ImmTOR IL was co-administered with 2 doses of an AAV vector. We observed complete inhibition of anti-AAV antibody formation after multiple vector doses through 117 days. And most excitingly, this synergistic effect was observed at doses that are considered sub therapeutic for ImmTOR alone. These results suggest that the addition of a Treg-selective IL-2 to ImmTOR has the potential to increase the potency, durability and potentially allow for dose sparing of ImmTOR.

Our own programs of engineered IL-2 molecules in development for autoimmune diseases focused on nonselective expansion of total existing Tregs, but not Tregs-specific for the autoantigens that drive the pathogenesis of the disease. ImmTOR IL has the potential to be a truly differentiated first-in-class antigen-specific immunotherapy that restores balance in vivo to the millions of patients suffering from auto immune disease today.

On September 8, 2021, we entered into a collaboration with Cyrus Biotechnology a world-leading protein engineering company to design a next-generation proprietary Tregs-elective IL-2 molecule. A key priority for 2022 will be to identify target indications and accelerated development of ImmTOR IL into the clinic. In parallel, we are continuing IND-enabling studies for primary biliary cholangitis or PBC program.

Moving on to our work in gene therapy. In 2021, we reported with our partner AskBio on a clinical proof-of-concept study of ImmTOR combined with an AAV empty-capsid in healthy volunteers which I'll expand on later. We also published preclinical studies in science advances, described in the first dose benefit of ImmTOR on enhancing transgene expression when co-administered with the initial dose of an AAV vector. In addition, we published a paper in Frontiers Immunology describing the potential hepatoprotective properties of ImmTOR. These findings built on the growing bodies of evidence demonstrating the potentially multifaceted benefits of ImmTOR for enhancing the efficacy and safety of AAV gene therapy.

On October 4, 2021, we entered a strategic license agreement with Takeda, a global pharmaceutical leader with expertise in rare diseases, to combine ImmTOR with their targeted next-generation gene therapies for 2 lysosomal storage disorders. We are encouraged by the strong endorsement from one of the leaders in the lysosomal storage disorder landscape as a validation of our approach and precision immune tolerance platform. We look forward to working closely with and supporting Takeda.

We also continue to seek partnerships to expand our platform with technologies that can be applied to mitigating immunogenicity of AAV gene therapies. On October 21, 2021, we announced an exclusive license agreement with Genovis to advance Xork, a differentiated IgG protease to enable the dosing of transformative gene therapies in patients with preexisting anti-AAV immunity. Currently, up to 50% of the potential patient population for gene therapy trials are ineligible for inclusion due to preexisting neutralizing anti-AAV antibodies that are a result of natural infection with wild-type AAVs. Thus, many patients in need are unable to access potentially life-altering treatments for their genetic diseases for which there may be few or no treatment alternatives.

Xork is a bacterial protease that is designed to specifically cleave human IgG and is being developed as a pretreatment in advance of an AAV gene therapy with a goal of trendily clearing preexisting neutralizing antibodies to create a treatment window during which gene therapy can be administered. Xork is differentiated from some other IgG proteases in that Xork is derived from a nonhuman pathogen, and therefore, has demonstrated very low cross-reactivity to preexisting anti-IgG protease antibodies.

The combination of Xork and ImmTOR has the potential to address 2 of the biggest issues currently limiting AAV gene therapy. Xork to bring the power of gene therapies to those patients who would be otherwise ineligible for treatment due to preexisting antibodies and ImmTOR to mitigate the no immune responses to AAV gene therapy and enable redosing. We believe that the combination of Xork and ImmTOR has the potential to provide safer and more effective gene therapies to more patients.

We also announced a collaboration with Ginkgo Bioworks on January 10, 2022 to design novel AAV capsids with the goal of improving transduction efficiency, liver tropism and immunogenicity profile. Ginkgo will design and engineer the capsids and Selecta will conduct all nonclinical and clinical studies thereafter. This partnership leverages Ginkgo cell engineering and high throughput screening capabilities and Selecta's ImmTOR precision immune tolerance platform to advance gene therapy delivery. A major hurdle for the gene therapy field has been the toxicity associated with high AAV doses. In many cases, the toxicity is extractable linked to immunogenicity. Our vision is to change the treatment paradigm to dose low and slow by combining ImmTOR with more efficient capsids to enable administration of multiple smaller doses rather than a single high AAV dose, which is often associated with serious adverse events.

As mentioned earlier, in 2021, we announced top line results from the first in-human Phase I dose escalation trial of SEL-399, which we conducted jointly with our partner, AskBio. SEL-399 is an AAV8 empty vector capsid containing no DNA combined with ImmTOR at doses of 0.15 mg per kg and 0.3 mg per kg. The randomized placebo-controlled double-blind dose escalation study conducted in healthy volunteers was designed to determine the dose regimen of ImmTOR to mitigate the formation of utilizing antibodies or NAbs against AAV8 serotype capsid used in gene therapies. We observed a strong immune response in humans administered AAV empty capsid alone. The addition of ImmTOR to the administration of empty capsids reduce the formation of anti-AAV8 NAbs in a dose-dependent manner at day 30.

Consistent with preclinical data, we observed that the single dose of ImmTOR cohorts saw delayed formation of NAbs eventually reaching similar median levels of NAbs to the control group by day 90. Based on prior animal studies, we believe that if NAbs are inhibited at day 30, administration of 2 additional monthly doses of ImmTOR has the potential to inhibit the formation of NAbs with improved durability. We expect that the learnings from the empty capsid clinical trials and our nonclinical studies, employing 3 monthly doses of ImmTOR, will guide the clinical development of our proprietary gene therapy program, SEL-302. SEL-302 is a combination of ImmTOR with MMA-101 and AAV gene therapy being delivered for the treatment of MMA, a rare metabolic disease in which the body cannot break down certain proteins and fats.

As previously mentioned, on March 9, the FDA cleared the IND application for our Phase I clinical trial of SEL-302 to treat MMA. I want to thank our dedicated clinical, regulatory and CMC teams here at Selecta and our external partners for all their hard work in addressing the clinical hold. The trial is expected to initiate in the second half of 2022 and will evaluate the safety and efficacy of SEL-302 and the prevention of formation of [AAV] antibodies against the MMA-101 AAV capsid.

Our second wholly owned proprietary gene therapy product candidate is SEL-313 for the treatment of ornithine transcarbamylase deficiency. While we had originally anticipated a clinical trial application and IND filing in 2022, we have decided to prioritize our resources on the MMA program for the time being. Overall, we're seeing excellent progress across our gene therapy programs and look forward to continuing to progress ImmTOR both our wholly owned gene therapies as well as in partnership with our leading gene therapy partners. We believe that the platform technologies of ImmTOR and Xork position Selecta as a leader in unlocking the true potential of AAV gene therapy.

Lastly, a few key updates on our biologics programs, our most mature pipeline pillar. Many biologics can be highly immunogenic, resulting in suboptimal responses due to the development of antidrug antibodies after multiple treatments. Patients that develop an immune response may be forced to discontinue treatment or experience adverse reactions. We believe the use of ImmTOR as an adjunct to biologics offers a promising approach to minimize the health care and economic burden of antidrug antibodies. SEL-212 is comprised of ImmTOR co-administered with a proprietary uricase, pegadricase, for the treatment of chronic refractory gout and was licensed to Sobi in 2020.

As a reminder, our Phase III DISSOLVE clinical program kicked off in the third quarter of 2020 and consists of 2 double-blind, placebo-controlled trials of SEL-212. In both trials, SEL-212 will be evaluated at 2 doses of ImmTOR 0.15 mg per kg and 0.15 mg per kg and 1 dose of pegadricase 0.2 mg per kg. Each trial aims to enroll up to 100 patients -- 120 patients with up to 40 subjects in each of the 2 treatment arms and up to 40 on placebo.

On December 1, 2021, we announced full enrollment of the DISSOLVE I, which is being conducted in the United States. Enrollment into the DISSOLVE II trial is ongoing, and the study is being conducted in the United States and 4 countries across Eastern Europe. We are closely monitoring the evolving geopolitical situation in Ukraine and Russia and have proactively undertaken mitigation steps to prioritize the safety of our patients and investigators first and foremost as well as address any potential disruptions. While we have temporarily closed screening and randomization at sites in both Russia and Ukraine due to shipping constraints, we have proactively added 11 additional sites in the United States to offset and speed enrollment in DISSOLVE II. Of these additional enrollment sites, 9 have already been activated and 2 are pending initiation and activation. We will continue to work closely with our licensing partner, Sobi, our clinical trial providers and regulatory authorities to assess the potential impact on the program.

Before turning back to our pipeline and program updates, we want to emphasize that our hearts are with the people of Ukraine during this unprecedented humanitarian crisis. With extensive clinical data and an asset currently in Phase III, we believe our biologics pipeline is well positioned to leverage these learnings into our second [biologic] indication in IgA nephropathy, a kidney disease that occurs when immune complexes of an antibody called immunoglobulin A1 or IgA1, accumulate in the kidneys. Current treatments fail to address the underlying pathopsychology of the disease, which are the IgA immune deposits. We believe our novel approach, which combines ImmTOR with an IgA1 protease, has the potential to remove injurious IgA from the kidneys and improve markers of renal dysfunction. We're currently working with IgAN Biosciences on the first-generation IgA protease derived from the haemophilus influenzae bacteria.

On October 26, 2021, we entered the collaboration with Ginkgo Bioworks to discover next-generation enzyme therapies. Today, we're announcing that the first program will focus on generating a second-generation IgA protease with lower immunogenicity and potentially transformative therapeutic potential when combined with ImmTOR. We're extremely excited about these advancements and the value-driving milestones ahead.

With that, I'll turn the call over to Kevin to run through our financial results for the fourth quarter and fiscal year ended December 31, 2021. Kevin?

Thank you, Carsten. We remain well capitalized with $129.4 million in liquidity as of December 31, 2021, which compares to $140.1 million in liquidity as of December 31, 2020. We believe our liquidity will be sufficient to meet our operating requirements into the third quarter of 2023. It is important to note that this is the most conservative forecast of our cash runway as it considers none of the potential incoming milestones and royalties from our numerous partnerships.

Net cash used in the operating activities was $60.4 million for the 12 months and fiscal year ended December 31, 2021 as compared with $34.9 million net cash provided by operating activities for the same period in 2020. Collaboration and license revenue recognized for the fourth quarter and fiscal year 2021 was $29.9 million and $85.1 million compared to $12 million and $16.6 million for the same period in 2020. Revenue was primarily driven by the license agreement with Sobi, resulting from the shipment of clinical supply and the reimbursement of costs incurred for the Phase III DISSOLVE clinical program.

Additionally, during the fourth quarter, Selecta recognized $1 million for shipments of clinical supply under the license agreement with Takeda and $0.4 million for shipments under the license agreement with Sarepta. Research and development expenses for the fourth quarter and fiscal year 2021 were $20.3 million and $68.7 million, respectively, which compares with $15.1 million and $54.5 million for the same period in 2020. Quarterly and annual increases were primarily driven by expenses incurred for preclinical programs, payroll costs and AskBio collaboration costs.

General and administrative expenses for the fourth quarter and fiscal year 2021 were $5.5 million and $20.9 million, respectively, which compares with $4.8 million and $18.9 million for the same period in 2020. The quarterly and annual increases were primarily driven by increases in stock compensation expenses and consulting fees, offset by a reduction in professional fees.

For the full year 2021, Selecta recognized an income tax expense of $16 million. The expense was the result of our decision to opt out of the installment sales method that would have been applied to the sale of the Sobi license for income tax purposes. By electing out of the installment method, the company was taxed on an estimated fair value of the current and future proceeds from the Sobi license as part of our 2020 income tax return filing. As a reminder, the Sobi agreement provides for up to $630 million in development, regulatory and sales milestones as well as royalty payments based on contractual sales tiers. As a result of this election, any revenues resulting from these future milestones and royalties will be excluded from Selecta's taxable income.

For the fourth quarter and fiscal year 2021, we reported net income of $12.2 million or basic net income per share of $0.10 per share and a net loss of $25.7 million or basic net loss per share of $0.22. For the fourth quarter and full year 2020, we reported net losses of $15.4 million or a net loss of $0.14 per share and $68.9 million or a net loss of $0.68 per share.

I will now turn it back to Carsten for closing remarks. Carsten?

Thank you, Kevin. In summary, 2021 was an incredibly productive year for Selecta. We're excited to enter the clinic with SEL-302 about the continued growth of our pipeline, our multiple shots on goal and numerous validating partnerships. Furthermore, we remain confident in the broad applicability of our precision immune tolerance platform to potentially restore self-tolerance in autoimmune disease and overcome immunogenicity in gene therapies and biologics. We believe ImmTOR IL, an evolution of the ImmTOR platform, potentially represents a generation leap forward. The strong synergistic effects we have seen in our preclinical work demonstrates ImmTOR IL has the potential to unlock antigen-specific immunotherapies for autoimmune diseases as well as improve the efficacy and safety profile of therapies across our entire pipeline.

With multiple anticipated catalysts in 2022, we look forward to providing additional updates on our progress as we explore gene therapy enabling opportunities, advanced SEL-302, complete the DISSOLVE Phase III trial of SEL-212 in chronic refractory gout and continue to expand our diversified pipeline to autoimmune diseases.

Looking ahead, we believe we're well positioned to deliver on our sharpened clinical development strategy with a focus on autoimmune disease indications, explore gene therapy enabling applications and realize the full potential of our evolving ImmTOR platform.

Before we conclude today's call, I would also like to thank the entire Selecta team, our investors and many people who have been supportive along the way, including our patients and their families.

With that, we are happy to take questions.

(Operator Instructions) Our first question will come from Kristen Kluska with Cantor Fitzgerald.

Congrats on addressing this hold and getting it lifted in under 4 months. So I wanted to ask at a high level, if you could talk about some of the CMC-related items for this hold? And by addressing these now, do you think that running future studies, whether in MMA or other indications that could be more seamless from making some of these changes now, but then also understanding what the agency is looking for in IND packages on CMC?

Yes. Good question, Kristen. So we haven't disclosed the exact nature of the questions. But I think I've been clear in the past they were all around the AAV capsid MMA-101. They had questions around additional analytics, which usually have been asked more in a Phase III setting. But as you said, I think it's great we got those out of the way early before we even started the trial. And just to give you one specific example, the FDA is looking at the ratio of empty to full capsid, for example. I mean that's one very specific question.

So we completed all the [energic] work and then supply the answers -- provided the answers on February 9 and then got the wonderful news yesterday to move forward into the clinic. And there's definitely learnings for us, but also for our partners as well. I think it's important that we have a clear clinical path with 3 monthly doses in kids actually. So I think that provides a lot of certainty for our partners as well. There's a clear regulatory path for ImmTOR in gene therapy.

Got it. And recently, the FDA published a draft guidance on immunogenicity information for therapeutics, including a focus on antidrug antibody formation and thoughts about how they should be labeled and communicated. So obviously, this phenomenon isn't new across biologics. But curious to hear your thoughts on how some of these criteria across labeling might impact physician behavior, especially if alternatives come to the market, including with your ImmTOR technology?

Yes, it's not a great question. And obviously, the FDA has been focused on ADA mitigation for quite a while. And I think the most recent guidance even puts more emphasis on the importance of ADA mitigation. And I think to our knowledge, we're the only company actually with clinical stage assets that specifically address ADAs. We have demonstrated now across a number of modalities and obviously, most advanced with our gout asset, where we recently published a Phase I data where we clearly address ADAs and with a very immunogenic enzyme, pegadricase. You pretty much have ADAs and 100% of patients if you don't add ImmTOR. So we're extremely encouraged by this. And I think it will foster even more interest in our platform because it can help overcome the challenge of many of the biologics who all have, to some degree, induce ADAs, which impacts efficacy and more importantly, maybe patient safety.

And you're clearly very excited about the data you've seen for ImmTOR IL and the potential broad applicability. So how are you thinking about integrating this into your current pipeline, including some of these earlier-stage programs versus looking at newer indications and targets?

Yes. Yes. We're definitely very excited about ImmTOR IL. We really think that's a generation lead for us. And there is excitement around the Tregs selective IL-2s alone already. The IL-2s basically expands pre-existing Tregs, but don't address the antigen-specific Tregs versus ImmTOR alone induces antigen Tregs but not necessarily expand. And the combination really, we saw highly statistic effects where we both induce and expand antigen specific Tregs, which is really an amazing evolution of the platform. We see the application really across all 3 pillars of the pipeline. We've shown some data in a preclinical model of AAV gene therapy. We saw very good control of using antibodies actually at 1/4 of the dose of ImmTOR, which is, I think, very encouraging as well. So that's potential for this combination to be dose-bearing.

But we're extremely excited about the application in autoimmune disease as anti-immune tolerance is kind of the holy grail, if you like. And with our approach, we're trying to reimagine immunotherapy for autoimmune disease. Obviously, we've just released this exciting data around JPMorgan conference, and we're in the process to identify target indications. But you see us focus a lot more on the autoimmune disease space based on this exciting data.

Our next question will come from John Newman with Canaccord.

Congrats on the progress. I have a specific question regarding the potential design for the SEL-302 study in MMA. I know that, that study will be initiated later this year. But I wondered if you could just talk to us about some of the potential aspects of that design regarding things like frequency of ImmTOR dosing, et cetera, just whatever you might be able to share?

Yes. Thanks for the question. I'll hand this to Peter, our CMO.

Yes. This is Peter Traber in. Thanks, John, for that question. With the agreement of the FDA that the clinical trial proceed, I think we can now provide some details regarding the MMA clinical trial. Just as background, as we've stated previously, the trial will be conducted at the NIH by Dr. Chuck Venditti, a leading investigator with the largest MMA population in the United States. The trial will be conducted in cohorts of patients starting with adolescents, age 12 through 18 and then progressing to children ages 2 through 12. The AAV8 gene vector carrying the gene replacement designated MMA-101 will be administered at a dose of 1e13 viral genomes per kilogram. This is a dose which has been shown to have excellent efficacy in nonclinical animal models, and we expect this dose to have therapeutic efficacy in humans. The dose of MMA-101 will be given with 3 doses of ImmTOR to potentially prevent the development of antibodies, which might allow future redosing to mitigate hepatic toxicity associated with gene therapy and enhance the first dose effect of gene therapy as Carsten had mentioned.

The first dose of ImmTOR will be administered at the time of the gene therapy administration and then doses 2 and 3 will be given on day 28 and day 56 following the MMA-101 administration. There are provisions in the protocol for dose escalation of ImmTOR depending on the effect on anti-AAV8 antibody production. And there will be an adolescent subject treated without ImmTOR for comparison with -- that patient will get steroid prophylaxis, whereas those treated with ImmTOR will not have steroid prophylaxis as that's not a relative contraindication in subjects with MMA.

Each subject will be treated sequentially with the assessment of safety and efficacy by data safety monitoring board at 3 months following the infusion of the gene therapy before progressing to the next patient. The adolescents will be treated without -- 3 adolescents will be treated, followed by 3 children with the dose of 1e13. The primary efficacy measures will be done at 3 months, and there'll be serum methylmalonic acid levels, C13 propionate breath test, which is a direct measurement of enzymatic activity as well as clinical status, including episodes of decompensation and dietary prescription.

In addition, the primary immunologic endpoint will be the development of neutralizing antibodies to AAV8 to assess the effect of ImmTOR. Following enrollment and assessment of the 6 treated subjects, 3 adolescents and 3 children, we will hold, discussions with the FDA to determine whether to continue the program with the 1e13 dose of MMA-101 or to consider dose escalation or even potentially deescalation.

And as Carsten mentioned, now with the program off clinical hold, we anticipate infusing the first subject in the trial in the second half of this year. So John, those are some details of the trial. Happy to answer any questions regarding that.

Great. That's a lot of detail. It's really helpful. The only follow-up I had was just curious how long you'll be able to follow patients in this study?

Yes. So the initial assessment of efficacy and safety will be, as I mentioned, at 3 months, but the study will follow closely the subjects for a full year. And then intermittent follow-up over the next 4 years. So we will follow the subjects for at least 5 years following the dosing.

Our next question will come from Raju Prasad with William Blair.

On the Phase I trial for 399, did you mention the potential to redose and how will that determination be made?

Yes. Carsten, I can answer that if you like. It's a very good question. Redosing of gene therapy or dosing of gene therapy is primarily related to whether there are neutralizing antibodies present. So anywhere from 20% to 50% of people have neutralizing antibodies to AAV, and they are generally not eligible for gene therapy. So we have a guidance. So redosing -- the eligibility for redosing would be based on the level of neutralizing antibodies at the time when redosing was going to be done.

And we think that, that's a regulatory endpoint, which will be defensible. In the 399 study, with the 0.3 mg per kg dose, we had antibodies at 30 days that we're at the level that would allow redosing. By 90 days, as you'll recall, the neutralizing antibody levels rose. And that's the same thing we had found in animal studies. In animal studies when we gave 3 doses of ImmTOR, we were able to suppress antibody production at 90 days and beyond. And so that's why we think that giving 3 doses of ImmTOR will allow us to suppress antibodies long term, and it's why the FDA agreed that we should give 3 doses of ImmTOR in the MMA trial.

I don't know if that answers your question, Raju, or do you have a follow-up.

Yes. No, that's helpful. Is there a plan to go any ages below 2 years in the trial at any point? Obviously, another MMA program was put on clinical hold for TMA and -- 2 cases TMA in younger patients. But I was just kind of curious to hear your thoughts there as well?

Yes. That's also a very good observation. We know that as the adverse-effect profile gets filled out both for gene therapies as well as particular indications, so each gene therapy is not just related to the vector that's given, it's also the underlying disease. And of course, given the 2 cases that LogicBio announced of TMA, that's very concerning. And it's why we're taking the approach of treating first adolescents than children. And then, of course, in the future, the goal would be to extend therapy to children less than 2 years old. But by that time, we'll have a lot more data on the efficacy and safety of our dosing.

The other thing is our dose of AAV8 is lower than LogicBio and what we've seen so far with both hepatotoxicity as well as TMA that it's the higher doses of gene therapy approaching or going over 1e14, which is a lot higher than we're starting is where most of the problems have been -- the major problems have been seen.

Great. And then you mentioned, Carsten, in the prepared comments and the press release on the DISSOLVE II trial being kind of impacted by the conflict in Russia -- or sorry, in Ukraine. But how many patients in the DISSOLVE I trial were enrolled at those sites? And are there any potential complications on follow-up there? Just kind of curious to hear the impact on the program overall.

Yes, Raju, that's a great question, and I'm going to give that to Peter. He's going to get all the difficult questions today.

Yes. Thank you. Yes, that's a very good question. And just to review, the DISSOLVE I and II trials are identical Phase III trials with a primary end point at 6 months. The only difference between the 2 is that DISSOLVE I has a 6-month extension -- treatment extension period. So the total treatment period is 12 months. The DISSOLVE I study is U.S. only and enroll -- already completed enrollment, as Carsten mentioned, of 112 subjects by last November, and we will have top line data by the end of the year. So there's nothing in the Russia-Ukraine situation that will affect the completion of subjects in the DISSOLVE I trial.

The DISSOLVE II trial, which has not yet completed enrollment, but still has a 6-month endpoint, I had several European sites, including Russia and Ukraine. The disruption of our clinical programs, of course, due to the Russian invasion is an industry-wide problem. Our main issues have been operations disruptions such as the supply of -- resupply of drugs and other supplies, the lack of in-country personnel, limited communication, payment uncertainty and interruption of patient visits. And we're closely working with our CRO [Parexel] to address and -- while maintaining the safety of the personnel and patients.

We have 4 active sites in Russia and 3 active sites in Ukraine, representing about 12% of the total number of sites in our study. And that's kind of representative of many other companies' clinical trials. We've temporarily closed the Russian and Ukrainian sites to patient screening and enrollment of new patients so that we can focus on conserving resources and supplies to complete the already enrolled subjects. And given the very fluid situation, at this time, we don't have an estimate of what percentages or numbers of subjects will be able to complete.

We have undertaken a couple of really key mitigation measures. As Carsten mentioned, we've added 11 study sites to the DISSOLVE trial, all in the United States. And 9 of those have already been activated and the final 2 will be activated this month. And second, we've requested a meeting with the FDA to discuss the statistical handling of subjects enrolled in Russia and Ukraine, should they not be able to complete the study due to the war. This will be important to our understanding whether additional subjects need to be enrolled in the trial to maintain study power and so forth.

So while our guidance right now is top line data for DISSOLVE II in addition to DISSOLVE I by the end of the year, we continue to assess our continued assessment of the status of the enrolled subjects in Russian, Ukraine or consultation with the FDA and the performance of our newly added sites will be monitored, and we'll update guidance as the situation is clarified. At the present time, it's a little hard to project while we have all these different moving parts.

Our next question will come from Gil Blum with Needham.

This is [Chang] for Gil. I just want to ask if you have observed any developed immunity against the PEG chain ImmTOR previously?

Generated immunity to what, I'm sorry?

Generated immunity against the PEG chain in ImmTOR.

The packaging, is that what...

The PEG chain, P-E-G chain in particles.

I'm not sure...

Sorry, polyethylene glycol chain's particles.

Pegylation?

Yes, because there was pegylation in a particle, so is there any development immunity against that?

Yes. Okay. Yes, that's a good question because there is a PEG in the -- attached to the ImmTOR particle. And no, we have not identified specific antibody generation against the nanoparticle associated PEG. Now there is the enzyme pegadricase is also heavily pegylated. But the antibodies that we've seen that have been generated to pegadricase is more to the protein epitope rather than the pegylation with Krystexxa pegloticase, that uricase. The antibodies have been generated to the pegylated portion, but that's not what we've seen with pegadricase.

Our next question will come from Yun Zhong with BTIG.

So the first one is on MMA program. Can you remind us the origin of the MMA-101 capsid? Was it derived from some type of wild-type capsid, please?

Yes. Yes. It's in ADA capsid.

ADA capsid. Okay. So yes, just kind of follow-up on the TMA observation from another study. I know that your -- in combination with ImmTOR to deal with the immunogenicity, but any lessons that you can potentially learn from that observation? And do you think you have sufficient mitigation already incorporated in the study to prevent any potential immunogenicity-related side effects?

Yes, obviously, we were building on the learnings that we have with ImmTOR and one of the potential benefits is that we're addressing the immunogenicity of the AAV capsid. So -- but we have extensive experience with ImmTOR in the [Gau] trial where we've demonstrated we prevent the formation of ADAs and then we have indication from the 399 trial, the empty capsid that we prevent the formation of NAbs. And that's really what we're building on our assumption, and that's how we discussed with the FDA, and they were comfortable that this is a very interesting approach, which could be actually transformational for the field if we're able to prevent the formation of NAbs and ultimately, redose and address many of the secondary issues such as the high doses and toxicity associated with the high doses. And we've also demonstrated at least in animal models that ImmTOR also has hepatoprotective properties as well probably related to autophagy. But obviously, we'll have to see in the actual trial. But we feel comfortable that we -- and the FDA, most importantly, is comfortable that we have a safe setup here.

Okay. So with the decision to deprioritize OTC deficiency program, does that mean that in the long term, enzymatic therapy and also autoimmune diseases potentially be more interesting or more promising direction for the company? And did you say that the combination of ImmTOR and IL-12 -- sorry, IL-2 and the combination also has activity in -- or potential use in gene therapy as well?

Yes. So I think pausing the OTC program is really -- given the market backdrop, we're very cautious on how we spend our money. We're not saying we're discontinuing the program. We're pausing it for now, which leads to, obviously, cost savings, and we put our efforts behind the MMA program. This is not an indication that we're less excited about gene therapy, but we think the deployment of capital is most efficient in focusing on the MMA program for now.

We obviously also have a number of partnerships, growing partnerships, most recently with Takeda. So we see a lot of potential use of ImmTOR in gene therapy, not only ImmTOR, but also with the Xork. And you're right, we have generated very compelling data with ImmTOR IL, so the combination of ImmTOR with an IL-2 receptor agonist in a mouse model of AAV gene therapy where we demonstrated basically complete control of NAbs after 2 AAV doses at 1/4 of the dose of ImmTOR so -- which would usually be a therapeutic dose. So we definitely see application also in gene therapy down the line.

Our next question comes from Uy Ear with Mizuho.

Just going back to the trial design for SEL-302. Did -- I wasn't sure if I heard correctly. Is there any -- in the protocol, is there anything for redosing at the -- I guess, at the end of the first 3 months of patients -- if you don't see efficacy in the patients?

Yes. No, there -- in this protocol, there's no provision for redosing during the first 3 months or within the year. Redosing is going to depend on the level of efficacy of the gene therapy and how long it lasts and so forth. We -- the FDA, however, was very interested in that possibility and open the door for us coming back to them at any point in time if we see results that would allow redosing, but there's nothing in the protocol.

Okay. So even after 3 months, after the assessment, there's -- I guess what you seem to be saying is that you could go back to the FDA and retreat the patients, is that correct?

Yes. So the -- in our discussions with the FDA, they left that open for us to return to talk to them about that. They didn't want to approve that a priority, but they were very open for us to come back and discuss that.

Okay. And I guess the second question I have is on DISSOLVE II. I'm just wondering like what was the targeted number of patients that were expected to enroll in Ukraine and Russia? And what -- how many patients have been, I guess, treated and have completed treatment, if you can share that?

Yes. We haven't disclosed exact numbers of patients per country and/or how many were enrolled and so forth. And the situation is quite fluid. We've enrolled a certain number of subjects in Ukraine and Russia. And we're not certain at this point. We will over the next month or so understand how many of those are going to be complete and valuable. So we're not -- we haven't disclosed the exact number.

What I will say is that the total number of projected patients for Russian Ukraine was nearing capacity that we had initially set up. So we did have a targeted number for those countries as well as other countries, and it was reaching that target. So now the key thing is where our each of those subjects in the 6-month treatment and can we complete them. And that's a very fluid situation.

Okay. With -- do you think that -- I mean, it's kind of hard to assess now, I guess, as you indicated. But based on the number of patients, I guess, that have completed, do you think that you would need to enroll additional patients in order to not have it meaningfully change your, I guess, your statistics?

Yes, that's what we're in the process of assessing. And the study was highly powered already. And as you know, it's a comparison of treatment versus placebo and the treatment and placebo has basically a 0 response rate. So it was high powered for a straightforward end (inaudible). But nevertheless, we're -- that's one of the reasons why we'll be talking to the FDA and trying to see how they would have us consider any subjects that do not complete in Ukraine and Russia and assess whether we change the target for enrollment. We -- the target for enrollment was already increased from 105 to 120 some time ago. And our target right now is still approximately 120.

Okay. A last question for -- I guess, for Kevin. Kevin, yes, could you sort of help us think about the quarterly cadence for the R&D spend? I guess, the last 2 quarters have sort of been in the $20 million. And would it be something similar? Or do you sort of expect it to grow modestly over the year on a quarterly basis?

That's a great question. With the reprioritization of our spend, I wouldn't expect it to be markedly different going forward. Obviously, we have paused one program, so we're reprioritizing our spend and trying to optimize our cash resources for the highest value assets that we have. I think that (inaudible).

(Operator Instructions) Our next question will come from Boobalan Pachaiyappan.

Okay. Great. A couple of questions from our end. So firstly, how do you envision the Ginkgo partnership to evolve over the next 3 to 5 years? And what will be the key indicator for success in this partnership?

Yes, that's a great question. We have, as you know, 2 partnerships for 2 of our pillars. One is around the biologics where they're working on a second-generation IgA protease. And there's obviously predefined milestones where they have to deliver certain advancements of the enzyme over time. The same is true for the AAV capsid as well. And obviously, the goal is to have clinical candidates as quickly as possible. And -- but overall, as you can tell, the cadence of deals we're quite excited about the partnership, and we're in close collaboration with them on both programs.

Okay. Helpful. And secondly, do you think there might be opportunities for ImmTOR to be combined with existing approved gene therapy drugs to make the safety profile better? If so, which drugs would be most appropriate to assess from a combination regimen perspective?

Yes. I mean it's a great question. And obviously, with our portfolio with both ImmTOR and Xork, we have the opportunity to address some of the unmet needs or some of the key unmet needs out of the marketplace. Obviously, right now, there are a limited number of gene therapies. But I mean, that's definitely a potential approach to leverage both Xork and ImmTOR in the future.

This concludes our question-and-answer portion of the call. I will now turn the call back to Selecta's CEO, Carsten Brunn, for closing remarks. Carsten?

Yes. Thank you, operator, and thank you to everyone who joined us this morning for the numerous questions. Please stay safe and healthy, and this concludes today's call. Thank you.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.