Taysha Gene Therapies, Inc. (NASDAQ:TSHA) Q3 2024 Earnings Call Transcript

Taysha Gene Therapies, Inc. (NASDAQ:TSHA) Q3 2024 Earnings Call Transcript November 13, 2024

Operator: Greetings. And welcome to the Taysha Gene Therapies’ Third Quarter 2024 Earnings Call. At this time, all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. [Operator Instructions] It is now my pleasure to introduce Hayleigh Collins, the Director and Head of Investor Relations. Thank you and you may proceed, Hayleigh.

Hayleigh Collins: Thank you. Good afternoon. And welcome to Taysha’s third quarter 2024 financial results and corporate update conference call. Earlier today, Taysha issued a press release announcing financial results for the third quarter ended September 30, 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 concerning the potential of TSHA-102, including the reproducibility and durability of any favorable results initially seen in patients’ dose-to-date in clinical trials to positively impact quality of life and alter the course of disease in the patients we seek to treat, our research, development and regulatory plans for our product candidates, including the timing of initiating additional trials and reporting data from our clinical trials, the potential for these product candidates to receive regulatory approval from the FDA or equivalent foreign regulatory agencies, the clinical potential of intrathecal administration and our current cash resources supporting our planned operating expenses and capital requirements into the fourth quarter of 2025.

These statements may include the expected timing and results of clinical trials for our product candidates and other clinical 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 and regulatory interactions for our product candidates, our dependence upon strategic alliances and other third-party relationships, our ability to obtain patent protection for 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 we have filed with the Securities and Exchange Commission, including in our annual report on Form 10-K for the full year ended December 31, 2023, and our quarterly report on Form 10-Q for the quarter ended September 30, 2024, that we filed today. This conference call contains sensitive information that is accurate only as of the date of this live broadcast, November 13, 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 security 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 third quarter 2024 financial results and corporate update conference call. I will begin with a brief update on our recent activities and then Sukumar Nagendran, President and Head of R&D of Taysha, will provide an update on our lead TSHA-102 program and clinical evaluation for Rett Syndrome. Kamran Alam, our Chief Financial Officer, will follow up with a financial update. I will then provide closing remarks and open up the call for questions. In the third quarter, we continued to drive progress across our TSHA-102 program and clinical evaluation for pediatric, adolescent and adult patients with Rett Syndrome. Our accomplishments included achieving important clinical and CMC regulatory progress, collecting additional clinical data, further supporting the safety profile of TSHA-102 across different ages and stages of disease, and enrolling additional patients in the high-dose cohort across both our adolescent, adult, and our pediatric REVEAL Phase 1/2 trials, which support our expeditious development of TSHA-102 for patients and families suffering from Rett Syndrome.

We recently completed our initial Type B multidisciplinary meeting with the FDA that was granted as a benefit of receiving Regenerative Medicine Advanced Therapy or RMAT designation for TSHA-102. We are pleased with the progress made with the FDA on further elucidating the potential regulatory pathway for TSHA-102 as we advance discussions on trial design, endpoints and the potential use of an established natural history dataset for Part B of our REVEAL trials. Additionally, we aligned on a meeting cadence with the FDA to expedite the development plan for TSHA-102. We recently completed a Type D CMC meeting, which was well attended by the FDA, including senior officials. We obtained FDA approval to use the pivotal TSHA-102 product in our REVEAL trials based on a successful demonstration of analytical comparability between the clinical product and the product derived from the final commercial manufacturing process.

Subsequently, we released the pivotal product, which we intend to use in Part B of our trials. With this progress, we believe we are in a strong position with our CMC activities for TSHA-102. Suku will discuss this in more detail. We also received approval from the Independent Data Monitoring Committee, or IDMC, to proceed with continued enrollment in cohort two, evaluating the high-dose of TSHA-102 of 1×1015 total vector genomes for both REVEAL Phase 1/2 trials, following the IDMC’s review of available clinical data from the three patients treated with the high-dose. And I am pleased to share the high-dose of TSHA-102 continues to demonstrate an encouraging safety profile. TSHA-102 was generally well-tolerated with no serious adverse events or dose-limiting toxicities in the first two adolescent adult patients as of 20 weeks and nine weeks’ post-treatment, respectively, and in the first pediatric patient at six weeks’ post-treatment.

Subsequently, we dosed the third patient in the high-dose cohort of the adolescent adult trial and enrolled the second patient in the high-dose cohort of the pediatric trial with dosing scheduled for the current quarter. As a reminder, Rett Syndrome is a rare neurodevelopmental disorder that afflicts an estimated 15,000 to 20,000 patients in the United States, Europe and the United Kingdom. Currently, there are no approved disease-modifying therapies to treat the genetic root cause of the disease and there is significant unmet need. Rett Syndrome is caused by mutations in the X-linked MECP2 gene, which inhibits neuronal development and leads to multi-system complications. It’s characterized by loss of communication and hand functions, slowing or regression of development, motor and respiratory impairment, and autonomic dysfunction, seizures, intellectual disabilities, and shortened life expectancy.

Individuals with Rett Syndrome typically require 24×7 care and lifelong assistance with daily activities, resulting in high caregiver burden and significant impact on quality of life. We remain confident in our differentiated gene therapy candidate, which we believe has potential to provide meaningful therapeutic benefit to a broad population of patients with Rett Syndrome, using a minimally invasive delivery approach that has the potential to be administered in the outpatient setting for both children and adults. TSHA-102 is a one-time intrinsically delivered gene therapy that was strategically designed to enable optimal and controlled transgene expression across the central nervous system. Rett Syndrome is challenging to treat with traditional small molecules and gene therapy approaches due to the random inactivation and subsequent mosaic expression pattern of MECP2 that results in a mixture of cells that are either deficient in MECP2 or expressive normally.

We believe TSHA-102, equipped with the novel 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. By silencing the transgene in healthy cells expressing MECP2 and enabling protein production in deficient cells, miRARE is designed to overcome the risks associated with both under and overexpression of MECP2. Importantly, our capsid is paired with a self-complementary viral genome to enhance the effectiveness of gene transduction. We made the decision to utilize the mini-MECP2 gene, which is a smaller version of the MECP2 gene that contains the essential functional domains necessary to therapeutic benefit, so that we were able to package our construct with a self-complementary vector.

Self-complementary vectors have a smaller packaging capacity than traditional single-stranded vectors, but they offer the important advantage of faster and more efficient transduction because they’re able to entirely bypass the step of converting the vector genome into a double-stranded DNA prior to gene expression. As a result, a self-complementary vector can speed up the onset of transgene expression and potentially improve the efficacy of the gene therapy. We believe these strategic attributes of our construct enable the early and consistent clinical improvements that persisted and strengthened over time, as we’ve seen in the adult and pediatric patients treated with the low-dose of TSHA-102. Since Rett Syndrome is a progressive disease, we believe early clinical response increases the likelihood of reversing the disease trajectory and may be predictive of long-term clinical outcomes.

Rett Syndrome requires an increased MECP2 protein to activate the neural circuits necessary for regaining function and it also requires time for patients to strengthen these reactivated circuits to enable deeper learning of the skills affected by the disease. We believe the sooner positive clinical impact is observed following treatment, the greater the trajectory of potential improvement and longer-term outcomes. Therefore, early clinical benefit is a strong indicator that MECP2 protein has reached therapeutic levels that, in turn, create the opportunity for patients to further strengthen and gain new skills that can positively impact their activities of daily living. Importantly, the clinical data presented from the adult patients with the most advanced stage of the disease treated with the low-dose of TSHA-102 indicate a pattern of early clinical improvements and functional gains across multiple domains within four weeks’ post-treatment that persisted and strengthened over time.

Specifically, improvements in autonomic function, including breathing and sleep, were demonstrated as early as two weeks’ post-treatment. At four weeks, clinical improvements and functional gains were reported across multiple domains impacting daily activities, including non-engrossed motor skills, socialization and communication, and seizure events. This includes beginning to use eating utensils, sitting without support, saying mama or daddy, petting a dog, improved attentiveness and social interactions with family members, and improved use of an eye-based driven communication device, as documented by video evidence, efficacy measures and/or clinical observations reported by the principal investigator. As the pediatric data mature, we anticipate that the early clinical improvements and functional gains observed should also persist and strengthen over time in the pediatric patients treated with TSHA-102 as the neural network matures and patients develop the strength to gain more complex skills.

We look forward to further evaluating the pediatric patients over time. As clinical evaluation of TSHA-102 further progresses, it is important to note that our program leverages a routine, minimally invasive delivery approach that has the potential to be administered in the outpatient setting. Preclinical findings support the clinical potential of intrathecal administration as an effective delivery method for AAV-based gene therapies that are designed to treat the genetic root cause of CNS diseases as it enables widespread and consistent bio-distribution across the brain and spinal cord. We believe this widespread distribution has been demonstrated throughout the clinical data, through the clinical data we reported that showed broad improvements across key clinical domains important in disease pathology, including fine and gross motor skills, communication and socialization, autonomic and seizure events.

Importantly, we saw this consistently in the two adult and two pediatric patients treated with the low-dose of TSHA-102, despite differences in baseline disease severity. This was translationally reinforced with data from the analysis of five non-human primate studies that we recently presented at the ESGCT Annual Congress, which demonstrated that intrathecal delivery of gene therapies reaches key areas of the brain and spinal cord. Suku will discuss this in more depth. Collectively, we believe the strategic design of our construct has contributed to the encouraging safety and efficacy data we have reported to-date in both REVEAL trials, demonstrating early, sustained and new clinical improvements and functional gains that strengthen over time and across multiple domains.

We believe there is potential to see continued improvements as the data mature and we look forward to reporting longer term data from the low-dose cohort and data from the high-dose cohort in both REVEAL trials in the first half of 2025. We plan to continue working closely with the FDA through the RMAT mechanism to solidify the regulatory pathway for TSHA-102 based on the totality of data and we remain focused on the execution as we prepare for what we expect to be an impactful year ahead. 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 Rett Syndrome. As Sean mentioned, we believe we have achieved important regulatory progress for TSHA-102 over the last quarter. As a reminder, our approach is to use Part A of the trials to generate data that will inform our development plan for Part B of the trials. Therefore, Part A is hypothesis generating, not hypothesis testing, and was intentionally designed to collect data across a multitude of endpoints to help inform the final key elements for the next phase of our studies. We recently completed an RMAT Type B multidisciplinary meeting with the FDA regarding our ongoing TSHA-102 development plan.

I’m pleased to share the meeting was very productive and we continue to find alignment in the potential regulatory pathway forward for TSHA-102. We advanced discussions with the agency on the trial design, endpoints and potential use of an established natural history data set for Part B of our REVEAL trial. Based on FDA feedback from our ongoing discussions, we intend to focus on objective measures that clinically capture functional gains. In line with this focus, the caregiver reported Rett Syndrome behavior questionnaire or RSVQ, will not be included as a primary or secondary endpoint in Part B of our REVEAL trials as discussed with the FDA. We will no longer be reporting RSVQ scores as part of future data readouts in our ongoing REVEAL Phase 1/2 trials.

The FDA confirmed our existing non-clinical data package is adequate to support BLA submission and we aligned on a meeting cadence with the FDA to expedite the development plan for TSHA-102. We recently completed a Type D CMC meeting with the FDA and I’m pleased to share the FDA approved the use of pivotal TSHA-102 product in our REVEAL trials based on the successful demonstration of analytical comparability between the clinical product and the product derived from the final commercial manufacturing process. Subsequently, we released the pivotal product, which we intend to use in Part B. The FDA also endorsed the proposed analytical methods and corresponding qualification and validation plans, including mechanism of action potency release assays.

We believe this feedback provides further evidence of our meaningful progress towards Part B of the REVEAL trials. It also demonstrates our CMC readiness for BLA submission in the completed development of our final commercial scale process and pivotal product release for use in Part B. Importantly, this progress provides a path forward to potentially utilize the clinical data from Part A of our trials in our future BLA submission. Collectively, we believe our discussions with the FDA have been encouraging. We plan to continue working closely with the FDA through the RMAT mechanism to solidify the regulatory pathway for TSHA-102 based on the totality of data. Now let’s turn to our clinical progress. As a reminder, we have two ongoing Phase 2 REVEAL trials evaluating TSHA-102, an adolescent and adult trial taking place in Canada and the U.S. for patients 12 and older with Stage 4 Rett Syndrome and a pediatric trial taking place in the U.S., the U.K. and Canada for patients five years to eight years of age with Stage 3 Rett Syndrome.

We are currently enrolling patients in Part A, the dose escalation portion of both trials, which is evaluating two dose levels of TSHA-102. With cohort one complete across both REVEAL trials, which is evaluating the low-dose of 5.7E14 total vector genomes, we have made substantial progress in the enrollment of cohort two, evaluating the high-dose of TSHA-102 at 1E15 total vector genomes. The high-dose of TSHA-102 continues to be generally well tolerated with no serious adverse events or dose limiting toxicities as of 20 weeks and nine weeks for the first two adolescent adult patients, and as of six weeks for the first pediatric patient treated. Following the IDMC review of this data, we received approval to continue with enrollment in the high-dose cohort.

Subsequently, we dose the third patient in the high-dose cohort of the adolescent adult trial, and we enrolled the second patient in the high-dose cohort of the pediatric trial with dosing scheduled for the current quarter. We also activated additional clinical trial sites across both REVEAL trials to further support Part B readiness. In collaboration of our intrathecal delivery approach for TSHA-102, we recently presented preclinical biodistribution data that further supports the clinical potential for intrathecal delivery as an effective, safe and minimally invasive delivery approach for broad targeting of the central nervous system at the Annual ESGCT Congress. Data from the analysis of 28 human primates across five studies evaluating AAV9 gene therapy delivery showed that both lumbar intrathecal and intracisternal magma administration led to comparable, consistent and widespread biodistribution of AAV9 vector throughout the brain and spinal cord regions.

Importantly, these findings provide translational support for the clinical data we reported across both REVEAL trials that demonstrated broad clinical improvements seen across key areas of disease pathology that are known to impact different regions of the brain. We believe our continued clinical trial execution and data collection, supporting a continued, well-tolerated safety profile of TSHA-102 at the low and the high-dose, combined with the encouraging regulatory discussions that we have — that have further shaped our developmental plan, strongly position us to success as you work to solidify our developmental plan for Part B of our studies. 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 $14.9 million for the three-month ended September 30, 2024, compared to $11.8 million for the three-month ended September 30, 2023. The $3.1 million increase was driven by a $0.8 million increase in GMP batch activity during the three-month ended September 30, 2024, which is representative of the intended commercial manufacturing process for TSHA-102 and Rett Syndrome. Additionally, compensation for R&D employees increased as a result of higher headcount and this is partially offset by lower consultant and contractor expenses. General and administrative expenses were $7.9 million for the three-month ended September 30, 2024, compared to $8.6 million for the three-month ended September 30, 2023.

The reduction of $0.7 million was primarily due to the decrease in issuance costs allocated to liability-classified 2023 pre-funded warrants associated with the August 2023 financing. Net loss for the three-month ended September 30, 2024 was $25.5 million or $0.10 per share, compared to a net loss of $117.1 million or $0.93 per share for the three-month ended September 30, 2023. The reduction in net loss in 2024 was primarily due to a non-cash loss of $100.5 million reported in 2023 from a change in fair value of warrant liability from the 2023 pre-funded warrants associated with the August 2023 financing. As of September 30, 2024, Taysha had $157.7 million in cash and cash equivalents. Taysha expects that its current cash resources will support planned operating expenses and capital requirements into the fourth quarter of 2026.

I will now turn the call back over to Sean for his closing remarks. Sean?

Sean Nolan: Thank you, Kamran. We are pleased with the continued progress made across our TSHA-102 clinical development program and we remain confident in the potential of TSHA-102 to provide therapeutic benefit to adult, adolescent and pediatric patients with Rett Syndrome across different genetic mutation severity. We remain steadfast and focused on execution as we prepare for what we expect to be an impactful year ahead, which is planned to include reporting longer-term data from the low-dose cohort and data from the high-dose cohort in both REVEAL trials and solidifying the development plan for Part B of our trials. We look forward to continued discussions with regulatory authorities as we work to bring a new treatment option to patients with Rett Syndrome as expeditiously and safely as possible. With that, I will now ask the Operator to begin our Q&A session. Operator?

Operator: Thank you very much. [Operator Instructions] The first question comes from Kristen Kluska from Cantor Fitzgerald. Please proceed with your questions, Kristen.

Q&A Session

Kristen Kluska: Everyone, thanks for taking the questions. It sounds like it was a very productive quarter for you. I wanted to ask one on the regulatory side. Considering that the endpoint could focus on objective measures, how are you broadly thinking about this in the context that this is a largely heterogeneous disorder? Will it be more personalized or could it focus on something perhaps that’s broad that covers a few areas and specific measures?

Sean Nolan: Thanks for the question, Kristen. I would say it’s — you definitely have to take the heterogeneity into consideration as you’re thinking through this. And so, as an example of that, we’re looking at different types of potential trial and trial designs. Possibly thinking about the patient as their own control could be a consideration. And I think to do that, you need to have good natural history and we’ve completed our analysis of natural history and look forward to our next discussion with the FDA about how that can be taken into consideration as we think about trial design and potential endpoints. And specific to endpoints, I think, at this point, I’d put it into a couple buckets. One would be looking at milestones and functional gains, right?

I mean, to your point, every patient is going to have loss or never having gained certain functions or milestones. And if you can potentially restore those, you can have different milestones for different patients, but yet it may be something that’s very consistent across all patients is that you would never expect them to have these types of gains. And I think we’ve seen some preliminary evidence of supporting this kind of thinking actually communicated to the market earlier this week. I also think if you think broadly about the disease, hand function, gross motor function are also aspects that are very consistent across patients that you could consider and you can measure each of these things very specifically, very objectively and in a standardized approach that would lead to high data integrity and demonstration potentially of a very exciting, clinically meaningful effect for patients.

Hopefully that gives you a little bit of color.

Kristen Kluska: Yes. It does. Thanks. And just for the follow-up on that, I was hoping to get a little bit more context around the natural history completed analysis and then thinking about using it as a potential comparator here. Are there any stratifications to expect to compare this or will it just be broadly based on many of these patients couldn’t achieve milestone X and we’re seeing Y in our trial?

Sean Nolan: Yeah. Again, I just want to — I want to keep it at a high level. I think there is a distinction between using it as a comparator to the extent like in SMA, you could say type one patients all followed a similar progression. That’s not what the natural history would indicate here. However, there are aspects of the disease, including when people lose or never gain certain functions seems to be very consistent as well. So, again, we have to think about this carefully, but when you think there’s a path forward here, we’ve had preliminary discussions with the FDA and look forward to next steps in that discussion, hopefully later on here in the quarter.

Sukumar Nagendran: And Kristen…

Kristen Kluska: Thank you.

Sukumar Nagendran: …one thing I would add is also the totality of clinical evidence will also play an important role in this disease. As you pointed out, it’s heterogeneous and these patients have many clinical features.

Operator: Thank you very much. The next question comes from Chris Raymond from Piper Sandler. Please proceed with your questions, Chris.

Chris Raymond: Yeah. Thanks. A couple of questions. Maybe just on the safety update you guys had today from the two adults and pediatric patients. It seems at least from Neurogene’s language and the way they were talking with that SAE they saw that showed within a patient that just had been very recently been dosed. It looks like you guys are 29 weeks and six weeks out with your high-dose. Just thinking about maybe the window for an AAV related SAE, is there a range when you think a patient might be in the clear and have a follow-up?

Sean Nolan: Yeah. And Chris, just to be clear, and I’ll turn it over to Suku. We’ve now dosed four high-dose patients. We reported safety in three…

Chris Raymond: Right.

Sean Nolan: … because the fourth patient was very recently dosed, so they didn’t get that cut off yet. But to answer your question specifically, I’ll turn it over to Suku.

Sukumar Nagendran: Yeah. Chris, I mean, what I’m going to kind of walk you through is based on my experience with both systemic gene therapies, as well as other alternative drugs, which include intrathecal. So keeping in mind that with intrathecal ICV, the dosage given could become eventually an important factor in some of these clinical reactions that you might see in this patient population. So again, I have no idea what exactly happened with the Neurogene program, but what I can tell you is the following, right? With intrathecal, about 15% to 20% of ICV, 15% to 20% of that product can get into the systemic circulation and you can sometimes get an immune response in the liver, because AAV9 has significant tropism to the liver.

And for whatever reason, if there’s an immune response, T cell or sometimes a mixed antibody and T cell response, that can result in elevated liver enzymes and so forth. And sometimes the product itself, I guess, the purity of the product can also play a role in the immune response. So that’s something else to keep in mind. The second is that when you do an ICV procedure, and I’m sure Neurogene knows this better than we do, when they do an ICV procedure from a surgical standpoint, the needle itself, if it impacts the brain and causes some damage or there’s spillage of the product, that can also sometimes cause an immune response, even though the patient may be on tricholiminal modulation and that can cause inflammation in that part of the brain and that could obviously cause a symptomatic concern within that trial.

The other component to keep in mind is as a product gets into the systemic circulation, you can get something called TMA, thrombotic microangiopathy, which I’ve seen many times in the past with DMV. But I think it’s pretty unusual when you do an intrathecal ICV approach. So if that is something that’s going on here, obviously we have to wait to see what they share with us. But it also tends to be an immune response, there’s complement activation, and then there’s the entire cascade of the immune system can get activated, which results in TMA that can then result in a systemic inflammatory response that affects the liver, the kidney, et cetera, et cetera. So, and there might be something else that you’re not aware of, and this all circles back to the purity of the product.

So that’s about all I can tell you based on my past experience. But again, with the Neurogene program, I cannot speak to it at all.

Chris Raymond: Okay. Cool. Thanks. And then just on, I know you gave a lot of detail on RSVQ and not using that in FDA, your discussion with FDA, just, but it was a co-primary endpoint for trofinetide, maybe, but it is also highly variable as you guys have been pointing out. Just any sort of reaction from KOLs or in terms of their reliance on that, do docs use that, any sort of reaction to actually or paying attention to RSVQ as an endpoint?

Sean Nolan: Suku and I can take this. So I would say in our discussions with KOLs, they are very, I would say, universal in their view that RSVQ is a tool to measure clinical intervention with a therapeutic is not a good idea at all. And the first thing they go to is the fact that it was never designed for that purpose. It’s highly variable. It’s given by caregivers. And if you’re going to use it, you’re going to have to use a placebo to try to control for it, which is what trofinetide did. So in our discussions with KOLs, they’re supportive and they’re actually pleased with the discussions we’ve had with the FDA. And instead of looking at that, focusing more on some of these very clinically meaningful objective type endpoints.

Sukumar Nagendran: Yeah. And Sean, what I would add to that is that RSVQ, as you said, is very subjective. It’s driven by a caregiver-based measurement that can vary on a day-to-day basis. And also from what I’m aware with trofinetide, if I remember the original driving force as an endpoint for their Phase 3 trial was RSVQ. And I think CDER reviewed it and felt there was too much variability and that’s why they had CGII added us to make a composite, which then gave you a P-value of significance that allowed, I think, the product to be reviewed and appropriately approved at that point in time. But I guess my point again is, as Sean pointed out, there’s too much variability, and frankly, many of us both who design clinical trials, and I think some of the KOLs really know the scores RSVQ well, are relieved that we’re not using it.

Sean Nolan: Yeah. And I guess the last point, Chris, is keep in mind that the RSVQ measures behavior rather than function. And I think we’ve given multiple examples where function has improved and the RSVQ gets worse because the behaviors that like certain aspects of behavior that people couldn’t have done in the past because they didn’t have the functions looks to be a negative when the function itself is a positive. So just another reason to not use that scale in this type of a setting.

Chris Raymond: Yeah. Very helpful. Thank you.

Sean Nolan: Sure.

Operator: Thank you. The next question comes from Whitney Ijem from Canaccord Genuity. Please proceed with your questions, Whitney.

Whitney Ijem: Hey, guys. Congrats on all the progress for me as well. Just curious, enrollment in the high-dose cohorts is obviously going really well, but wondering if you can characterize the level of demand or interest in the study, I guess, with an eye — in the adults in particular with an eye towards thinking through kind of the ultimate market opportunity and kind of demand from older patients that you might be hearing or seeing?

Sean Nolan: Yeah. I mean, we’ve had significant demand. I mean, we’ve had — there’s multiple patients wanting to get into the slots in both protocols. And I think that we’ve gotten feedback from the community that it’s — they’re very pleased that we’ve cast such a wide net. I mean, oftentimes you start with a younger population and then expand over time possibly. I think they’ve appreciated the approach and the consideration of the fact that we’re trying to take care and offer a potential treatment for all patients suffering from Rett.

Whitney Ijem: Got it. That’s helpful. And then just lastly, on the point of the Rett of administration, which is a clear point of differentiation between you guys and Neurogene, can you walk us through like what happens from a patient perspective as it relates to treatment? Like remind us what’s the immunomodulatory regimen? When does that start? And like, what does the day look like from a patient perspective, logistically and timeline-wise around treatment?

Sean Nolan: You’re talking about the immunotherapy that we’re, immunosuppression regimen that we’re using in our protocol?

Whitney Ijem: Yeah. That and then just kind of like, what does treatment day look like for these patients?

Sean Nolan: Oh! Treatment day. Okay.

Sukumar Nagendran: Oh! Okay. Okay. I get it. Yeah. So right now, we need the, our protocol is such that if you recall when we originally started our studies, we were using prednisolone and sirolimus, but they were for a much longer duration and that was done for many different reasons. But as you got more experience with the, with the gene therapy, the procedure and how patients are responding, we’ve been shortening the immunomodulatory duration, because we feel the patients don’t really need it. So right now, prednisolone, it started on day minus seven, so roughly one week before the day of administration at 1-milligram per kilogram per body weight. And then it’s given for six weeks and then it’s tapered off over six weeks.

So it’s a total of 12 weeks. And then sirolimus, which was at 1-point running for almost 37 weeks, 40 weeks, is now being reduced to 24 weeks or 25 weeks and it’s 0.8 milligrams per kilogram. And obviously, ideally, I would like to see even that duration shortened further and keep it as simple as possible for this patient population. So obviously, before a patient is brought in for actual treatment and engagement within the study, they have to go through multiple screening procedures to make sure they actually qualify for the trial and there’s a time range that can run somewhere from, say, 20 days to 30 days, 50 days. I mean, there’s a duration. So I’m not being exact here, but I’m just going to give you a feel. So once they qualify through screening, then they’re given immunosuppressant modulatory agents at day minus seven.

And then they come in on that day and they have to be prepped for the procedure. Now, the caveat here is, remember, our is a simple number puncture, which can be done inpatient or outpatient. And this has significant impact on who is actually doing the number puncture. Because eventually, a number puncture that can be done in an outpatient setting by not necessarily a neurologist, but can be done by an internist or a physician who can administer the procedure and the drug in a very simple manner and then the patient, I guess, eventually could be discharged. But at the present time, given it’s a first-in-human study, we have to observe the patient over a certain period of time for the protocol before we can discharge the patient. And then the patient is followed week one, week two, week three and week four for the first four weeks from a safety standpoint and then we start doing efficacy assessments as well.

As Sean and I pointed out earlier during the call, as hypothesis-generating efficacy measures. Now, the caveat is when you do other procedures like ICV, it’s a surgical procedure, very invasive and then these patients have to be observed sometimes in a surgical unit almost up to a week. So that’s kind of the big picture at the present time. So the ease of use, a lot of administration, and obviously, the immunosuppressive regimen, keeping it simple and not being too aggressive with it, all of those could make it a much more palatable gene therapy for this disease state with a broad range of applications, so.

Sean Nolan: Yeah. And the only thing I would add to that, just so you have a sense of time, once the patient is brought in for the procedure, the administration itself, we’re talking 10 minutes to 20 minutes.

Sukumar Nagendran: Yeah.

Sean Nolan: So it’s very, very short and we like to make it as easy as we can on the patients and their families.

Whitney Ijem: Very helpful. Thank you.

Sean Nolan: Sure.

Operator: Thank you. The next question comes from Salveen Richter from Goldman Sachs. Please proceed with your question, Salveen.

Salveen Richter: Good afternoon. Thanks for taking my question. Can you elaborate on the exact objective measures you’re looking at in Part B of the REVEAL study based on the FDA feedback and the specific milestones and or functional gains you’ll be monitoring? Thank you.

Sean Nolan: Salveen, I really don’t want to get into the details of that at this point in time. I think it’s better to keep it high level in terms of the areas that we’re looking at, which would be milestones and function, gross motor function, and the actual means that we’re going to do that and what we’re going to follow. I can tell you, we’ve got a very specific set. It’s all been identified and validated with the existing metrics, so there’s nothing new that we’re introducing here. I’d prefer to wait until we have everything fully and finally fleshed out with the FDA. We’ve got another meeting with them coming up here, hopefully before the end of the year, as a next step. We’ve talked about locking it all in in a meeting likely in the first half of next year. We’re continuing to make good progress, but I’d hesitate from getting into the details until we’re fully aligned.

Operator: Salveen, may I just check if you have any further questions?

Salveen Richter: Thank you so much.

Operator: Thank you. The next question comes from Gil Blum from Needham & Co. Please proceed with your questions.

Gil Blum: Hi, everyone, and thanks for taking our questions. Maybe a more general question as it relates to your Type D meeting. So were there some garnered synergies from prior experience with Zolgensma that helped you get the equivalence through here or is this just the new product, checking all the boxes, and I have a follow-up.

Sean Nolan: You’re talking about the comparability between the clinical lot and then the product made from the final commercial process?

Gil Blum: Yeah.

Sean Nolan: Yeah. I would just keep it at a high level, Gil, and say we really didn’t do much to the upstream. They’re very, very similar between the two processes. What we wanted to do was just to continue, like, one of the things that we brought over from the Zolgensma experience is that, we always want to make the most pure product that we can. I mean, then you’re minimizing the dose exposure that you’re giving the patient. So while we never had any direction from the FDA or anything like that, I mean, the FDA has generally been looking at keep empty capsids from going above 30% or so and we want to be way less than that. And so we focused a little bit more on the downstream and that’s where we did our work. And so when you look at the actual attributes of the product, the potency and infectivity and those kinds of things, the data were very, very consistent.

And the improvements that we made were clear and we identified those. Obviously, where we landed with the FDA was in a very positive fashion. So we’re pleased with where we are and look forward to — I guess, I’d make the point that we’re at scale, we’ve got our final process and we’ve got product in the freezer that we’re planning to use in Part B, and we’re looking forward to that. So having CMC lined up at this point in time is a big step for the program, because generally it turns out that CMC gets on the critical path, and that’s not the case for us.

Gil Blum: Okay. That’s very helpful. And another follow-on as it relates to potential designs for pivotal studies here. Is there — it sounds like we’re looking more at natural history here, but would you guys still consider a randomized study in adult patients, for example, or does the disease heterogeneity make that very complicated? Thank you.

Sean Nolan: I mean, the heterogeneity is really there in all patient ages and stages. So that’s one of the reasons that we’re thinking about multiple trial designs. But ultimately, if you can come up with a construct where it’s defendable to use the patient as their own control, regardless of age, would be an optimal setting, because the patients are so heterogeneous that using a delayed treatment group, that really isn’t taking care of the issue either. So I think we have — I can tell you we’ve given a great deal of time and effort around this, we’ve had discussions with the FDA on multiple occasions and we’ve basically said we’ll continue to bring forward both clinical data, as well as the final assessment of the work we did in natural history to make our case for why we think a certain approach makes the most sense.

And I can just say the agency’s been very open to that. There’s been no pushback. There’s, I would say, a very good understanding by the agency of the disease and the inherent challenges that you would have. And so that’s where we’ve been thinking a lot about the combination of the trial design and the end points to allow us to facilitate getting this drug approved in the most expedited fashion possible with the greatest scientific rigor. And it’s our view that the natural history work that we’ve done will be helpful in facilitating that. And look, we have to certainly get there in final form with the FDA, but that’s where we’re thinking at this point in time and we’re encouraged by previous discussion.

Operator: Thank you very much. The next question comes from Maury Raycroft from Jefferies. Please proceed with your questions.

Maury Raycroft: Hi. Congrats on the progress and thanks for taking my questions. Just clarifying, it sounds like you could have that alignment on a registrational study design and end points ahead of the data update first half of 2025. So would that be part of your first half 2025 disclosure?

Sean Nolan: In a perfect world, yes. We would like to basically come out with the feedback from the FDA and do the data update simultaneously would be fantastic. So just to be clear that what I was pointing at, we are going to have another meeting with the FDA at the end of this year or very beginning of next year. That’s the next step in the discussion. We would expect that more final discussion to happen in the first half of next year, and it’s our goal, our preference to align it. So we’d love to come out and tell you guys, here’s where we landed with the FDA, here’s the data update and here’s the next steps in the program. It’s how we’ve drawn it up, and hopefully, we’re able to execute and make that happen.

Maury Raycroft: Got it. Okay. That’s helpful. And maybe just a quick one. Wondering if you discussed with FDA the potential to dose a younger cohort of patients at three-year olds to five-year-olds in Part B or is this part of longer-term plans? I guess just based on the safety and profile they have so far, could you potentially get into those younger patients in Part B?

Sean Nolan: Yeah. I mean, right now Part B does include three-year olds to five-year-olds, and I would just say, Maury, that our intent is ultimately to make sure that this is available for patients newly diagnosed throughout adulthood. So, we are contemplating all of that in our full clinical program and we’ll step through it accordingly. We’ve got the plan in place, and we’re in concert in discussion with the FDA about that and how to best step through that.

Maury Raycroft: Got it. Okay. Thanks for taking my questions.

Sean Nolan: Sure.

Operator: Thank you. The next question comes from Yanan Zhu from Wolf Fargo. Please proceed with your questions, Yanan.

Unidentified Analyst: Hi. This is Jeff [ph] on for Yanan. And thanks for taking our questions. Can you just give us your overall thoughts on the Neurogene data and how you see it comparing to TSHA-102? And then secondly, is dosing above the high-dose of 1×1015 vector genomes with TSHA-102 possible? Do you think there’s safety room to dose higher? Thanks.

Sean Nolan: Yeah. I mean, I can say that in our non-human primate tox, we were clean at 2E15, so we could potentially go higher if we wanted to. Based on the preclinical data, it looks like 1×1015 is the right choice at the higher dose, but it’s something that we could certainly contemplate. We have the ability to go higher, so I think that’s a key point. I think as it relates to the Neurogene data, I think number one, I would just say that it’s a positive for the Rett community that the Neurogene data was demonstrating benefit to patients. I think what it highlights is that utilizing gene therapy to target MECP2 is a good target and that there’s a benefit that’s been derived now from two different constructs. I think we have to look at over time how things elapse.

I don’t think it’s appropriate to get into the details of how one may be better than the other at this particular point in time, but I think that the win, if you will, is for the community and that hopefully there’s options available for the family suffering from Rett.

Unidentified Analyst: Okay. Thanks very much.

Sean Nolan: Yeah.

Operator: Thank you. [Operator Instructions] The next question comes from Jack Allen from Baird. Please proceed with your question.

Jack Allen: Great. Thanks so much for taking the questions and congratulations on the progress made over the course of the quarter. I wanted to ask about the four patients that have been dosed with a high-dose. How should we think about those patients and the centers at which they’ve been dosed? I’m trying to understand if there’s a broadening footprint here and if additional physicians are getting hands-on experience with TSHA-102? Thanks for any context you provide.

Sean Nolan: Yeah. Suku, don’t make sure I get this right, but we have seven total sites available, five sites available right now to dose in the two protocols. And so of the four patients that were dosed at the high-dose, it’s at least two different sites. So right now we’ve had a total, when you look at the total, the both REVEAL programs, there’s at least three sites that dose patients, and hopefully, that makes sense. Three different sites.

Sukumar Nagendran: Correct.

Sean Nolan: Yeah.

Jack Allen: Got it. And then three sites, I guess, just to clarify across both the low and the high-dose, is the way to think about it?

Sean Nolan: Yes.

Jack Allen: Okay. Thanks so much for the call.

Operator: Thank you. The next question comes from Joon Lee from Truist Securities. Please proceed with your questions.

Joon Lee: Hey. Thanks for taking our questions. As we look forward to Part A data in first half of next year, will you be providing updates on RSVQ or are you no longer sharing RSVQ as part of the assessment? And for the endpoint you are considering for Part B, can you at least share if that’s something that you’re already tracking in Part A? Thank you.

Sean Nolan: Yeah. Joon, we are not going to give updates on RSVQ anymore, given the fact that in our discussions with the FDA, it’s very clear that they didn’t see it as a viable option as a primary endpoint or a secondary endpoint for that matter and we completely are on board with that. We see no value to continue to show up. Yeah, and so, for those reasons, we’re…

Sukumar Nagendran: Yeah.

Sean Nolan: … focused more on, most importantly to us, are really what are the functional gains and clinical observations that are being demonstrated? We still think CGII is something that’s relevant to look at, but again, that’s not a primary endpoint in our view and discussions with the FDA. So, we will consistently give updates on the other aspects of the program that we have, but we just felt RSVQ, given that it’s been completely ruled out and given the focus that people have put on it, makes no sense. We’re trying to be very clear that it has no effect on the program going forward from a regulatory perspective and it’s not a good assessment of clinical effectiveness. As it relates to your question about Part A, yes, I mean, we are collecting milestone data.

We’ve reported on a lot of milestones over the course of time. That’ll certainly go into the discussion that we’re having with the FDA in terms of endpoints. We’ve already had several discussions about that, as well as hand function and gross motor function. So, when we give our update in the first half of next year, hopefully it can be very comprehensive for everyone in terms of where we landed from trial design and endpoints, how does that correlate to what we’ve seen in Part A and then what does your high-dose data look like? So, we’re excited. I think we’re exiting the year with a ton of momentum, we’re in a good place, and what we have to do as a team is execute across the Board, generate clinical data and continue our dialogue with regulators to put us in a great position that we plan to share in the first half of 2025.

Joon Lee: All right. Thank you.

Sean Nolan: You bet.

Operator: Thank you. The next question comes from Silvan Tuerkcan from Citizens JMP. Please proceed with your questions.

Silvan Tuerkcan: Hey. Good evening and thanks for taking my question. I just wanted to ask about the doses and how you view the equivalency between your dosing exposure and that of Neurogene, given you’ve also recently presented data at ESGCT on biodistribution? Thank you.

Sean Nolan: So, can you kind of restate that question? I want to make sure I understand it and act — and can be accurate in giving the answer.

Silvan Tuerkcan: Basically, like your low-dose is little bit below what Neurogene is administering and now you escalated at the higher dose to approximate the same dose. Obviously, the route of administration is different. I just wanted to get an idea of, if you have any sense of what the exposure around the critical part of the brain is in terms of the gene therapy — two gene therapies and what that means for the efficacy we’ve seen so far with the product?

Sean Nolan: Well, Suku and I can tackle this together, but I think, number one, the data that we reported out at ESGTC was hopefully giving good context to the question of what’s the bioavailability look like when you go direct to brain versus intrathecally? And so, we had over 29 non-human primates across all the AAV9 programs that we had, and when we looked at the biodistribution data, there really wasn’t a difference between intrathecal levels of transduction versus what happens with ICM or direct to brain. So, I think the first point is the biodistribution appears to be equal. And number two, when you look at the clinical data, that makes sense, because when we reported our data initially, we were seeing effects occur across clinical domains.

And so, as you know, autonomic function, socialization, communication, gross and fine motor function, seizures, all those happen in different parts of the brain. Sleep, so that lines up well with the biodistribution data that I talked about that you have to be getting to all parts. And then, when you look at the data that was announced later this week, there seems to be similar effects, 1-point or 2-point improvements in CGII, so it looks like the routes of administration are relatively equal in terms of delivering the effect across clinical domains. And I would just point to the fact that, our dose is about 50% less than what was used at 1×1015 and part of that can also be the construct design. And so, we’ve talked about the fact that having a double strand and self-complementary generally leads to greater levels of transduction efficiency than versus using a single strand.

So, I think all the data kind of line up with, you know, what we’ve been saying for the last couple of years. And so, we’re encouraged by what we’ve seen at the low-dose. Even in the pediatrics at early time points, within four weeks, we were seeing effects across breathing, sleep. We were seeing impacts on fine motor skills, gross motor skills, seizure activity and that was in as little as four weeks to 12 weeks. So, from our perspective, that’s super exciting and we think that sets the trajectory for how these patients are going to do over time. So, it’s our anticipation that as longer-term data unfolds at the low-dose and we believe hopefully even at a better magnitude at the high-dose, that we see the data strengthen over the course of time and we see sustained new gains emerge over time as well.

Sukumar Nagendran: Sean, I would also add that what it appears, right, both the ICV approach and the intrathecal approach, the proof-of-concept now has been proven. So, that is number one. Number two is, yes, the Neurogene does use a high-dose. And the only thing is, from an overall safety standpoint, it’s pretty well known in gene therapy to higher the dose, even small changes from a logarithmic standard sometimes can impact certain types of safety signals. So, obviously, with the recent safety issue, I think there’s a lot of curiosity as to what is going on. The third is the bio-distribution, as you pointed out. There was a lot of questions around intrathecal via number puncture. We look at the same amount of equivalent biodistribution to ICM or ICV.

What we’ve shown now is a pretty large cohort of non-human primates that we have equal biodistribution. We activate the neural network quite effectively and we work quite rapidly when it comes to clinical efficacy, much quicker than a single-stranded construct. That is very clear. And then, if you don’t use the right dosage from a single-stranded construct, your efficacy is slow, it takes a while and it may not even process. So, those are some of the questions, I think, that have to be answered between the two constructs over time.

Silvan Tuerkcan: Great. Thank you so much.

Sean Nolan: Thanks, Silvan.

Operator: Thank you. The next question comes from Keith Tapper from BMO Capital Markets. Please proceed with your question.

Keith Tapper: Hey, guys. Thanks for taking my questions and appreciate the execution across the program. Just trying to frame for investors the motivation for the high-dose cohort, given the potential safety tradeoff and really an absence of mature low-dose data in pediatric patients. Maybe could you remind us of expectations for the higher dose? Are we looking for upside to efficacy, durability, biodistribution or a broadening of the patient population with two doses possibly moving to approval? And then, from where we are today, I guess, could you characterize the higher dose as experimental, exploratory or necessary for competitiveness? Thanks.

Sean Nolan: Yeah. I mean, Keith, we decided to, when we picked the doses, we see, in preclinical data, that there should be benefit to go to the 1×1015, based on all the preclinical work that we’ve done. And given the fact that we have double that, 2x that safety margin in our tox studies, we feel encouraged about the benefit-risk. And I think that utilizing the intrathecal approach, assuming that you have equal biodistribution, in our view, the data that we’ve put out preclinically, and more importantly, clinically, support the biodistribution, intrathecal is, if not the safest, one of the safest ways to administer therapy to target the benefit and minimize the risk. So, we’re very pleased with what we’ve seen at the low-dose and it’s our view that at the high-dose, there is a relatively very low likelihood of any type of safety issue.

And there is a better than — there is a good chance that we’re going to see incremental benefit that the patients are going to derive by going to that dose. So, for us, it’s a very easy calculus to say, let’s go to the high-dose. And I can tell you, in the IDMC meetings, we continue to show high versus low-dose, looking at all of the different parameters that are collected, whether it’s liver function, platelets, all that kind of stuff and we’ve seen essentially no difference in the two. So, again, that’s why we feel good about things and have decided to move to the high-dose even earlier than we were supposed to based on the protocol, and of course, the IDMC supported that recommendation.

Keith Tapper: Okay. Great. That’s helpful. And just one follow-up, if I could. Just — how should we think about the more mature adult clinical data that we have in terms of translatability to the pediatric cohort, just maybe in context of baseline characteristics and the original goals of the adult trial, and then considering differences in brain development and disease stage for the adults? Another way, do you have different expectations for pediatric versus adult responses to treatment? Thanks.

Sean Nolan: Well, I think, keep in mind, when we started the adult trial, I think that the consensus view was we wouldn’t see any efficacy. So, that was kind of what the KOL community felt and within four weeks, actually within two weeks, sleep normalized.

Sukumar Nagendran: Seven days.

Sean Nolan: Seven days was, okay. Seven days. And within six weeks, gross motor function improving were milestones being achieved that hadn’t occurred in over eight years, essentially. And what we’ve seen when we look at the high-dose data is that, the patients do seem to strengthen over the course of time, right? And so, sometimes, like the CGIIs, sometimes the scale will get better in the adult. Sometimes it might stay the same. But what’s happening to the patient, the activities of daily living, the functional gains, those are improving over time. Seizure reduction, that’s improving over the course of time. And so, the way we’ve described it is that, in the adult population, you see early benefits, early clinical improvements and functional gain, and then, over time, those are either sustained or they get better.

And so, it’s our expectation in the pediatric group that that should also be the case. It should follow a similar pattern. And so, we were very encouraged with the early data that we put out in June. In eight weeks, we had a patient with a 2-point improvement in CGII. That’s fantastic. And so, 50% of the patients had a 2-point improvement, 50% had a 1-point improvement. And then, we were seeing changes occur in terms of function, right? I mean, one of the girls got her ability to use her thumb and pincer grasp back after having not had it for five years. Like, that’s incredible. And so, it’s our view that those patients should get better over the course of time as they get stronger, they get used to having certain skills. The socialization aspect, also with what we’ve seen in the adults and even in the early data of the pediatrics got better over the course of a few months.

We would expect that to do the same. So, it’s kind of like you think about two possibilities with the pediatric patients that I feel pretty good about is I would hope and I’m hoping based on what I’ve seen in the adults that the pediatric low-dose data looks even better over the long-term. And then, that the high-dose looks even better, both in the short- and the long-term than the low-dose. So, again, that’s why we’re so excited about 2025, because I think the teams worked hard to put us in a position with regulators, with opening multiple sites. I mean, we’re not just getting our data from one site. We’ve now got five sites that are active and enrolling and we’ve dosed patients at three of those five with the other two coming online here.

Well, they’re online. It’s just getting to the dosing that we’ve got scheduled already. So, we feel good about where we are and where the program’s going. We look forward to the game continuing to be played.

Operator: Thank you very much. Ladies and gentlemen, we have reached the end of the question-and-answer session, and I’d now like to hand the call back to Mr. Sean Nolan for closing remarks. Thank you, sir.

Sean Nolan: I just want to thank everyone for taking the time this evening to hear the update and look forward to any follow-up questions. Take care and have a good night.

Operator: Thank you. Ladies and gentlemen, that does conclude today’s conference. Thank you very much for joining us. You may now disconnect your lines.