Voyager Therapeutics, Inc. (NASDAQ:VYGR) Q3 2023 Earnings Call Transcript

Voyager Therapeutics, Inc. (NASDAQ:VYGR) Q3 2023 Earnings Call Transcript November 6, 2023

Voyager Therapeutics, Inc. misses on earnings expectations. Reported EPS is $-0.59 EPS, expectations were $-0.58.

Operator: Good afternoon, and welcome to the Voyager Therapeutics Third Quarter 2023 Conference Call. All participants are now in a listen-only mode. There will be a question-and-answer session at the end of this call. Please be advised that this call is being recorded at the Company’s request. A replay of today’s call will be available on the Investors section of the company’s website approximately two hours after completion of this call. I would now like to turn the call over to Pete Pfreundschuh, Chief Financial Officer. You may begin.

Pete Pfreundschuh: Thank you, and good afternoon. Joining me on the call today is Dr. Al Sandrock, our CEO, and joining us for Q&A is Dr. Todd Carter, our Chief Scientific Officer. We issued our Q3 2023 financial results press release this afternoon. The press release and 10-Q are available on our website. In a moment, I will turn the call over to Al. Before I do this, I want to remind everyone that during call, Voyager representatives may make forward-looking statements as noted in slide 2 of today’s deck. These forward-looking statements include future expectations, prospects and plans. All forward-looking statements are inherently uncertain and are subject to risks and uncertainties that may cause actual results to differ materially from those indicated by these forward-looking statements.

You are encouraged to review and understand the various material risks and uncertainties facing the Company as described in the Company’s most recent annual report on Form 10-K filed with the SEC. As of the filing of today’s quarterly report on Form 10-Q, there have been no material changes to the risk factors described in our annual report. All SEC filings are available on our company’s website. Now, it is my pleasure to turn the call over to Al.

Dr. Al Sandrock: Thank you, Pete, and good afternoon, everyone. Please turn to slide 3. I’d like to start by briefly reviewing Voyager’s investment rationale, platform, pipeline, partnerships and potential. First, the platform: The delivery of gene therapies into the central nervous system, or CNS, has historically proven challenging. Voyager is working to solve this delivery challenge with our TRACER capsid discovery platform. We have generated multiple families of novel capsids with robust CNS tropism following IV delivery. We believe our capsids are best-in-class because we have demonstrated high transduction in multiple brain areas at relatively low doses with the targeting of the liver and dorsal root ganglia neurons. We have also shown the ability to target neurons and glial cells, blood brain barrier or BBB penetrants across multiple species and an identified receptor that is also expressed in humans.

Second, our pipeline: We are advancing two wholly owned and two partnered CNS programs through late-stage research and towards IND filings. The most advanced is our anti-tau antibody program for Alzheimer’s disease, for which we anticipate an IND filing in the first half of 2024. We were encouraged by the data presented by some of our peers at the recent clinical trials on Alzheimer’s disease meeting, which provided for the first time an early clinical evidence showing that tau targeting therapies slowed cognitive decline. These data strengthen our conviction in the value of tau as an important therapeutic target for Alzheimer’s disease. Behind our anti-tau antibody, we have multiple opportunities to advance gene therapies enabled by our novel TRACER capsids into the clinic in 2025, including potentially our wholly owned SOD1 program for amyotrophic lateral sclerosis, or ALS.

Third, partnerships: Voyager has generated more than $200 million this year alone in non-dilutive partnering revenue. We currently have 11 partnered programs, which provide opportunities to achieve milestone and/or royalty revenue to generate data with our capsids and most importantly, to help patients. Finally, potential: Specifically the potential to expand from gene therapy into other approaches of neurogenetic medicine. We have identified multiple receptors associated with our capsid families. We are exploring the potential to leverage one of these, which we call Receptor X to shuttle non-viral genetic medicines across the blood brain barrier. I am increasingly excited about the potential here to expand the reach of our technology into other approaches of neurogenetic medicine.

Moving to slide 4. As you can see, Voyager is advancing quite a robust pipeline. However, we are doing so efficiently. The wholly-owned programs at the top of this slide that noted in orange are the only programs we fund. The rest of our pipeline is funded by our partners. During Q3, Voyager focused on advancing our prioritized pipeline programs toward the clinic. We initiated GLP toxicology studies with VY-TAU01, our humanized anti-tau antibody for Alzheimer’s disease. This program is on track for an IND filing in the first half of 2024. We also continue to advance our SOD1 gene therapy program for ALS. This program is on track for a development candidate selection before the end of this year to support an IND in mid-2025. As we move forward towards the clinic, we are thoughtfully building clinical expertise within the Voyager team, including in regulatory affairs, toxicology and development operations.

I will make one more note before we leave this slide. In September, Alexion, AstraZeneca Rare Disease, announced it had completed a definitive purchase and license agreement for a portfolio of preclinical rare disease gene therapies and enabling technologies from Pfizer. The portfolio includes the license for a novel capsid generated from our TRACER platform to enable a potential gene therapy program exclusively for an undisclosed rare neurologic disease target. The assignment does not impact the terms of the licensing agreement. We are thrilled to have them as a partner on this program, particularly given their public commitment to advancing next-generation genomic medicines. Turning to slide 5. As you can see, Voyager continues to execute on our milestones.

So far this year, we secured partnerships with Neurocrine, Novartis and Sangamo. The Company is well capitalized with approximately $253 million in cash on our balance sheet as of the close of Q3 2023. We expect our cash, cash equivalents and marketable securities, along with expected reimbursements under the Neurocrine collaborations and interest income to provide runway into mid-2025. We selected a development candidate and an initiated GLP toxicology studies for our anti-tau antibody program for Alzheimer’s disease, and we launched three early-stage gene therapy programs, one for Huntington’s disease and two for Alzheimer’s disease. Looking forward, we continued our work to advance neurogenetic medicines. We expect to identify a lead candidate for our wholly owned SOD1 ALS gene therapy program by the end of this year.

As we look towards 2024 and 2025, we anticipate the potential for multiple IND filings across our wholly-owned and collaborative and/or licensed programs. This translates into multiple opportunities to earn milestone payments and even more importantly, once clinical trials begin, several opportunities to establish human proof of concept for our TRACER capsids. Furthermore, there is potential to see early biomarker-based evidence of disease impact in some of these very difficult CNS indications. We continue to engage in active discussions with potential partners regarding collaboration and licensing arrangements around our platform and pipeline. In summary, Voyager continues to advance our lead programs towards the clinic while maintaining our robust platform and early pipeline programs.

We look forward to continued execution this year and next. I’d like to thank the wonderful employees at Voyager for their hard work to keep everything moving forward. With that, we’re happy to take any questions you may have. Operator?

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Q&A Session

Operator: [Operator Instructions] Now, first question coming from the line of Joon Lee with Truist Securities.

Joon Lee: Congrats on the progress. As you consider nominating your genetic medicine beads, you can either do so with the capsids that you have or choose to use the so-called Receptor X that you discovered. What are some considerations as you decide which route to go and which strategies to use? Is it disease-specific or something else? And I have a follow-up.

Dr. Al Sandrock: Thanks, Joon. I’ll start, and I’m sure Todd would want to add some comments. So look, gene therapy remains our core technology. And we’re so excited by our capsids that — that’s going to be the first thing we think about, right? And — but look, genetic medicines I think is best done with multiple modalities. And we are, as we speak, doing this experiment, where we’re going to test whether we could shuttle other modalities into the brain using a ligand against Receptor X. And if those experiments are successful, then we’re going to have more options available to us. I view it very much as a toolbox where we can choose the right modality for the right disease for the right mode of action that we’re seeking. And I think we’re headed to the point where you will have multiple options. Todd?

Dr. Todd Carter: I think that what you’re keying in on is the need for delivery and whatever the modality is, need for delivery at a safe and tolerable dose to achieve efficacy. One of the things that we’re showing with our next-gen — current gen capsids is that we can deliver broadly throughout the CNS at relatively low doses. I think there could be advantages to different modalities, gene therapy as an advantage of a single dose and with those of novel capsids that [indiscernible] delivery and targeting for all targets, but the other modalities that we’re starting to explore for the different advantages as well.

Joon Lee: Great. And in your cash runway guidance into mid-2025, what’s included in that assumption? And are you able to provide any guidance on what milestones we can expect over the next 12 months from any 1 of your 11 partnered programs?

Pete Pfreundschuh: So, Joon, thanks for the question. I think, first and foremost, I would say that, we continue to be very diligent in our cash resources that are on our balance sheet. And I think what we did for you guys today is we just kind of updated the guidance to be a bit more precise as to runway guidance for the business. As you know, our guidance is based upon only the cash that we have physically sitting on the balance sheet. It does not include any additional potential milestones that we would receive from the 11 partnered programs that Al alluded to earlier, so that potentially could extend that guidance and runway as well as some further BD as Al alluded to earlier as well. We continue to be very thoughtful and are looking potentially to do some further collaborations and deals from a licensing perspective.

So, that’s kind of the guidance with regards to the runway. It does take us into the middle of, we said mid-2025. In terms of inflection points and milestones, obviously, some big milestones and inflection points that we talked about. We mentioned as part of this earnings call, we plan on getting into the clinic in the first half of next year, specifically with regards to the tau program. So, that would be filing the IND and getting in the clinic. And then obviously, the SOD1 program we talked about 2025 with regards to filing IND and advancing that program. That does not include the milestones associated with some of our partner programs, which as we’ve referenced in the past, we do have some partnerships, both Sangamo as — with regards to Neurocrine, they alluded to also advancing two programs for Neurocrine and Sangamo one program to IND in 2025.

So those are additional milestones that we’re looking forward down the road. Hopefully that helps with regards to guidance and also provide you with some context around milestones during that time period.

Operator: And our next question coming from the line of Jack Allen with Baird.

Jack Allen: Congratulations to the team on the progress. Maybe the first one on the timing of some of these updates. You mentioned that the studies are ongoing as it relates to the shuttle program. I was wondering when those preclinical studies might read out and when we could get a disclosure surrounding that. And then similarly for the SOD1 candidate selection expected by the end of the year, how should we think about disclosures going forward as you select that candidate? And then I have a quick follow-up as well.

Dr. Al Sandrock: So I’ll ask Todd to answer the first question, and I’ll let attempt to answer the second one.

Dr. Todd Carter: Sure. So the shuttle program, that’s in early stages of discovery right now. At its early stage, we haven’t really given any guidance as to the time line. We’re looking forward to being able to update you in the future, but we don’t have specific dates yet.

Dr. Al Sandrock: As far as the SOD1 program, we expect to announce when and if we’ve announced — identified a development candidate, we’ll let you know. And also, we’ll let you know when we start our GLP toxicology studies, and generally speaking, we’ll let you know whether or not we’re on track for the IND in mid-2025.

Jack Allen: Great. And then, shifting gears to the tau program. I know we just had CTAD recently. Al, I was wondering if you could speak to some of the evidence from the meeting that provide you additional support as you look to move forward this tau antibody. And then I know one of the questions around the meeting was taking antibodies and giving them via IV or more rapid injections as well. What are your thoughts as it relates to the initial formulation for the tau program as you look to bring this into the clinic?

Dr. Al Sandrock: Well, I think the meeting continues to, I think, validate that tau is a very exciting target for Alzheimer’s disease, potentially the next target after the anti-amyloid treatments that will produce hopefully new medicines for patients. I think — by that, I’m referring to the fact that we’ve already seen that — certainly, the knockdown approach will affect the spread of tau by tau-PET imaging. And now we saw at this most recently meeting that it seems to lead to a slowing of clinical decline. Small numbers, still early days, but I think I would look at the data as encouraging. I think it’s also interesting that the anti-amyloid antibodies really work best in people with a low tau burden, right? And that’s predictable, I believe, because many of us believe that beta amyloid plaques or the formation of plaques seems to somehow trigger the spread of tau.

So I think — and in fact, tau appearing in certain parts of the brain in the medial temporal lobe is actually part of normal aging. But it’s only when you have the presence of amyloid plaques in the brain that you start to see it spread into other areas of the brain, which is actually pathologic. So, we continue to be excited by tau as a target, and that’s why we have two programs in it, the lead one being an antibody that we have seen block the spread of tau in animals quite well, actually, quite robustly. And then, we have the tau — vectorized tau, a knockdown approach, a vectorized siRNA, which in some ways could mirror the efficacy seen. We hope that we’ll mirror the efficacy seen with the antisense oligonucleotide approaches but also knockdown expression of tau.

Operator: And our next question coming from the line of Jay Olson with Oppenheimer.

Jay Olson: Just a follow-up on BIIB080 data at CTAD. Can you just talk about how your anti-tau antibody will be clinically differentiated from other antibodies and also other modalities like anti-tau ASOs.

Dr. Al Sandrock: Yes. So, our vectorized siRNA will knock down the expression of all forms of tau. And so, in some ways, it mirrors what BIIB080, the antisense against tau does. The mechanism is different, but the end result, we think, will be pretty similar. Of course, will be differentiated from BIIB080 in that and it’s a onetime treatment using our — one of our proprietary TRACER derived capsids. So, we’ll deliver an IV and we’ll be able to get transduction across multiple brain regions pretty much across the CNS, which I think is a big advantage. That’s a very different approach from the anti-tau antibody, which will not address intracellular tau, for example. We don’t believe the — we think the antibody will bind to extracellular forms of tau. And what we hope to do with that antibody is to block the spread of tau. So, two very different approaches and we’ll see which one works the best. Could be that both works, which would be great.

Jay Olson: And I had a follow-up question, if I could. Assuming your first IND will be for your anti-tau antibody, what’s the cadence of subsequent INDs and which are the next most likely candidates for filing INDs? And then, maybe a financial question since you’ll be in the clinic next year. Can you just talk about how you plan to finance those clinical trials?

Dr. Al Sandrock: So, let me start with your first question. So, after the IND that we anticipate for the VY-TAU01 antibody in 2024, the next IND wholly-owned program will be the SOD1 gene therapy program for ALS, which we anticipate we will file an IND in 2025. In addition, our partners at Neurocrine have indicated that they plan to select and move two gene therapy programs into IND by 2025. I assume that means the Parkinson’s and Friedreich’s ataxia program since they are the most advanced. But you’ll have to ask them, which two programs they mean. And then, Sangamo has indicated that they’re planning to move the Prion program into an IND in 2025 as well. And then those are the ones we know of. I mean some of our other partners that are pure capsid licenses, for all I know, they’re planning to file INDs in 2025 as well.

But we don’t know that for certain because we don’t know their time lines. But yes, so I hope to see a steady stream of INDs for the foreseeable future at Voyager with or without our partners.

Jack Allen: Great. Super helpful. And then maybe, Peter, if you could please comment on the financial plans for funding the clinical trials next year.

Pete Pfreundschuh: Yes. So, Jack, the — with regards to the wholly-owned programs that Al just mentioned, so those are our tau antibody program and then also the ALS program. We’re building those programs on a wholly-owned basis where we’re funding and financing those as we’re advancing those both to IND as well as towards the clinic. So, it is our assumption and we’ve modeled that as part of our cash runway guidance that we provided to you and updated today. So, that is — that’s clearly our ideas to fund and finance those and advance those along. Of course, as we get to various milestones as we move forward in the future, we’ll always be thoughtful about the next step and maybe partnerships around those programs, if we decide to do that.

But as of right now, those are modeled into our cash guidance and runway. With regards to the partner programs that Al alluded to where we have milestones that could come up over the next couple of years, specifically in 2025 with regards to Neurocrine and Sangamo, the beauty of those programs is those are financed off our balance sheet. And so, that’s not part of our overall financing and funding runway. I think the one thing I would add to that is, specifically on Neurocrine, Neurocrine is becoming from a pass-through R&D expense perspective, a bigger piece of our overall research and development expense on a quarterly as well as year-to-date basis. And so, to that note, we’ve actually added some non-GAAP guidance information at the back of the earnings release that hopefully helps you guys understand kind of how much really doesn’t sit on our balance sheet, when you look at our research and development expense growing on a quarterly basis or on a full year basis.

So I think that provides a lot of kind of look-through with regards to the pass-through that’s associated with that partnership. And again, that does not sit on our balance sheet. So hopefully, that helps, Jack.

Operator: And our next question coming from the line of Laura Chico with Wedbush.

Laura Chico: I guess, I just wanted to circle back with respect to CTAD. And there was also some data showing some novel tau biomarkers at the meeting. Just out of curiosity, as you’re thinking about preliminary clinical studies, just curious if something along those lines would be used, or how are you thinking about kind of categorizing patients in terms of their tau load at entry?

Dr. Al Sandrock: Thanks, Laura. I mean, yes, there’s a lot going on in the field of tau. And in terms of the selection of patients, at the present time, we’re thinking that we will likely mirror what BIIB080 has done in terms of starting with early-stage Alzheimer’s disease, people with mild cognitive empowerment plus early stages of dementia. And we will likely also insist on a certain tau burden, because what we want to do certainly with the antibody program is to block the spread of tau, so it would be sort of like a region of interest, if you will, primary endpoint on the spread of tau. So, we’d have to pick people who are at one of the early block stages, probably stage 2, which can be visualized by tau PET imaging to see if we can block the spread of tau.

That’s how we’re thinking. And in terms of new tau biomarkers, there’s a lot of fluid-based biomarkers that are coming out a lot of ptau — various types of ptau biomarkers, which I think are also exciting. And I think we will probably also evaluate those in our tau programs as well. But I think for — there’s nothing like PET imaging to evaluate the spread of tau, which is what we want to see if we can block with the anti-tau antibody.

Laura Chico: And then just beyond that, I guess, is to spreading just the primary criteria you’re going to be evaluating for advancement or kind of the threshold. And is there a specific degree or magnitude of effect that you’re kind of hoping to see? Thanks very much.

Dr. Al Sandrock: Well, we saw 70% — approximately 70% reduction in spreading from one hippocampus to the other side to the other hippocampus in our in our animal models. So we have that as sort of an animal experiment. But in terms of the human experiment, I mean I think right now, I’d be happy to see a statistically significant decrease in tau spreading as the first stage in a relatively small study. And then hopefully, by then, we will know the clinical significance of that. Somebody will likely have drawn the — figured out the relationship between tau spreading or tau reduction in a certain brain region and the clinical consequence of that. And so, in this way, actually, not being first can be helpful sometimes because we will learn from the people who have entered the clinic first.

Operator: Our next question coming from the line of Yanan Zhu with Wells Fargo.

Yanan Zhu: A couple questions on tau. And I too wanted to ask about the CTAD presentation for tau ASL. Al, I was wondering if you can share your assessment about the magnitude of the signal of benefit on cognitive function and also on the time point at which these signals were — was achieved or observed and whether these signals of benefit in your mind is consistent with more of a reduction of the tau in existing neurons that have these neurofibrillary tangles or could it be also consistent with the spreading during this time frame. I just want to understand a little better the contribution of those two separate compartments to this potential clinical benefit that was observed.

Dr. Al Sandrock: So, in terms of the magnitude, I think it’d be kind of premature to really understand. I don’t think we can fully understand the magnitude when you have 16 to 20 patients per group, right? It’s a very small sample size. So I think it’d be hard. Also, it’s a group that’s chosen. It’s the first foray into the choice of patients. So I think — so I would say that. And then there’s the matter of multiple different endpoints. The nice thing is that it was seen across several endpoints. So, there seems to be a high degree of consistency regardless of the endpoint. So, rather than focus on the magnitude, have been focusing more on the consistency of effect across multiple endpoints. With respect to the time point, it’s not uncommon that you would see an effect on tau — on PET imaging and then to have a sort of a delayed effect on the clinical outcomes.

I think this is something that we’ve seen kind of more than once in neurodegenerative disease that you get an effect on target engagement. We see an effect on target engagement and even pharmacodynamic effects, biological effects and then the clinical effects takes a little longer to see. And so, the fact that they had to wait, I believe, as much as two years to see some of the effect does not surprise me. In fact, that’s what you see with amyloid drugs too, that you can see an effect on amyloid PET imaging within 6 months. But it takes longer to see the clinical effect. And I would say you see something similar in ALS as well. In terms of your question, I think you hit on something that’s pretty darn interesting, which is that you see an actual reduction in the tau PET signal in neurons or at least in the regions.

And that’s a bit surprising to me because I always used to think of neurofibrillary tangles as pretty highly aggregated and the fact that you can actually reduce the tau PET signal, and the ligands are specific for aggregated misfolded forms of tau. So maybe that — maybe there’s more — maybe these neurofibrillary tangles are not quite as sort of end stage, if you will, and that there can be this reversible aggregation or it can be removed. It’s an intracellular tangle. So I don’t think it’s phagocytosis. It must be that these aggregates are more dynamic and perhaps reversible than we once thought. Then in terms of what causes the efficacy that you see, whether it’s the reduction in tau and cells, or is it a block of spreading, while both are being seen with BIIB080, so it’s hard for you to discern which it is — whether it’s the block of — interference with spreading or the actual reduction in cells, it could — it’s hard to discern which, based on the data, at least as far as I’m concerned, Todd, I don’t know whether you have any other thoughts on that.

Dr. Todd Carter: I think you’ve covered it. I think it’s — overall, it’s early data. I think it’s extremely exciting. We still have a lot to learn.

Yanan Zhu: Got it. Very helpful. And then, I was wondering, obviously, the SOD1 program will be the first gene therapy program, your internal program to enter the clinic, hopefully, in 2025. But I was also wondering for the tau silencing gene therapy program, how much of the component would need to be different. Obviously, the trigger sequence obviously is different. But I was wondering is there also differences in the capsid, for example, depending — due to the different cell type to be targeted. So, I’m just wondering how much can the tau gene silencing program leverage the first in clinic gene therapy SOD1 program.

Dr. Al Sandrock: So I’m not sure I fully understood your question, Yanan. But Todd, did you understand it because if you did, why don’t you go ahead.

Dr. Todd Carter: Yes. So I think the fundamental question is, can we take learnings from SOD1 to move forward quickly with the tau knockdown program. And I think the answer is it’s fundamentally yes, but there are different components. So there’s the capsid and then there’s the payload. We’re learning a lot about our novel capsids through our current programs. We’ll continue to learn about them as we move along. We may or may not select the same capsid for tau knockdown, say, as we do for the SOD1, but we might select the same capsid. It depends upon the particular characteristics. For something like SOD1, we know we want to get to the spinal cord, motorneurons and probably astrocytes in the spinal cord. And we want to get to motorneurons and the brainstem and perhaps the cortex as well.

For tau, we want to get a broader delivery across cortex. The spinal cord is much less important for tau. But we are looking for different things from our capsids in that context. Just as an example, in terms of the payload, they are both vectorized siRNA payloads. We have a lot of experience with siRNA, vectorizing siRNA here at Voyager, and we’re certainly deleveraging that for tau knockdown as we are for the SOD1 program. Obviously, the sequences will be different because we’re targeting different genes. But in terms of off-target, et cetera, there are synergies and our knowledge base there. We can — we have the opportunity, just different kinds of promoters in terms of the different cell types you want to target. So the answer is, I think we will learn.

We are learning a whole lot about our capsids and our payloads. We’ll certainly employ all of that. A lot of it will be transferable, but some will be disease and target specific.

Dr. Al Sandrock: And I would only add — thanks, Todd. Now I understand the question, I think. Yes, I would add that for tau, we don’t really care too much about knocking down in astrocytes. It’s mainly the neuron that we want to knock down the expression of tau. But Todd’s right, they’re both vectorized siRNA. So we’ll learn a lot from the first program that we hope will apply to the second. I would also say that the capsids, we could use the same capsid. We can use different capsids against different receptors or we can use different capsids again for the same receptor, which we already know that Receptor X is a human homologue. So yes, I think there’s a high potential for lots of learnings from our first program that may help us with the second and third and so forth programs.

Yanan Zhu: Great. That’s super helpful. And lastly, I was wondering if I can ask a quick question, the Receptor X efforts. I’m mainly interested in at what stage do you think this will be an asset that is ready to pursue a partnership interest. Is there a particular milestone in terms of preclinical evidence, or could the interest come in at any time and you’re ready to discuss it at any time?

Dr. Al Sandrock: Well, look, I’m always ready to discuss potential partnerships with good partners, always ready, door’s always open. For me, what I want to see is in vivo evidence that we can shuttle a macro molecule, such as a nucleic acid or a protein across the BBB and get the desired effect, pharmacodynamic effect in the brain. If we see that, now I’m pretty — I’m even more excited. And then we can start to think about, okay, what do we want to shuttle across and which targets do we want to pursue? But it’s that proof of concept, if you will, if you can use the leverage Receptor X to shuttle things across the BBB and produce a biological effect in the brain that will trigger a whole bunch of things, I believe, including potential partnership discussions, as you mentioned.

Operator: [Operator Instructions] And our next question coming from the line of Sumant Kulkarni with Canaccord.

Sumant Kulkarni: Thanks for taking my questions. Both are on the TAU01 antibody. You alluded to this a little bit, but was more related to the potential outcomes of a trial. But at this stage, how are you conceptualizing any tau-based or to tau burden-based cutoff to recruit patients into your clinical trials?

Dr. Al Sandrock: Yes. I was thinking that we would probably want people who have — people will be the equivalent of Braak stage 2 maybe also Braak stage 3, but right now, I’m honing in on Braak stage 2, which can be defined by tau PET imaging to enroll those patients and then see whether or not we can block the progression to stage 3 and 4, if you will. That’s how we’re thinking about it now. Still — we’re still doing a lot of the thinking around it as well as consulting with experts and investigators but that’s conceptually how we’re thinking about it now. Is that what you were asking? Does that answer your question, Sumant.

Sumant Kulkarni: Yes, somewhat. But a little bit of a follow-up to that is, do you think blood-based biomarkers will evolve enough to be helpful to you in your trial inclusion program?

Dr. Al Sandrock: I think that blood-based biomarkers, we can get clarity as to which blood-based biomarker links up to Braak stage 2 that would be helpful. It may be — what I can imagine us doing is starting with a — starting the screening for patients with a blood test using a blood-based biomarker and then taking those patients that are — that qualify based on that and then doing tau PET imaging to be sure that they have the right stage. So, I could see it as a sequential sort of straining process, if you will, starting with more feasible and easier and cheaper blood tests and then moving to the more complex and more expensive tau PET imaging to select the right patients.

Sumant Kulkarni: Got it. And then given what you know so far about your antibody, are there any special considerations we should be aware of on your GLP tox studies, or are these relatively conventional ones?

Dr. Al Sandrock: Well, let me start by saying that we did have an interaction with FDA earlier this year. Second, I would say that there’s one, word conventional is a little tough, because one of the things that we like of our antibody is that it’s very specific for pathological forms of tau. In other words, it does not bind normal tau that we all have in our bodies and that every animal has. So, if you want to look at on-target toxicity, it’s kind of hard to do that in a wild-type animal, which is what’s typically used for tox studies. So, you can imagine that’s a little bit more complicated than, I would say, the conventional toxicology studies. But we’ve taken all that into account, and we’ve had our interaction with FDA. And we think we’re on track for an IND as we indicated in the first half of next year.

Operator: Our next question coming from the line of Divya Rao with TD Cowen.

Divya Rao: Most of mine have been answered, but — you guys have talked a lot about potential partnerships and how those discussions are constantly ongoing. But, going forward, is the focus going to be more on maybe generating a proof of concept in an early stage trial before initiating discussions with partners to pursue those larger later-stage trials, or can we still think of it as like out-licensing programs that are identified through the TRACER platform? And then, I have a follow-up.

Dr. Al Sandrock: Yes. So I would say that right now, we — as you’ve seen, we’ve done a variety of partnerships, including sort of relatively simple capsid licensing arrangements as well as partnerships around named programs, such as GBA1 program, for example. And we’re open to either type of partnership. And your question was, I think, are we going to increasingly look to get to proof of concept before we partner. Well, as we get more and more the financial wherewithal to do that, we may want to get to proof of concept. But I never rule out anything. We’re open to talking to any partner about any type of deal that makes sense for us, for our shareholders and for the patients most importantly. We’re conscious of the fact that, of course, the further you go in development, the more value is created.

But on the other hand, there is more risk that you absorb as we get to that proof of concept. So, it’s always — we’re always thinking about all these things, value, risk, et cetera.

Divya Rao: That’s helpful. And then, on the tau program, with the top studies done, are there — I guess what else needs to be done before the IND is ready to be submitted? Is it mostly just compiling everything and putting it all together?

Dr. Al Sandrock: Is this on our tau knockdown or tau…

Divya Rao: Yes, VY-TAU01 program, with the IND…

Dr. Al Sandrock: We’ve already selected a development candidate. And so we’re in the process of — we just initiated the GLP toxicology studies. We have started the manufacturing. Obviously, you have to manufacture enough material to do the GLP tox studies. And if we want to start clinical trials shortly after we file an IND the first half of next year, we have to have enough product to be able to do the first in human clinical studies, and we’re on track for all that. Does that answer your question?

Divya Rao: Yes, it does. Thank you so much.

Operator: Thank you. And I see no further questions in the queue at this time. I will now turn the call back over to Dr. Al Sandrock for any closing remarks.

Dr. Al Sandrock: Thank you to everyone for joining us today. And please feel free to follow up with us directly if you have any further questions. Thanks again.

Operator: Ladies and gentlemen, this concludes today’s presentation. Thank you once again for your participation. You may now disconnect.