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spk07: Good morning and welcome to the Passage Bio Second Quarter 2022 Financial and Operating Results Conference Call. At this time, all participants are on a listen-only mode. Following the formal remarks, we will open the call up for your questions. Please be advised that this call is being recorded at the company's request. Now I'd like to turn the call over to Stuart Henderson, Vice President of Corporate Development and Investor Relations. Stuart, please proceed.
spk00: Thank you, Operator. This morning, we issued a press release that outlines the topics we plan to discuss today. This release is available on the Passage Bio website under the Press Releases and Statements section of Investors & News. On today's call, Chip Cahill, Interim Chief Executive Officer, will review our second quarter 2022 and recent business highlights. Mark Forman, our Chief Medical Officer, will review our clinical programs, and Simona King, our Chief Financial Officer, will review our second quarter 2022 financial results. Before we begin, please note that today's call may include a number of forward-looking statements, including but not limited to comments on our expectations about timing and execution of anticipated milestones, including the initiation of clinical trials and the availability of clinical data from such trials, our expectations about our collaborators' and partners' ability to execute key initiatives, the ability of our lead product candidates to treat their respective target CNS disorder, manufacturing plans and strategies, trends with respect to financial performance and cash flows, the company's ability to fund research and development programs, impact of the COVID-19 pandemic on the company's operations, and its ability to manage costs along with uses of cash and other matters. These forward-looking statements are based on assumptions that are subject to risks and uncertainties that could cause the company's actual results to differ significantly from those suggested by these statements. Given these risks and uncertainties, you should not place undue reliance on these forward-looking statements. Please refer to the company's filings with the SEC for information concerning risk factors that could cause its actual results to differ materially from expectations, including any forward-looking statements made on this call. Except as required by law, the company disclaims any obligation to publicly update or revise any forward-looking statements to account for or reflect events or circumstances that occur after this call. It is now my pleasure to pass the call over to Chip Koehl. Chip?
spk08: Thanks, Stuart, and thank you all for joining us this morning. We continue to make important progress advancing our programs and our mission to develop transformative therapies for devastating CNS disorders with limited or no approved treatment options. As we advance our three ongoing clinical programs, we look forward to delivering multiple value-creating clinical milestones in the second half of this year. These milestones build upon several recent accomplishments, including, first, strong momentum in advancing our IMAGINE ONE trial for GM1 gangliosidosis. We have now progressed the study to recruitment of the final cohort, cohort four, in the dose ascending phase of the trial, and we are excited to have begun recruiting patients for this cohort. Second, presentation of encouraging longer-term safety biomarker and clinical efficacy data from cohort one of our IMAGINE ONE trial at the American Society of Gene and Cell Therapy, or ASGCT, annual meeting in May. Mark will review these data in more detail shortly, and we look forward to reporting initial data from cohorts two and three later this year. Finally, FDA clearance of our IND application for a phase one study of PBML-04 in metachromatic leukodystrophy. This marks our fourth consecutive IMD clearance as a company and our third rare pediatric lysosomal storage disorder program to reach clinical development. This clearance is a testament to the strong CMC and analytics capabilities we have developed internally at our state-of-the-art CMC laboratory in New Jersey and the high-quality preclinical data supporting the program through our strong partnership with Penn's gene therapy program. In addition, we continue to recruit additional patients in cohort one of our Galaxy clinical trial for early infantile Krabbe disease and look forward to reporting initial data from a subset of cohort one by year end. Consistent with our current guidance, we also expect to dose the first patient in our UPLIFT-D clinical trial for frontotemporal dementia shortly. Clinical trial execution remains a core priority for us. We have established a global network of trial sites across each of our ongoing clinical programs with active sites in the United States, Brazil, Canada, the UK, Israel, and the Netherlands. We also continue to employ various strategies to drive patient identification across our programs, including several initiatives focused on identifying frontotemporal dementia patients with a granular mutation. These efforts have increased genetic testing among FTD patients over the last few months. Underpinning our execution is a strong cash position, which we estimate will fund our continued operations into the second quarter of 2024. Lastly, we were pleased to have recently added Michael Kamark, PhD, to our board of directors. Dr. Kamark is a seasoned biopharmaceutical executive with over 40 years of experience in discovery research, process development, and technical operations. We look forward to drawing on his expertise. With that, I will now turn it over to our chief medical officer, Mark Foreman, who will review the progress made across each of our ongoing clinical programs.
spk01: Thank you, Chip. First, let me discuss our lead program, PBGM01 for GM1 gangliosidosis. GM1 is a fatal neurological lysosomal storage disease caused by a GLB1 gene mutation that results in low activity of the beta galactosidase enzyme. This leads to a rapid neurological decline and in the most severe forms, unfortunately, to mortality within several years. Patients with GM1 are a rare and underserved population, and there are no disease-modifying therapies for the disorder currently. Our IMAGINE-1 clinical trial focuses on the early and late infantile forms of GM1, which are the most severe forms of the disease. This global Phase I-II trial is an open-label dose escalation study with PB-GMO1 enrolling four distinct cohorts divided by age and dose level. As a reminder, our approach uses a next-generation proprietary AAVHU6 capsid administered via the cisterna magna to deliver a codon-optimized GLB1 transgene to increase beta-galactosidase enzyme activity in the brain and peripheral tissues. We were pleased to report updated positive interim safety, biomarker, and clinical efficacy data from cohort one at ASGCT in May. These data show that the low dose of PBGMO1 was well tolerated and had a favorable safety profile, with patient one data through 13 months and patient two data through seven months. No serious adverse events, no complications related to ICM administration, and no evidence of dorsal root ganglion toxicity were observed in either patient. Both patients showed continued improvement across developmental areas on the Vineland 2, a caregiver-assessed scale, and Bailey 3, and investigator-assessed scales following PBGMO1 administration. Patient 1 showed improvement across all developmental areas through the 12-month assessment, with notable progression in motor and language domains. Patient 1 progressed from taking a few steps to jumping and climbing stairs. Patient 2 showed improvement across multiple developmental domains, despite having severe developmental delay at baseline and a prior history of regression. This patient progressed from standing with support for five seconds to standing with support for one to three minutes and walking without support. We were extremely pleased to see continued and meaningful improvement in developmental milestones for these children, including regaining of lost milestones. Volumetric MRI data showed meaningful growth in brain volume for patient one, who was 15 months of age at gene transfer, patient two, who had severe developmental delay at baseline, and was 31 months of age at gene transfer, showed a slight decline in brain volume from baseline at six months. Longer-term biomarker data for beta-galactosidase enzyme activity in CSF and serum showed functional transgene expression. As Chip mentioned, our IMAGINE 1 trial has experienced strong momentum. To date, we have dosed a total of five patients in the study. We have completed dosing of cohorts one and three, low dose in late and early infantile patients, respectively. and have dosed the first patient in the high-dose late infantile cohort two. Following positive review of interim safety data from cohort three by the independent data monitoring committee, we are excited to have now advanced the study to recruitment of patients for cohort four, high-dose early infantile GM1. This is the final patient cohort in the dose ascending phase of the study. We remain on track to report initial safety and biomarker data from cohorts two and three in the second half of 2022. Moving on to our global PBKRO3 program, GALX-C, which is an open-label dose escalation study in patients with early infantile Krabbe disease. Krabbe disease is a condition that progresses rapidly, damaging both the brain and the peripheral nervous system, resulting in a life expectancy of only two years in the severe cases. Krabbe disease is a fatal neurological lysosomal storage disease caused by a GALC gene mutation that results in decreased enzyme activity of galactosylceramidase. Like GM1, this is also a pediatric leukodystrophy and lysosomal storage disease with an underserved population and devastating disease progression. Our approach to treating CREV-A is similar to our approach to GM1, utilizing the same proprietary capsid and ICM delivery to potentially address both CNS and peripheral disease manifestations. We have now opened six sites for recruiting globally, including in the US, Canada, the Netherlands, Israel, and the UK. We have dosed the first patient in the study and are actively recruiting additional patients in cohort one. We look forward to reporting initial safety and biomarker data from a subset of cohort one by the end of 2022. Our third clinical program, PBFT-02, is for frontal temporal dementia with granular mutations. STD is a devastating form of early-onset dementia affecting patients between the ages of 40 to 65. The form of the disease we are seeking to treat with our therapy is caused by a granulin or GRN gene mutation, which results in a deficiency of progranulin. It's estimated that about 5% to 10% of STD is caused by a GRN mutation. We are utilizing the AAV1 capsid to deliver the GRN gene via ICM delivery to the CSF. The goal of this treatment and delivery approach is to potentially provide higher than normal levels of the progranulin protein to the CNS to overcome the progranulin deficiency in GRN gene mutation carriers. As a reminder, the study design consists of two cohorts of three patients, each receiving two different ascending doses of PBSTO2, with an optional third cohort treated with a higher dose, depending on safety and biomarker data results observed in the first two cohorts. We now have three active clinical trial sites, including two in the U.S. and one in Brazil, and activation efforts at additional sites continue. We also continue to employ a variety of patient identification initiatives, including efforts to increase genetic testing among FTD patients. We've now identified prospective patients with a granular mutation, expect to dose the first patient in the study shortly. Turning lastly to PBML-04, our program for metachromatic leukodystrophy, or MLD. Infantile MLD is a fatal inherited disease caused by mutations in the ARSA, or the aryl sulfatase A gene, which reduces enzyme activity. MLD is characterized by muscle weakness, rigidity, gait disorder, and developmental delays, and unfortunately, children typically die by the age of five. Worldwide incidence is approximately 1 in 100,000 live births. Our approach is similar to our approach to GM1 and Crab A, utilizing the same proprietary capsid, AAVHU68, and ICM delivery to express ARSA and potentially address both central nervous system and peripheral manifestations of this devastating disease. We announced in June that the FDA cleared our IND, marking our fourth IND clearance as a company and our third pediatric lysosomal storage disorder program to reach clinical development. We're thrilled to have achieved this milestone and are excited by the promise of our potential therapy. As we continue to evaluate our resources and operating expenses, we've made the decision to hold advancement of clinical development activities for the program at this time. With that, I will now turn the call over to Simona to review our financials.
spk06: Thank you, Mark. Before reviewing our expenses for the quarter, I want to reiterate our strong cash position. As we reported in our press release this morning, We ended the second quarter with approximately $239.3 million in cash, cash equivalents, and marketable securities, compared to $267.1 million as of March 31, 2022. We continue to expect these existing cash resources to fund operations into Q2 2024 and continue to manage our cash carefully to ensure we can deliver on meaningful clinical milestones over the coming quarters. R&D expenses were $26.8 million for the quarter ended June 30, 2022, compared to $33.1 million for the same quarter in 2021. The decrease was primarily due to a decrease of $10.9 million in clinical manufacturing expenses, which relates to the timing of our manufacturing activities. This amount was partially offset by $4.6 million of increases and clinical operations expenses, expenses associated with the PEN agreement, and facility and other expenses. DNA expenses were $13 million for the quarter ended June 30, 2022, compared to $15.4 million for the same quarter ended June 30, 2022, compared to $15.4 million for the same quarter in 21. The decrease was primarily due to a $2.3 million reduction in personnel-related and share-based compensation expense related to our workforce restructuring, which was partially offset by seven expenses incurred in the three months end of June related to our workforce restructuring, which was partially offset by seven expenses incurred in the three months end of June 30, 2022 related to the separation of our chief executive officer. Net loss was $39.5 million for the quarter ended June 30, 2022, compared to $48.4 million for the same quarter in 2021. Let me now turn it back to Chip for closing remarks.
spk08: Thank you, Simona. With three ongoing clinical programs and state-of-the-art analytic capabilities, we believe we are well positioned to achieve several important milestones over the coming months. We continue to experience strong momentum in our IMAGINE 1 trial and expect to report initial data from cohorts 2 and 3 in the second half of 2022. Additional expected near-term milestones include, first, reporting initial safety and biomarker data from a subset of cohort 1 of our GALX-C trial by the end of 2022, and second, consistent with our guidance, dosing the first patient in our UPLIFT-D trial soon. Prior to taking your questions, I would like to thank the patients, families, and trial investigators, as well as the employees at Passage Bio and our colleagues at the Gene Therapy Program for their support and dedication to our mission. With that, I'd like to open the call for your questions. Operator?
spk07: Thank you. We will now take any questions you may have. If you have a question, please press R11 and you will be put into the queue. Please stand by while we compile the Q&A roster. Our first question comes from the line of Brendan Smith with Cowan. Your line is open.
spk03: Hi, guys. Thanks very much for taking the questions. Just a couple quick ones from us. Sorry if I missed this, but for the initial CRAB-A data and actually maybe for the GM-1 update as well in the second half, is this something we should probably expect in like a press release or are you targeting something more formal like a medical meeting? And then just really quickly for MLD, can you maybe just expand a bit on your decision for clinical development for the time being? Is this probably something that we would see for additional pipeline programs? Is it more of a way to strategize and prioritize the current programs you have in the clinic? Or does it have something to do more with the drug itself? Thanks very much.
spk08: Great. Hey, Brendan, thank you. Thanks for those questions. So, first, I think on the CRABE data and the GM1 data, we are currently evaluating the best way to release that data. We will be looking to see if it makes sense to do it at a scientific conference. But if that doesn't, you know, it depends on when the data comes in and the schedule of those meetings, or we would do a press release. So that is still to be determined, but we're looking at all different alternatives. On your question about MLD and the decision to pause the further development, as we said earlier, it's really, it's not about the asset itself. It is about our evaluation of our current financial situation and priorities and And so we're just evaluating the best way to go forward and to prioritize the assets that we need to prioritize.
spk03: Got it. Yep, makes a lot of sense. Thanks, guys.
spk07: Thank you. Please stand by for our next question. Our next question comes from the line of Nina. by Trudeau Garage with Citi. Your line is open. Hey, guys.
spk05: Thanks for taking the question. I was just wondering if you could give us an update on some of the safety events that you saw in the initial patient that was dosed with PBKR03. And I'm just curious how many additional patients you've dosed and if you've seen any similar safety signals. And then on PPFTO2, It sounds like you have identified some patients, so just kind of curious what the getting factor is to getting at least the first patient dose there. Thanks.
spk08: Great. Thank you, Nina. I'll hand it over to Mark to talk about the safety events that we've seen with PBKR03. But on FTD, yeah, consistent with our guidance, we're happy to announce that we will be We expect to be dosing shortly, and that is a result of, we think, ongoing patient identification activities that we've been doing. So, I'll hand it over now to Mark to talk about the safety issues on the CREB-A asset.
spk01: Thanks, Chip. So, as we disclosed previously, our first patient approximately 30 days after administration developed the adverse event of acute hydrocephalus. That patient had a ventricular peritoneal shunt placed, and that was to reduce the CSF buildup in the brain. This is a standard treatment for hydrocephalus. This patient has done well following this intervention and is currently stable, and the SAE has been updated to resolve it. As a result of that SAE, and as we disclosed previously, we've updated the protocol to include additional safety monitoring, and now we're actively recruiting additional patients for that study, but we haven't dosed anyone to date.
spk05: Got it. Thank you.
spk07: Thank you. Please stand by for our next question. Our next question comes from the line of Madison Elsati with Raymond James. The line is open.
spk05: Please check to see if you're on mute, Madison.
spk02: I'm sorry about that. This is Alex on for Danielle Thrill. Nina, you stole my questions, but I just wanted to see what expansion for additional sites for SED recruitment, how that effort is going, and how kind of the patient influx, you know, I think COVID was a major concern about screening efforts and wanted to hear how if those are impacted by some of these VA point whatever variants. moving forward for patient recruitment in that study.
spk08: Great. Thank you, Alex. I think I'll hand it over to Mark to talk about the latest on our site expansion and our patient ID activities and how that may be helping screening. Just as a general comment, as we've commented over the past few quarters, we have been focusing a lot on our patient ID efforts. And we believe that we're beginning to see some benefit from that. But with that, I'll hand it over to Mark.
spk01: Thanks, Jim. So consistent with all of our programs, for the FTD program, we are taking a global approach. To date, we have three active clinical sites following the recent activation of trial sites in Houston and Brazil. So we now have two sites open in the U.S. and one in Brazil. We are actively working towards opening a site in additional countries, and we anticipate those to bear fruit in the coming months. With regard to patient identification, again, as Chip said, we're really excited that we expect to be dosing our first patient soon, and we believe this is a direct result of our patient identification efforts where we've employed a number of different strategies to help improve rates of genetic testing among FTD patients. We're supporting genetic testing in partnership with Informed DNA and VTAG, and are working with healthcare providers and study investigators to provide these kits free of charge and to offer these genetic testing programs. We're also working closely with each of our study investigators to develop individualized plans for patient identification and recruitment. And lastly, we're conducting extensive outreach to healthcare providers to educate them on the availability and benefits of our genetic testing program. These efforts have translated into a significantly observed increase in genetic testing among FTD patients with our sponsored genetic testing programs over the last three months and are quite encouraging. We have identified a number of individuals, a number of patients with GRN mutations, and those are the patients that are currently being evaluated for study availability. But again, we expect to hope to dose our first patient in the near future.
spk02: Great. Thank you so much.
spk07: Thank you. Please stand by for our next question. Our next question comes from the line of Laura Chico with Wetbush. Your line is open.
spk04: Hey. Good morning, guys. I apologize. I joined a little bit late. I just had two questions. The FTD recruitment, I guess I just wanted to clarify, is this necessarily, is the bottleneck here a diagnosis issue or is there something else kind of at play in terms of just the competitive environment? And then I apologize, I missed this. Any updates related to the CEO search? Thanks very much.
spk08: Great. Thank you, Laura. I think I'll take your second question first and then hand it over to Mark to talk about FTD recruitment. But on the CEO search, the board has engaged Russell Reynolds to conduct the public search for the new CEO. The search is active and the board is evaluating potential candidates and is making good progress. While the search is ongoing, our strong, capable executive leadership team remains focused on driving execution of our near-term milestones and managing our cash. With that, I'll hand it over to Mark to talk about, you know, what the issues and what we're doing to resolve the issues with the FTD recruitment.
spk01: Sure. Yes. Thanks, Chip. So, I mean, I think the challenges with the recruitment that we've experienced, I think, are multifactorial. First, there is, you know, a critical issue is the identification of patients. And so that is where our extensive outreach efforts are working to sort of increase that sort of throughput that are coming through. There's certainly competition with other companies that do have active trials. But lastly is the patients that are identified obviously have to meet eligibility criteria. So it's a combination of all of those factors. But again, I think to reiterate, the efforts that we have been making to do our outreach and to increase our throughput of genetic testing are clearly bearing fruit, and we now have a cohort of individuals that are being evaluated for eligibility.
spk07: Thank you. And I'm showing no further questions in the queue at this time. Ladies and gentlemen, thank you for participating in today's conference call. This does conclude your program, and you may disconnect. Everyone have a great day.
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