Selecta Biosciences, Inc. (NASDAQ:SELB) Q4 2022 Earnings Call Transcript

Selecta Biosciences, Inc. (NASDAQ:SELB) Q4 2022 Earnings Call Transcript March 2, 2023

Operator: Good morning, and welcome to the Selecta Bio Fourth Quarter 2022 Earnings Release Conference Call. Please note this event is being recorded. I would now like to turn the conference over to Blaine Davis, Chief Financial Officer. Please go ahead.

Blaine Davis: Thank you, and good morning, everyone. Welcome to our fourth quarter and full year 2022 Financial Results and Business Update Conference Call. The press release reporting our financial results is available in the Investors and Media section of Selecta’s website at www.selectabio.com in our Annual Report on Form 10-K for the year ended December 31, 2022, which was filed earlier this morning with the Securities and Exchange Commission or the SEC. Joining me on today’s call are Carsten Brunn, President and Chief Executive Officer; Kei Kishimoto, Chief Scientific Officer; and Peter Traber, our Chief Medical Officer. During today’s call, we will be making certain forward-looking statements, including, without limitation, statements about the potential safety, efficacy and regulatory and clinical progress of our product candidates, our financial projections and our future expectations, plans, partnerships and prospects.

These statements are subject to various risks that are described in the filings made with the SEC, including our most recent Annual Report on Form 10-K and subsequent quarterly reports on Form 10-Q. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of today, March 2, 2023, and Selecta disclaims any obligation to update such statements, except as required by law, even if management’s views change. With that, I’d now like to turn the call over to Carsten.

Carsten Brunn: Thank you, Blaine. Good morning. I appreciate everyone taking the time to join us today. In the fourth quarter of 2022 and in the first months of 2023, we continue to make steady progress across our pipeline, and we believe we’re well-positioned to execute on our key priorities and reach multi milestones throughout this year. In collaboration with our partner, Sobi, we expect to announce top line data from the Phase III DISSOLVE I and II clinical trials of SEL-212 later this quarter. We remain blinded to the data based on the results from previous trials in which we observed SEL-212’s differentiated profile and convenient once-monthly dosing regimen, we remain confident in its potential to improve the lives of patients suffering from chronic refractory gout.

Further, we plan to continue to leverage our growing safety database to advance our ImmTOR clinical development programs for our ongoing ReiMMAgine Phase I/II clinical trial of SEL-302 for the treatment of methylmalonic acidemia, or MMA, and propel our next-generation programs forward. Notably, we recently identified an Interleukin-2 or IL-2 candidate to be started in combination with ImmTOR in a broad set of potential autoimmune indications as well as an IgA protease candidate for the treatment of IgA Nephropathy. We also continue to accelerate our IgG Protease called Xork following a deal we signed with Astellas in early January, which involves the study of Xork in combination with AT845 an investigational adeno-associated virus or AAV-based treatment for Late-Onset Pompe Disease.

As we look ahead, we intend to continue to advance our pipeline in autoimmune disease and explore additional collaborations to maximize the value of our ImmTOR platform and pipeline. On the cusp of this pivotal moment in the company’s growth trajectory, we’d like to provide an update on recent activities and share details on how these programs align with our mission to solve the toughest challenges associated with unwanted immunogenicity. The current standards of care for autoimmune disease utilize immunosuppressive drugs or symptom-masking treatment. Unfortunately, these treatments often leave patients vulnerable to serious infections, malignancies and fail to adequately address the underlying cause of the disease, which is an imbalance of regulatory T-cells versus effective T-cells.

At Selecta, we’re reimagining immunotherapy. There are over 24 million Americans still suffering from autoimmune diseases. We believe ImmTOR has the potential to transform the treatment landscape by restoring natural immune system balance through induction and expansion of regulatory T-cells in vivo. The combination of ImmTOR and IL-2, which we call ImmTOR-IL represents an evolution of Selecta’s precision immune tolerance platform that has the potential to further enhance the magnitude and duration of immune tolerance in patients treated for autoimmune diseases. We have chosen IL-2 development candidate that will be started in combination with ImmTOR to potentially further advance and expand our pipeline in autoimmune disease. We plan to initiate I enabling studies in 2023 while also exploring multiple autoimmune indications that may be suitable for study with ImmTOR-IL with an initial focus on diseases of the liver.

We believe ImmTOR-IL has the potential to be a truly differentiated first-in-class treatment for those suffering from autoimmune diseases. We plan to initiate multiple preclinical studies this year with this exciting combination. Moving on to our gene therapy vertical, which we believe has the potential to enhance the efficacy and safety of AAV gene therapy and broaden patient population for such therapy. ImmTOR is designed to enable patients to receive multiple lower doses of AAV gene therapy, titrate up to a therapeutic benefit and mitigate side effects associated with higher vector doses, thereby transforming the dosing paradigm from one-and-done to a low-and-slow. In December €˜22, we initiated ReiMMAgine, the Phase I/II clinical trial of SEL-302, an AAV gene therapy combined with ImmTOR for the treatment of MMA.

The ReiMMAgine trial is now enrolling patients and aims to evaluate the safety, tolerability and efficacy of SEL-302. ReiMMAgine builds on our human proof-of-concept study in healthy volunteers, where we observed that with a single dose of ImmTOR at 0.3 mg/kg, all subjects maintained utilizing antibodies or Nab titers below 1:25 at Day 30 and two-thirds of the subjects at this dose of ImmTOR maintained Nab titers below 1:5 at Day 30. We believe our preclinical data in nonhuman primates and mice indicate that two additional monthly doses of ImmTOR have the potential to provide durable inhibition of anti-AAV Nabs. We’ve incorporated this dosing regimen in the ReiMMAgine trial. By advancing SEL-302 into the clinic, we believe we can help our current and future gene therapy partners accelerate the use of ImmTOR in their gene therapy programs by providing a clinical and regulatory blueprint to follow.

In January 2023, we announced an exclusive licensing and development agreement for Xork to be developed for the use with AT845, Astellas investigational AAV-based treatment for Late-Onset Pompe Disease in adults. Xork a next-generation IgG protease. Most other IgG protease in development are derived from common human pathogens and as a result there is a high prevalence of pre-existing antibodies against these proteases that can restrict their utility. Xork is differentiated by its low cross reactivity to pre-existing antibodies in human serum, and we believe it has the potential to deliver transformative gene therapy treatments to a broader range of patients living with debilitating diseases. Many patients are currently ineligible for clinical trials with investigational AAV gene therapies due to the presence of naturally occurring antibodies against AAV capsids.

Due to its selective protease activity against anti-AAV Nabs, we believe Xork has the potential to expand access to life-changing gene therapies by addressing preexisting immunity to AAV. The objective of our gene therapy vertical is to bring hope to patients who may not have many other treatment options, enable companies to maximize the commercial potential of their gene therapy candidates and help to make otherwise uneconomic gene therapy candidates viable targets for commercial development. We plan to continue to pursue business development and out-licensing opportunities to maximize the value of our platform. Now turning to our biologics pipeline; many biologics can be highly immunogenic, resulting in suboptimal responses due to the development of antidrug antibodies after treatment.

Patients who develop an immune response may be forced to discontinue treatment or experience adverse reactions to continuous therapies. We believe the use of ImmTOR as an adjunct to biologics offers a promising approach to reduce the unwanted immune responses and improved patient outcomes. We believe our most advanced program, SEL-212, has served as clinical proof-of-concept for our ImmTOR platform with over 500 patients dosed to-date. As a reminder, SEL-212 is comprised of ImmTOR co-administered with a proprietary uricase, pegadricase for the treatment of chronic refractory gout and was licensed to Sobi in 2020. Our Phase III DISSOLVE clinical program kicked off in the third quarter of 2020 and consists of two double-blind, placebo-controlled trials of SEL-212.

In both trials, SEL-212 is being evaluated at two dose levels of ImmTOR, 0.1 mg/kg and 0.15 mg/kg with a single dose level of pegadricase at 0.2 mg/kg. We continue to work closely with our partner, Sobi, our clinical trial providers and regulatory authorities to advance towards the successful completion of the Phase III program, and we are on track to announce top line data for DISSOLVE I and II later this quarter. Based on the results from previous trials in which we’ve observed SEL-212’s differentiated profile and convenient once-monthly dosing regimen, we believe SEL-212 is well-positioned against the current standard of care and other drugs in the class that target this patient segment. In our Phase II trial, we observed a high percentage of responders in patients with both visible uric acid crystal tissue deposits, or tophi and without tophi as well as statistically significant and clinically relevant reductions in serum uric levels in treatment periods 3 and 6.

These responses were achieved with a favorable tolerability profile, simplified dosing and avoidance of immune suppression. With the promising clinical data generated to-date and SEL-212 currently in Phase III, we believe we’re well-positioned to leverage these learnings into our second biologics indication in IgA nephropathy or IgAN, a kidney disease that occurs when immune complexes of an antibody called immunoglobulin A1, or IgA1, accumulates in the kidneys. In December 2022, we selected a next-generation IgA protease from IGAN Biosciences for the treatment of IgAN and plan to initiate I-enabling studies in 2023. By combining ImmTOR with an IgA protease, we believe our novel approach has the potential to address the underlying pathophysiology of the disease by removing injurious IgA from the kidneys and improve markers of renal dysfunction.

We’re extremely excited about the advancements across our pipeline and the growing body of clinical data showcasing the promise of our ImmTOR platform in a number of applications. We look forward to continuing our momentum in the coming year. With that, I’ll turn the call over to our newly appointed Chief Financial Officer, Blaine Davis, to run through our financial results for the fourth quarter and full year. Blaine brings more than 25 years of experience in Investor Relations, Business Development, Corporate Affairs and Sales and Marketing at life science companies with a particular focus on rare diseases. Blaine’s impressive track record makes him an ideal fit for Selecta at this critical inflection point, and we’re truly delighted to have him on board.

Blaine?

Blaine Davis: Thank you, Carsten. I’m thrilled to join the Selecta team and look forward to working closely with everyone as we deliver our mission to improve the lives of our patients. Now I would like to briefly run through our financial results for the fourth quarter and full year 2022. Revenue for the fourth quarter and full year 2022 was 16.8 and $110.8 million, respectively, as compared to 29.9 and $85.1 million for the same periods in 2021. Revenue was primarily driven by the license agreement with Sobi, resulting from the shipment of clinical supply and the reimbursement of costs incurred for the Phase III DISSOLVE clinical program. Research and development expenses for the fourth quarter and full year 2022 were 19 and $72.4 million, respectively, as compared to 20.3 and $68.7 million for the same periods in 2021.

The quarterly decrease was primarily driven by a decrease in expenses incurred for the SEL-212 clinical program. The annual increase was primarily driven by expenses incurred for preclinical programs, increased personnel expense and stock compensation expense. General and administrative expenses for the fourth quarter and full year 2022 were 6.3 and $23.9 million, respectively, as compared to 5.5 and $20.9 million for the same periods in 2021. The quarterly and annual increases were primarily driven by increases in stock compensation and personnel-related expenses. For the fourth quarter and full year 2022, Selecta reported net income of $5.9 million or basic net income per share of $0.04 and net income of $35.4 million or basic net income per share of $0.24, respectively.

For the fourth quarter and full year 2021, Selecta reported net income of $12.2 million or $0.10 per share and a net loss of $25.7 million or $0.22 per share, respectively. Selecta had $136.2 million in cash, cash equivalents, marketable securities and restricted cash as of December 31, 2022 as compared to $129.4 million as of December 31, 2021. We believe our available cash, cash equivalents, restricted cash and marketable securities will be sufficient to meet our operating requirements into mid-2024. With that, I’d now like to turn the call back to Carsten for closing remarks.

Carsten Brunn: Thank you, Blaine. In 2022, we delivered on key milestones that we believe further validated the value and breadth of our innovative ImmTOR platform. We continue to advance our diversified clinical pipeline, and we established strategic collaborations that we believe can propel our next-generation programs toward multiple IND filings. We look forward to building on the momentum of our recently announced deal with Astellas for Xork and Pompe disease, the initiation of the Phase I/II trial in MMA, identification of an IL-2 candidate and selection of an IgA Protease candidate, and we remain on track to report top line data from the Phase III DISSOLVE I and II clinical trials, investigating SEL-212 in chronic refractory gout later this quarter.

We remain blind to the data, but as previously stated, are confident in SEL-212’s competitive profile and potential to treat chronic refractory gout based on the positive results from previous trials. We look forward to providing further updates in the coming weeks. Looking ahead, we remain deeply committed to solving the hardest challenges in autoimmune disease and helping patients overcome autoimmunity and unwanted immunogenicity. In parallel, we intend to continue to seek opportunities to strategically partner in our gene therapy vertical to maximize the value of our platform. Before we conclude today’s call, I would once again like to thank the entire Selecta team, our investors and the many people who have been supportive along the way, including our patients and their families.

With that, we’re happy to take questions.

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Q&A Session

Operator: And our first question will come from Joseph Schwartz of SVB Securities.

Joseph Schwartz: I was wondering, first of all, SEL-302, if you could provide us with any more clarity on what we might expect to see from the first data readout from the study that you’re commencing? I know you’ve previously said that you expect to release data on a patient-by-patient basis. But since the first patient, I think, is being dosed without ImmTOR. I was wondering if you expect to wait until you have the first ImmTOR dosed patient as well to present this initial data set?

Carsten Brunn: Yes, that’s a great question. Yes, as we’ve previously guided, we will report interim data, so it’s three months data, looking — obviously, this is primarily a safety study, but also biomarker of the disease. And then specifically, we are interested in ImmTOR and the Nab response. So we expect to release data towards the end of this year, as you rightly said, the first patient only receives the gene therapy, the second patient then will receive ImmTOR. So we’ll likely release data towards the end of the year.

Joseph Schwartz: Okay. And then on ImmTOR-IL, I was wondering if we could get your thoughts on the recent IL-2 trial failure in SLE ? And why do you think your PBC program is perhaps better suited for success? And do you plan to report any new preclinical data across your early-stage pipeline this year?

Carsten Brunn: Yes, that’s another great question. Obviously, we haven’t looked at the data in a lot of detail. But obviously, where we think we are highly differentiated is the combination of ImmTOR with an engineered IL-2. We actually are really a first-in-class by inducing and expanding Treg-selective sales. So I think that approach — the end — specific approach is really unique and you have a much better chance of addressing the underlying disease. We are going into autoimmune diseases of the liver. And we think it’s really low-hanging fruit also because of ImmTOR accumulates in the liver. And actually, we’ve shown in a couple of models that ImmTOR alone actually already is hepatoprotective. So we’re pretty confident in the liver approach.

And yes, we will release after everybody has the eyes on DISSOLVE this quarter but after DISSOLVE readout, we’ll throughout the year, we’ll also provide more data from various animal models that Kei and his team have been working on, which are very encouraging.

Operator: The next question comes from Kristen Kluska of Cantor Fitzgerald.

Kristen Kluska: The first one to two quarter on gene therapy. So given that your partners were willing to sign deals with you ahead of MMA reading out and in some cases, even before the empty capsid data, I wanted to know how you believe that some of the MMA data and of course, your discussions with the respective regulatory agencies could further help with your conversations with current partners, but then also how it could potentially open the door for others that are interested?

Carsten Brunn: Yes, Kristen, that’s a great question. I think the fact that we signed two deals with Takeda and Sarepta, ahead of the empty capsid just shows the unmet medical need in this field. I mean there’s tremendous unmet need to prevent the formation of NAbs and give patients a chance to receive a second dose. We definitely believe that just the fact that we have empty capsid data available is an important data point. And most importantly, we have a clear regulatory path. I think that’s really important. That’s the reason we’re actually running the MMA program, and we can give clear guidance to our partners on how to develop ImmTOR and in this case, with three monthly doses of ImmTOR. And obviously, we believe that the data from the MMA study will also be helpful along the way as well.

Kristen Kluska: Then the second part on gene therapy is, how would you say that general awareness of the platform potential here has increased given you’ve had more data over time, there have been safety and durability hiccups from others in this space as well as, of course, you’re seeing the number of deals you’ve been able to execute as well.

Carsten Brunn: Can you just repeat the question, you were breaking up here on my end, sorry.

Kristen Kluska: Yes. Sorry about that. The question was just on understanding the awareness of the platform potential. Given you’ve had more data, there have been some safety and durability hiccups in this space as well as just seeing the execution you’ve had through striking deals with others.

Carsten Brunn: Got it. Yes, sorry about that. Yes, I mean there’s — obviously, there is increased awareness and there have been a number of setbacks the last two years in the gene therapy field with toxicities associated with AAV. So I think there’s acute awareness around ImmTOR and the potential of ImmTOR, but also, we really position ourselves as a solution provider, addressing some of the key challenges in gene therapy, which, number one, is the ability to potentially redose with ImmTOR but also secondly, with our IgG Protease Xork to increase the number of patients eligible to genotherapy as well. And I think our deal with Astellas is testament to that. There’s a lot of awareness and interest in the platform in gene therapy. And we’ve been pretty outspoken. This is really a vertical we want to pursue from a partnering perspective.

Kristen Kluska: Great. And then the last question I have for you is just how many roughly liver diseases do you believe more ImmTOR-IL could be evaluated in? And then what are some of the criteria on your wish list essentially when choosing which indication you might start with?

Carsten Brunn: Yes, that’s a great question. And I’ll actually throw this question to our resident hepatologist, Peter, and maybe talk about PBC, but also other indications we’re interested in and why we’re interested in that. Peter?

Peter Traber: Yes. Thanks, Carsten. And thanks for the question, Kristen. I think that we’re going to be giving once the DISSOLVE data comes out and so forth, we’re going to be really giving a lot more information on how we’ve chosen, how we will choose diseases for ImmTOR-IL. But to your specific question about liver diseases, there are a number of clearly autoimmune liver diseases which are T-cell mediated and affect the liver. PBC is a quintessential one, but there are others that are even more clinically important and have more unmet medical needs, such as autoimmune hepatitis. There are a couple of types of that disorder, primary biliary cholangitis, which is associated with inflammatory bowel diseases and clearly has an autoimmune underlying mediology.

And then there are overlap syndromes with parts of each — PBC with autoimmune hepatitis and so forth. But those — collectively, those autoimmune liver diseases represent a significant number of affected individuals and significant unmet medical need. While there’s therapy in PBC available, as you know, there’s only a single approach to AI autoimmune hepatitis and no successful therapies in primary sclerosing cholangitis, PSC. So we think that there’s an area there to make an impact, which will be one of our focuses. Not the only focus we’ll have in autoimmune disease, but a key one.

Operator: The next question comes from John Newman of Canaccord Genuity.

John Newman: Regarding the top line data for SEL-212, I’m just curious as to how much information you might be able to share regarding the safety, specifically the gout flares. I know that some of the early developments suggested that in addition to good efficacy, you may actually be able to improve the incidence of gout flares maybe lower that a bit. Just curious if you’ll be able to talk about that at all, excuse me, on the top line readout?

Carsten Brunn: Yes, that’s a great question, John. And obviously, what’s important to note that we’ve been completely blinded to the data, so we haven’t seen the data, but I’ll let Peter address what we expect in terms of showing the top line perspective.

Peter Traber: Yes, John, I’ll tell you what we expect, but I’ll just clarify a little bit kind of some of the historical data from our program. So first of all, it’s well established that gout flares increase with uricase therapy. That’s been established by — in all of the pegloticase trials that have been done. So you do get an increase in gout flares as you start to dissolve and reduce the urate deposits in the body. In Phase I and early Phase II, it did appear that there was some reduction in gout flares incidents with SEL-212. But in the COMPARE trial, which as you know, was a large comparison trial with 83 patients receiving SEL-212 we didn’t see a real reduction in gout flares. Now in DISSOLVE, we’ll be comparing — we’ll be doing the best comparison because we’ll be comparing gout flares versus placebo.

And we’ll be able to look at the number of gout flares in different periods of time of the therapy versus placebo. So we will have those data, and we’ll be able to report on that.

Operator: The next question comes from Yun Zhong of BTIG.

Yun Zhong: So the first one is kind of a follow-up question on the indication selection for ImmTOR-IL-2. I don’t see the press release specifically mentioned PBC. I just wanted to confirm that PBC is still likely the first indication to choose or I do believe that you mentioned that multiple preclinical I enabling studies will be initiated in 2022 — sorry, 2023. So I assume those studies are for different indications.

Carsten Brunn: Yes. It’s a great — very observant and a great question. As Peter said, I mean, PBC definitely is still part of the mix. We want to open the funnel a little bit and look broader at autoimmune of the liver as there are multiple indications of high interest indications that are well suited for ImmTOR-IL like PBC, where we know the autoantigen impacting the disease, PBC-2, but also there’s other indications with high united, as Peter mentioned, like autoimmune hepatitis. So definitely, PBC is still part of the mix, but we want to open up the funnel and we’ll give more detailed guidance after the DISSOLVE readout.

Yun Zhong: Okay. Then second question on the collaboration with Astellas. It’s a very exciting one. But I believe the gene therapy program uses AAV8 which happens to be the capsid used in the empty capsid study. So just curious, did Astellas show any interest in ImmTOR? And I just wanted to confirm also that ImmTOR and also Xork both of them are agnostic to the capsid used in the study. So the effect is not affected by which capsid to choose. Is that correct?

Carsten Brunn: Yes, that’s a good question. And yes, so Astellas exclusive licensees of Xork for the use in their Pompe program. And you’re also right that both approaches as far as we know, are agnostic. We’ve shown with different AAV subtypes that ImmTOR prevents the formation of losing antibodies. And we assume the same for Xork as a pretreatment, the same that’s agnostic actually to the AAV exposure that patients had.

Operator: The next question comes from Gil Blum of Needham & Company.

Gil Blum: Maybe a simple question here. So given the number of pretty large indications for autoimmunity, even in the liver, how much of this is going to be finding a partner?

Carsten Brunn: Yes, Gil, that’s a good question as well. It is indeed a large area, and we’ve spent a significant amount of time kind of prioritizing indications — and we kind of landed on the liver as an interesting area. As Peter mentioned, it’s — we think its low-hanging fruit because into accumulation in the liver, there are indications that we can execute on as a company all the way through commercial actually. I mean these are all attractive, but still kind of orphan-type indications that we can execute on. At the same time, there are larger indications, which are of interest. We might potentially do an initial proof-of-concept study, but then you would look for partnerships to see this through for sure, given the complexity that this specific disease expertise, but also the cost of the programs.

Gil Blum: Excellent. And maybe just to organize things for us here. What sort of milestones are you expecting on a positive readout from the pivotal studies for Sobi here?

Carsten Brunn: Yes. Good question as well. So — and I think we’ve guided in the past. So just to remind you of the overall deal terms. So we licensed the asset to Sobi in 2020, received $100 million upfront. We also received $630 million in milestones. That’s broken down $80 million in regulatory and development and $550 million in commercial. Out of the $80 million, we have received $15 million so far. So we were still eligible to receive $65 million. We haven’t broken out to which event these are tied to. And then also, we are eligible to receive royalties in the double digits as well.

Operator: The next question comes from Tiffany Marchell of William Blair.

Tiffany Marchell: This is Tiffany on for Raj. For the IgG Protease Xork, can you maybe discuss a bit how you and Astellas plan to use Xork prophylactically for preexisting antibodies? And do you imagine there’s still a certain cutoff in the level of preexisting antibodies that it might be effective for or really just how much do you imagine Xork could expand the treatable population here?

Carsten Brunn: Yes, that’s a great question. And obviously, I can’t comment how Astellas plans to develop this, but I can just comment on how we kind of view the approach. And so there’s interesting data from IgG Protease that they basically cleave preexisting antibodies, which prevent dosing. And specifically, we’re looking here patients had a natural AAV infection. So not necessarily patients that were exposed to an AAV gene therapy get very high titers in the thousands. We’re looking to hear more at natural AAV infections. And that inflicts between 30% to 70% of all patients had a natural AAV infection, not eligible to receive gene therapy. So we think that’s very attractive, both from a patient perspective but also a commercial perspective, you potentially double the number of patients eligible and that definitely played a part of why Astellas license Xork.

Tiffany Marchell: Great, that makes sense. And I guess for Xork, do you also plan to share any additional preclinical data this year on that?

Carsten Brunn: So we haven’t guided to that. I think we have shared some of the initial data. But I mean, at this point, we don’t — we have not guided specifically to share additional data.

Operator: The next question comes from Boobalan Pachaiyappan of H.C. Wainwright.

Boobalan Pachaiyappan: This is Boobalan. Can you hear me okay?

Carsten Brunn: Yes. Boobalan, we can hear you. Thank you.

Boobalan Pachaiyappan: All right. Great. A few questions from our end. So firstly, with respect to IgA Nephropathy, obviously, you might have — you are aware of FDA approval of Filspari, sparsentan. So I’m curious how this FDA approval might alter the dynamics of your IgAN program, especially in light of the fact that the agent that was approved may increase the risk of liver injury and birth defects.

Carsten Brunn: Yes. So maybe I’ll let Peter just talk a little bit about our approach here and why we think it’s a truly novel approach and really see this complementary to some of the other products in development, Peter?

Peter Traber: Yes, happy to answer that question. I think that what you’re referring to is that there were some warnings on the latest approval based on age group. We don’t anticipate age group issues, but of course, we will be starting our development program in adults. Now with regard to the specific approach, all the approaches that are — have either been approved or are in development are either looking at a type of steroid, which affects the upstream production of IgA or downstream effects of the deposits in the kidney. We’re the only approach, which is targeting the IgA immune complexes in the kidney to try to clear those to see whether that will improve the disease. So our approach is complementary to the two drugs that have been recently approved as well as all of those in the development pipeline.

Now approval of additional drugs will certainly affect the development program from the standpoint of exclusions and inclusions and standard of care and so forth. But we’ll have to wait to see how that evolves with the recent approvals. But by and large, ours is a novel approach that no one else at this point is utilizing.

Boobalan Pachaiyappan: As you’re thinking deeply about your IgAN program, just curious, are there specific biomarkers that you’ll be paying close attention maybe in the next few quarters to gain confidence in the program in addition to say ?

Peter Traber: Yes. So biomarkers, you’re talking about of effect in IgAN. Yes. Okay. Yes. So the biomarkers that have been looked at, of course, and are most important is urinary protein excretion. That’s number one. Number two is kind of the most important one is the effect on kidney function, which would be eGFR. But we’re also exploring a variety of urinary markers and other markers that we might be able to utilize. But the two most important are urinary protein for albumin excretion and eGFR, if I understood your question properly.

Boobalan Pachaiyappan: Got it. And then maybe a market opportunity question in IgAN. So roughly 30,000 to 50,000 patients. So is there a specific population that you’re planning to target with your agent or is it for general or all IgAN patients?

Peter Traber: Well, I think that we are looking at that carefully. We haven’t decided exactly which patient population or segment that we will focus our development program on. Obviously, there are different ways to segment the patients in terms of when they were diagnosed, whether they have failed other therapies, what their baseline renal function is, whether they have evidence of progressive — rapidly progressive disease or slowly progressive disease. We’ll be looking at all of that to take into account how to focus our program. And we haven’t really made those decisions yet, but we do think that patient segmentation will be an important part of the program.

Boobalan Pachaiyappan: Great. And maybe one final question with respect to your Astellas gene therapy collaboration. This is more a clarification. Is there a requirement that the agent or the gene therapy agent plus your Xork it should get to skeletal and cardiac muscles.

Carsten Brunn: If I understand the question correctly, is this around ImmTOR or Xork. Just ImmTOR works through the liver, but we have partnerships and all the data we have generated is in liver-directed vectors. But obviously, we do have a partnership with Sarepta and looking at neuromuscular disease, where we also believe that there’s a good rationale why we could use ImmTOR migrate, obviously, as well systemically that hopefully address the question?

Boobalan Pachaiyappan: So the question was not about ImmTOR, it was about Xork but yes, thanks for the color there.

Peter Traber: I can comment on the Xork. So the Xork works through variance of systemic IgG so of the neutralizing antibodies included. So regardless of where the capsid target is, it’s going — as long it’s systemically delivered, it’s going to be intercepted by the neutralizing antibodies. So the Xork enzyme should be active in that situation.

Operator: Next question comes from Uy Ear of Mizuho.

Uy Ear: So I guess the first question is on the MMA study that you guys are ongoing. Just curious to sort of get a better sense of what you’re seeing in terms of patients’ interest in the gene therapy? And I guess my second question is given the completion of the DISSOLVE 1 and DISSOLVE 2 studies, just curious to — curious to see if you can help us understand how to think about R&D for 2023. It looks like the consensus is projecting kind of flat R&D versus 2022. And yes, that’s essentially it.

Carsten Brunn: Great. Yes. I’ll give the first question to Peter, who is obviously intimately involved in the ReMagine trial, which we’re running at a single center at the NIH, Peter?

Peter Traber: Yes, happy to answer that. In terms of the patient interest, we have done a good deal of promotion of the trial through the Organic Acidemia Society, the website for the trial and so forth. And we have gotten a lot of interest both in the U.S. and internationally. But of course, this is a trial where we are sequentially enrolling subjects over time. So it’s not like the trial success is going to be dependent on a very large group of patients interested right at the beginning because we’re going to enroll them sequentially over the course of two years. We have, as you know, the trial is active. It has been since the end of last year. We have enrolled a subject — first subject, and that subject is going through the extensive screening process leading up to treatment. And we don’t have a specific date or timing yet for that, but it’s — the program is moving along with screening and evaluating the first subject.

Carsten Brunn: Great. And Blaine, if you handle the second around R&D expenses.

Blaine Davis: Sure. Yes. So relative to R&D expenses, well, we don’t kind of specifically guide to how to think about future expenses for the organization overall. Let me give a little bit of context. So as you could expect, we continue to have clinical trial expenses associated with the SEL-212 program that will be continuing in 2023. And then we’ll also start to have obviously a decent amount of ramp-up activity associated with the earlier stage pipeline around preclinical activities as well as kind of a number of other sort of R&D-related expenses. So there will start to be a shift in kind of where those R&D expenses are associated on a go-forward basis. We do have a number of kind of early-stage activities and programs as well as the ongoing MMA study that will start to have a shift overall.

But I don’t want to provide kind of specific guidance at this particular juncture on how to think about overall expenses. But hopefully, that gives a little bit of context in some of the moving parts as we think about 2023.

Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Carsten Brunn for any closing remarks.

Carsten Brunn: Thank you, operator, and thank you to everyone who joined us this morning. Stay safe and healthy. This concludes today’s call. Thanks.