REGENXBIO Inc. (NASDAQ:RGNX) Q1 2024 Earnings Call Transcript

REGENXBIO Inc. (NASDAQ:RGNX) Q1 2024 Earnings Call Transcript May 8, 2024

REGENXBIO Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Good day and thank you for standing by. Welcome to REGENXBIO’s First Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your speaker today Patrick Christmas, Chief Legal Officer. Please go ahead.

Patrick Christmas: Good afternoon and thank you for joining us today. Earlier this afternoon, REGENXBIO released financial and operating results for the first quarter ended March 31, 2024. The press release is available on our website at www.regenxbio.com. Today’s conference call will include forward-looking statements regarding our financial outlook, in addition to regulatory and product development plans. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ from those forecasted and can be identified by words such as expect, plan, will, may, anticipate, believe, should, intend, and other words of similar meaning. Any such forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties.

These risks are described in the risk factors and the management’s discussion and analysis sections of REGENXBIO’s annual report on Form 10-K for the full year ended December 31, 2023, and comparable risk factors sections of REGENXBIO’s quarterly reports on Form 10-Q, which are on file with the Securities and Exchange Commission and available on the SEC’s website. Any information we provide on this conference call is provided only as of the date of this call, May 08, 2024 and we undertake no obligation to update any forward-looking statements we may make on this call on account of new information, future events, or otherwise. Please be advised that today’s call is being recorded and webcast. In addition any unaudited or pro forma financial information that may be provided is preliminary and does not purport to project financial positions or operating results of the company.

Actual results may differ materially. I would like to now turn the call over to Ken Mills, CEO of REGENXBIO. Ken?

Ken Mills: Thank you, Patrick, good afternoon everyone. Thanks for joining us. I’m pleased to begin today’s call with a recap of the recent business highlights as well as an update on our corporate goals. Today, Curran Simpson, our Chief Operating Officer, will be speaking for Steve Pakola, Chief Medical Officer, who’s unable to join us today. Curran will provide an update on our clinical programs. Then Vit Vasista, our Chief Financial Officer, will provide an overview of the financial results for the quarter ended March 31, 2024. At the end of the call, we’ll open up the line for questions. We have what I think are some exciting updates today and so I want to get right into these topics. We started off the year making significant progress across our pipeline as we advance each of our programs toward pivotal stage clinical trials and commercialization.

In 2024, we’ve put a focus on large commercial opportunities where our product candidates are differentiated, can be expedited, and support meaningful value generation soon and for the long-term. Our priority programs, our RGX-202 for the treatment of Duchenne, ABBV-RGX-314, or 314, for the treatment of wet AMD and diabetic retinopathy, or DR, being developed in collaboration with AbbVie, and RGX-121 for the treatment of MPS II, or Hunter syndrome. All of our programs remain on track to meet our goals for this year. Program milestones over the past couple of months further demonstrate how our new plan is supporting the acceleration of the development of our gene therapies and the expansion of value for shareholders. Today, we’re especially pleased to share new positive data and important updates about acceleration in our programs for Duchenne and DR using in-office delivery.

We are providing some new updated guidance on near-term milestones for these programs. So let me explain. We’re thrilled to see RGX-202 is demonstrating strong microdystrophin expression across a wide range of patients, including in older boys like those ages eight to under twelve, and importantly, we are seeing positive safety signals. No SAEs have been reported in patients who’ve received RGX-202, which is highly notable differentiator in Duchenne gene therapy trials. Today, we announced that we have selected our pivotal dose. Also, we have already begun a new expansion phase of our clinical development with the pivotal dose. This includes the enrollment of third and fourth boys already. Expansion using the pivotal dose will continue into the third quarter and can enroll up to a total of seven boys in the ages ranging from four to under twelve.

By early Q3, we expect to hold an end of Phase 2 meeting with the FDA, which will support a final pivotal design and pivotal trial initiation is anticipated in late Q3 to early Q4 of this year. RGX-202 is a differentiated product candidate in the landscape for Duchenne, representing the closest thing to natural healthy dystrophin and we believe has the potential to make a meaningful difference for a broad range of patients. Given these unique characteristics of RGX-202, a significant ongoing unmet need in the Duchenne community, in conversations with the FDA we’re confident in our plans to file a BLA using the accelerated approval pathway. Separately, we believe there’s a multibillion dollar potential opportunity for ABBV-RGX-314 as a single injection treatment to become a first-in-class gene therapy for wet AMD, and the standard of care to treat and prevent progression for diabetic retinopathy.

Enrollment remains on track for our subretinal delivery program for wet AMD, currently in pivotal trials. And today we announced that based on positive interim results to date from the Phase 2 ALTITUDE trial in DR, the design and evaluation of two pivotal trials is ongoing, which would be the first pivotal trials for our in-office suprachoroidal delivery. These positive results and activities are in support of a planned discussion with the FDA at an end of Phase 2 meeting anticipated in Q1 2025 that can enable the rapid acceleration toward pivotal development. We would expect to initiate the first two pivotal trials for suprachoroidal delivery of diabetic retinopathy in the first half of 2025. As a one-time treatment, we believe that 314 is well positioned to become the standard of care to treat and prevent progression of diabetic retinopathy, which is expected to impact over 20 million people globally in the next five years.

Overall, we’re thrilled about the current status and the way that 2024 can achieve meaningful value generation based on what we’ve seen in these first few months. With that, I’m going to turn the call over to Chief Operating Officer, Curran Simpson, who take us through a bit more of a detailed update on the Duchenne data and our plans for accelerating the pivotal trial initiation for Duchenne in the second half of this year and diabetic retinopathy in the first half of next year. Curran?

Curran Simpson: Thank you, Ken. I’ll start with RGX-202, a potential one-time gene therapy for the treatment of Duchenne. RGX-202 represents an alternative for boys, who may not be eligible for other AAV mediated microdystrophin therapies due to age or presence of preexisting neutralizing antibodies. Today we reported that new microdystrophin expression from the second patient, aged 8.1 years, who received RDX-202 at dose level 2, was measured at 20.9% compared to control at three months. A reduction in baseline in serum creatinine kinase, CK levels of approximately 90% was observed at ten weeks. We’re excited about this data and the robust response seen in this trial, particularly in dose level 2 and in older boys. As we shared previously, we used two methods of measuring microdystrophin protein, western blot the Jess and LC-MS.

Notably in this case, the microdystrophin measured using LC-MS for this patient was approximately 44% higher than the western blot result. Today’s data adds to the totality of evidence demonstrating that all patients, who completed three month trial assessments, indicate consistent, encouraging increases in expression of RGX-202 microdystrophin and the reduction from baseline in serum CK levels, supporting early evidence of clinical benefit. In addition, early evidence of strength and motor function improvement were observed via trial clinic assessments and home videos shared with trial investigators by caregivers. As of May 3, 2024, RGX-202 continues to be well tolerated in all treated patients with no serious adverse events. Given the robust data and positive safety signals, we plan to move forward with dose level 2, 2e14 per kilogram as our pivotal trial dose.

We have initiated an accelerated dose level 2 expansion cohort and have already dosed two patients. We expect to treat up to a total of seven patients at the pivotal dose. Looking ahead, we remain on track to share strength and functional data for both dose levels and initiate dosing in the pivotal trial in late Q3 to early Q4 this year. Moving to 314, which is being developed in collaboration with AbbVie to try treat wet AMD and diabetic retinopathy via subretinal and suprachoroidal routes of administration. We are evaluating 314 for the treatment of wet AMD via subretinal delivery in two ongoing pivotal trials, ATMOSPHERE and ASCENT, in the U.S., Europe and Japan. We anticipate global regulatory submissions in the first half of 2026. We are also evaluating 314 in the Phase 2 ALTITUDE trial, which is the dose escalation study of 314 using suprachoroidal delivery.

We’re very excited about the opportunity in DR given the size of market, which exceeds that of wet AMD. One year data from dose levels 1 and 2 showed 314 to be well tolerated with patients demonstrating clinically meaningful improvements in disease severity with reductions in vision threatening events. Based on these and other positive interim results from ALTITUDE, today we are pleased to share more details about our path to pivotal stage in DR. We are evaluating the design for two pivotal trials in support of an end to Phase 2 meeting with the FDA anticipated in the first quarter of 2025. We expect to start the first pivotal trial in DR in the first half of 2025. We’ve aligned with our partner AbbVie on this timing and believe there may be opportunities to further accelerate.

To conclude, we continue to make significant progress with data updates and trial progression across all programs in our pipeline. Lastly, I’d like to thank the patients, families, clinicians and patient advocacy representatives who have been involved and supported all of these trials. And with that, I turn the call over to Vit to review our financial guidance. Vit?

Vit Vasista: Thank you, Curran. REGENXBIO ended the quarter on March 31, 2024 with cash, cash equivalents and marketable securities totaling $381 million, compared to $314 million as of December 31, 2023. The increase was primarily attributable to the $131 million in net proceeds received from an upsized public offering of common stock and pre-funded warrants completed in March 2024, partially offset by cash used to fund operating activities in the first quarter of 2024. R&D expenses were $55 million for the first quarter of 2024, compared to $59 million for the first quarter of 2023. The decrease was primarily attributable to reduced manufacturing and clinical supply costs for our lead product candidates and personal related costs as a result of reduced headcount.

It was partially offset by an increase in clinical trial expenses across our lead product candidates. We expect a balance in cash, cash equivalents and marketable securities of $381 million as of March 31, 2024 to fund our operations into 2026. This cash runway guidance is based on the company’s current operational plans and excludes the impact of any payments that may be received from AbbVie upon the achievement of development or commercial milestones under our 314 collaboration, including a potential milestone payment of $200 million receivable upon achieving the dosing of the first patient in the pivotal trial for suprachoroidal delivery for treatment of DR. Additionally, this cash runway guidance excludes any potential monetization of a priority review voucher that may be received for RGX-121.

With that, I will turn the call back to Ken Mosabi [ph] to provide final thoughts.

Ken Mills: Thanks Vit. So to wrap things up, so far in 2024, our plans are on track and intended to generate significant value for shareholders as we’re ensuring that resources are allocated to the most valuable assets and to accelerate the development of those assets. As outlined here today and supported by the press release announcements, we’re motivated by expanding that value by addressing important unmet need in patients and focusing on large commercial opportunities where we think our product candidates are differentiated and have a clear regulatory pathway forward. The recent efficacy and safety data has allowed us to determine the planned pivotal dose for RGX-202 which is enabling us to further accelerate this program.

So far, this drug candidate is exceeding our expectations in the clinic. We’ve already begun a clinical trial expansion phase to add voice onto our pivotal dose, a step that we believe will contribute meaningfully to our accelerated approval plans. Duchenne is a market where there is large unmet need for new therapies and that is capable of supporting multiple gene therapies. And we believe RGX-202 has unique differentiating features that support its potential to be a best-in-class product. Regardless of today’s landscape of Duchenne treatments, communication from the FDA continues to support the need for alternative gene therapies for rare diseases, including Duchenne. Backed by strong data, we’re acting with urgency and in concert with the FDA, taking steps to initiate the pivotal trial for RGX-202 as soon as possible this year, and focused on serving needs in a broad range of voice.

We are also continuing to grow value with our eye care partnership with AbbVie. It’s using our one time treatments that provide sustaining vision health long term and overcome the clinical challenges of managing retinal diseases. The updates today highlight key alignment on important partnership goals in 2024 that are directed at completing trial designs and plans for initiating first pivotal trials for RGX-314 using in-office suprachoroidal delivery in diabetic retinopathy and completing enrollment of our pivotal trials for RGX-314 using subretinal delivery to support filing of global regulatory submissions. And as Curran mentioned, we believe there are opportunities to further accelerate these programs. RGX-121 is meaningfully changing course of disease in boys with MPS II by restoring a missing gene, and we’re on track to file our first BLA as a company in 2024 using the accelerated approval pathway for RGX-121.

Our pivotal trial achieved its primary endpoint of reduction of natural substrate in the CSF. Patients treated with RGX-121 have showed continued improvement in neurodevelopmental skill acquisition up to four years and have discontinued intravenous enzyme replacement therapy. Our pivotal trial was designed to enroll boys under the age of five. A strong proportion of those enrolled in our program are below the age of two. And these are key features that are important in assessing neuronopathic Hunter syndrome. We’re locking our clinical trial databases and our team is busy collecting final pivotal trial data and completing steps for the entire BLA filing process. By the end of 2024, our pipeline should be filled with programs that are initiating pivotal stage, fully enrolled at pivotal stage or under a filed BLA.

And as Vit mentioned in the fourth quarter, we announced a successful public offering. This raise strengthens our balance sheet, it extends our operating runway into 2026 to support the acceleration of our candidates through multiple value generating milestones today, but it’s worth noting and restating that achievement of certain of these milestones would also trigger hundreds of millions of dollars of additional funds. As a result of these recent updates and the upcoming milestones announced today, we believe REGENXBIO is well positioned for success. Thanks everyone for your time today. That finishes our discussion part of the call, and now we’re going to move over to Q&A.

See also 20 Drunkest States in the US and 10 Best States for Technology Careers in the US.

Q&A Session

Operator: Thank you. [Operator Instructions] Our first question comes from the line of Vikram Purohit from Morgan Stanley.

Unidentified Analyst: Hi everyone, this is Gaspar [ph] on for Vikram, we have one question on the DMD program. So what do you think are the trial enrollment and regulatory implication, if any, from Pfizer’s update yesterday for RGX-202?

Ken Mills: Hi Gaspar [ph], thanks for the question. I think that as we reflect on what was obviously a sad event reported by Pfizer yesterday, we continue to feel very strongly, as we always do, about the importance of safety with gene therapy and in rare diseases in general, especially in pediatric populations which is why we continue to feel very strongly and enthusiastic about the safety profile of RGX-202 to date, being really the wind at the back for how, partly how we’re thinking about being able to progress on a more accelerated basis into pivotal phase, the same way that we had reflection when we made those decisions about RGX-121 and advancing it into pivotal phase. I do think that from a regulatory perspective, this also has to, at a high level, be something that agencies like the FDA take into consideration for existing approved products as well as products in development.

I think it’s going to – this is something that, I think, people should be cautious about. Generating data in certain populations, I personally feel is a must when you think about the ability to apply and understanding in certain areas, like in certain ages or certain progressed areas of disease. I think you also have to think about where those lines and differences are in seeing a younger boy enrolled in a trial go through an event like that, I think, is something that we’ve been emphasizing for a while, that it’s important to generate the data, including in older boys, where we have been doing so, as you continue to think about how to progress into later stages of development to support that clinical understanding and the potential for commercialization there.

So I imagine that many stakeholders are reflecting on that as well.

Unidentified Analyst: Thank you.

Operator: Thank you. One moment for our next question. Our next question comes from the line of Gena Wang from Barclays.

Gena Wang: Thank you for taking my questions. So, just want to confirm, did I hear you correctly that the fifth patient, the mass spec protein level, was 44% higher, i.e. 65% protein level per mass spec. And also, will you pick one methodology for protein level for pivotal study? Would that be western blot or mass spec? Related question, sorry, have you already scheduled the date for end of a Phase 2 meeting in 3Q? And also regarding understanding you will still need to finalize the trial with FDA, but can you submit BLA once three months protein data available?

Ken Mills: Hi, Gena. We’ll unpack that. Thanks for the good questions. On the first point about the microdystrophin result, what Curran said is that we had approximately 44% higher LCMS result compared to the western blot Jess result. Typically for us, we’ve gotten comparable results in previous assessments between boys. In this case, LCMS was higher, but that 44% applied to the result we reported in the press release gets to about 30% for the LCMS result. With respect to the plans, what can I say? I mean, we’re just in constant communication with the FDA on really all of our programs. But in particular, Duchenne, there is a lot going on in the space. I think Gaspar’s [ph] question can’t be ignored as well. So we continue to see very close.

We do have plans for an early Q3 meeting with the FDA on sort of end of Phase 2, pivotal planning and initiation. We have shared with them already, during the course of the program, ideas about variables and features that are important to us or that we are hearing are important to them in order to be able to design what we and they think is the most efficient and appropriate trial. We’ve really been focused on wanting to emphasize gaps in understanding for the community. We’ve talked a lot about the data that we’ve been able to generate and the focus that we’ve been able to put on older boys continuing to show positive microdystrophin results, measurable microdystrophin results in this case reported today in another eight-year-old. We continue to enroll in that age range.

The last two patients we enrolled were a five-year-old and an eight-year-old. So we feel like the data and the conversations that we have are going to set up for a very constructive discussion with FDA in early Q3. And we’ve also been open about the fact that we want to have that discussion on what putatively would be the other side of the potential action date with respect to the existing accelerated approved product. So we feel like everything is really on track and being able to declare the pivotal dose today to bring that into the conversation discussion is something that is also important.

Gena Wang: Thank you.

Ken Mills: Thanks, Gena.

Operator: Thank you. One moment for our next question. Our next question comes from the line of Alec Stranahan from Bank of America.

Unidentified Analyst: Hey guys, this is John [ph]. I am on for Alec. So just a quick question from us. In terms of the second half data update for DMD program, RGX-202, in terms of functional assessment data, what kind of data should we be expecting and what – like if you were to give us a comp, like something to look to as like a standard, what would that be if you could shed some light on that? Thank you.

Ken Mills: Yes, John [ph], sure. I mean, I think we’re collecting the normal strength and functional assessment, including the full North Star domain on all of the boys in AFFINITY DUCHENNE. We showed some of the activities that were going on in the trial by sharing some – Dr. Panda shared some video that he was able to bring forward at the MDA conference just a few months ago. So we’re going to have the opportunity to with boys that have achieved time points, some of which will be by the second half of the year reaching out to 12 months and maybe some a little bit earlier. NSAA scores, as well as subdomains of North Star, including things that have been the focus of other recent Duchenne approvals or even discussions around the recent sort of confirmatory evidence, that was presented by the existing approved product sponsors.

So things like time to stand and sort of domains associated with the ability around movement. So, these are the types of things that I think you can expect from us in the second half of the year based on patients that have been enrolled today.

Unidentified Analyst: Thank you.

Operator: Thank you. One moment for our next question. Our next question comes from the line of Annabel Samimy from Stifel.

Annabel Samimy: Hi, all. Thanks for taking my question. I guess, on the DMD program, I want to sort of understand your view on this. You’re saying that the microdystrophin levels are consistent, but it doesn’t seem like it’s specifically linear with age. And so I was just wondering if you had any more insight into what’s happening there and is this maybe going to change? What the clinical relevance is of microdystrophins specifically? Or are there other factors that they’re considering here? And then the second question I have is obviously Sarepta has an FDA decision pending on final approval and label expansion. And we’re getting a lot of questions about what the various scenarios might be. And sitting from your perspective, can you opine on how that might impact you and your opportunity going forward? And how you sort of view the different scenarios that are possibly emerging from that? Thanks.

Ken Mills: Yes, absolutely, Annabel. Again, I think that – so partial answer to the first question, just to clarify. We’re talking about different methods of measure for microdystrophin today that we generally have viewed as comparable. We’ve been using western blot and LC-MS. I think we’re the only company to use both. We’ve been presenting western blot, which is more of an automated western blot data in general to the community because people are more familiar with it with respect to what is in the existing approved product label. In terms of what we measured in this eight-year-old today and what we previously measured in the 12-year-old, let’s remind everyone that we’re talking about results that are positive measures of microdystrophin protein in age ranges that generally have not been reported with other products.

And in this case, between the NF2 that we enrolled at dose level two, we’re seeing about an average of 50% microdystrophin level expression based on that western blot method. So we’re really encouraged about that based on what we’ve seen in our preclinical data, what we see of the safety profile and what we’ve seen, that has started to emerge from some of the strengths in functional assessments, even at dose level one. Again, referring back to what Dr. Panda was able to share a bit on podium at MDA. So I think this, the safety profile in particular made a dose decision about the pivotal dose, a rather straightforward one for us. We think we’re continuing to see high levels of microdystrophin expression, especially in older boys. And we think that in particular is something that’s representative of a really strong, stable and durable product candidate.

When it comes to the upcoming decision on the confirmatory evaluation evidence of [indiscernible] and the supplement. I think we’ve been reasonably cautious with all of you all along about what that outcome may be and also what we think the opportunity for RGX-202 is. Now, something’s changed in the last couple of days, and we’ve often talked about this unmet need for Duchenne boys with gene therapy as having at least two or three other candidates in development. And yesterday, obviously, there has been a bit of a change to the profile of one of them, which I think everyone’s still trying to digest. We continue to view that RGX-202 with new biology, with the C-Terminal domain, with the type of microdystrophin expression that we’ve been showing in older boys, but also in four to seven year olds, as being robust and significant and unique is a differentiated product profile.

And that’s without even having reached the time points yet on strength and function, where we can really exercise an understanding of the benefits of the C-Terminal domain. Those are things that are, we think, coming in front of us. So we see a differentiated product profile here as being very important. It’s important for the incident population of Duchenne boys, always. I think it’s important for the prevalent population of boys as they are considering what their options are or will be as families and as physicians. And we’ve talked often about the fact that in general, RGX-202 also holds a unique potential position in the market. As you know, boys are certainly going to be excluded from access to other treatments due to preexisting immunology, just like they would be for our own.

And in the case that we’ve talked about, where there would be two products on the market, that both were, let’s say, ahead, either on the market or in pivotal phase development ahead of 202. We’ve sort of labeled that as maybe 15% of the market, prevalent market that would be able to be uniquely addressed by 202. If you change that to Regenx [ph] with RGX-202 could be second to market. Then that number could be higher. It could be something more like 20% to 30%. So I think for us, the work that we’re doing to focus on the go forward plan for accelerating RGX-202 is about the strength of our differentiation, the strength of our data, the safety data, the efficacy data, and addressing what we still think is unmet need with first generation microdystrophin products.

But the case of just being as good as other things is also something that, from an economic perspective, is foundationally valuable. But we think that RGX-202, of course, is much more than that. And we think that the data is showing that, and we intend to continue to show that through as fast an expansion and acceleration phase as possible working with the FDA.

Annabel Samimy: Thank you.

Operator: Thank you. One moment for our next question. Our next question comes from the line of Ellie Merle from UBS.

Unidentified Analyst: Hi, this is Jasmine on for Ellie. Thanks so much for taking our question. So we have another one on the strength and functional measures we’ll be getting in the DMD update in the second half. So what do you think would be meaningful to see at the time point that you’ll share later this year? So at 12 months follow-up or earlier relative to what you think would be meaningful in the longer term? So in another year or two?

Ken Mills: Sure. Thanks, Jasmine. Look, I mean, I think we believe that RGX-202, with the C-Terminal domain, has biological function and structure that translates into improvements in muscle function that we’ve seen in its design in animal modeling, and that even early evidence of strength in motor function improvement was observed that we reported back with the investigator at the MDA conference in March. So we continue to be eager to accumulate the domains of the North Star that we can collect on strength and function and be able to show that, and show the support for that differentiation coming into the second half of the year. That is not impacting, though, our conversations with the FDA on the approach to the accelerated approval pathway and the regulatory plan that we have.

If it is, it’s only enhancing it, because any evidence of early strength and motor function improvement that’s being observed is becoming a contribution to the totality of evidence. But the conversations with the FDA are about continued unmet need in the Duchenne population, even with existing and known standard of care. Boys who cannot get access to treatment because of preexisting immunology. Boys who may not be able to access treatment in certain age ranges because they’re looking for more data, there are gaps in data and that understanding boys who may have certain types of mutations that have not been able to be studied and explored either due to profiles of other products or simply because they haven’t been done. And so that’s been our focus is to design something that is both efficient, effective, and accelerated in sort of pivotal design, but also something that’s answering not just questions that FDA feels like it already has answers to.

And I think FDA has evidence pretty strongly that it is supportive of microdystrophin as a surrogate biomarker predictive of clinical benefit. And we certainly, with RGX-202, are achieving levels of microdystrophin at or really above what I think is expected in terms of the regulatory process. So where we’re going next is moving quickly on microdystrophin accelerated approval, and then focusing on strength and function data that we accumulate over time to further differentiate us in the commercial market and on more of a confirmatory basis.