Taysha Gene Therapies, Inc. (NASDAQ:TSHA) Q1 2024 Earnings Call Transcript

Taysha Gene Therapies, Inc. (NASDAQ:TSHA) Q1 2024 Earnings Call Transcript May 15, 2024

Operator: Greetings and welcome to the Taysha Gene Therapies First Quarter 2024 Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Hayleigh Collins. Thank you. You may begin.

Hayleigh Collins: Thank you. Good afternoon and welcome to Taysha’s First Quarter 2024 Financial Results and Corporate Update Conference Call. Earlier today, Taysha issued a press release announcing financial results for the first quarter ended March 31st, 2024. A copy of this press release is available on the company’s website and through our SEC filings. Joining me on today’s call are Sean Nolan, Taysha’s CEO; Sukumar Nagendran, President and Head of R&D; and Kamran Alam, Chief Financial Officer. We will hold a question-and-answer session following our prepared remarks. Please note that on today’s call, we will be making forward-looking statements including statements relating to the therapeutic and commercial potential of TSHA-102, including the reproducibility and durability of any favorable results initially seen in our first and second patient dosed in the REVEAL trial to positively impact quality of life and the course of disease in the patients we seek to treat our research, development and regulatory plans for our product candidates, including the timeline for our clinical trials and reporting results therefrom, in our current cash resources supporting our planned operating expenses and capital requirements into 2026.

These statements may include the expected timing and results of clinical trials for our product candidates and other clinical and regulatory plans, and the market opportunity for those programs. This call may also contain forward-looking statements relating to Taysha’s growth, forecasted cash runway and future operating results, discovery and development of product candidates, strategic alliances and intellectual property as well as matters that are not historical facts or information. Various risks may cause Taysha’s actual results to differ materially from those stated or implied in such forward-looking statements. These risks include uncertainties related to the timing and results of clinical trials of and regulatory interactions for our product candidates, our dependence upon strategic alliances and other third-party relationships, our ability to obtain patent protection for our discoveries, limitations imposed by patents owned or controlled by third parties and the requirements of substantial funding to conduct our research and development activities.

For a list and description of the risks and uncertainties that we face, please see the reports that we have filed with the Securities and Exchange Commission, including in our annual report on Form 10-K for the full year ended December 31st, 2023, and our quarterly report on Form 10-Q for the quarter ended March 31st, 2024, that we filed today. This conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, May 14th, 2024. Taysha undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call, except as may be required by applicable securities laws. With that, I would now like to turn the call over to our CEO, Sean Nolan.

Sean Nolan: Thank you, Hayleigh, and welcome everyone to our first quarter 2024 financial results and quarter update conference call. Today, I will begin with a brief update on our recent activities. Then Dr. Suku Nagendran, President and Head of R&D of Taysha will provide an update on our lead TSHA-102 program in clinical evaluation for the treatment of Rett Syndrome. Kamran Alam, our Chief Financial Officer, will follow up with a financial update. I will provide closing remarks and open the call up for questions. We are pleased with the recent progress that we’ve made to advance TSHA-102, our lead gene therapy program in clinical evaluation for the treatment of Rett Syndrome. This includes reporting encouraging longer-term data for the first two adult patients dosed in the low-dose cohort and enrolling the first patient in the high-dose cohort of our REVEAL Phase I/II adolescent and adult trial earlier than planned.

Dosing the second patient in our REVEAL Phase I/II pediatric trial and receiving regenerative medicine advanced therapy designation from the FDA for TSHA-102. I believe this progress reinforces the therapeutic potential of TSHA-102 across a broad population of patients with Rett Syndrome and supports the continued clinical evaluation of our gene therapy program. We believe that we are well positioned for continued execution across our key upcoming value-creating milestones for our TSHA-102 program with the goal of generating critical longer-term clinical data across broad range of ages and stages of patients with Rett Syndrome in multiple geographies that will guide the next phase of our studies. The unmet need and burden of care for Rett Syndrome is high.

As a rare neurodevelopmental disorder caused by mutations of the MECP2 gene, Rett Syndrome affects an estimated 15,000 to 20,000 patients in the United States, European Union and the United Kingdom. Currently, there are no approved disease-modifying therapies that treat the genetic root cause of the disease and there is a significant unmet medical need. The random X-inactivation and subsequent mosaic pattern of MECP2 expression results in a mixture of cells that are either deficient in MECP2 protein overexpressed MECP2 protein normally, which makes Rett Syndrome challenging to treat with traditional small molecule and gene therapy approaches. We believe our TSHA-102 gene therapy candidate equipped with the novel miRNA-Responsive Auto-Regulatory Element or miRARE technology has the potential to appropriately address this challenge by mediating MECP2 expression in the central nervous system on a cell-by-cell basis to overcome the risks associated with both under and overexpression of MECP2 protein.

We are evaluating TSHA-102 in two ongoing Phase I/II REVEAL trials, an adolescent and adult trial taking place in Canada and the US and a pediatric trial taking place in the US with clearance in the UK. As a reminder, our REVEAL Phase I/II adolescent and adult trial is a first in human study assessing the safety and preliminary efficacy of TSHA-102 in females aged 12 years and older with Rett Syndrome. We are currently enrolling patients in Part A, the dose escalation portion of the trial, which is evaluating two dose levels of TSHA-102 sequentially. Two patients have been dosed to date in Cohort 1 with the low dose of TSHA-102 of 5.7×1014 total vector genomes and dosing in Cohort 1 is not considered complete. Following review of the clinical data from the first three patients treated with TSHA-102 across the adolescent and adult trial and pediatric trial, the independent data monitoring or IDMC, approved our request to proceed to an early dose escalation in the adolescent and adult trial.

Data from Part A of the trial will be assessed by regulatory agencies and the IDMC to provide guidance to determine final key elements of the Part B aspect of our trial. The dose expansion portion, including hierarchy of efficacy endpoints, study duration and the maximum tolerated dose or maximum administered dose. Therefore, advancing to Cohort 2 evaluating the high dose of TSHA-102 of 1×1015 total vector genomes earlier than planned accelerates our ability to inform our clinical development and regulatory strategy for Part B. We’re pleased to share the first patient in a high-dose cohort has been enrolled in the study and dosing is scheduled to take place here in the second quarter of 2024. Earlier this year, we announced encouraging longer-term data for the first two adult patients treated in the low-dose cohort with late motor deterioration Stage 4 Rett Syndrome and different genetic mutations and severity of disease.

Recall, when we initiated REVEAL, our focus was primarily on safety with little expectation of efficacy for the adult population among key opinion leaders in the Rett Syndrome community due to the advanced stage of the disease. Therefore, it was very exciting last November to announce the encouraging initial impact of TSHA-102 appeared to have across multiple clinical domains in the first two adult patients as early as four weeks following treatment, despite the trial participants having very different genetic mutations and disease severity. We presented longer-term follow-up data in the first quarter of this year, including a six-month follow-up assessment for the first adult patients showing a continued durable response with sustained new improvements in the absence or reduction of steroid levels.

As of the six-month assessment, Patient 1 showed sustained improvement across key efficacy measures at decreased steroid levels with new improvements observed in the Rett Syndrome Behavioral Questionnaire or RSBQ. Additionally, the second adult patients demonstrated sustained improvements across key efficacy measures with new improvements observed in certain measures, including the Revised Motor Behavior Assessment or R-MBA as of the 12-week assessment and significantly reduce seizures as of the 19-week assessment following treatment. Moreover, the longer-term clinical observations reported by the principal investigator showed that both patients had sustained new improvements across multiple clinical domains impacting activities of daily living, including motor skills, socialization and communication, autonomic function and seizures compared to earlier post treatment assessments.

Importantly, these continued improvements were reported at Week 35, following completion of the steroid taper for the first patient and at Week 19 at decreased steroid levels for the second patient. Suku will discuss these observations in more detail. The longer-term safety profile is also encouraging. Data from the first two adult patients showed that TSHA-102 was well tolerated with no treatment-emergent serious adverse events as of Week 35 assessment for Patient 1 and as of the 19-week assessment for Patient 2. We believe the safety profile and continued improvement across multiple clinical domains even at reduced steroids levels in both adult patients — in both adult patients with advanced Stage 4 Rett syndrome treated with the low-dose of TSHA-102, supports the durability and transformational potential of TSHA-102 across multiple genotypes of Rett Syndrome and further validates our construct.

We are also focused on evaluating the therapeutic potential of TSHA-102 in the pediatric population, where we hope to see similar safety profile and a consistent pattern of response across clinical domains in the pediatric patients with different genotypes treated with the low-dose of TSHA-102. Our ongoing REVEAL Phase I/II pediatric trial is evaluating the safety and preliminary efficacy of TSHA-102 in female patient with Rett Syndrome, aged five to eight years old. We are currently enrolling pediatric patients in Part A of the trial, which will evaluate two dose levels of TSHA-102 sequentially. We have dosed the second pediatric patient in Cohort 1, the low-dose cohort of 5.7×1014 total vector genomes following the IDMC’s review of the initial 6-week data from the first pediatric patient dose.

While this trial captures a younger patient population with an earlier stage of disease compared to our adolescent and adult trial, it is important to understand that most patients with Stage 3 Rett Syndrome have already developed the hallmark symptoms of the disease and therefore present with many advanced disease manifestations. Patients typically approach Stage 3 disease known as the Pseudo Stationary symptom stage after a period of deterioration and rapid regression of learned skills, particularly relating to language and hand movement. The regression period is also characterized by partial or complete loss of acquired purposeful hand skills and spoken language, gate abnormalities and stereotypic hand movements, which results in the loss of independence, and in most cases, leads to lifelong caregiver dependence.

Many patients in this age group also suffer from seizures that can significantly impact their quality of life. Similar to the adult population, the heterogeneity among pediatric patients is high due to the broad spectrum of genetic backgrounds that result in variable phenotypic symptoms and severity in Rett Syndrome. Part A of the pediatric trial is intended to include patients across a broad spectrum of genetic backgrounds, which will help us generate a robust data set to inform our development plan for the next phase of the study. We hope to see a consistent pattern of response across key clinical domains in the pediatric patients with different genotypes treated in the low-dose cohort, which we believe will bring us closer to our goal of bringing a potentially transformative treatment to all patients with Rett Syndrome.

Recently, we were pleased to receive Regenerative Medicines Advanced Therapy or RMAT designation from the FDA, following review of available safety and efficacy data from the first two adult patients and the first pediatric patient dose with the low-dose of TSHA-102. Regenerative medicine therapy is eligible for RMAT designation if it is intended to treat, modify, reverse or cure a serious condition and preliminary clinical evidence indicates the therapy has the potential to address unmet needs for such a condition. Sponsored companies receiving RMAT designation can benefit from increased interactions with FDA involving senior managers to help expedite drug development. We believe receiving RMAT designation is an important recognition from the FDA that reinforces the high unmet need in Rett Syndrome and the therapeutic potential of TSHA-102 to bring meaningful change to patients and families with Rett Syndrome.

We will work closely with the FDA and other regulatory agencies as we continue to advance our TSHA-102 program. We look forward to the year ahead as we remain focused on further expanding into pediatric patients, executing trials in multiple geographies, evaluating the high dose across age groups and generating critical longer-term clinical data across a broad population of patients with Rett Syndrome that will guide the next phase of our studies. We expect to provide an update on clinical data from the completed low-dose cohort of our REVEAL adolescent and adult trial and initial available data from the low-dose cohort of our REVEAL pediatric trial in mid-2024. Additionally, we expect to report initial available data from the high-dose cohort for both of our REVEAL trials in the second half of 2024.

I will now turn the call over to Suku to provide a more in-depth discussion of TSHA-102. Suku?

Sukumar Nagendran: Thank you, Sean, and good afternoon, everyone. I’m pleased to provide an update on our TSHA-102 gene therapy program in clinical evaluation for the treatment of Rett Syndrome. Rett Syndrome is a rare neurodevelopmental disorder caused by mutations in the X-linked MECP2 gene which encodes the MECP2 protein, an essential regulator of neuronal and synaptic function in the brain. The disorder is characterized by loss of communication and hand function, slowing and/or regression of development, motor and respiratory impairment, seizures, intellectual disabilities and shortened life expectancy. Rett Syndrome progression is divided into four key stages, beginning with early onset developmental stagnation at 6 to 18 months of age, followed by rapid regression, plateauing and late motor deterioration.

As a reminder, TSHA-102 is self-complementary intrathecally delivered AAV9 gene transfer therapy designed as a one-time treatment. Because of the risks associated with both under and overexpression of MECP2, we have combined high-throughput micro-RNA profiling and expression to create miRARE. Our miRNA target panel designed to mediate MECP2 expression in the central nervous system on a cell-by-cell basis controls the therapeutic levels of MECP2. With miRARE endogenous miRNA are estimated in the presence of MECP2 protein and a thought to base pair with targets in the viral genome encoded micro-RNA to ultimately decrease protein expression levels through RNA interference. Thus, TSHA-102 is expected to provide the necessary function of the MECP2 protein in cells lacking MECP2, while protecting against toxic overexpression of MECP2 in healthy cells.

Clinical and pre-clinical data continue to support the ability of TSHA-102 to produce and maintain safe transgene expression levels in the central nervous system. As Sean mentioned, we observed a similar pattern of response across multiple clinical domains, impacting activities of daily living in both adult patients treated in the low-dose cohort of our REVEAL Phase I/II adolescent and adult trial. These patients have very different genetic mutations and associated disease severity. The first patient is a 20-year-old female with a large deletion which is a MECP2 gene that manifests in a most severe disease phenotype and was completely nonambulatory at baseline. While the second patient is a 21-year-old female, it’s a missense mutation in her MECP2 gene that manifest as a milder phenotype and could walk with something at baseline.

Further protocol, prophylactic immunosuppression therapy began prior to TSHA-102 administration. The steriod paper was initiated at Week 17 and completed by Week 33 for the first patient at the 35-Week post-treatment assessment, the principal investigator observed that the initial improvement across multiple clinical domains had been maintained following completion of the steriod paper and new improvements observed compared to earlier post treatment assessments. Basically 35-Week following treatment. The first patient showed sustained improvement in motor function, including restored leg movement and the ability to sit unassisted for the first time in over a decade and his hand function, including the gained ability to grasp objects with a nondominant hands and transfer them to a dominant hand for the first time since infancy.

Progressive loss of hand function is a hallmark characteristic of Rett Syndrome and a key area of concern for caregivers given its limits, communication, daily activities and independence. We believe the sustained improvements in hand function, which are not typically observed in the natural history of Rett Syndrome support the therapeutic potential of TSHA-102 to bring meaningful change to patients and caregivers. Sustained improvement in autonomic function were also observed in the first patient, including improved breathing pattern, circulation and sleep quality, while the gained ability to sleep through the night for the first time in 20 years, resulting in the patient being more alert and interactive during the day. A Week 35 post treatment, the principal investigator observed new improvements in the first patient in socialization and communication, including increased vocalization and the enhanced ability to use an eye-driven communication device.

Difficulty in communication, including loss of speech is also a prominent symptom of Rett Syndrome and a key area of concern for caregivers as it directly interfere with the patient’s ability to communicate their needs and express their interest. Based on caregiver input, we believe the ability to communicate to give patients a sense of control and greater independence. The first patient seizure for overall well controlled with a stable seizure event through Week 35 at lower levels of antiseizure medication, relative to baseline and the patients now no longer experience unprovoked seizures. Now let’s turn to the second patient, second adult patient. At the 19-Week post treatment assessment, while the patient was on decreased steroid levels, the patient showed sustained improvement in motor skills with movement in hand stereotypies for the first time since regressing at age three and in socialization and communication with increased interest in social, communication and activities, including increased response to spoken words and eye contact.

The patient also saw improvements in autonomic function with sustained improvements in breathing patterns and circulation. The principal investigator also observed new improvements in the second patient patient’s seizures frequency at Week-19 with a significant reduction in seizures and a 25% lower level of anti-seizure medicine relative to baseline. The patient’s pretreatment seizure frequency is approximately two to four seizures per week and the patient has been seizure free for 17-Weeks as of the 19-Week post treatment assessment. Additionally, both patients demonstrated continued improvement across consistent key clinical and caregiver reported efficacy measures based on the six-month assessment and decreased steroid level for the first patient and 12-Week assessment for the second patient.

This includes sustained improvement in clinical global impression improvement or CGI-I, parent global impression implement of PGI-I, revised motor behavior assessment or RMBA, rett syndrome behavior questionnaire or RSBQ and in seizures dialysis. The first patient also demonstrated a sustained improvement in CGI-S and the Rett Syndrome Hand Function Scale, a six-month post treatment relative to earlier post treatment assessment. These similar assessments across key efficacy measures observed at both adult patients reinforces the clinical observations from their principal investigators. Overall, we are entirely encouraged by the consistent and early responses that were sustained through long-term follow-up assessments and the new improvements that developed in the two adult patients with different disease severity.

We believe these improvements, even at reduced steroid levels, completed with a well-tolerated safety profile supports the durability and transformative potential of TSHA-102 across multiple genotypes for Rett Syndrome. With the low-dose cohort complete in the adolescent and the adult trial, we are currently focused on collecting data with the high-dose to further explore the clinical impact of TSHA-102. We enrolled the first patient in the high-dose cohort and dosing is scheduled to take place in the second quarter of 2024. Now let’s turn to the first the pediatric trial. Its title REVEAL Phase I/II pediatric trial similar to the REVEAL Phase I/II adolescent and adult trial was designed primarily as a safety study. Efficacy data being collected across a variety of measures is hypothesis generating and will inform our thinking relative to Part B of the trial.

Therefore, Part A of the trial is intended to include patients with diverse genetic backgrounds to evaluate the clinical impact of TSHA-102 across broad range of pediatric patients. As Sean mentioned, similar to the adult population, the heterogeneity amongst pediatric patients is high due to the broad spectrum of genetic background that result in different phenotypic symptoms and severity in patients with Rett syndrome. Phenotypic variation commonly occurs between individuals with the same MECP2 mutation and is attributed to difference in the random X-chromosome inactivation that results in a miniature mixture of cells with different levels of MECP2 protein expression. Because of this, the baseline status and overall disease severity of the patients will continue to be of importance to consider when interpreting the data, regardless of the age of stage of disease.

Our hope is that the pediatric patients with different genotypes were treated with the low-dose of TSHA-102 will show consistent safety profile and recapitalize the meaningful improvement across clinical domains that we have observed in the adult patients. We have discussed the first two pediatric — we have dosed the first two pediatric patients in Cohort 1 evaluating the lower dose of TSHA-102 and expect to report the initial available safe efficacy data from Cohort 1 in mid-2024. We remain focused on completing dosing a Part A of both REVEAL trials and anticipate significant data collection in 2024. Our efforts to expand our clinical trials remain underway and we’re currently focus on additional site activation in the US for our REVEAL, adolescent and adult trial with the goal of expanding the ongoing trial in Canada into the US.

In our REVEAL pediatric trial as we have focused on site activation in the UK with the goal of expanding our ongoing pediatric trial in the US into the UK as well. I will now turn the call over to Kamran to discuss our financial results. Kamran?

Kamran Alam: Thank you, Suku. Research and development expenses were $20.7 million for the three months ended March 31st, 2024, compared to $12.5 million for the three months ending March 31st, 2023. The $8.2 million increase was primarily driven by an increase in good manufacturing practice or GMP batch activities during the three months ended March 31st, 2024, which is representative of the intended commercial manufacturing process for TSHA-102. Additionally, clinical trial expenses increased primarily due to ongoing activities in the REVEAL, adolescent, adult and pediatric trials. General and administrative expenses were $7.1 million for the three months ended March 31st, 2024, compared to $8.8 million for the three months ended March 31st, 2023.

The decrease of $1.7 million was due to reduced general and administrative compensation as a result of lower headcount and a reduction in consulting and professional fees. Net loss for the three months ended March 31st, 2024, was $24.1 million or $0.10 per share as compared to a net loss of $17.6 million or $0.28 per share for the three months ended March 31st, 2023. As of March 31st, 2024, Taysha had $124 million in cash and cash equivalents. The company continues to expect that its current cash resources will support planned operating expenses and capital requirements into 2026. I will now turn the call back over to Sean for his closing remarks. Sean?

Sean Nolan: Thank you, Kamran. Throughout the first quarter of 2024, we have made important progress on the clinical development of TSHA-102 to sustain the new improvements in both adult patients with advanced Stage 4 Rett Syndrome are very encouraging and we look forward to moving to the high-dose and further evaluating TSHA-102 across a broad population of ages and stages of patients with Rett Syndrome. We are focused on completing dose escalation for both of our REVEAL trials and collecting data to inform the next phase of our studies. We will continue to look for similar patterns of improvement across adult, adolescent and pediatric patient populations. In the year ahead, we have many clinical milestones expected and we look forward to providing additional updates including reporting initial clinical data from our REVEAL pediatric trial and providing an update on the completed low-dose cohort from our REVEAL, adolescent and adult trial in mid-2024.

With that I will now ask the operator to begin our Q&A session. Operator?

Operator: Thank you. We will now be conducting a question and answer session. [Operator Instructions] The first question we have is from Kristen Kluska of Cantor Fitzgerald. Please go ahead.

Q&A Session

Kristen Kluska: Hi, everyone. Congrats on the RMAT designation. So you’ve been very transparent providing all the data you collected to — The Street, but we continue to get a lot of questions about expectations for the younger patients in the trial. So how should we be thinking about ways to measure some anecdotes since this population isn’t as far advanced? I know it’s heterogeneic with different genetic backgrounds, but for younger patients, are there any domains in particular that stand out? Thank you.

Sean Nolan: Thanks for the question, Kristen. I’ll take a stab at that and ask Suku to further opine on it. But I think what’s important is, again, that we recognize the fact that the pediatric patient population that we’re studying ages five to eight has very advanced disease. And they have generally all the hallmark symptoms that people who are adults have. They may not have had it very long. But again they may have had it for six or seven years or something along those lines. So it’s a very entrenched disease and the severities to be different based on the genotypes. So from our perspective, what would be, I think, a dramatic response in the low-dose would be a consistent response to what we’re seeing in the adults, meaning that there’s clinical impact occurring across multiple domains and that it’s occurring very rapidly post treatment.

And I think that would further reinforce our belief that we’re potentially dealing with the transformational therapy here. And I think with pediatric patients, it stands to reason that it could be that over the course of time, they have ultimately a better outcome than, let’s say, in adults. But just remember, it takes time for people to make such dramatic improvements. I mean if you put it in the terms of — probably most on the call can appreciate it if you have children, the first words may be coming at 8 to 10 to 12 months post birth. So it takes time to developmentally get there. And so if you had the disease and you haven’t been able to speak as an example, for multiple years, to expect that there’s going to be a transformational occurrence happening in the first three months, I don’t think is reasonable.

But I think if you see consistently that gross motor function is improving, fine motor function is improving, the hands are becoming more efficient in what they can do, the socialization and the attempted communication improves, seizure improvement, those are the things that I think are going to tell us that we’ve got effect happening from a clinical perspective and again keeping in mind that we’re at the low dose. Let me pause there and ask Suku is there anything you would add to that for perspective for Kristen?

Sukumar Nagendran: So Sean, I mean, you’ve, I think, laid it out very clearly. And what I would also just, I mean, remind Kristen and the audience is that given that we are treating the root cause of the disease with our gene replacement therapy. The duration of the disease, whether it’s a younger patients or older patients, the severity of the genotype and the actual severity of the clinical presentation with this complex syndromic presentation that these patients have. That I think will also drive at times the consistent efficacy that we’ve shown so far in the adult patients. So what I’m saying is, I think, this gene therapy, I think, will treat the patients across the age ranges fairly efficaciously, but we have to see as we recruit the patients into the pediatric trial and gather that data to confirm this as well.

Kristen Kluska: Thank you so much. That was very helpful. And then for my follow-up, for the RMAT designation, I appreciate you can’t share any data from patients — the third patient yet. But can you comment to us the length or the amount of data that the FDA had from this patient when they gave you that designation? Thanks so much again.

Sean Nolan: Yes. Thank you, Kristen. Suku, do you want to take that question?

Sukumar Nagendran: Yes, sure. Absolutely, Sean. So when we filed for the RMAT designation, Kristen, we filed with the data from the two adult patients who are dosed in Canada and one pediatric patient who was dosed in the US. And the FDA reviewed the data set and found that our product has — what they will consider significant clinical impact to qualify to receive the RMAT designation. And then as you know, once you get the RMAT designation, the FDA obviously then commits a lot more time in working with the sponsor on its product and program because there is commitment now that this disease that we are trying to address has significant unmet medical needs and justifies very close collaboration between the sponsor and the FDA. So overall, we are very excited that we received it, and it’s a good thing for patients.

Operator: Thank you. The next question we have is from Salveen Richter of Goldman Sachs. Please go ahead.

Salveen Richter: Good afternoon. Thanks for taking my questions. With regard to the midyear update on the low-dose cohort, can you just frame this for us in the context of what we’ve seen so far, where you’ve had new benefits or basically maintained the benefit thus far? And then secondly, with regard to RMAT, help us understand how you’re thinking about the regulatory process from here on the forward? Thank you.

Sean Nolan: Sure thing, Salveen. So in terms of what to expect, so we’re going to give an update midyear on the two adult patients that we’ve dosed. So we’ll work to share the most recent clinical observations and evaluations that have been done. And again, at this time both patients would be off of steroids, as an example. So we’ll make sure we highlight the endpoints that we’ve shared to-date, the clinical observations that we’ve shared to-date, and try to give a very fulsome update on how they are tracking over the course of time. And with the pediatrics, think of it in the same terms relative to the endpoints, it’s possible we could show some additional data that wasn’t collected in the adult study as part of this midyear update as well, and we’ll provide the most recent available information we have for both of these patients.

And so what we want to do is really give all of you a good landscape shot over the course of time in adults what have we seen. And again, to-date, what we’ve been able to outline is that there’s been consistent effect across multiple clinical domains. So the gross and fine motor function, the socialization and communication aspects, seizures, hand function, all of that, we seem to have movement going in the right direction for both patients regardless of their genotype. We want to provide that same type of an overview for the first two pediatric patients. In our view, a win at the low-dose would be seeing consistent-type effect across these domains for the pediatric patients. As it relates to RMAT, we’re excited about this for a number of reasons.

First of all, what’s fantastic is that you get very ready access to the FDA, including folks at a senior level. So what’s the good of that? You can be very much more collaborative, just because you’ve got the opportunities to talk through things such as what we’re seeing and what we think we might want to do with endpoints and trial design and get their feedback early on. And that obviously can help dramatically in terms of reducing the amount of time and increasing the probability of success in a potentially registrational trial. So we are very thankful to the agency for granting that particular designation to us. What you do is within about 60 days is your initial meeting with them. So again, as we’re generating this data, it will — very early on, we’ll be able to have nice pulse checks with the FDA relative to our thinking and their thinking.

And we think we’re pretty aligned going into it, but this will further enhance things. So I think that the communication aspect and who you’re able to talk to are probably the most critical aspects of garnering the RMAT designation. But let me ask Suku if there’s additional considerations that I didn’t outline that you think are important.

Sukumar Nagendran: Sean, I mean, based on what you’ve already discussed with Salveen, and as I said earlier, the RMAT obviously gives you a much closer contact with senior officials within the FDA CBER and it also actually allows the company, the sponsor, to understand as far as the FDA what they are thinking when it comes to the initial data of our product on the program and what else to be done to accelerate the program if necessary. So essentially, I mean, it’s a process designation that the FDA has created that allows the sponsor to truly accelerate our program that we think is going to make a significant difference in this patient population, especially when there is a significant unmet medical need. So as I said, my teams will work very closely with the FDA when it comes to the clinical and CMC meetings and so forth, to move this program forward in an appropriate but rapid manner.

Sean Nolan: Yes. The only other thing I would add is that, we highlighted it in our remarks, but the other thing I think that’s important about RMAT is that it’s granted based on the preliminary clinical data that you’re sharing. And so we shared the two adult patients worth of data. And I think Kristen asked the question about the pediatric patient, I believe it was 4-Week data from the pediatric patient. So it’s also an indicator that a very objective third-party is sensing that there could be a potential benefit to the patient population that’s suffering from the disease. So again, we’re pleased we have it and look forward to the first interaction under RMAT with the agency. Next question, please.

Operator: The next question we have is from Whitney Ijem of Canaccord Genuity. Please go ahead.

Whitney Ijem: Hey, guys. I’ll add my congrats on RMAT. And I guess my question is around Astellas. Can you remind us how they are being — or to what extent they are being kept in the loop on the data, is there sort of like a regular quarterly data sharing session, or what does that communication look like?

Sean Nolan: Sure, Whitney. I mean there’s formal structure around quarterly updates to the Astellas team. But I would also just remind everybody that we do have Richard Wilson as an observer on our Board. So he obviously is in real time, anything we’re updating the Board on, he’s very aware of that. I can say that if we’re having regulatory interactions, members from the Astellas team are participating in that. So I would say there’s a very clear transparency with Astellas about the data that’s being generated and key strategic aspects of the program and communications with regulatory authorities that are being shared. Hopefully that helps you out, Whitney.

Whitney Ijem: Yes, very helpful. Thank you.

Sean Nolan: Sure.

Operator: The next question we have is from Chris Raymond of Piper Sandler. Please go ahead. Chris, your line is live. You may ask your question. It seems to have no response from that line. The next question we have is from Joon Lee of Truist Securities. Please go ahead.

Joon Lee: Hey, congrats on the data and the progress, and thanks for taking our question. You’re scheduled to present data on June 19th at Rett’s conference. Is that when we can expect initial pediatric data in the low-dose? And do you have any plans to host a webcast around the event for the investors? Thank you.

Sean Nolan: Yes. That would be the platform where we’d like to give the update on the pediatric data and the update on the adult Cohort 1. And we haven’t decided the specifics around further investor communication, but there will be some, Joon, yes.

Joon Lee: Looking forward. Thank you.

Sean Nolan: Thank you.

Operator: The next question we have is from Maury Raycroft of Jefferies. Please go ahead.

Maury Raycroft: Hi. Congrats on the progress and thanks for taking my question. Just a clarification question initially. Are you saying which month you dosed the second pediatric patient? Or can you say how much total follow-up you’ll have in the mid-year update for the pediatric patients?

Sean Nolan: I don’t believe we gave specific dosing date for the second pediatric patient. But what I would think about is that we would have four to eight weeks of data, most likely, for that second patient.

Maury Raycroft: Got it. And also clarifying for the pediatric data, are there specific measures or any unique efficacy measures that you’re going to show for the pediatrics, like the MSELA measure, in the midyear update?

Sean Nolan: We’re still working through the presentation, so I can tell you the things that you’ve seen on the adults, we’ll do our best to share that information. I would say that they’re — we’re still working through the presentation, but there could be some measures that are shown that we haven’t to-date because they’re not part of the adult study. So I’d just say stay tuned on that. Again simply because we’re working through it all and collecting the data at this point. But stay tuned for more on that, Maury.

Maury Raycroft: Okay. Thanks for taking my questions. I’ll hop back in the queue.

Sean Nolan: Sure.

Operator: The next question we have is from Chris Raymond of Piper Sandler. Please go ahead.

Christopher Raymond: Sorry about the technical issues earlier. Just if this got asked already, I apologize, I got disconnected, but we’ve heard some market chatter around the relative advantages of intrathecal administration versus a competitor program which uses ICV. And we’ve heard some folks may be positing that there might be a disadvantage for 102 in terms of impacting brain function. I guess I’m kind of curious about this because you guys are seeing pretty clear early improvement in autonomic functions, some communication improvement, even seizures. So that — maybe just in broad strokes, remind us of the data that you have that shows the vector gets into the brain and has broad distribution. And then I have a follow-up.

Sean Nolan: Yes. I’ll ask Suku to take this question. I would just say that the — what I would point to, and then Suku can fill in any gaps or take it down a different path, but I think the most important thing is that you’re — it’s a combination of biodistribution and likely total MECP2 produced. There’s some threshold you have to get over to where you right, you really could see the impact on the disease. And when you point to all of the preclinical work that’s been done, right, I mean I think other gene therapies here have done one clinical trial or one preclinical trial in P2 mice in ICV. We’ve done that, and I think the results are very striking for TSHA-102 at a lesser dose given intrathecally. And importantly, we also did work in different ages of mice, right?

P7, P14, P28, looking — you’re trying to — those should be harder mice to affect the phenotype. And again, we saw very good outcomes there as well with the intrathecal route. But most importantly, I think, is looking at the clinical data, right? And one of the reasons we’ve reported like we have thus far is we wanted to share with everybody the different clinical domains that are being affected, right? So if you’re looking at gross and fine motor function, you’re looking at speech and socialization, seizure impact, hand coordination, those are all different areas of the brain, right? So there has to be distribution and level enough to have the impact that we’re seeing. And again I’d point to the RMAT designation and the threshold to get it is demonstrating some preliminary clinical efficacy in a disease with very high unmet need.

So I understand the academic discussion of one route versus another, but I think that the preponderance of the evidence would indicate, whether it’s preclinical or more importantly, clinical data, that 102 has a significant effect on the disease, and we’re seeing that in real time. But Suku, you may have more to add. Please go ahead.

Sukumar Nagendran: Well, Sean, I think you gave him quite a good explanation. The only other thing I would add is that Rett Syndrome is thought to be not just a neurodevelopmental disorder, but it’s a neural network or maintenance disorder. And the reason I point this out is the rapidity with which both adult patients responded to our gene therapy given by lumbar puncture. So especially when it comes to outlining this function, these are getting corrected 10 days post dosing with our gene therapy. So this raises another question that with the, I guess, with gene therapy, regardless of product, you may never need perfect bio distribution. It’s really trying to understand the pathophysiology of the disease. So my point is when MECP2 gets in or is in the nucleus of every neuron or astrocyte, it activates, it appears, thousands of genes, some of these genes are silenced or transcription is prevented, while other deals are actually activated.

So I guess what I’m getting at is just think of this orchestra conductor-like picture where MECP2 is the sick orchestra conductor. And once you wake him up and restore him, the entire orchestra starts playing and then your brain function starts getting restored. And that’s kind of what we are seeing with the adult patients that we have dosed up till now.

Christopher Raymond: Thanks. Maybe and just a follow-up. I think when you guys gave your last update there was some discussion around the presence, the fact that you were tapering steroids and the impact of steroid tapering on the RSBQ improvement in Patient 1. Any progress here maybe or update on teasing that out as you continue dosing patients?

Sean Nolan: Well, I would say, and Suku, feel free to jump in here, but that N of 1 patient, I think, is interesting. We’ll have to see as more time elapses with other patients if we see the same thing. But initially there was a thesis that the benefit that we were seeing efficacy-wise was because of the steroids. And what we’ve demonstrated is that, number one, I mean we tried to highlight to everybody that no one uses steroids to treat this disease, number one. And I think we’ve dismissed that. But we wanted to show that after the steroids were gone, there was no loss or diminution of effect. But the flip side to it is, I think that we may see that there’s a case to be made that steroids are actually masking some of the benefits of the therapy.

And I think Patient 1 is showing that she had reduced anxiety and irritability as a result of going off the steroids. And I can tell you, when you look at the patients that have been treated to-date, the steroids are hard on them. I mean they’re on it for a long period of time at a very high-dose. And if you think about it, a lot of these girls have very bad GERD or reflux. Well, the steroids make that worse. And then steroids can make you irritable, right? And it can be negative in terms of your ability to sleep, which then it’s like a cycle, right? So I actually like I believe that as the steroids are backed down and eventually are removed, there may be positive outcomes that we see that were being masked, particularly when you think about an RSBQ, where the caregiver is having to provide an update on things.

And they’re probably tired and irritable too, because they’ve been dealing with a child that doesn’t feel well. So I think that’s the distinction that we were trying to make. We’ll have to see as more patients come off steroids if that’s totally accurate, but that seems to be the case. And then certainly, I think Patient 1 would help support that thesis. But Suku, is there anything else you’d add to that one?

Sukumar Nagendran: Not much else, Sean, I mean, as you pointed out, I think steroids and other immunosuppressants what we are learning is the short-end or tighter the use of them, the more effective it’s going to be.

Christopher Raymond: Thanks, guys.

Operator: The next question we have is from Gil Blum of Needham & Co. Please go ahead.

Gil Blum: Hi, everyone, and thanks for taking our questions, and again congrats on the progress. So maybe harping a bit here, but just to help me understand what you guys mean by similar pattern of activity? I mean those there a multi-domain indications, right? Some of these patients are very heterogeneous, just to help me understand that. And I do have a follow-up.

Sean Nolan: Yes, sure. I mean I would say very simplistically, if you think about the endpoints like CGI-I, CGI-S, RSBQ, and what those measure, yes, we’re going to give updates on those types of scales, but it’s also thinking about the domains like the gross and fine motor function, hand function, speech and socialization, the seizure aspect of things. So we’ve always tried to paint a snapshot of the fact that the disease just hits so many different areas for each patient and each patient can have more or less severity in one area versus another. I mean it’s very heterogeneous, as you know, and so we’re just trying to say that it’s the same thing for the pediatric patients. They’re going to present in a similar fashion in terms of multiple domains being affected.

They’ve had the disease for, for this group, at least five, six years. And to us, it’s important to show that we’re affecting the disease across these domains, similar to what we’re seeing in the adults at the low-dose. But Suku, again, if there’s something there you want to highlight further, please do.

Sukumar Nagendran: No, Sean, I mean, I don’t really have much to add. I’ll remind everyone, this is a very complex syndromic disease where multiple aspects of, I guess, the human biology is made abnormal. And I think as Gil pointed out, and as you know, the phenotypic presentation does vary quite a lot. So when it comes to the impact of a therapeutic intervention, I mean my hope is that once you do the gene replacement through the intrathecal approach, you are able to restore function regardless of the syndromic presentation. So as we accumulate more data, then hopefully that proves our point.

Gil Blum: All right. That’s very helpful. Now is there any reason to believe that potential improvements in the pediatrics will be larger than what we’ve seen in adults, but maybe not in kind of the learned functions that you guys discussed before. How about autonomic functions? I mean they are younger patients. Thank you.

Sean Nolan: Suku, do you want to take that question?

Sukumar Nagendran: Yes. So what’s that Gil — Sean?

Sean Nolan: Gil was asking might autonomic function have a faster improvement or a greater improvement in a pediatric patient versus an adult.

Sukumar Nagendran: That is a tough question. I mean I would assume, at this point in time, it’s probably safer to say, given that in the two adult patients we were rapidly correcting autonomic dysfunction within 10 days, if we are able to do those kind of autonomic corrections in the pediatric population also within 10 days, I think, that will be a remarkable outcome for this therapeutic intervention. Now the caveat, as you say, Gil, is can you do it in half the time? Honestly, I don’t know. We have to dose the patients and see what happens. But at the same time, when it comes to autonomic dysfunction, at least the features we are aware of in Rett Syndrome, rapidity of response, like, say, you get it addressed in two days versus 8 or 10 days, I don’t think in the bigger picture, clinically, really made that much of a difference.

Sean Nolan: Hope that helps, Gil.

Operator: The next question we have is from Yanan Zhu of Wells Fargo. Please go ahead.

Yanan Zhu: Great. Thanks for taking our questions. Since you mentioned the heterogeneity, greater heterogeneity even, in young patients, I was wondering for the two patients you treated so far at baseline, what are the severity level like i.e. could there be a very mild phenotype and therefore incurring the caveat of potential to see less of an effect? And then I have a follow-up. Thanks.

Sean Nolan: Can you take that one, Suku, please?

Sukumar Nagendran: Yes, Sean. So I just want to make sure I heard the question though. At the beginning, I think, I heard you say that the pediatric population tends to be a lot more heterogeneous, I assume compared to the adult population with Rett Syndrome. Is that what you said?

Yanan Zhu: Right. I’m just saying I thought I heard in the prepared remarks, you highlighted variability of disease for the pediatric patient population. So I was wondering, in that context, for the two patients you have dosed so far, is there, what are the baseline disease severity levels? Are they reasonably high so that it’s reasonable to expect to see some benefit if there could be any or could there be — for example, one patient may have a very mild disease and therefore difficult to demonstrate benefit.

Sukumar Nagendran: So I think the heterogeneity. So my understanding, is across the board when it comes to Rett Syndrome regardless of age. I mean so — but having said that, I think, if you take a patient by patient with Rett Syndrome, regardless of age and look at the complexities of the syndromic presentation, at the present time, what we would anticipate is a consistent response clinically given that the gene therapy has shown rapid response and more sustained response to the two adult patients where one never expected a response, right? So pediatric patients, obviously we haven’t disclosed baseline characteristics or any of the data yet. So all I can say is stay tuned. And my hope is as you go to the higher dose, the effect that we have, regardless of the clinical features of the syndrome, should be consistent and across the board.

Now the only other thing I think to again address is the autonomic dysfunction seen in a young pediatric patient, where I guess the concept is if your network is young, the odds are you should respond even quicker. I mean so obviously, I don’t think anyone has done gene therapy to assess that. And hopefully as we gather more data in the pediatric population, we can help answer that question.

Sean Nolan: Yes. The only other thing I would say to that, Yanan, is that per the protocol, basically, you’re going to see similar severities in that the CGI-S range is between four to six, okay? So it’s very similar to the adult trial in severity.

Yanan Zhu: Got it. That’s super helpful. And then maybe the follow-up is about the next patient or perhaps if I may ask for patient number two, has the IDMC safety evaluation been done yet or is that still upcoming? And for the third patient, I was wondering, is this plan still to dose that patient with the low dose or could you do something similar to what you did for the adult cohort and reassign that patient to a higher dose based on the data you have accumulated? Thank you.

Sean Nolan: Yes. That’s — it’s a good question, Yanan. And so basically the IDMC has not yet met for patient two. It’s coming in the next couple of weeks. And I think the answer to your question on would you go to the high dose after only two patients, I think, it’s going to depend on the combination of things. It will certainly start with the safety and any observed efficacy to evaluate and also — and again, we haven’t talked to the IDMC. So like don’t read into what I’m saying, I’m just giving you an example — they could say, well, it’s pediatrics, and we would like to see a third patient dosed just simply because they’re pediatrics. So I think your logic makes a lot of sense. We’ll just have to see how things play out and it will start with the data presentation to the IDMC.

Yanan Zhu: Understood. Thank you for taking all the questions.

Sean Nolan: Sure. Thank you.

Operator: The next question we have is from Jack Allen of Bird. Please go ahead.

Jack Allen: Hey, thanks for taking the questions and congratulations on the progress. Just one quick one from me and — similar question of mine as the last couple of questions that were asked here. But I know it was asked about the phenotypes of these patients, the pediatric patients that we’re going to get data from in the next couple of weeks here. How about the genotypes? Anything you can say as it relates to what kind of genotypes these two patients have?

Sean Nolan: Yes. We haven’t disclosed that. But Suku do you want to comment on that?

Sukumar Nagendran: So I just want to make sure I got the question. So this is in the two pediatric patients, right?

Sean Nolan: Right like seeing a significant deletion are we seeing missense mutations?

Sukumar Nagendran: So Sean, I mean, can I guess — we haven’t disclosed in the genotypes at this point in time. So I assume, without going into too much detail, what I can tell you is one patient is, I would call, very mild or mild, and other patient is more towards the severe side. And now keep in mind that they do evaluate CGI-S and so forth to see how sick patients are. And so that also gives you a feel for what one would anticipate as a response to the therapy. But there’s a caveat, though. What we are observing is, even if someone as a patient with Rett Syndrome has a mild phenotype due to a missense mutation, some of their symptomology actually gets treated remarkably well. And the reason I say that is, if you think of our second adult patient, who was dosed in Canada, this was a patient who had multiple seizures and was on two antiepileptics and had four seizures a week.

Now this patient appears to be seizure-free and the anti-seizure medicine doses have been decreased by 25%. So I guess I hope that draws a parallel, because sometimes these patients have 10 different clinical features. The question on the table then becomes which of these can you hopefully address, control or eliminate such that the patient gets much stronger and can have a productive life.

Jack Allen: Got it. Great. That’s great color. Thanks so much and looking forward to the data.

Sean Nolan: Thanks, Jack.

Operator: The last question we have is from Silvan Tuerkcan of Citizens JMP. Please go ahead.

Silvan Tuerkcan: Yeah, thank you for taking my question and congrats on the RMAT designation. I also have a question on the pediatric patients, given that they may be more heterogeneous. Is there anything on the safety side that will be important to consider here? Do they have comorbidities, anything in that vein, please? Thank you.

Sean Nolan: Sure. I would just clarify too and Suku, correct me if I’m wrong. The pediatric patient isn’t any more heterogeneous than the adult.

Sukumar Nagendran: That’s correct. It’s the same distribution, to my knowledge, Sean.

Sean Nolan: Right. And Suku, any comments on Yanan’s question?

Sukumar Nagendran: So, Yanan, your question, do you mind repeating it?

Sean Nolan: I’m sorry, Silvan.

Silvan Tuerkcan: Yes, sure. I was just wondering in pediatric in general, if there’s anything on the safety profile side that we may have to be aware of. They’re smaller livers, anything with toxicities, but also maybe comorbidities that smaller patients have that adolescents don’t have. Thank you.

Sukumar Nagendran: No, that’s a good question because we did discuss that in great detail before we launched this program. And given that the intrathecal dose about 15% to 20% does get into systemic circulation, and as you know, AAV9 is tropic to the liver, that’s where it goes. But elevation in liver enzymes with an intrathecal dose, which is pretty low, compared to systemic dose is highly unusual, any change in blood count, highly unusual, complement activation and the thrombotic events that have been seen in DLT, highly unusual, if ever with intrathecal therapies, purely because we’re giving such a low dose. Let me think. The antibodies and T cells being made to the transient, highly unusual. So I guess my point is, from a gene therapy standpoint — I guess there’s also ganglion changes.

But again, it’s not common. So my point is, if you do the risk/benefit analysis for the Rett Syndrome program, the benefit, I think, far outweighs the risk. And so — and we haven’t had any concern up to now.

Silvan Tuerkcan: Great. Thanks for the color.

Sean Nolan: Thanks, Silvan.

Operator: We have reached the end of the question-and-answer session. And I would like to turn the floor back over to Sean Nolan for closing comments.

Sean Nolan: Just thank everybody for your time this evening and we look forward to providing further updates here in the next coming weeks on both the Cohort 1 adults as well as the available data for the two pediatric patients. Thank you all. Have a good night.

Operator: This concludes today’s conference. Thank you for joining us. You may now disconnect your lines.