Orchard Therapeutics plc (NASDAQ:ORTX) Q4 2022 Earnings Call Transcript

Orchard Therapeutics plc (NASDAQ:ORTX) Q4 2022 Earnings Call Transcript March 10, 2023

Bobby Gaspar : Hello, everyone. I’m Bobby Gaspar, CEO and Co-Founder of Orchard. I’m especially delighted to host our fourth quarter 2022 conference call, where we have a number of important corporate and regulatory updates, along with providing our full financial results. Before we get started, I want to remind everyone that this presentation contains forward-looking statements. Please refer to this slide and our latest SEC filings for more information. I believe in news we announced this morning and that we will discuss during this call constitute a breakthrough moment in the evolution of our company and our HSC gene therapy platform. I have three members of the leadership team joining me on today’s call. Following my remarks, Frank Thomas, President and Chief Operating Officer, will provide more view on the financing we announced this morning, along with a summary of our financial results for the quarter; Braden Parker, our Chief Commercial Officer; and Leslie Meltzer, our Chief Medical Officer, will also be joining for Q&A.

Our plan is to keep our prepared remarks focused on 3 primary topics during this call. First, to provide you an update on Libmeldy commercialization in Europe. Second, we will cover recent significant developments in the U.S. with our interactions with the FDA. And third, to review the financing that we announced this morning that will take the need for additional capital off the table for the foreseeable future. Let’s start with Libmeldy. We’ve always believed HSC gene therapy will be the future for treating certain severe neurometabolic disorders. And with the approval and launch of Libmeldy in Europe, we are making that future a reality for patients with MLD. Our commercial and medical teams continue to identify, refer and support treatment of eligible MLD patients and we are seeing signs that disease awareness is growing among the physicians diagnosing and managing patients.

In fact, we expect will be reflected in our annual revenue figures for 2023. Libmeldy generated just under $20 million in sales in 2022 during its first year of launch, and that was only with a few reimbursement agreements in place. As we expand access and reimbursement to other markets in Europe and see the implementation of additional newborn screening studies, we are optimistic that sales will continue to grow in 2023 in Europe, while we also prepare for a potential 2024 launch in the U.S. We’ve spoken frequently about the importance of newborn screening. And to date, 3 confirmed cases of MLD have been identified after the screening of 96,000 newborns globally. One of these cases has been assessed clinically and referred for treatment with Libmeldy, while the other 2 more recently identified patients are pending clinical assessment.

You may recall that previously we have talked about the incidence of MLD being 1 in 100,000 live births. While these data are still early, it does suggest that the incidence and consequently the commercial opportunity may be higher than previously published. In total, 6 studies are actively screening newborns in Europe, the Middle East and the U.S. with additional pilots starting this year. Turning to the U.S. As planned in early 2023, we held a constructive Type B clinical meeting with the FDA on our potential BLA submission for OTL-200 for MLD. This meeting provided clarity on key elements of the clinical package that have been pointed to ongoing dialogue with the FDA, including our natural history comparator data and the predictability of the clinical course in presymptomatic patients.

Based on the outcome of this meeting, we requested a pre-BLA meeting, which we are very pleased to confirm, has been granted by the FDA and is now scheduled for the second quarter of 2023. We are also in the process of addressing remaining questions on our CMC comparability package. Assuming a successful outcome following the multidisciplinary pre-BLA meeting, we now anticipate a potential mid-2023 BLA submission for OTL-200. We are very pleased to have come to this point and look forward to our continued partnership with the FDA as we work to bring this important therapy to patients in the U.S. We believe we are likely to be granted a priority review. And with a potential submission in the middle of this year, we can expect an approval and launch in the first half of 2024.

So we believe during the past couple of months, we have come a long way and are now on the cusp of some key inflection points for OTL-200. This progress led to the other part of today’s news, which is the strategic financing that Frank will talk about in a minute. Before I turn it over to Frank, I want to also mention that the rest of our portfolio continues to make progress as well, including our programs in MPS I Hurler syndrome, where we are preparing to initiate a registrational study, MPS IIIA Sanfilippo syndrome and the NOD2 genetic form of Crohn’s disease. We’ll be in a position to talk about these programs in future press releases and conference calls. So okay, with that, let me turn the call over to Frank.

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Frank Thomas : Thanks a lot, Bobby. I believe 2023 is setting up to be a pivotal year for Orchard as we strive to fully unlock the curative potential of our HSC gene therapy platform. We’re now a commercial stage company with significant revenue potential with Libmeldy and an infrastructure in manufacturing, distribution and commercialization that can be leveraged for our other clinical and preclinical programs. Libmeldy will drive near-term growth. And as the pipeline matures, our therapies will utilize many of the same organizational capabilities that we’re developing today. The first 2 months have proven to be quite positive for the company, and I know our employees are focused on delivering results for the rest of the year also.

We have had an IND cleared for OTL-203, clinical data presented at the WORLD Conference for OTL-201, the regulatory progress that Bobby described with the FDA and patient identification ramping up through newborn screening. All that progress attracted the interest of a group of leading health care investors, and we were able to structure a very significant financing for the company. Not only does the financing provide near-term capital to accelerate our commercialization, but it also provides for future closings that could negate the need for additional financing and allow the company to focus and execute on our business plan and growth strategy. The total proceeds could be up to $188 million and will be used to fund Libmeldy in Europe, while simultaneously preparing for a potential U.S. approval and launch as well as advance our portfolio of next-in-line MPS programs and research in larger indications.

RA Capital led the transaction and worked closely with us to structure the financing to support a long-term vision for our company and to build a sustainable business. The financing is comprised of 3 elements: A $34 million upfront investment that is priced at a 25% premium to Friday’s closing price. These proceeds alone will extend our runway into 2025. There is a second anticipated closing of $34 million based on a successful pre-BLA meeting and shareholder approval of additional authorized shares, both of which are expected to occur in the second quarter of 2023. The final element is a warrant structure that would provide up to $120 million upon FDA approval of OTL-200 for MLD in the U.S. in 2024. This assumes all warrants are exercised at $1.10 per share.

We believe the deal structure is good for our existing shareholders with each potential closing priced at progressively higher valuations and share prices. It’s also attractive to participating investors with their incremental committed capital as OTL-200 advances towards potential regulatory approval in the U.S. We want to thank each of the participating investors for supporting this unique and innovative structure and partnering with us to build a special company in the field of gene therapy. Now turning to our financial performance, starting with revenue from Libmeldy, which was $5.8 million for the fourth quarter and $18.8 million for the full year. Total revenue in the fourth quarter, which includes Libmeldy plus collaboration revenue and sales of Strimvelis was $7 million compared to $0.5 million in the same period in 2021.

Cost of goods sold was $2.4 million, which primarily comprises manufacturing costs, royalties to third-parties and noncash amortization. This resulted in gross margins from product sales of approximately 65% to 70% for the quarter and year-to-date periods. Beyond Libmeldy revenue and costs, you can find the full financial results from the fourth quarter in this morning’s press release. It’s worth calling out that the restructuring that we completed in March 2022 has been pulled through the quarterly results with a 38% overall reduction in our burn rate when comparing the fourth quarter against the first quarter of 2022. We ended the year with cash and investments of approximately $144 million. During the fourth quarter, the company used about $23.5 million in cash to fund operations, excluding offsets from onetime items.

Our focus and financial goals for 2023 are continuing to grow Libmeldy sales over 2022 and managing our operating expenses, which should lead to a continued downward trend in our annual burn rate. Looking forward to upcoming milestones, I believe Orchard is well positioned to become the breakout leader in gene therapy as we continue to gain traction on the Libmeldy launch in Europe and demonstrate a sustainable business model for onetime potentially curative therapies. In addition to our commercial objectives, we also will prepare for a potential U.S. approval and launch and advance a pipeline of clinical and research candidates in various stages of development. So with that, I’ll turn the call over to the operator for your questions.

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Q&A Session

Operator: And your first question comes from the line of Dae Gon Ha from Stifel.

Dae Gon Ha : Congrats on all the progress. Maybe two from me. One on the Type B meeting/pre-BLA. So Bobby, I guess, can you maybe provide any more color around this comparability with the natural history cohort and the predictability aspect? I know that’s been kind of the sticking point that you wanted to discuss in the Type B meeting. Has that been fully resolved, leading you to have a more optimistic outlook heading into the pre-BLA? Or is there still more discussions to be had and kind of latching on to that, the CMC aspect, what additional aspects need to be ironed out before the pre-BLA meeting? And then second question for Frank. With regards to OTL-200, the 34, 34 and then 120 tranches you just laid out, the first 34 was already enough to get you into 2025. Just wanted to ask, can you remind me on the OTL-200 program, is that eligible for PRV? And does the cash runway already include that 2025, sorry, does that already include the PRV monetization?

Bobby Gaspar : Thank you, Dae Gon. So maybe I’ll take the first bit, and Leslie may be able to comment as well. But just to kind of address that question, which I think is all about the overall path to this pre-BLA meeting. I’ll just step back for a second because, remember, about 6 months ago, we talked to the FDA, and FDA said that we weren’t ready for a pre-BLA meeting. And they wanted to discuss some clinical questions as you outlined in the context of the Type B clinical meeting. And they also said they would review our CMC comparability package. And so with regards to the clinical aspects, we had a constructive Type B clinical meeting with them, where we addressed those specific points that you talked about, which is the natural history comparator arm and the validity and the robustness of that and also the predictability of the clinical course in presymptomatic patients.

And again, I think we resolved these issues, and that was part of the reason that the FDA said that we could now advance to a pre-BLA meeting. On the CMC side, where we’ve had a number of dialogues with the FDA on the CMC side as we did for the clinical side. We’re narrowing down on some specific questions as far as the comparability is concerned, we’re in interaction with the FDA as far as that is concerned, it’s also something that we can talk to them about at the pre-BLA meeting and also during the BLA submission as well. So that is ongoing. But I think the main thing is, obviously, having said that, we weren’t ready the FDA now saying that we are ready for a pre-BLA meeting, request the meeting. The meeting has been granted and is in the diary for Q2.

Frank Thomas : So maybe then with respect to the financing burn and PRV question. I mean, when I think about the burn just generally over a multiyear period, I would expect that we’ll continue to see growth in Libmeldy over the next several years, especially as we look to bring on the U.S. market and eventually other markets globally. So you’ll have a contribution coming from that revenue that will offset the burn. I think on the OpEx line, I would expect flat to slightly down operating expenses as we complete the submission of the BLA, I think we’ll start to see R&D expenses come down a bit. So overall, I feel like the first tranche of the financing gets us into ’25. The second tranche of the financing gets us, I would say, well into ’25.

And then if the proceeds come in from the third piece, the warrants are exercised, then I think we have the opportunity with all of that capital to substantially extend our runway through to Libmeldy certainly being profitable and beyond. So I think this is a very important financing for the company when you combine the proceeds plus the existing cash. With respect to the PRV, unfortunately, we do not have rights to the PRV. If you recall, we licensed in MLD from GSK back in 2018 for very little money upfront, but the downstream consideration was that they would get royalties on sales and that they would get the PRV from this program. So essentially, if we get or when we get the PRV, it will be transferred to GSK. So I’ve not included any proceeds from PRV monetization in my runway assumptions.

Operator: And your next question comes from the line of Hartaj Singh from Oppenheimer & Co.

Hartaj Singh : Just a couple of quick questions, a little bit disparate. One is just on the three patients. You’ve been able to find over 96,000 patients. I know that seems to be quite higher than the one in the 100,000 that seems to be sort of the academic work that’s been done, Bobby. Just any thoughts there, and do you see that as sort of the trend going forward? It’s quite a difference from what we’ve seen out in the academic study. And then secondly, just on the integrated data analysis you presented both on the safety side, you — type B meeting with the FDA, how much in-depth discussions were there looking at that specific integrated analysis and especially on safety and some of the insertional mutagenesis issues or if there were any? Just what were the discussions around that?

Bobby Gaspar : Thank you, Hartaj. So let me talk about the newborn screening piece first of all. So I think, importantly, the figures that we previously had quoted come from a retrospective analysis, numerous different retrospective analyses talking about the incidence of MLD. And those ranged anything from, I think, an instance of 1 in 30,000 to up to 1 in 250,000. And the average was around 1 in 100,000. Remember, there’s always an ascertainment bias in those retrospective analysis. It’s — patients will have been missed. And so usually, especially in these rare diseases, where the incidence is higher than previously published because now you start to capture every child. And so you could only do that with prospective analysis through newborn screening.

And so that’s what we started to do. And so it’s been the first year of screening, nice 6,000 babies screened and 3 genetically confirmed cases of MLD. I will also add that there was a prospect deidentified study that was conducted in Washington State. And there 27,000 babies were screened and 1 MLD baby was identified. So that’s a separate study to what we’ve seen. And again, these are prospective screens. So on the basis of that, all I can say is it’s probably not enough baby screens to give a true epidemiology. But as I said in my prepared remarks, it does suggest that the incidence may be higher than what was previously published and predicted. And I think we will just need to screen more babies to get a full true incidence picture. But let’s say it does point to something that might be slightly higher than 100%.

It’s just exactly how much higher, I think fits difficult to say at this time point. So we’ll keep doing that, and we are anticipating doing even more than 100,000 screens this coming year with all the pilots that are actually planned. So we’ll get nearer to understanding exactly what that true incidence figure is. On the second point with respect to the integrated analysis and I’ll let Leslie kind of comment on the overall facts. But I will comment that there wasn’t really anything about the insertional mutagenesis picture because we’ve never had a case of insertional mutagenesis. We never even had a molecular signal of clonal expansion or insertional mutagenesis within that program. And the reason for that, and I’ve talked about this previously, is about the promoters that we have used in our lentiviral vectors.

So remember, the events that were seen of insertional mutagenesis using lentiviral vectors are related to the use of viral, internal viral promoters which have enhanced the sequences that can activate genes. And in all our programs, we have used human promoter and regulatory elements that do not have the capacity to activate neighboring genes. And we believe that is the reason why we have such a strong safety profile as far as that is concerned. Let me hand it over to Leslie to talk about other aspects…

Leslie Meltzer : Yes. There’s not a whole lot to add with regard to safety as it was presented at WORLD, which is very consistent with everything that we’ve presented to date, in addition to all the points that Bobby made about the fact that we see no evidence of malignancy, no evidence of insertional oncogenesis or clonal expansion, a very robust safety profile. We’ve got over 232 cumulative patient, years of exposure. It’s been very — OTL-200 has been very well tolerated, no treatment-related SAEs or deaths. We see some instances of anti la antibodies, but these are not associated with any sort of impact on clinical outcomes. And we also see robust engraftment in all patients treated. The efficacy data that we present at WORLD is an update from previous presentations that includes all 39 patients treated in the clinical development program as well as patients treated in some compassionate use programs.

And again, we consistently see significantly improved clinical outcomes on motor impairment, on survival, on cognitive impairment on all of the clinical manifestations of the disease. And these results were, among other results that were discussed with the FDA as part of our Type B meeting and supported our movement to the next stage of the process, which is a pre-BLA meeting.

Hartaj Singh : And Bobby, and just to follow-up to that. I was actually just going to ask a quick question on the Type B and going into the pre-BLA meeting. Is that just the pre-BLA meeting, I would imagine, is sort of a — and I don’t want to use the term lightly sort of a check box exercise in the sense that the Type B meeting was where you had in-depth discussions around safety and the efficacy, the integrated mass all the other pieces of data that Orchard has and the pre-BLA sort of preparing for the actual BLA filing and getting that going. Is that the way to think about it? And that’s the core of the question.

Bobby Gaspar : I think so. I think generally, that is the case. And especially on the clinical front, as I said previously, they did have clinical questions that they wanted to address. And I think the fact that we’ve gone to a pre-BLA meeting, I think we feel that those clinical questions have been addressed. And so this is now — a lot of it will be procedural. We are waiting for feedback on the CMC comparability package. And that, again, is just about the comparability package. And that is a process that we are — that is ongoing with the FDA where they’re making comments to us, we are responding, et cetera, and there may be still a discussion of that at the pre-BLA meeting.

Operator: And your next question comes from the line of Yaron Werber from Cowen.

Brendan Smith : This is Brendan on for Yaron. Congrats on a great progress. Maybe just a quick one from us. You mentioned that the IND filing for MPS I still pending after which you expect you would be able to initiate a pivotal study. Can you remind us if you filed an IND for the MPS IIIA program? And if not, maybe what the timing for that is kind of relative to the Crohn’s IND? And then in MPS IIIA, assuming things proceed as expected, should we maybe expect to start a pivotal study sometime next year? Or is that still a little bit in flux?

Bobby Gaspar : Yes. So let me just take those one by one, and I’ll ask Leslie to comment on the path forward for MPS IIIA. But let me comment on MPS I, first of all. And so remember, we announced at the beginning of the year that the study design for a registrational study for MPS I has been cleared, and we gave some details around that. It’s going to be a randomized study against allogeneic transplant, approximately 40 patients with a composite endpoint that includes both safety and efficacy features. And our plan for that with the IND having been filed and cleared by the FDA is to open the pivotal registrational study by the end of the year. On the Crohn’s program, we are in the first half of the year, we’re going to announce preclinical proof-of-concept data, and we are anticipating moving forward on IND-enabling studies with the aim of submitting an IND by the end of 2024.

And so that — those are the milestones for these 2 programs. But I’ll ask Leslie to comment specifically on MPS IIIA.

Leslie Meltzer : Sure. So for MPS IIIA, we presented at the end of last year and then recently presented an at WORLD, results from the 5-patient study, 5 patient proof-of-concept study where we have at least year follow-up in all patients, in 4 out of 5 patients. And what we’ve shown is that in 4 out of 5 patients, we see cognitive outcomes that either are improved relative to natural history or are consistent with normal development in patients that are still early in the follow-up. So we see gain of constative skills in these patients, and we see some encouraging signs on clinical outcomes. However, this is still quite early in the disease course. If you recall from some previous discussions, patients with Sanfilippo Type A will go through a period of normal development and until around the age of 3, at which point they’ll plateau and then quickly decline around the ages of 4 to 5.

So we’re looking for some additional follow-up in this proof-of-concept study as the data matures. And as these patients reach an age where if things are working, we would start to expect a deviation from natural history. And as this data matures and as we see additional presentations of clinical data from this program, this will inform our discussion with regulators on potential study designs for a potential pivotal study.

Frank Thomas : Brendan — sorry, Brendan, it’s Frank. I mean just to follow up on your question about how soon could a pivotal study. I would anticipate that if we have the data this year that supports moving into a pivotal study that we would need a period of time to develop some of the CMC work. So I don’t think we’d be in a position to start a registrational study next year. But certainly, we’d be more working as quickly as we can to get that design and in parallel working on the CMC.

Operator: And your next question comes from the line of David Hoang from SMBC.

David Hoang : Congrats on the –on pulling together this financing. So I had a question or two just around a potential approval and launch of Libmeldy in 2024. Assuming that, that is possible, could you just talk a little bit about what prelaunch commercial activities you may need to pursue in the U.S. to develop the U.S. market? And then how would — do you have any, I guess, expectations as to how the cadence of a potential U.S. launch may look compared to what’s currently ongoing in the EU?

Bobby Gaspar : Okay. I’ll hand that straight over to Braden.

Braden Parker : Sure. Thanks for the question, David. In the U.S., the prelaunch activities would mirror somewhat the European activities in the sense of identification of treatment centers that we would want to qualify in advance of an approval to be prepared to have access for patients overall. Also working with a number of payers to educate them on MLD, as you might imagine, as a rare disease, there’s quite an education process that has to take place from the payer side on the disease state as well as the clinical impact of Libmeldy overall in preparation for access as well. And then as Leslie mentioned and others, there’s certainly some newborn screening activities that are taking place in the U.S. There will be other patient identification efforts that would be taking place as well leading up to a potential approval and launch.

So those are some of the major buckets that we’re looking at in addition to at the right time, building out the team to cover the region. Those are some of the activities we’ll be looking at from a prelaunch perspective in the U.S. In terms of the cadence of launch, if you look at the size of the opportunity in the U.S., it’s roughly similar to the EU, again, taking kind of the current estimates of 1 in 100,000 births, live births in the U.S., you’re looking at anywhere between 40 and 50 potential new patients each year that we would have to try to find and identify. So it’s a similar type of opportunity in terms of sizing but the access and the reimbursement side is where you see the real difference in the U.S. So in Europe, we see quite a lengthy process in terms of health technology assessments followed by reimbursement negotiations in the U.S., I would expect reimbursement to happen much more quickly than what we’ve seen in Europe.

So once we get approval, if we get approval in the U.S., we would be able to start to identify and recognize revenue a lot sooner than we have in Europe.

Operator: And your next question comes from the line of Robert Finke from Guggenheim.

Robert Finke : This is Robert on for Debjit. Congrats on the financing. From the perspective of the next mega financing, can you speak to the confidence in the pre-BLA meeting outcome and how a positive outcome is defined for the next leg?

Frank Thomas : Yes. Maybe I’ll speak to the sort of how the financing is tied to that. And then Bobby and Leslie can comment on sort of confidence level. So yes, the deal, as you saw in the press release, is structured success-based. So as we make progress and derisk the program, more and more capital comes in to fund the growth and strategy for the business. So the second milestone is tied to essentially a successful pre-BLA meeting and defining what exactly that means. I think as long as there’s nothing in the minutes that precludes us from moving forward to a submission, then that second tranche of financing is obligated to come in. It’s an obligation, not a right. So as long as we have a successful meeting, then we would expect that money to come in, and we’re expecting that because the meeting is scheduled in the second quarter to happen, sometime before midyear.

So that’s sort of the technical aspects of it, but I’ll let Bobby comment further on the meeting itself.

Bobby Gaspar : Yes. I think as far as our confidence is in the pre-BLA meeting and how we — and what happens off of that, I think we feel that we’re in a very good place. I’d say we’ve been in a lot of discussions with the FDA over the past essentially 3 years as far as this file is concerned. And I think what we’ve been able to do during that time period, we filed the IND, we had an RMAT designation. We talked through a number of different questions with the FDA, both on the clinical side and on the CMC side. We’ve agreed on things like what measures to use, such as the GMFC score to look at motor function. We’ve agreed on the primary endpoint that is clinically meaningful. We’ve developed a composite score called severe motor free survival.

We had detailed conversations with the FDA, what else needed to be addressed on the clinical side, the predictability of the clinical course is presymptomatic patients, the robustness of the natural history comparator cohort, the use of an independent review committee to review all the clinical data, both of treated patients and of the natural history cohort and had a constructive type B clinical meeting where these items were clear. So all of that has been very positive and has given us confidence to move forward to this pre-BLA meeting. On the CMC side, we’ve again started — we started with a lot of questions that needed to be addressed. We addressed a number of those through a written response only documentation. The CMC comparator package is under review, we’re answering questions as they come through.

And again, as I say, there was a multidisciplinary view that we could proceed to a pre-BLA meeting. And so I think with all of that, that’s where we stand. And I’m being kind of very transparent with you as to where we are. Obviously, we have to get through that meeting. But those are the things that have led up to us having that meeting and why we feel we’re in a good place to move forward after that.

Operator: And the next question comes from the line of Pete Stavropoulos from Cantor Fitzgerald.

Pete Stavropoulos : So recently on WORLD, you had a number of presentations for MLD newborn screening, which is going to be important to identify patients. Can you just sort of discuss the assay used? How sensitive is it? How easy or difficult is it to implement? And how specific is it to MLD patients? In other words, they get hit from the screen, but genetically couldn’t confirm?

Bobby Gaspar : Yes. Maybe I’ll start, and Leslie may be able to add detail on this. So the screen that is used is — uses a tandem mass spec and is basically looking for an increase in sulfatides levels. And so sulfatides are the substrate that accumulate in patient cells as a result of deficiency of the ARSA enzyme. So that is the first thing that is measurable. And what you can do is you can take a shot from the — a little punch from the dried blood spot, you process that. And from the eluate, you run that on the tandem mass spec and you can look for the rise in sulfatide. Now in MLD patients, you will see a high level of sulfatide accumulation compared to the natural history, natural normal children. But this is always a spread.

And you have to kind of define threshold above which you consider individuals to have a positive screen. And that threshold can be set over time. But of course, that is just the screening test. After that, you need to confirm whether that rise in sulfatides is actually associated with MLD. And in fact, you can use 2 subsequent events. One, you can look at or activity itself or you could go to genetic analysis. And Leslie maybe correct me, but I think different pilots are using either both of those second-tier tests or just one of those tests. But the gold standard is to get to a genetic diagnosis. So I’ll hand it over to Leslie.

Leslie Meltzer : Yes, I think that’s right. And an important point, Pete, is that these are research pilots. And part of the goals of these pilots is to really narrow down and make precise the screening methodology that would be intended to be the shared methodology worldwide as screening becomes universal at the country or state level. And there’s a regular collaboration between all of the different research groups that are conducting these pilots to share results and share improvements in methodological testing that will inform how that takes place. But in the ideal scenario, you have either a 2-tier or a 3-tier testing that starts with sulfatides, as Bobby mentioned, and in patients or in subjects who have elevated sulfatides could either go directly to genetic confirmation or you could first do in the same dry blood spot an assessment of ARSA levels.

You don’t start with ARSA directly because there’s actually a high rate in the general population of people who have what they call pseudo deficiency of ARSA. If you were to just screen for ARSA, first you get a lot of false positives. But the idea is by testing first for sulfatides, and then for ARSA, you can dramatically reduce the incidence of potential false positives to the point where you get to roughly 1 in 10,000 to 1 in 20,000 samples being referred for confirmatory genetics, which is what the de-identified pilot in Washington state showed. So those specific details of the methodology are being worked out in the pilots as we speak, and I would anticipate some significant improvement in that alignment over the course of this year as more pilots are coming online.

Pete Stavropoulos : And also, I don’t know if you answered this earlier, but any color on the CMC interaction for 200? Has the agency inspected the site or visited it? And does the agency have any experience with the site from other companies?

Bobby Gaspar : Yes, just so on the interaction. I think I’ve outlined in previous questions that we’re in the process of answer questions from the FDA on the CMC comparability package. On the site inspection front, so AGC Milan, which is the manufacturer that we use, you’ll know that they are obviously — they’re approved for commercial manufacture in the EU. We have done a pre-inspection monitoring with them using ex-FDA inspectors and there are questions that were asked and we are putting those processes and procedures in place for an FDA inspection. So I think we will only understand once we get nearer as to when the pre-inspection readiness will actually instill actually occur. So I’d say we can comment on that at a later stage.

Pete Stavropoulos : And if I can just squeeze one more in. For MPS I, the 203 program, can you just give us a little bit more detail about the composite endpoint of complication-free survival?

Bobby Gaspar : Sure. Let me hand that over to Leslie, who’ll have more detail on that.

Leslie Meltzer : Sure. So this composite endpoint was designed specifically looking at outcomes that are clinically meaningful in MPS I and are particularly suboptimally served by the current standard of care, which for almost all patients is an allogeneic HSCT. So this includes outcomes associated with morbidity and mortality of transplants such as death, failure too in graft, requirement for a follow-up transplant, the need to reinitiate therapy with enzyme replacement and so forth. It also includes components associated with the clinical outcomes of MPS-I that aren’t as well served by HSCT, and that includes incidence of cognitive decline as well as incidence of growth impairment. And so again, we’d be directly comparing outcomes with OTL-203 against outcomes with standard of care and the study is designed to show superiority of OTL-203 relative to that standard of care.

Operator: We have now reached the end of the Q&A session. I will now hand the call back to Bobby.

Bobby Gaspar : Thank you. Thank you, everyone. Thank you for your time, your attention and your support on what I think is a very important day for Orchard as we continue to advance our important mission in bringing this HSC gene therapy to patients with severe devastating diseases. Thank you very much.