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spk08: Good day and thank you for standing by. Welcome to Regenexx BIO's third quarter 2023 earnings conference call. At this time all participants are in a listen-only mode. After the speaker's presentation there will be a question and answer session. To ask a question during the session you will need to press star 1 1 on your touch-tone telephone. You will then hear an automated message advising your hand is raised. To withdraw your question please press star 1 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your host today, Patrick Christmas, Chief Legal Officer. Please go ahead.
spk09: Good afternoon, and thank you for joining us today. Earlier this afternoon, Regenexx Bio released financial and operating results for the third quarter ended September 30, 2023. The press release 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 section of Regenexx BIOS annual report on Form 10-K for the full year ended December 31st, 2022, and comparable risk factors in sections of Regenexx BIOS quarterly reports on Form 10-Q, which are on file with the Securities and Exchange Commission and available on the SEC's website. Any information we provide on this conference call is being provided only as of the date of this call, November 8th, 2023, 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 in webcast. In addition, any unaudited or pro forma financial information that may be provided is preliminary and does not purport to project financial positions or operating results of the company. Actual results may differ materially. I would now like to turn the call over to Ken Mills, CEO of Regenexx Bio. Ken?
spk06: Thank you, Patrick. Good afternoon, everyone, and thanks for joining us. I'm pleased to begin today's call with an explanation of our updated strategic plans. Dr. Steve Pakola, our Chief Medical Officer, will then provide an update on our clinical programs, and Vita Sista, our Chief Financial Officer, will provide an overview of financial results for the third quarter ended September 30th, 2023. At the end of the call, we will be opening up the line for questions. At Regenexx Bio, our mission is to improve lives through the curative potential of gene therapy. Earlier today, we began work on a pipeline prioritization and corporate restructuring plan that will enable Regenexx Bio to focus our capabilities and resources on large commercial opportunities where product candidates are differentiated, can be expedited, and support meaningful value generation soon and for the long term. I want to be clear about what this sharpened focus means moving forward. Our highest priority programs are ADBV-RGX314 program for the treatment of wet age-related macular degeneration and diabetic retinopathy being developed in collaboration with AbbVie, RGX202 for the treatment of Duchenne, and RGX121 for the treatment of MPS2 or Hunter syndrome. Now, in the last two months, we've experienced exciting progress from each of these programs. We've reported positive clinical data from investigational treatments from diabetic retinopathy and Duchenne, and we've held a very encouraging RMAT meeting with the FDA about expediting the BLA for the treatment for MPS II. These milestones demonstrate how our science is supporting avenues to accelerate the development of new gene therapies. And today, we're following that encouraging data and announcing updated strategic plans for Regenexx Bio. We believe that there's a multi-billion dollar potential for RGX314 as a single injection treatment to become the first in class gene therapy for wet AMD and the standard of care to treat and prevent the progression of diabetic retinopathy. Initial efficacy data from patients treated with RGX202 is enabling us to accelerate this program. Duchenne is a market where there is a large unmet need for new therapies, and that is capable of supporting multiple gene therapies, and we believe RGX202 has unique differentiating features that support its potential to be a best-in-class product. During a very constructive RMAT meeting with the FDA just recently in October, we received encouraging feedback and confirmed alignment with the FDA on key elements of an expedited DLA. So we remain on track to support a BLA filing in 2024 using the accelerated approval pathway. RGX121 would be the first gene therapy treatment for MPS2. In today's challenging market, the ability to create value quickly and efficiently is critical. Importantly, these restructuring decisions extends our cash runway much deeper into 2025. allowing us to progress our pipeline to a number of key inflection points. These would include initiating and dosing the first pivotal trials for 314 using supracroidal delivery, enrolling the pivotal program for our RGX202 program, and completing performance qualification lots to support a planned BLA for RGX202, and also achieving the BLA approval for RGX121 and MPS2. Now, it's worth noting that successfully achieving certain of these milestones between now and then would also trigger hundreds of millions of additional funds, such as milestone payments from our collaboration partner, AbbVie, for initiating superchoroidal pivotal trials, which these milestones represent a meaningful portion of the over $560 million in development milestones eligible through this partnership for us. and the potential receipt of a pediatric review voucher for approval of RGX121. Generally, we've been observing PRV sales are resulting in nearly $100 million to BLA sponsors at the time of receipt. So, our updated strategic plans are intended to generate significant value for shareholders as we ensure resources are allocated to our most valuable assets. To be able to accelerate the development of these assets, and to extend our operational runway in order to achieve even more milestones that can unlock value. These additional non-dilutive sources that I just highlighted, for instance, are not in our current runway guidance, and if received, would allow us to bridge to additional value-creating milestones, such as more product approvals and potentially to profitability. Now I'll turn the call over to Steve so he can review some of our clinical progress and guidance for the prioritized programs in greater detail. Steve?
spk10: Thank you, Ken. I'll begin with 314, which is being developed in collaboration with AbbVie to treat wet AMD and diabetic retinopathy via subretinal and suprachoroidal routes of administration. 314 utilizes our NAVAVA vector to deliver a gene encoding of therapeutic antibody fragment to inhibit VEGF. The anti-VEGF market opportunity is poised to grow significantly as the population ages. 314 for the treatment of wet AMD via subretinal delivery is being evaluated in two ongoing pivotal trials, Atmosphere and Ascent, which are expected to enroll a total of 1,200 patients in the U.S., Europe, and Japan, supporting the global development of the program. with anticipated global regulatory submissions in late 2025 through the first half of 2026. We also have two ongoing Phase II trials that fall under our collaboration with AbbVie, assessing in-office supracoroidal delivery of 314 for treatment of wet AMD in the AV8 study and diabetic retinopathy, or DR, in the altitude studies. AB8 is an active controlled dose escalation trial evaluating 314 for the treatment of wet AMD. We most recently presented safety data in July from cohort 6 evaluating the dose level 3 that included short course prophylactic ocular steroids following administration of 314. The initial data presented continues to support the safety profile of 314 and highlighted the inclusion of short-course prophylactic steroid eye drops, which resulted in zero cases of intraocular inflammation. We plan to present full six-month results from cohorts five and six at the Hawaiian Eye and Retina Meeting in the beginning of 2024. Altitude is an observation-controlled dose escalation study of 314, supercoital delivery for the treatment of DR. We're very excited about the opportunity in DR, given the size of the market, which exceeds that of even wet AMD, and because we believe this patient population can benefit the most from a potential one-time gene therapy. At AAO this past weekend, and on a call with retina physicians on Monday, we we presented positive data from dose levels one and two cohorts at one year. Patients at those dose levels did not receive prophylactic steroids before or after 314 administration. 314 was reported to be well-tolerated at both dose levels. One time in-office 314 injection demonstrated clinically meaningful improvements in disease severity with reductions in vision-threatening events Importantly, 100% of the patients with baseline MPDR treated with dose level 2 achieved stable to improved disease severity. Moreover, dose level 2 in these patients reduced the risk of visioning-threatening events by 89%. We are encouraged by this data and the potential of a one-time in-office injection for patients with diabetic retinopathy. Moving now to RGX202 for the treatment of Duchenne. RGX202 is a potential one-time gene therapy for the treatment of Duchenne being developed as a highly differentiated product designed to deliver a transgene for a novel microdystrophin that includes the functional elements of the C-terminal domain found in naturally occurring dystrophin. RGX202 is designed to support the delivery and targeted gene expression throughout skeletal and heart muscle using our NAVAV8 vector and a well-characterized muscle-specific promoter. Our AAV8 capsid also represents an alternative for boys who may not be eligible for other AAV-mediated microdistrophin therapies due to the presence of preexisting neutralizing antibodies. At World Muscle held in October, we shared interim clinical data from the Phase I-II Affinity Duchenne trial, Initial results from the first two patients for whom results were available showed robust microdystrophin expression and appropriate localization to muscle cell membrane. In the 4.4-year-old patient, microdystrophin expression was measured to be 38.8% compared to control. A reduction from baseline in serum creatinine kinase, or CK, levels of 43% was observed, supporting evidence of clinical improvement. The 10.6-year-old patient had microdistrophin expression measurements of 11.1% compared to control and a reduction from baseline in serum CK levels of 44%. Microdistrophin expression was measured by Western blot with comparable results observed when measured by the LC-MS method. Overall, the data showed that RGX202 was well-tolerated with no drug-related serious adverse events in all three patients treated as of the time the data were presented. As Ken shared earlier, we recently held an RMAT meeting with the FDA for RGX121 for treatment of MPS2. I'm pleased to share that this was a very positive and constructive discussion. we were able to align with the FDA on our manufacturing strategy, the adequacy of our safety database, and confirmatory study design. Patients treated with RGX121 continue to do well on follow-up, and we expect to share top-line data from the Phase 1, 2, 3 campsite trial in the first quarter of 2024. While we are no longer moving forward with our RGX111, 181, and 381 rare neurodegenerative programs, we believe in the potential of these therapies and are committed to finding strategic alternatives for them, including potential partners or leveraging public-private partnerships. So to conclude, we have made significant progress with data updates and trial progression across all programs in our pipeline as we continue working to advance our prioritized programs. Lastly, I'd like to thank the patients, families, clinicians, and patient advocacy representatives who have been involved in and supported all of these trials. And with that, I turn the call over to Vit to review our financial guidance.
spk05: Thank you, Steve. Regenexx file ended the quarter on September 30th, 2023 with cash, cash equivalents and marketable securities totaling $365 million compared to $565 million as of December 31st, 2022. The decrease was primarily driven by cash used to fund operating activities during the nine months ended September 30th, 2023. R&D expenses were $58 million for the third quarter of 2023, compared to $63 million for the third quarter of 2022. The decrease was primarily attributable to an increase in development cost reimbursement from AbbVie under our eye care collaboration. With a strategic reprioritization plan and 15% workforce reduction announced earlier today, we expect to save at least $100 million over the next two years. We now expect the balance in cash, cash equivalents, and marketable securities of $365 million as of September 30th 2023 to fund our operations into the second half of 2025. This cash runway guidance is based on the company's current operational plans and excludes the impact of any payments that may be received from AbbVie upon the achievement of development or commercial milestones under our 314 collaboration. With that, I will turn the call back to Ken to provide final thoughts. Ken?
spk06: Thanks, Sid. As we look ahead, our extended cash runway will now enable us to reach additional meaningful value-driving milestones for our programs, which I've outlined. We also want to bring focus to the fact that we have a lot of important near-term value-driving catalysts expected at medical conferences upcoming in the first half of 2024. This would include new six-month data from recently dosed cohorts, of the AV8 trial for wet AMD superchoroidal, additional dose level 1 and initial dose level 2 data from the Infinity Duchenne trial, and top-line data from the pivotal phase 3 campsite trial. I want to reiterate that our updated strategic plans are intended to generate significant value for our shareholders as we assure resources are allocated to our most valuable assets. To accelerating the development of these assets, into extending our operational runway and to achieve more milestones that can unlock additional value, including access to non-dilutive capital that we talked about from the AbbVie partnership or other sources like anticipated sale of a PRV that could all of which extend our runway even further. With a renewed sense of focus, I expect that we'll continue to perform at a high level as we execute on our mission And as a result of these updated strategic plans announced and implemented today, we believe Regenexx Bio is well positioned for long-term success. With that, I think we can now turn the call over for questions. Operator?
spk08: As a reminder, if you'd like to ask a question at this time, please press star 1 1 on your touchtone telephone and wait for your name to be announced. To withdraw your question, please press star 1 1 again. In the interest of time, we ask that you limit yourself to one question and rejoin the queue for any additional questions. Our first question will come from the line of Gina Wang with Barclays.
spk01: Thank you for taking my questions. Okay, I will follow just one question rule. I know there are tons of questions you can ask. So one question I have is, you know, what you can learn from Sarepta's experience in terms of a clinical development for the DMD program and regarding primary endpoints selection and also efficacy bar?
spk06: Thanks, Gina. This is a good question. Obviously, we've Ourselves have been engaged in dialogue with regulators about RGX202, and especially as we've been able to emerge with our own clinical data, it's been an important focus for us since World Muscle Society to think about how to accelerate the program. And we've given guidance next year that we believe we have the ability to both dose select and start a pivotal phase program I think that what we're seeing in the landscape of micro dystrophin continues to be encouraging that it's clearly helping boys. I think it's something that we viewed since we entered the spaces beyond a sort of increment, but something that in certain boys certainly is having more response than in others. We believe that the C-terminal domain hypothesis for RGX202 is a meaningful differentiator, and I think where it can be an important differentiator is on clinical function, long-term clinical function. So, you know, we're very much engaged about how to design trials to accelerate and still continue to borrow the endorsement and the use of microdystrophin as a surrogate endpoint to support accelerated approval. Think about how to further support that in a pivotal setting and even in a commercial setting with respect to looking at long-term function. So I think that, you know, the domains that are part of the, you know, scoring that's used in Duchenne boys, I think some people are starting to recognize both at the regular level and at the clinical level that some of these domains are more reliable in terms of prognostic indicators for improvement. We're very much dialed into that and think that having an opportunity to have our own direct dialogue about our data and seeing the evolution of what's happening on the regulatory landscape actually puts us in the best position to start executing next year on a really great package.
spk08: Thank you. Our next question comes from the line of Dane Leon with Raymond James.
spk11: Thanks for taking the questions. One, for me, I'm glad I didn't have to be the DMV person. There's hope that obviously altitude and ABA can support moving into pivotal studies during 2024. One, could you comment on the potential for that? And then two, there's been a lot of debate in the shifting regulatory landscape on the whether the way you've run the subretinal study can actually be used for further studies of gene therapies. I mean, said differently, it seems like the FDA is shying away from an ability to use a sham control in that may cause problems for longer-acting NIVF therapies in controlled studies going forward. Thank you.
spk06: Thanks, Dana. I'll probably let Steve address the comment about the regulatory landscape. I guess with respect to altitude and aviate, I think what's been an important part of the update today with respect to the strategic plan is that the extension of the runway for Regenexx Bio, I think, for us, increases the likelihood of current capital supporting the transition of supercaroidal into pivotal phase and achieving some of these milestone value events that can be unlocked. We have half a billion dollars of potential development milestones over, and a large proportion of that is associated with transition of super-choroidal delivery for wet AMD and DR occurring and patient dosing beginning there. So, you know, we view that the data that's starting to come off that we're particularly excited about right now with respect to diabetic retinopathy is really shaping up for supportive decisions for that transition. And we have additional data coming up just early in 2024 with respect to the 88 study. So I think, you know, we're I think as confident as we've ever been about the science that we're seeing and the likelihood of these events occurring in the future for us, I think are improved, particularly with respect to the updated strategic plan and the extension of the runway that we have to focus on those events. Steve, do you want to pick up the regulatory part?
spk10: Sure. Hi, Dane. Thanks for the question. Yeah. Interestingly, or maybe not surprisingly, this was a discussion point at AAO this past weekend and also some of the ancillary meetings that were held there, the issue of sham control. And I think there's a couple key points here that a big component of the FDA's view on the challenges of masking with a sham control relate to intravitreal injection. And that's due to the fact that there's a general belief within the FDA in particular that getting an intravitreal injection, the patient can actually sense that they're getting a real intraocular injection and may even be able to see something in the visual axis to suggest that there's actually been a fluid injection. So for our supracoroidal programs, that's not an issue because we're not actually injecting into the eye. And we've had regulatory interactions with where we're aligned on an approach for giving a quote unquote sham injection that preserves masking. The other aspect that's come up from the FDA's discussion of this are there's other ways to address this such as considering having two active arms of different dose level of your given drug that at least then preserve the masking between active arms. So there's several approaches that companies can consider, but fortunately for us, the fact that we're not an intravitreal injection really shields us from this issue.
spk06: Thanks for the question, Dane. I guess the level of detail that Steve is giving about thought that's going into the application of supercoital delivery and later stage trials is, I think, additional evidence of the work that's going on inside the company and in the partnership to support these types of things.
spk08: Our next question comes from the line of Vikram Parohit with Morgan Stanley.
spk12: Hi, everyone. This is Gaspol on Fort Reckham. We have one question, and For potential partnerships for IGX11, 181, and 281, do you have a timeline in mind for establishing a partnership? What would you be looking for through a partnership outside of TACO? Thank you.
spk06: Gospel, the strategic update plans today are really focused on assuring and sourcing capital for RGX 314, RGX 202, and RGX 121 to achieve what we think is the strongest potential value that we have in the pipeline today. With respect to 111 and other things, it's going to be a discontinuation of any clinical development work and an exercise that will result in looking for opportunities in the short term for partnering, but it won't become something that will be viewed as a meaningful contribution to the operating plans going forward.
spk12: Thank you very much. Thanks.
spk08: Our next question comes from the line of Alex Dranahan with Bank of America.
spk14: Hey, guys. Thanks for taking our questions. Just one from me. Could you maybe expand upon the positive FDA interactions you've had after the update for 202 dose level 1? And did you get any input on the pivotal study design as well, particularly as it relates to the different age cohorts? Thanks.
spk06: Yeah, thanks for the question, Alec. I think that, you know, it's been a very dynamic process for us with respect to contact with the FDA on our GX202. And that's because of the landscape of what's happening in microdistricts and in general. You know, we want to understand how FDA is sort of thinking about our data and other data sets and the evolution of things with respect to microdystrophin as a class. I think for us, you know, incredible opportunity to, you know, early on at dose level one, talk about safety and microdystrophin expression and, you know, sort of the pathway to making a dose selection. I think there's also a lot of interplay that we see on, let's say, for instance, manufacturing, Alec, right? We're working through basically DLA readiness for our manufacturing facility and a manufacturing process with 121. That is also something that is a path for us with respect to 202. And so, you know, we're, I mean, this is for us between an RMAT meeting and interaction around 121 and between the opportunity to, you know, sort of update, you know, leadership and people at FDA with additional information and data about RGX202 and also get feedback about, you know, what is going on with respect to the landscape of micro dystrophin in general. it's a really rich time. I think that we're setting us up well for thinking about strategies and operational plans that are about acceleration. And I think, you know, the best example of that was, you know, just being able to modify the clinical protocol to reduce the number of patients from three to two before moving into a parallel enrollment scenario with you know, the dose levels that we're at. I think, you know, that was something that was informed by data. It was informed by safety. It was informed by, you know, updates to our dossier with respect to the IND. And having alignment with FDA on that, I think, was a meaningful signal.
spk14: Great. Thanks, Ken. Very helpful.
spk08: Our next question comes from the line of Ellie Merle with UBS.
spk07: Hi, this is Sarah on for Ellie. Thanks so much for taking our question. Just quickly on potential milestones from AbbVie. I know they're not currently in your guidance. Can you remind us what the milestone would be for moving into pivotal studies with suprachoroidal and then any color around the timing of other near-term milestones there that we should be thinking about? Thanks.
spk06: Sure, Sarah. Thanks for the question. Yeah, we've disclosed that we have over 560 million of eligible development milestones associated with the partnership, and a large proportion of those milestones are associated with the suprachoroidal programs transitioning into pivotal phase. So, you know, I think those are things that we view with this change in guidance and runway guidance are you know, increasing likelihood for them to occur across the operational runway that we have now. And, you know, obviously they've been answering questions already about, you know, specific timing or things that have been going into how that decision made what i can say about um you know some of the updates that we've given recently like with respect to the exciting data that we've seen from diabetic retinopathy and some of the thinking that has been going on within the partnership is that we really think that the data sets are starting to mature now to a point where those types of decisions can be made soon so We have the Hawaiian Eye data update coming also in the beginning of next year. These are things that now with a runway guidance into the second half of 2025, I think are achievable. And again, I tried to frame this in the overview. I think these are opportunities to sort of bridge to obviously, you know, we're talking about hundreds of millions of dollars in milestones here that can occur that can bridge the company even further into years 26, 27, for instance, And those start to be years now where we're talking about, you know, BLA filings of the subretinal program and, you know, potential if you think about acceleration for our Duchenne program, additional product launches. So we really like how the strategic update plan here and the interplay of some of these milestones are coming together to think about, you know, effectively having opportunities to capitalize ourselves with things that are currently assets of the company, all the way to a whole row of product approvals and potentially even profitability.
spk13: Great, thanks. Thanks, Sarah.
spk08: Our next question comes from the line of Luca Isi with RBC Capital Markets.
spk00: Oh good, thanks for taking our questions. Just maybe one, this is Lisa on for Luca, just maybe one on DMD. We know the affinity trial is enrolling patients up to 11 years of age. However, from the Embark data, it appeared harder to discern a benefit in older children versus younger children. So just wondering what gives you confidence that 202 will show a benefit in older children? because especially when it appeared that the western blot suggested that there was higher expression in the younger patient. Any calls there would be helpful. Thanks.
spk06: Yeah, thanks, Lisa. I mean, you know, look, we have an older patient enrolled already, and so, you know, I certainly acknowledge the remark about the differences that we've seen in microdystrophin expression, but, you know, we're going to be able to see sort of unfold in front of us and continue to be able to update on the progress of that patient. I think, you know, the meaningful differentiator here is the C-terminal domain design of our expression cassette. We just think that scientifically from a biological plausibility perspective, amounts of micro dystrophin that are expressed with the C-terminal domain are going to translate into improved function. And I think that gives RGX202 a better and as good as any other treatment, but really better than any other treatment that's spring forward. to date to show improvement in older boys. So we continue to view that the opportunity to enroll in that age range is something that's going to be important for our profile clinically and ultimately commercially. And, you know, we do think that there's strong validation in the four to five and, you know, the emergence of more data in six to seven is also sort of helping inform the benefits there. But we really feel strongly that the C-terminal domain, the functionality associated with it, what we've seen from our preclinical data and the early evidence that we've reported on and will continue to update on in an older patient, I think is, you know, something that we're excited about for that age range.
spk13: Thanks, Lisa.
spk08: Our next question comes from the line of Brian Scorney with Baird.
spk04: Hey, good afternoon, everyone. Thanks for taking the question. It just sounds like you're getting near a decision point on pivotal programs with the super-choroidal administration. So just wondering what's sort of the rate-limiting factor here in terms of ABA and altitude to kind of make a decision you really need like one year data from cohort six and cohorts four and five to trigger that point. And you've been talking very enthusiastically about diabetic retinopathy. Do you see sort of the pivotal program moving forward in DR and what AMD at the same time? Or will one of these indications potentially move forward earlier than the other?
spk06: Yeah, thanks for the question, Brian. I think, you know, again, like, we have a lot of enthusiasm about the recent data update, you know, and there's a recency effect there. Of course, the AAO was, you know, just a few days ago, and I think the new DR data has, you know, now been communicated and, you know, has been a focus for us in terms of communication in the last few days, you know, with respect. And then we have 88 update coming, you know, only in January. I think our vision has been from the beginning that, you know, you know, wet AMD subretinal, wet AMD supercoroidal, wet AMD for diabetic retinopathy, you know, they are, they're obviously all interrelated because of the same pharmacological agent, but, you know, each one of them, because of the difference in delivery or in the last case in the difference with respect to the potential market and the sort of evidence that's needed clinically to think about how to transition in a pivotal, you know, they're all, they're all slightly different paths, but, but they derive from the same consideration and variables that we would look at for any kind of advancement of a program like this, almost independent of modality into pivotal phase. I always like to point out that we are the company that is the first to have transitioned into a pivotal phase program with respect to an AAV gene therapy in a large market indication in wet AMD. And now we also have the strength and sort of the robust you know, decision-making to sort of bring additional variables into the equation with us, with AbbVie, you know, yeah, the decisions, though, are going to be different and separate between, you know, the supracoroidal wet AMD and the supracoroidal diabetic retinopathy. I mean, they rely on different data sets and different inputs, so it's certainly possible that, you know, they could happen at the same time, but it's as likely that those decisions are independent variables and would come forward. But I think the message today is how strongly we feel about reinforcing our excitement about the value of RGX314 And the opportunity to continue to realize that value and continue to make that focused investment with an extended runway here, I think really improves the probability of success of meeting some of these milestones in terms of transitioning the pivotal. Therefore, realizing some of these monetary milestones that are associated with the partnership in a way that is improved, right, just with that extended runway alone. But at the same time, we've also started to become, you know, really encouraged about the newer and longer-term data that's been coming out of the investments that have been made in things like aviate and altitude. So, you know, excited for things to come here moving into 2024. Thanks, Tim.
spk13: Thanks, Brian.
spk08: As a reminder, that is star one one to ask a question. Our next question comes from the line of Annabelle Samimi with Stiefel.
spk02: Hi, this is Jack on for Annabelle. Thanks for taking our question. So for the subretinal formulation of 314 in wet AMD, what's the right amount of follow-up time that FDA is looking for to establish safety and durability there? And what might the value proposition be here for the payers when you think of pricing this, considering that many of these patients are elderly and may not see the maximal benefit of a long-term treatment?
spk13: Eve, you want to take the regulatory part here?
spk10: Sure. Hi, Jack. Yeah, so taking the first part of your question, the duration from a regulatory standpoint as far as follow-up, We've gotten very clear feedback back as far as the end of Phase 2 meeting that allowed us to finalize the pivotal program that really is a class requirement having one-year safety and efficacy data, which also was somewhat informed by efficacy but predominantly by gene therapy aspect. We'll also have longer-term follow-up. from a lot of the patients from our pretty sizable safety database. And we actually already have from our Phase I-II database out through four years good safety and also good durability from an efficacy standpoint. So I think both based on other programs, even outside the eye that have shown durability out, even beyond a dozen years, for example, in hemophilia with the same serotype AAV8. And then now our own data gives us a lot of confidence on duration of efficacy. And I think that's obviously going to inform the value proposition, having durable efficacy evidence. And the value proposition, importantly, is more than just decreasing treatment burden and visit burden, really the big unmet need here is by breaking the barrier of the treatment burden, it ensures that these patients are going to have the ongoing sustained anti-VEGF activity that they need to prevent vision-threatening complications. that they simply aren't getting now, both in terms of wet AMD and diabetic retinopathy because of the treatment burden. So there's various layers of the value proposition, treatment burden, visit burden, and actual vision and complication outcomes.
spk06: Yeah, and I would add, Jack, that I think it's pretty well established by a lot of different sources that the cost related to blindness that's associated with wet AMD is on an annual basis something that can be in excess of $100,000 a year, and that's separated from the cost of drugs. So when we think about a wet AMD patient, you're talking about the life expectancy might be on the order of 10 to 15 years. I think in the real world, there's a need there for You know, recovering the vision that is being lost because people aren't staying compliant with the existing treatments and the cost and the obviously the effect that that's having on a productivity basis. with respect to, you know, the effect that it has on the families of those patients as well is significant. And so durability is everything. I like how Steve brought up the, you know, four-year evidence, which just continues to grow. It's there as a backstop for things on a regulatory basis, but I think also important in the commercial setting.
spk13: Great. Thanks so much.
spk08: Our next question comes from the line of Manny Ferruhar with Learing Partners.
spk03: Hey, guys. Thanks for taking the question. Obviously, there's never fun decisions to make, but obviously the right thing to do. You've outlined in the press release a little bit of detail around about $100 million of savings, et cetera, a couple years. Could you give us a sense of where that tempo is? Should we expect that to drop in immediately starting in one queue and be fairly linear on a quarterly basis? Or is it something that's a little more front loaded, a little more back loaded over the first couple years? And beyond that, how should we think about, you know, post that two years period, what is the implication on OpEx longer term?
spk06: Do you want to chime in on this one?
spk05: Sure. Thanks, Manny. I think that as you're thinking about that 100 million, it would be not 100% linear as much as it slowly gets bled into our operating plan going forward. Some of it will be a little bit lumpy as we start to discontinue programs and obviously with that 15% headcount reduction that's a little bit more front end loaded. And then as we think about OpEx, I would start to be looking at the models and start to, you know, determine what's the appropriate kind of run rate. What I've seen looking at different analyst models is their estimates for OpEx seem to be a lot higher than what we're tracking against. And I think, you know, coming out of this quarter into next year, you'll have a better idea of what the run rate is on an OpEx perspective. And then on the other side of 2025, obviously, with the non-dilutive capital that we're talking about and, you know, the opportunity that possibly the markets will unlock finally. You know, I think post-2025, we're going to still maintain our discipline as it relates to OpEx, but we'll also have to start, you know, moving programs forward as they become commercial opportunities. Then also, you know, start to think about our pipeline going forward.
spk03: That's helpful, thanks. I'll hop off.
spk08: Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.
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