This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.
spk01: Good afternoon and welcome to the Region X BIO first quarter 2021 earnings conference call. At this time, all participants are in a listen only mode. Later, we will conduct the question and answer session and instructions will be given at that time. 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 of Region X BIO You may begin.
spk07: Good afternoon, and thank you for joining us. With us today are Ken Mills, Regenexx Bio's President and Chief Executive Officer, and Dr. Steve Pakola, our Chief Medical Officer. Earlier this afternoon, Regenexx Bio released financial and operating results for the first quarter ended March 31, 2021. The press release reporting our financial results is available on our website at www.regenexxbio.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 Regenexx BIO's annual report on Form 10-K for the full year ended December 31, 2020, and comparable risk factors sections of Regenexx BIO's quarterly reports on Form 10-Q 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, May 5th, 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 or Actual results may differ materially. I would now like to turn the call over to Ken Mills.
spk03: Thank you, Patrick. Good afternoon, everyone, and thanks for joining us. I hope everyone's continuing to stay safe and healthy. On today's call, Steve and I will review our recent progress, advancing and expanding our internal pipeline based on our proprietary NAV technology, discuss future milestones, and VIT is unable to join us today, so I will provide an update of our financial results for the first quarter of 2021. At the end of the call, we'll open the line for questions. To begin, I want to express how encouraged I am by the dedication of our team and what they've shown and the progress we've made for our pipeline of AAV gene therapies for patients. In the first quarter of this year, we've achieved quite a few milestones. We've initiated our first pivotal trial, Atmosphere, to evaluate RGX314, a one-time gene therapy for the treatment of wet AMD. and we look forward to moving towards a potential BLA filing in 2024. We're also evaluating the suprachoroidal delivery of RGX314 using the SCS microinjector, a targeted in-office approach, and we have completed dosing in our second cohort of our ongoing Phase II AV8 trial for the treatment of wet AMDA. Today, we also announced that we have expanded the AV8 trial to include a third cohort, and Steve will walk through further details about that in just a moment. Our team has also made great strides on our rare genetic disease programs. We're pleased with the continued development and advancement of our RGX121 clinical program for the treatment of MPS. We recently provided an update at the World Symposium for our ongoing Phase 1-2 trial of RGX121 in patients up to five years old, and look forward to providing additional data from this trial in 2021, including next week at ASGCT. We also announced today that we've dosed the first patient in a Phase I-II trial in older patients with MPS II, where we hope to gain additional insight into the potential treatment effects of RGX-121. We've recently completed enrollment in the first cohort of our Phase I-II trial of RGX-111 for the treatment of MPS II. And our team has also been working diligently towards an expected IND submission of RGX202 for the treatment of Duchenne muscular dystrophy in mid-2021. Here at Regenexx Bio, we continue to believe in the promise of our NAV technology and remain committed to the developing gene therapies that improve treatment options for people with serious diseases. I'm grateful for the relationships we've forged with physicians, patients, patient advocates, and we're dedicated to supporting them in many other ways as well. We've participated recently in several events sponsored, for instance, by the National MPS Society, including the virtual Race for a Cure this past weekend. And next week, we'll join their annual celebration of MPS Awareness Day. We look forward to connecting with friends and colleagues to raise awareness for these important diseases. Our recent financial transactions, including the January 2021 follow-on common stock offering, provide us with necessary resources to continue to advance our lead programs and research pipeline. And lastly, just to summarize, this week we've begun the process to move into our new corporate headquarters. A lot going on so far in 2021, and with that, I'll turn the call over to Steve.
spk06: Thanks, Ken. Our RGX 314 development program for the treatment of wet AMD aims to evaluate the one-time gene therapy across multiple settings of care with the goal of providing access and benefit to as many patients as possible. I'll begin today with an update on our pivotal program. As previously announced, our pivotal program is expected to include two randomized, well-controlled clinical trials to evaluate the efficacy and safety of RGX 314. and enroll approximately 700 patients in total, and is expected to support a potential BLA filing in 2024. We are enrolling patients in the first planned pivotal trial known as Atmosphere. Atmosphere is a randomized, well-controlled trial designed to evaluate the efficacy and safety of RGX314 compared to repeated ranivizumab intraocular injection, a standard treatment option for patients with wet AMD. The trial is expected to enroll approximately 300 patients, and the primary endpoint is non-inferiority to ranivizumab based on change from baseline in best-corrected visual acuity at one year. Patients in this trial do not receive any prophylactic steroids beyond what is normally administered after routine vitrectomy. The second pivotal trial is expected to be similar in design to atmosphere, and we plan to initiate the trial in the second half of 2021. We have initiated the pivotal program using CGMP material produced from our existing manufacturing process, and we plan to incorporate our scalable suspension cell culture manufacturing process to support future commercialization upon completion of a bridging study, which is now active. This open-label study will enroll approximately 60 patients to evaluate two manufacturing process formulations of RGX314. The primary endpoint of the trial is RGX314 protein concentration in the aqueous humor at six months. We are also evaluating the safety and efficacy of RGX314 when delivered suprachoroidally in our ongoing phase two AVA trial for the treatment of wet AMD. We plan to report interim data from the first cohort of patients in the third quarter of 2021. Today, we announced that we have completed dosing of patients in cohort two and look forward to reporting interim data from this cohort in the second half of this year. As Ken mentioned, we also announced today that we have expanded the AVA trial into a third cohort of patients who are positive for AAV8 neutralizing antibodies, or NAVs. 20 patients will be dosed in cohort three with five E11 genome copies per eye of RG8X314. The same dose evaluated in cohort two delivered as a single injection. As with previous cohorts, patients in cohort three will not receive prophylactic immune-suppressive corticosteroid therapy before or after administration of RGX314. This cohort of patients may provide us additional information about the effects of RGX314 in NAV-positive patients, potentially broadening the patient population that could be treated with this in-office delivery approach. Moving on to Altitude, our Phase II trial to evaluate RGX314 supracoroidal delivery in patients with diabetic retinopathy. This trial continues to enroll patients in the first cohort, and we are on track to report initial data from this trial in 2021. In our rare disease portfolio, we remain committed to bringing potential one-time gene therapies to patients with rare genetic disease. for which there is a significant unmet medical need. Earlier this year, we announced the development of RGX202, a one-time gene therapy for the treatment of Duchenne. We are working towards an IND filing for RGX202, which we expect to submit in mid-2021. We recently announced that the first patient had been dosed in Cohort 3 of our ongoing Phase 1-2 trial of RGX121 in patients with MPS II up to age five years. As reported at the World Symposium Conference in February, we have observed encouraging interim data from the first two cohorts, which include signals of I2S enzyme activity in the CNS, continued neurocognitive development, and evidence of I2S enzyme activity in the plasma and urine following RGX121 administration. We will be providing further program updates later this year, including additional data from these cohorts at ASGCT next week. We're also pleased to announce that the first patient has been dosed in a Phase I-II trial of RGX-121 for the treatment of pediatric patients with MPS II over the age of five years old. Expanding the RGX121 development program may provide meaningful insights into the potential treatment effects of RGX121 in more patients. Turning to our Phase 1-2 trial of RGX111 for the treatment of MPS1, we recently completed dosing of patients in Cohort 1. RGX111 is our second product candidate for the treatment of a rare neurodegenerative disease to be dosed in patients. We believe one-time treatment with RGX111 may provide sustained IDUA enzyme for patients, potentially preventing the progression of disease, and we look forward to providing additional program updates in 2021. We also recently submitted an IND for the intracisternal delivery of RGX181 for the treatment of CLN2 disease, after which the FDA notified us in a letter that our proposed trial has been placed on clinical hold, and the agency requested more information to support the initial dose selection and certain study drug administration procedures. Our team is currently evaluating the request from the FDA, and we plan to provide an update on the program in the second half of 2021. Based on separate discussions with the FDA around the RGX381 program for the treatment of ocular manifestations of CLN2, and the update from the RGX 181 program, we now expect to provide an update on plans for the RGX 381 program in the second half of 2021. With that, I turn the call back over to Ken.
spk03: Thanks for those good updates, Steve. As I mentioned at the beginning of the call, we're excited that we've started to move into our new headquarters here in Rockville, Maryland. And as we populate the offices and labs We'll also be completing the build-out of the CGMP suites in the new building, which is expected to allow for production of NAV vectors at scales of up to 2,000 liters using our platform suspension cell culture process. While the construction of this new building has been exciting to watch so far, we're keenly focused on getting to work in the new facility with the goal of strategically integrating our in-house production capabilities with our external suppliers to meet the clinical and commercial supply needs across all of our programs. Outside of Progenix Bio's walls, we've also been pleased to see the clinical advancement of some of our partner programs utilizing our proprietary NAV technology platform. Ultragenix recently announced the IND clearance of their product candidate for the treatment of Wilson disease. Stellis has announced that the first patient was dosed in their new trial for patients with late-onset Pompe disease. We're encouraged by these examples of advancements by our partners in the AAV gene therapy space. Now, I will turn to the review of our financials. Regenexx Bio ended the quarter on March 31, 2021, with cash, cash equivalents, and marketable securities totaling $656.5 million, compared to $522.5 million as of December 31, 2020. The increase was primarily attributable to $216.1 million of aggregate net proceeds received from our follow-on public offering of common stock completed in January 2021. The increase was partially offset by net cash used in operating activities of $41.1 million, cash used to purchase property and equipment of $31 million, and Zolgensma royalties paid to healthcare royalty management of $9.5 million. Revenues were $18.9 million for the three months ended March 31, 2021, compared to $17.6 million for the same period in 2020. This increase was primarily attributable to Zulgenzma royalty revenues, which has increased by $8.3 million and was partially offset by a decrease in other license revenues. Research and development expenses were $39.7 million for the three months ended March 31, 2021, compared to $37 million for the same period in 2020. The increase was primarily attributable to personnel costs as a result of increased headcount, laboratory and facilities costs, and clinical trials expenses for our lead product candidates. General and administrative expenses were $17.8 million for the three months ended March 31, 2021, compared to $18.4 million for the same period in 2020. The increase was primarily attributable to personnel costs as a result of increased headcount and professional fees for advisory and other services. Net loss was $50.1 million, or $1.20 basic and diluted net loss per share, for the three months of March 31, 2021, compared to a net loss of $40 million, or $1.08 basic and diluted net loss per share, for the same period in 2020. As of March 31st, 2021, we had approximately 42.5 million common shares outstanding. Based on our current operating plan, we expect the balance in cash, cash equivalents, and marketable securities of $656.5 million as of March 31st, 2021 to fund operations, including the completion of our internal manufacturing capabilities and clinical advancement of our product candidates into the second half of 2023. The focus on our internal pipeline and encouraging process, encouraging progress, is a testament to the hard work, experience, and commitment of our entire team. We also look forward to sharing more about our progress using our NAGS technology next week at the American Society of Cell and Gene Therapy annual meeting, Gene and Cell Therapy annual meeting, one of those meetings. We will be sharing multiple scientific posters and presentations showcasing our extensive knowledge across our pipeline and broader AAV characterization. Given the breadth of our pipeline of gene therapy candidates, the advancement of our first pivotal gene therapy program, and our strong financial position, we believe we're well positioned to realize potential curative gene therapies for many patients in need. We look forward to keeping all of you updated on our programs throughout the remainder of 2021. And at this time, operator, we are ready to open the call for questions.
spk01: At this time, if you would like to ask a question, press star followed by the number one on your telephone keypad. To withdraw your question, press the pound key.
spk00: Please stand by while we compile the Q&A roster.
spk01: Your first question comes from the line of Jeff Meacham with Bank of America.
spk09: Hey, guys. This is Alec on for Jeff. Thanks for taking our questions, and congrats on the progress so far this year. So my first question is on 314. Do you have a sense from your physician interactions what an acceptable frequency of rescue VEGF injections would be for clinical adoption? I mean, taking into account that Bayview, I think, is three months dosing, and FirstMav is up to four months. And I know it may be a bit premature considering 314 is just starting pivotal study, but I'd also be interested to hear your thoughts on how reimbursement discussions for gene therapies in wet AMD are evolving, and any color on how you think payers will approach this if, indeed, rescue injections are still required, even in a subset of patients. And then I have a follow-up.
spk06: Hi, Alec. Thanks for the question. Steve here. Yeah, we, of course, have our clinical investigators within our trials as well as our thought leaders in this space and other retina specialists that we've kept close contact with over the years. You mentioned other products that have come along and incrementally increased the durability of anti-VEGF treatment. there's still clearly a big unmet need that exists. And what we hear from investigators and also other retina specialists is if you can have a meaningful reduction in the treatment burden. So you don't have to actually completely obviate the need for any injections, though obviously we've seen that in a reasonable percentage of our patients. So really what we're targeting based on discussion with the retina community is a 50% reduction in anti-VETJET frequency, as well as potentially having 50% of patients needing absolutely no retreatment. That is a real home run for the retina community, both now and also compared to the incremental progress advancements that are occurring with some of the other treatments that are out there.
spk03: Yeah, Alec, and I think the second part of your question, you know, really relates to, you know, that one of those variables being sort of, you know, injection burden and the other being You know, obviously maintenance division and durability overall. You know, we've been really fortunate after we updated on three-year data from cohort three and one and a half year data with cohorts four and cohorts five at the beginning of the year. you know, just be able to integrate that into discussions that we are having as we sort of start our pre-commercial and commercial planning exercise. And I think what I can say is right now, you know, I think people are encouraged by what they're seeing. They're continuing to, you know, have a productive dialogue with us. And I think there's a lot of focus on, you know, not only the benefit that we bring to patients in terms of offsetting, you know, the current burden of treatment, but also looking at, you know, the reality of, you know, the treatment in not just the labeled paradigm, but certainly the real-world use paradigm. And that's where a one-time treatment of gene therapy really differentiates itself in terms of value, particularly with the data that we've seen in our cohort three out to three years with patients who have never received an injection. Thanks for the question.
spk01: Your next question comes from the line of Gina Wang with Barclays.
spk11: Thank you for taking my questions. Quite a lot of progress. I have a few questions regarding also the 314, the eight-year study. So since you already completed enrollment for cohort two, did you see any inflammation from patient in cohort two? Is the safety profile similar to cohort one? And my second question is regarding the cohort three. Can you remind us the antibody titer cutoff for cohort one and two? And what is the antibody titer threshold for cohort three? And then regarding the dose, why single injection of a 5E level? Is that because of a protein level or safety or convenience of administration?
spk06: Yeah. Hi, Gina. So we'll take these one by one. So On the inflammation question, so at the beginning of this year, we had updated based on the data that we had of C1, no inflammation, and also guided at the very same time that the next interim update that we would give would be Q3. And the reason for that is that we wanted to have a full six months a robust amount of data on both safety and efficacy. So we're not changing that guidance. What we can say is we did complete cohort two, and based on where we're at now, we were able to advance and expand the AVH study to include a third cohort with inclusion of patients who are positive for NABs So we feel good about the position we're in. Your question on single injection, why single injection, we have the ability with a higher concentration to be able to give a single injection. So in our discussions with investigators and others, not surprisingly, if you have a choice between a single injection or two injections, one injection would be preferred from a convenience standpoint. And again, based on where we've gone, we're very comfortable to be able to go with that higher concentration and a single injection in that cohort. The tighter question in terms of neutralizing antibodies, the reality is different assays will have different cutoffs, so it's somewhat arbitrary for if we were to give some dilution to you, what I can say is that we have experience with this from our subretinal study where, as you know, we don't have to exclude patients who have high titers to neutralizing antibodies. So in that study, you'll recall we actually included close to 60% of those patients actually had positive titers, so the threshold that we used with that assay, and that fits with what's in the literature. So we basically used that same threshold for this study with this assay.
spk03: Thanks, Gina.
spk01: Your next question comes from the line of Jibola Amusa with Chardon.
spk05: Hi, it's Jibola Amusa with Chardon. Thanks for taking my call. Just wondering if you had any thoughts with regards to the case of hypotony, penuviitis, and loss of vision from a competitor using intravitreal delivery. I know your program's different, but what are your thoughts on why it's sufficiently differentiated so the KOLs, maybe regulators, are less focused on the read-across? And then I have a follow-up.
spk06: Hi, Bola. As with any gene therapy, and I think even more so in ocular gene therapy, every program has, you have to look at the different variables that are relevant. And, you know, we can only say so much about another program, but that's a different vector, 7M8, and of course administered intravitrally in the setting of prophylactic steroids. where chronic inflammation requiring ongoing or repeat reactive steroids has been needed for beyond a year. And that has just not been something that has been seen with other gene therapies. So I think the chronic nature of that inflammation is very different from what's been seen with prior AAV2 or AAV8 gene therapy in subretinal delivery and even in intravitreal administration settings. So we do not see read-through, and although there's this unfortunate SUSAR case, the reality is in the backdrop of chronic inflammation. These are the negative sequelae from chronic inflammation So our view on this is the same as it's been before of why we picked our vector and our product and what we've seen preclinically and clinically where with SR administration, RGX314, we've not seen chronic inflammation and the transient inflammation has been consistent with a post-vitrectomy setting and with superchoroidal delivery preclinically, And what we've seen to date as well, we're very comfortable with what we've seen with our particular less immunogenic vector. And I think importantly, this route of administration where with intravitreal, we know there's anterior clearance of the vector and the potential to have transduction anteriorly. And then now with this particular program, unlike others, this chronic inflammation. So we see this as a very unique setting compared to certainly what we've characterized.
spk03: Thanks, Bola.
spk01: Your next question comes from the line of Manny Faruwar with Stableer Inc.
spk08: Yeah, it's Manny Faruwar from Stableer Inc. Thanks for taking the question, guys. So you talked a little about you know, what you've seen in previous studies, what's in the literature, and we've gone back and forth around the discussion around neutralizing antibodies. Oh, the name might perhaps overstate their impact, in this case, clinically for you guys, which is the purpose of COVID-3. Now you've had a little more experience in the clinic, subretinally, now with supracoroidal. What is your view on the prevalence of neutralizing antibodies in the real world, as opposed to in kind of historical literature that we've looked at, and how a successful COVID-3 affects the opportunity set by expanding into that population.
spk06: Hi, Manny. Thanks for the question. One of the favorable aspects, as we know, AAV8 preexisting neutralizing antibody high titers is less prevalent than, say, AAV2. So depending on the studies you look at and the thresholds 30 to 40% of patients will be positive for AAV8 neutralizing antibodies. We fortunately, for subretinal route of administration, can be totally agnostic to that, both as predicted based on the immunoprivileged status of the subretinal space, and we've actually shown that in our Phase I-II study where patients who did have positive NABs did just as well from a safety and efficacy standpoint in that trial. So there it's quite simple. The unknown is with suprachoroidal delivery, will that 30 to 40% of patients that are positive or have higher NAB titers, will that have any impact on the safety or efficacy of RGX314 via that route of administration? But that's why we decided to go stepwise with our supracoroidal delivery program, first looking in NAV negative patients in cohort one and two, and now being able to explore with the same dose, GC per eye, in patients who are NAV positive to really assess that question.
spk01: Your next question comes from the line of Esther Rajavalu with UBS.
spk02: Hey, guys. Thank you for taking my question. I just wanted to follow up on the altitude DME study. Where are you on enrollment, and is it tracking to the timeline you'd anticipated? And then I have another follow-up.
spk06: So, thanks, Esther. Our altitude study is in patients with advanced diabetic retinopathy. And it's actually in patients without DME, and that's intentional because with this in-office delivery approach, the ability to treat patients with sustained anti-VEGF gives the opportunity to prevent patients from developing site-threatening complications like DME or proliferative disease. We have previously guided and continue to guide that we'll have interim data by the end of the year, so in the second half of this year, so we're still on track.
spk01: As a reminder, to ask a question or go back into queue for a follow-up question, you may press star 1 at this time.
spk00: The next question comes from the line of Matthew Harrison with Morgan Stanley.
spk04: Hello, this is Kostason for Matthew. Thank you for taking my question. One question from us on 181. Could you provide some color on the trial hold and specifically how did the dose selection process in this program differ from your other programs and the How do you expect that trial hold to impact the timelines of the two CLN2 programs? Thank you.
spk06: Hi, Costa. So we received the clinical hold letter with comments and requests for more information regarding dose selection for the starting doses, as well as some specific technical aspects regarding administration You mentioned the relation to other programs. Each program gets looked at individually in terms of the overall preclinical package and assessment of an appropriate dose. So we're very excited about how far we've advanced with inter-cisternal delivery of AAV9 from our 121 and 111 programs, both in terms of safety, tolerability, and also proof of concept in terms of durable expression. So that's why we're advancing with RGX 181. But again, each program has its own aspects. We will give an update in the second half of this year so that we can evaluate the requests and the comments to decide on our next steps for 181.
spk01: Your next question comes from the line of Luca Issy with RBC.
spk10: Oh, perfect. Thanks for taking the questions. This is Lisa on for Luca, and congrats on all the progress made so far. Just wanted to ask about the super-coital program and your enrolling cohort three with patients with neutralizing antibodies. Just wondering if you are concerned about inflammation at all in this patient population, and if so, do you intend to offer steroids either on a prophylactic basis or as needed to patients? And a second question, we see in your ASGCT presentations, there's a poster suggesting exploration of intravitreal delivery with your AAV library in mice and non-human primates. excited to see the data here in a few days, but just curious if intravitreal delivery is something you intend to start exploring more aggressively for clinical development. Thank you.
spk06: Hi, Lisa. Steve here. I'll take the first part, and Ken can address the ASGCT rat of administration question. So, yeah, on C3, cohort 3 of AV8, just like Cohort 1 and 2, there is no prophylactic steroids either before RGX314 treatment or after. So we're excited to be able to expand into that. We do the study to see if NAB status would have an impact or not. Preclinically, we haven't seen inflammation yet. but of course we have to see in humans. But again, we have no prophylactic steroids in the study. Traditionally, people have thought of NABS as potentially impacting efficacy because of binding up your payload to some extent and less on the safety side, but Again, conservatively, we do the study to see, but again, we're quite comfortable going in without prophylactic steroids.
spk03: Yeah, and Lisa, on the second part of your question about looking at different routes of administration outside of what we're using clinically today, including intravitreal, I think we've been open with the fact that our research agenda is broad, and we look at all the possibilities for bringing our different product candidates depending on the disease and the target tissues forward preclinically in a robust way. We continue to, Olivier's group, some great science. I think we're going to be presenting next week about evaluation of different vector characterization, new types of vectors, and, you know, across the spectrum of route of administrations. But, you know, nothing has jumped out for us in terms of thinking any differently about how strongly we feel about subretinal being really the gold standard of approaches for targeting the retina with AAV. And that superchoroidal was the approach that we decided was best for in-office procedure, and that was after evaluating things like intrathecal as well as, frankly, other device approaches as well for the placement of AAV in the back of the eye. Always like to show off our good science and our scientists, but no plans to move intravitreal into the clinic anytime soon.
spk01: There are no further questions, and I will now turn the call back over to Mr. Ken Mills for any closing remarks.
spk03: Thank you, Operator, and thanks, everyone, for joining us today. We've had a good first quarter of the year. Look forward to continue to execute against our plan and our mission to progress the curative potential of AAV gene therapy for patients. So thanks. Look forward for further updates, and have a great night.
spk01: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation, and you may now disconnect.
Disclaimer