Selecta Biosciences, Inc.

Good morning and thank you for joining the Selective Biosciences first quarter 2023 earnings call. At this time, all participants are in a listen-only mode. Following management's remarks, we will hold a question and answer session. At that time, lines will be open for you. If anyone should require operator assistance, please press star then zero on your touch-tone phone. I would now like to turn the call over to Blaine Davis, Chief Financial Officer at Selecta. Please go ahead.

Thank you, and good morning, everyone. Welcome to our first quarter 2023 financial results and business update conference call. The press release reporting our financial results is available in the investor and media section of Selecta's website at www.selectabio.com. and in our quarterly report on Form 10-Q for the quarter ended March 31st, 2023, which was filed earlier this morning with the Securities and Exchange Commission of the SEC. Joining me on today's call are Karsten Brunn, President and Chief Executive Officer, Kay Kishimoto, Chief Scientific Officer, and Peter Traber, our Chief Medical Officer. During today's call, we will be making certain forward-looking statements, including, without limitation, statements about the potential safety, efficacy, and regulatory and clinical progress of our product candidates, our financial projections, and our future expectations, plans, partnerships, and prospects. These statements are subject to various risks that are described in the filings made with the SEC, including our most recent annual report on Form 10-K and quarterly report on Form 10-Q. You are cautioned not to place undue reliance on these forward-looking statements, which speak only, as of today, May 4, 2023, and selected disclaims any obligation to update such statements, except as required by law, even if management's views changed. With that, let me turn it over to Karsten.

Good morning. I appreciate everyone taking the time to join us today. The first quarter of 2023 was marked by a significant milestone with the announcement of positive results from two Phase III studies of SEL212 in chronic factory gout, Resolve 1 and 2, both of which met their primary endpoints. As a reminder, SEL212 is a combination drug product candidate consisting of two components. The first component is bagatricase, a potent enzyme that has been observed to reduce serum uric in refractory gout patients who continue to have serious disease symptoms such as debilitating joint pain and disfiguring tissue deposits of uric called tophine. The second component of the drug candidate is mTOR, which is our nanoencapsulated formulation of rapamycin that is designed to condition the immune system to reduce antibody formation to drugs that are administered at the same time. The proposed mechanism of interaction is the induction of immune tolerance rather than immune suppression, as with other commonly used drugs. Resolve 1 and 2 were identically designed, randomized, double-blind placebo-controlled trials in patients with gout refractory to conventional therapy. Patients were evenly randomized across three treatment arms, placebo, or one of two doses of SEL212, 0.15 mgs per gig, or 0.1 mgs per gig. Each arm received their respective intervention as a single treatment every 28 days. DISSOLVE-1 randomized and dosed a total of 112 subjects in the US, and DISSOLVE-2 randomized and dosed a total of 153 subjects globally. DISSOLVE-1 met its primary endpoint, with 56% of patients receiving monthly doses of SEL212 at 0.15 mgs per gig, achieving a response which was defined as achievement and maintenance of reduction in serum urate below 6 milligrams per deciliter for at least 80% of the time during month six. Resolve2 also met its primary endpoint, with 47% of patients receiving monthly doses of SEL212 at 0.15 mgs per gig, achieving a response. In patients 50 years of age or older, the response rate of the 0.15 mixed prokip dose was 65% in the U.S. study and 48% in the global study. We're also very encouraged by the safety profile of SEL212 observed in the trials. In the U.S. study, Seventy-five percent of subjects who completed six months of therapy continued their response through 12 months with no infusion reactions and no new safety signals. The infusion reaction incidence was 3.4 percent in the high-dose group. In contrast to other urine-lowering therapies, SEL212 did not increase gall-care rates compared to placebo. We're very excited by these results. which support that SEL212 could potentially serve as a meaningful new therapeutic option, notably with a convenient once-monthly dosing schedule for patients suffering from chronic refractory gout. Based on this data, our partner Sobe is preparing for a regulatory submission and potential commercialization in the U.S. We've long believed in the potential of our approach and believe this data service validation for mTOR technology, which to our knowledge now represents the only immune tolerance platform with positive phase three data. We expect to share full data from these trials at a scientific conference later this year. With these trials successfully completed and the BLA filing by SOBE on track for the first half of 2024, we now have the opportunity to decide where to take our mTOR platform next. We have always appreciated multiple potential applications for our immune tolerance approach to solve the toughest challenges associated with unwanted immunogenicity, from improving the tolerability profile of existing drugs, as we saw with the SEL212 program, to expanding and enabling the applications for gene therapy, and restoring self-tolerance in autoimmune disease. However, in the current market environment, we recognize that we need to be especially thoughtful about our capital allocation and clinical development strategy. Together with our board, we recently conducted a strategic review to focus our resources on key programs where we believe we have the highest potential to succeed. We believe that these steps, which I'll now walk you through, will extend our cash runway into the second half of 2025. First, we plan to prioritize the development of mTOR-L for diseases of the liver. mTOR-L, which combines our proprietary Treg-selective IL-2 candidate with mTOR, represents the evolution of our precision immune tolerance platform and has the potential to further enhance the magnitude and duration of immune tolerance in patients treated for autoimmune diseases. Specifically, it is designed to restore natural immune system balance for induction and expansion of regulatory T cells in vivo versus the standard approach of broad immune suppression, which is associated with side effects and leaves patients vulnerable to serious infection and malignancies. We remain on track to initiate IED-enabling studies for mTRL in 2023. Our initial focus will be on diseases of the liver, and in parallel, we continue to assess additional autoimmune indications for future development. We also intend to continue to support our existing partnerships and prioritize the work under these agreements. These include our collaborations with SOBI for SEL 212 and with Astellas for Zorg. For the SEL 212 program, we are continuing to work with SOBI to prepare the BLA filing, which is expected in the first half of 2024. As a reminder, under our agreement with SOBI, they are responsible for regulatory and commercial activities in all markets outside of China. Selecta is responsible for inter-manufacturing and we are entitled to receive up to $630 million in milestone payments, as well as tiered double-digit royalties on net sales. We're also advancing our partnership with Astellas for Zork, our next-generation immunoglobulin G or IgG protease. Zork will be developed to use with AT845, are still an investigational AV-based therapy for the treatment of late-onset Pompe disease in adults. The main IgG protease in development is derived from common human pathogens, and as a result, there's high prevalence of pre-existing antibodies against these proteases that can restrict their utility. Zork is differentiated by its low cross-reactivity to pre-existing antibodies in human serums. Many patients are currently ineligible for clinical trials with investigational AAV gene therapies due to the presence of naturally occurring antibodies against AAV capsids. Due to selective protease activity against anti-AAV NAVs, we believe SORC has the potential to expand access to life-changing gene therapies by addressing pre-existing immunity to AAVs. With respect to the remainder of our gene therapy assets, we have paused further development and are exploring alternative ways to advance these programs through potential partnerships. This includes pausing enrollment of our ongoing Phase I-II reimagined study of SEL302, our AV gene therapy combined with mTOR for the treatment of malignanic acidemia, or MMA. We've always intended to partner our gene therapy programs, and we believe pausing the reimagined trial will allow any potential partners to help inform the clinical and regulatory path forward for this program, while also preserving selectors' cash resources in the near term. In connection with this capital prioritization initiative, we've undertaken the difficult decision to reduce our headcount by approximately 25% in order to align our workforce with our priorities and streamline our operations. I'd like to express my sincere gratitude to all of those who were impacted by this initiative. I'm confident that Selecta is well positioned to execute on the priorities I've outlined today. we continue to focus on leveraging our intro platform to bring new therapies to patients suffering from autoimmune diseases. With that, I'll turn it over to Blaine for a review of the financial results.