Taysha Gene Therapies, Inc. (NASDAQ:TSHA) Q1 2023 Earnings Call Transcript

Taysha Gene Therapies, Inc. (NASDAQ:TSHA) Q1 2023 Earnings Call Transcript May 11, 2023

Taysha Gene Therapies, Inc. reports earnings inline with expectations. Reported EPS is $-0.28 EPS, expectations were $-0.28.

Operator: Thank you for standing by. This is the conference operator. Welcome to the Taysha Gene Therapies First Quarter 2023 Earnings Conference Call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there’ll be an opportunity to ask questions. [Operator Instructions] I would now like to turn the conference over to Hayleigh Collins, Director, Head of Corporate Communications. Please go ahead.

Hayleigh Collins: Thank you. Good afternoon and welcome to Taysha’s first quarter 2023 financial results and corporate update conference call. Earlier today Taysha issued a press release announcing financial results for the first quarter 2023. A copy of this press release is available on the Company’s website and through our SEC filings. Joining me on today’s call are Sean Nolan, Taysha’s CEO, Sukumar Nagendran, President and Head of Research & Development; Kamran Alam, Chief Financial Officer and Salman Bhai, Assistant Professor of Neurology at UT, Southwestern. We will hold a question-and-answer session following our prepared remarks. Please note that on today’s call, we will be making forward-looking statements, including statements relating to the existing clinical data for TSHA-120 the therapeutic and commercial potential of TSHA-120 and TSHA-102.

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

For a list and description of the risks and uncertainties that we face, please see the reports we have filed with the Securities and Exchange Commission including our Annual Report on Form 10-K for the year ended December 31, 2022. The conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, May 11, 2023. Taysha undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call, except as may be required by applicable securities law. With that, I would now like to turn the call over to our CEO, Sean Nolan.

Sean Nolan: Thank you, Hayleigh, and welcome, everyone to our 2023 first quarter financial results and corporate update conference call. Today, I will begin with a brief corporate update. Then Dr. Sukumar Nagendran, President and Head of R&D of Taysha will provide an update on our clinical development programs along with our collaborator, Dr. Salman Bhai, Assistant Professor of Neurology at UT Southwestern. Kamran Alam, our Chief Financial Officer will then follow-up with a financial update before I provide closing remarks and open the call up for questions. We’ve made significant progress across to lead programs in Rett syndrome and giant axonal neuropathy this year, and remain on track to deliver on multiple key milestones, including the generation of first-in-human clinical data for TSHA-102 in adult patients with Rett syndrome, the submission of a CTA to the MHRA to initiate expansion of TSHA-102 in pediatric patients, the submission of an IND application to the FDA for TSHA-102, and obtaining further clarity from the FDA on the regulatory path forward for TSHA-120 in GAN.

Screening is completed and the dosing of our first potential patient with TSHA-102 in the Phase 1/2 REVEAL trial in adult Rett syndrome is scheduled for the second quarter of this year. For our GAN program, the new comprehensive analyses of the totality of the data for TSHA-120 continues to be encouraging and includes compelling findings that offer potential to further support a regulatory path forward. I want to highlight that much of the data presentation plan for the FDA will be new to the agency. And we will work to contextualize the data in a manner that clearly elucidates the potential for meaningful benefit to patients. We plan to submit the meeting request this quarter and expect the formal meeting to occur in the third quarter of this year.

In the near-term, we look forward to hosting an R&D day in June, where we will provide an overview of the GAN disease state and share these new clinical data analyses. Additionally, we plan to provide an update on our Rett program. Suku and Salman will discuss this in more detail shortly. At the upcoming ASGCT conference, new preclinical data supporting TSHA-102 and the miRARE technology in Rett syndrome will be presented as part of a poster presentation. We remain focused on achieving the anticipated near-term milestones for Rett syndrome and GAN programs and continue to work towards our mission of bringing transformational new treatments to patients with these devastating neurodegenerative diseases. I will now turn the call over to Suku to provide a more in depth discussion of our clinical programs in Rett syndrome, and GAN.

Suku?

Sukumar Nagendran: Thank you, Sean, and good afternoon, everyone. First, I will start with an update on TSHA-102, our gene therapy program in development for the treatment of Rett syndrome. As a reminder, TSHA-102 utilizes an innovative miRNA-Responsive Auto-Regulatory Element or miRARE platform to regulate the cellular expression of MECP2 at the upcoming ASGCT Conference. We are excited to present new preclinical data that we believe supports the potential for TSHA-102 and the miRARE technology as part of a poster presentation on May 19. For our Phase 1/2 REVEAL study in adult patients with Rett syndrome. We have completed screening and scheduled the dosing for the first potential patient. We expect the dosing to take place in the second quarter of 2023.

We plan to report initial available clinical data, which will be primarily on safety in the second quarter of the year at our upcoming R&D Day. In the second half of the year, we plan to continue dosing adult patients with Rett syndrome in our REVEAL trial and provide quarterly updates on available clinical data thereafter. We receive feedback from Health Canada on our protocol amendment to expand enrollment eligibility to subject 15 years or older in the REVEAL trial, which suggests that Health Canada support the expansion following initial efficacy and safety data from adult patients. We plan to submit a CTA to the U.K. MHRA, for TSHA-102 in mid-2023 to enable the initiation of a pediatric Rett syndrome study. We also have an IND application submission to the U.S. FDA plan in the second half of the year to further expand our clinical study footprint with TSHA-102.

Now let’s turn to TSHA-120 for the treatment of GAN, an ultra-rare neurodegenerative indication that no approved treatments or established regulatory pathway. As Sean mentioned, we are currently completing a comprehensive review of data from the ongoing natural history and interventional trial that includes functional, biological and electrophysiological assessments. We plan to seek a formal meeting with the FDA to discuss a new analysis that FDA has not seen and regulatory path forward for TSHA-120. As a reminder, early analysis based on MFM32, the primary efficacy scale discussed at the FDA Type B end of Phase 2 meeting demonstrated clinically meaningful slowing of disease progression in patients with GAN following treatment with TSHA-120 across the therapeutic dose cohorts.

Importantly, long-term analyses points to sustain durability and the ability of TSHA-120 to prevent nerve degeneration, generate nerve fiber and preserve visual acuity, which are significant findings for patients affected by neuro-degeneration. Importantly, over six point [ph] years of long-term clinical safety data, supports a well-tolerated safety profile with no major drug related events. The FDA stated that MFM32 can be a relevant primary endpoint in the setting of a randomized double-blind controlled trial and acknowledged Taysha’s challenge in executing and enrolling such a study design due to the ultra-rare nature of GAN. As such, the FDA indicated that it is open to regulatory flexibility in a controlled trial setting and is willing to consider alternative study designs utilizing objective measurements to demonstrate a relatively large treatment effect that is self-evident and clinically meaningful.

Our comprehensive analyses of the totality of data from the ongoing natural history and interventional trial, which will inform our plans for future interactions with the FDA continues to be encouraging and includes compelling new findings with potential to further support the regulatory path forward. I will now turn the call over to our collaborator Dr. Salman Bhai from UT Southwestern, who will provide a high level overview of some of our initial analysis of the data for TSHA-120 in GAN and the clinical relevance to the disease state. Salman?

Salman Bhai: Thank you, Suku and hello everyone. My name is Dr. Salman Bhai and I’m an Assistant Professor of Neurology at UT, Southwestern. I earned my Medical Degree and completed my Neurology Clinical Training at Harvard Medical School, with specialization in neuromuscular disorders. As a practicing neuromuscular neurologist, I’m keenly aware of the devastation that GAN causes, not only to patients, but also to their families. I’ve been working closely with Taysha on the development of the TSHA-120 program for over a year and a half, and then energized by the opportunity to help bring a potentially transformational treatment to the GAN community. I’ve been heavily involved in the ongoing comprehensive analyses of the totality of data, and I’ve been working collaboratively with the team to identify new data findings.

Based on the GAN clinical phenotype and pathophysiology, we’re building a clinical narrative around the data to support our regulatory path forward for TSHA-120. I’m pleased to provide an update on the compelling findings from our ongoing data analyses. One goal of evaluating the totality of the data for TSHA-120 is to determine whether we can identify potential objective measurements that demonstrate a clinically meaningful treatment effect. For context, I think it’s important to understand that GAN, clinically manifest with marked in coordination, ataxia. Due to both severe central and peripheral nervous system degeneration, which lead to significant disability and early mortality caused by respiratory failure. There is no approved treatment for this ultra-rare fatal disease.

We have access to the largest natural history database of GAN to-date through the NIH. As a result of our analyses of these data, we have a clear understanding of how to measure meaningful treatment effect for these patients. I’m a neurologist. So of course, let’s start with the neuroanatomy. We know their central and peripheral nervous system degeneration with GAN. Specifically, this involves the cerebellum, long tracks and sensory and motor nerves. Clinically, these anatomical localizations translate to severe in coordination, which is ataxia, and weakness. Patients struggle with simple tasks like picking up objects and feeding themselves. How can we measure this, the integration of the central nervous system and the peripheral nervous system pathologies.

We believe we have a comprehensive scale that we prospectively collected in the natural history and interventional patients. The modified Friedreich ataxia rating scale or mFARS, which was recently used as the primary outcome measure for drug approval for Friedreich ataxia. This scale is based on functional and objective measures within the neurologic exam. Focusing on ataxia, a key driver of disability in GAN patients as a whole, we can prospectively measure the integration of the central and peripheral nervous systems using mFARS. We can then capture several objective peripheral nervous system data points, including nerve conduction studies, myometry and nerve pathology. We have scientific evidence of TSHA-120, leading to peripheral nerve regeneration in some patients, meaning nerves or growing back.

Nerve conduction studies indicate sensory nerves recover responses that were absent prior to treatment, a key finding that was truly unexpected, and to my knowledge has never been demonstrated previously in GAN patients. We also see an increase in regenerative clusters on nerve biopsy. This is direct electrophysiological and biological evidence of nerve regeneration. In neurodegenerative disease, the peripheral nervous system data is key because recovery of sensory nerves directly impacts patients’ performance on mFARS, providing links between objective biologic data and a clinical rating scale. Importantly, by developing a disease progression model through Bayesian analysis, based on the natural history data, we show that the progression of mFARS in GAN is predictable, monotonic and homogenous across patients.

Thus, we can use this model to determine treatment effect. Preliminary determinations of treatment effect size relative to the disease progression model as measured by mFARS and with multiple peripheral nervous system endpoints show disease slowing. Let me repeat, we have direct central nervous system and peripheral nervous system outcome measures, and clinical and biological objective data that show positive disease modification with TSHA-120 in an ultra-rare, fatal neurodegenerative disorder that has no approved treatment. The restoration of sensory nerve responses on nerve conduction studies and positive impact on other clinically relevant endpoints show the potential for even greater clinical impact in this neurodegenerative disorder, if treated at an earlier stage of disease with TSHA-120.

I believe these data have the potential to provide objective measurements that demonstrate clinically meaningful treatment effects. We are truly, truly inspired by these patients and their caregivers. We are hopeful that we can bring a potentially transformational treatment to the GAN community, and we look forward to working collaboratively with the FDA through our anticipated future discussions. With that, I’ll now turn the call back to Suku.

Sukumar Nagendran: Thank you, Salman. As you can see, we have compelling findings that we expect to submit as a part of a former meeting request to the FDA in the second quarter of this year. These data will inform our discussions with the FDA regarding alternative study designs, additional objective measures and ultimately a regulatory path forward. We anticipate a formal meeting to occur in the third quarter of 2023. Importantly, administration of TSHA-120 also shows a translational or correlation between preclinical and clinical studies with TSHA-120, GAN knockout mice show improved dorsal root ganglia pathology and motor function, both of which translate to our human studies with improved sensory nerve integrity and sensory nerve action potentials better known as SNAP as detected by nerve conduction studies and biopsy analysis and improvement or stabilization in strength.

We saw similar clinical translational impact with spinal muscular atrophy and the SMN delta 7 mouse models which were developed Zolgensma at AveXis which showed improvement of stabilization, motor function and strength after treatment with gene therapy. That for congruencely seen in human studies as well. In June, we are excited to host a Virtual R&D Day where we will detail this new analysis and review therapeutic potential in the context of the GAN disease state, as well as provide an update on our Rett syndrome program, including new preclinical data for TSHA-102, in Rett syndrome being presented at the upcoming ASGCT Annual Meeting and available clinical data from Phase 1/2 to REVEAL trial in adults. Lastly, with respect to manufacturing, we have completed the CMC module 3 amendment submission detailing our commercial process product manufacturing, and drug comparability analysis, and are waiting feedback from the FDA.

We continue to believe in the transformative potential of TSHA-120 and look forward to having a collaborative dialogue with the FDA regarding the potential registrational path to bring TSHA-120 to patients with GAN who to reiterate have no approved treatments. I will now turn the call over to Kamran to discuss financials. Kamran?

Kamran Alam: Thank you, Suku. Research and development expenses were $12.5 million for the three months ended March 31, 2023, compared to $38.2 million for three months ended March 31, 2022. The $25.7 million decrease was due to reduce research and development compensation as a result of lower headcount of $10.7 million. The decrease was also due to reduce manufacturing and other raw material purchases of $7.1 million. We also incurred $6.4 million reduced expense and non-clinical studies related to translational and toxicology studies, and $1.5 million lower expense in other research and development activities. General and administrative expenses were $8.8 million for three months ended March 31, 2023, compared to $11.5 million for three months ended March 31 2022.

The decrease of $2.7 million was due to reduce general and administrative compensation as a result of lower headcount and reduced consulting and professional fees. Net loss for the three months ended March 31, 2023 was $17.6 million, or $0.28 per share, as compared to a net loss of $50.3 million, or $1.32 per share for three months ended March 31, 2022. The net loss for the three months ended March 31, 2023 was partially offset by revenue of $4.7 million recognized related to the Astellas transaction. As of March 31, 2023 Taysha had $63.4 million in cash and cash equivalents. Taysha continues to expect that its current cash resources will support plant operating expenses and capital requirements into the first quarter of 2024. I will now turn the call back over to Sean for his closing remarks.

Sean?

Sean Nolan: Thank you, Kamran. We believe that the clinical and preclinical data generated to-date across our Rett syndrome and GAN programs reinforce our gene therapy approach and the therapeutic potential for our innovative programs to address severe unmet needs and monogenic central nervous system disease. In the year ahead, we are focused on executing across our near-term milestones in our Rett syndrome and GAN programs. In the second quarter of this year, we look forward to dosing the first potential adult patient with Rett syndrome, and reporting initial clinical safety data for TSHA-102. We are excited to host an R&D Day in June to review the analysis of the totality of the data for TSHA-120. That will inform our regulatory path forward for TSHA-120 as well as provide an update on our Rett syndrome program. We look forward to providing further updates on our programs throughout the year. With that, I will now ask the operator to begin Q&A. Operator?

See also 10 Easiest Countries in Europe to Get Citizenship and 16 Biggest PC Companies in the World.

Q&A Session

Operator: Thank you. [Operator Instructions] The first question comes from Yanan Zhu with Wells Fargo Securities. Please go ahead.

Operator: The next question comes from Jack Allen with Baird. Please go ahead.

Operator: The next question comes from Kristen Kluska with Cantor Fitzgerald. Please go ahead.

Operator: [Operator Instructions] The next question comes from Joon Lee with Truist Securities. Please go ahead.

Operator: [Operator Instructions] The next question comes from Gil Blum with Needham & Co. Please go ahead.

Operator: [Operator Instructions] This concludes the question-and-answer session. I would like to turn the conference back over to Mr. Sean Nolan for any closing remarks. Please go ahead.

Sean Nolan: Thank you, operator, and thanks to all of you for joining us on the call this afternoon. Have a great rest of your day. Take care.

Operator: This concludes today’s conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.