Taysha Gene Therapies, Inc. (NASDAQ:TSHA) Q4 2023 Earnings Call Transcript

Taysha Gene Therapies, Inc. (NASDAQ:TSHA) Q4 2023 Earnings Call Transcript March 19, 2024

Taysha Gene Therapies, Inc. beats earnings expectations. Reported EPS is $0.92, expectations were $-0.09. TSHA isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Greetings and welcome to Taysha Gene Therapies Fourth Quarter and Full-Year 2023 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce Hayleigh Collins, Director, Head of Corporate Communications and Investor Relations. Thank you. You may begin.

Hayleigh Collins: Thank you. Good afternoon and welcome to Taysha’s full-year 2023 financial results and corporate update conference call. Earlier today, Taysha issued a press release announcing financial results for the full-year ended December 31 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 R&D; Kamran Alam, Chief Financial Officer. We will hold a question-and-answer session following our prepared remarks. Please note that on today’s call, we will be making forward-looking statements including statements relating to the therapeutic and commercial potential of TSHA-102 including the reproducibility and durability of any favorable safety results initially seen in our first and second patients dosed in the REVEAL trial to positively impact quality of life and alter the course of disease in the patients we seek to treat in our research, development and regulatory plans for our product candidates, including timing for our clinical trials and reporting results therefrom, and our current cash resources supporting our plan’s operating expenses and capital requirements into 2026.

These statements may include the expected timing and results of clinical trials for 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 in future operating results, discovery and development of product candidates, strategic alliances and intellectual property, as well as matters that are not historical facts or information. Various risks may Taysha’s actual results to differ materially from those stated or implied in such forward-looking statements. These risks include uncertainties related to the timing and results of clinical trials and regulatory actions for product candidates are dependents 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 Securities and Exchange Commission, including in our annual report on Form 10-K for the year ended December 31, 2023, that we file today. This conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, March 19, 2024. Taysha undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call, except as may be required by applicable securities laws. With that, I would now like to turn the call over to our CEO, Sean Nolan.

Sean Nolan: Thank you, Hayleigh and welcome everyone to our 2023 full-year financial results and corporate update conference call. Today, I will begin with a brief update on our corporate and clinical activities, then Dr. Suku Nagendran, President and Head of R&D of Taysha, will provide an update on our lead TSHA-102 program and clinical evaluation for the treatment of Rett syndrome. Kamran Alam, our Chief Financial Officer, will follow up with a financial update. I will provide closing remarks and open the call up for questions. In 2023, we made tremendous progress on the development of TSHA-102, our lead gene therapy program and clinical evaluation for the treatment of Rett syndrome, which is a rare neurodevelopmental disorder with significant unmet medical need.

This included generating initial clinical data in adult patients and expanding the trial into the adolescent population, obtaining regulatory clearance to initiate the clinical evaluation of TSHA-102 and two additional geographies, and dosing the first patient in our pediatric trial. Importantly, we believe these accomplishments enable us to focus our efforts this year on generating critical, long-term clinical data in a broad range of ages and stages of Rett syndrome patients across multiple geographies. We now have two ongoing first-in-human trials evaluating the safety and preliminary efficacy of TSHA-102. The REVEAL Phase 1/2 Adolescent and Adult Trial in Canada and the U.S. and the REVEAL Phase 1/2 Pediatric Trial in the United States with clearance in the U.K. Today we are excited to report longer-term clinical data from our first two adult patients treated with a low dose of TSHA-102 in our adolescent and adult trial.

As a reminder, our ongoing review of Phase 1/2 adolescent and adult trial is a first-in-human, open-label, randomized dose escalation and dose expansion trial evaluating the safety and preliminary efficacy of TSHA-102 in females age 12-years and older with Stage 4 Rett syndrome. We are currently enrolling patients in Part A, the dose escalation portion of the trial, which is evaluating two dose levels of TSHA-102 sequentially. Two patients have been dosed to-date in Cohort 1, evaluating the low dose of TSHA-102 of 5.7×1014. And dosing in Cohort 1 is now considered complete. Today we’re pleased to provide an update on the encouraging follow-up data from the first two adult patients treated in the low dose cohort. Recall, when we initiated the REVEAL trial, there were low expectations of efficacy for the Stage 4 adult population among KOLs in the Rett syndrome community, due to the advanced and relentless progression of disease.

The focus was placed primarily on safety. Therefore, it was very exciting when we announced the encouraging initial impact that TSHA-102 appeared to have across multiple clinical domains in the first two adult patients treated as early as four weeks following the treatment that we reported in November 2023. The data presented today for Patient 1 is from her six-month post-treatment assessment with clinical observations from week 35 post-treatment. Importantly, we continue to see a durable response and we are seeing sustained improvement in the absence or reduction of steroid levels. We have received many questions since initiating — since initially announcing Patient 1 data about the possible impact of steroids on the disease itself. We are not surprised, but nonetheless pleased to highlight today that patient improvements were maintained or further improved in the absence of steroids.

As of the six-month assessment, Patient 1 has showed sustained improvement across key efficacy measures at decreased steroid levels, with new improvement observed in the Rett syndrome behavioral questionnaire or RSVQ. Additionally, the second adult patient also sustained improvements across key efficacy measures, with new improvement observed in certain measures, including the Revised Motor Behavior Assessment, or RMBA, and significantly reduced seizures at 12 weeks post-treatment. The longer-term clinical observations reported by the principal investigator showed that both patients had sustained and new improvements across multiple clinical domains, including autonomic function, social communication, motor skills, and seizures, compared to earlier post-treatment assessments.

Importantly, these continued improvements were reported at week 35 following completion of the steroid taper for the first patient and at week 19 at decreased steroid levels for the second patient. As a reminder, these two patients have quite different genetic mutations. The first patient’s MECP2 mutation manifests in a more severe disease phenotype than the second patient’s mutation. For example, Patient 1 was completely non-ambulatory at baseline, whereas Patient 2 could walk with prompting. Despite the different clinical baseline characteristics, both patients showed improvements across multiple clinical domains as early as four weeks following the treatment. And importantly, both patients showed sustained and new improvements across those clinical domains at the longer term assessments.

In addition to the positive safety data, we are encouraged by the longer term safety profile observed. Data from the first two adult patients showed that TSHA-102 was well tolerated with no treatment emergence, serious adverse events, as of the 35-week assessment for Patient 1, and as of the 19-week assessment for Patient 2. We believe the safety profile and these continued improvements across multiple clinical domains, even at reduced steroid levels, in both adult patients with advanced stage four Rett syndrome, support the durability and transformative potential of TSHA-102 across multiple genotypes of Rett syndrome and further validate our construct. Suku will discuss the clinical observations and efficacy data in more detail shortly. Now let’s turn to our pediatric trial.

Our ongoing reveal Phase 1/2 pediatric trial is a first-in-human open label randomized dose escalation and dose expansion trial evaluating the safety and preliminary efficacy of TSHA-102 in females aged five to eight years old with Stage 3 Rett syndrome. We are currently enrolling patients in Part A, the dose escalation portion of the trial, which is evaluating two dose levels of TSHA-102 sequentially. We’ve dosed the first pediatric patient in Cohort 1, evaluating the low dose of TSHA-102 of 5.7×1014 here in the U.S. The Independent Data Monitoring Committee or IDMC, recently convened to review these longer-term clinical data from the first two adult patients and the initial six-week data from the first pediatric patient treated with the low dose of TSHA-102.

Following review, the IDMC approved our request to proceed to dose escalation in the adolescent and adult trial, which enables us to initiate dosing with the high dose of TSHA-102 earlier than planned. This is a critical step in our development plan as advancing to the high dose accelerates our ability to further inform our clinical development and regulatory strategy for Part B of the study by at least a quarter. With Cohort 1 now completed in our adolescent and adult trial, we plan to dose the first patient in Cohort 2, evaluating the high dose of TSHA-102 of 1×1015 in the second quarter of 2024. Initial data from Cohort 2 of the adolescent and adult trial is expected in the second-half of 2024. The IDMC also approved dosing of the second pediatric patient in Cohort 1 in the REVEAL Phase 1/2 pediatric trial.

The patient has been identified and dosing is scheduled to take place this quarter. We plan to complete enrollment in the low and high dose cohorts of the pediatric trial this year with initial available data from the low dose cohort expected in mid-2024 as we disclosed previously in early January. Additionally, initial data from the high-dose cohort of pediatric trials expected in the second-half of 2024. Overall, we’re focused on completing dosing in Part A of both studies this year. Importantly, data from Part A will be assessed by regulatory agencies and the IDMC to provide guidance to determining final key elements of Part B, the dose expansion portion of the study, including the hierarchy of efficacy endpoints, study design, and the maximum tolerated dose or maximum administered dose.

Another key focus in 2023 was broadening the clinical evaluation of TSHA-102 across geographies. In our REVEAL Adolescent and Adult Trial, we recently announced the expansion of the ongoing trial in Canada into the U.S. Following our submission of the protocol to the U.S. Food and Drug Administration or FDA, we’re now focused on site initiation activities in the U.S. for the adolescent and adult trial, in addition to our ongoing U.S. site initiation activities and our pediatric trial. In our REVEAL pediatric trial, we announced earlier this year that the U.K. Medicines and Healthcare Products Regulatory Agency, or MHRA, authorized the clinical trial application for TSHA-102 in pediatric patients with Rett syndrome, enabling expansion of our ongoing pediatric trial in the U.S. into the U.K. And we’re currently focused on site initiation activities.

Additionally, we are pleased to share that TSHA-102 receives Innovative Licensing and Access Pathway Designation or ILAP from the MHRA, which is a program that’s designed to accelerate the review path of novel treatments. We believe this further reinforces the high-end medical need for patients with Rett syndrome. As a reminder, TSHA-102 has already received Fast-Track designation and orphan drug and rare pediatric disease designations from the FDA and has been granted orphan drug designation from the European Commission for the Treatment of Rett Syndrome. Lastly, we are pleased to share that we have strengthened our clinical and regulatory leadership with the promotion of Dr. Meredith Schultz, the Chief Medical Officer, and Rumana Haque-Ahmed to Chief Regulatory Officer.

Dr. Schultz and Ms. Haque-Ahmed will continue to report to Suku. Dr. Schultz is a Board certified licensed pediatric neurologist, who is experienced in treating patients with Rett syndrome. Dr. Schultz brings more than 17-years of clinical experience and has led numerous gene therapy clinical trials for rare diseases in her career. As Chief Medical Officer, Dr. Schultz will lead the company’s clinical development, clinical operations, medical affairs, and safety activities. Rumana Haque-Ahmed brings nearly 30-years of experience in global regulatory, strategy and product development in multiple therapeutic areas. She has been instrumental in the development and execution of our regulatory strategies for TSHA-102, including obtaining IND and CTA clearances across three countries.

And she’s led the regulatory interactions across Taysha’s gene therapy portfolio. She will continue to lead the company’s regulatory affairs department and regulatory interactions. Dr. Schultz and Ms. Haque-Ahmed have been instrumental to the clinical development of our TSHA-102 program, and we look forward to continuing to partner with them in their new leadership positions. With a significant focus on execution in the year ahead, we believe our team is well positioned to continue to accelerate the development of TSHA-102. As you can see, we have made exciting progress across our TSHA-102 program over the past year. The sustained and new improvements in both adult patients with Advanced Aged Force Syndrome coupled with the initial six-week clinical data from the first pediatric patient that was reviewed by the IDMC, support the therapeutic potential of TSHA-102 for a broad population of patients with Rett syndrome.

Looking ahead, we are focused on generating clinical data across a broad range of ages and stages of patients with Rett syndrome and multiple geographies with multiple value inflection catalysts anticipated in 2024. We look forward to further evaluating the therapeutic potential of TSHA-102 for patients and families living with Rett syndrome. I will now turn the call over to Suku to provide more in-depth discussion on our clinical program in Rett syndrome. Suku?

Sukumar Nagendran: Thank you, Sean, and good afternoon, everyone. I’m pleased to provide an update on our TSHA-102 gene therapy program in clinical evaluation for the treatment of Rett syndrome. Rett syndrome is a rare neurodevelopmental disorder caused by mutations in the X-linked MECP2 gene encoding methyl CpG-binding protein 2 or MeCP2 protein, which is essential for regulating neuronal and synaptic function in the brain. This disorder is characterized by loss of communication and hand function, slowing and regression of development, motor and respiratory impairment, seizures, intellectual disabilities, and shortened life expectancy. Rett syndrome progression is divided into four key stages, beginning with early onset stagnation at six to 18 months of age followed by rapid regression, plateau and late motor deterioration.

The X-chromosome inactivation and silencing of MeCP2 expression that occurs randomly with Rett syndrome results in a mixture of cells that are either deficient in or express MeCP2 normally. This heterogeneity in MeCP2 expression is what makes Rett syndrome challenging with traditional small molecule and simple gene therapy approaches. But we believe our construct equipped with the novel miRNA responsive autoregulatory element or miRARE can appropriately address this challenge and provide therapeutic benefit. As a reminder, TSHA-102 is a self-complementary intrathecally delivered AAV9 gene transfer therapy designed as a one-time treatment. Because of the risk associated with both under and over expression of MeCP2, we have combined high throughput MicroRNA profiling and genome mining to create miRARE, a novel miRNA target panel designed to mediate MeCP2 expression in the central nervous system on a cell-by-cell basis.

With miRARE, endogenous microRNA, which activated in the presence of MeCP2 are thought to base pair with targets in the viral genome encoded mRNA and ultimately decrease protein expression levels through RNA interference. Thus, TSHA-102 is expected to provide the necessary function of the MeCP2 protein in cells lacking MeCP2, while protecting against toxic overexpression of MeCP2 in healthy cells. By increasing MeCP2 levels in MeCP2 deficient cells and maintaining healthy levels of MeCP2 output in normal cells, TSHA-102 has demonstrated the ability to produce and maintain safe transgene expression in the CNS in preclinical models. As Sean mentioned, TSHA-102 is currently being investigated in the ongoing reveal Phase 1/2 adolescent and adult trial.

The trial, which was designed primarily as a safety study, is also measuring pre-specified efficacy measures. All efficacy data being collected in this Phase 1, Phase 2 trial, this hypothesis is generating. As we continue to generate long-term data across more patients and cohorts this year, these data across measures will further inform our thinking relative to optimal primary endpoints selection for registration study purposes. Today, we are pleased to share the long-term data from the two adult patients treated with TSHA-102. I will be discussing data from two different time points for each patient. Efficacy assessments were captured at month six for Patient 1 and week 12 for Patient 2. Safety data and clinical observations from the principal investigator were captured at week 35 for Patient 1, following completion of a steroid taper and week 19 for Patient 2 at decreased steroid levels, compared to earlier post-treatment assessments.

All these data have been reviewed by the Independent Data Monitoring Committee. We will begin with an overview of the baseline status of the two patients prior to treatment with TSHA-102. As a reminder, the two adult patients who have been treated with the low dose of TSHA-102 differ in the severity of their disease. Both patients have been diagnosed with Stage 4 Rett syndrome, the late motor deterioration stage, which is the most advanced stage of the disease. However, the patients possess different genetic backgrounds and mutation types in the MeCP2 gene, which manifests in dramatically different phenotypes and clinical severity. Studies have confirmed that MeCP2 mutation types can be reliable predictor of Rett syndrome disease severity with more severe mutations correlating to greater motor dysfunction, loss of angulation, and higher prevalence of scoliosis.

Patient 1, a 20-year-old female, has a large deletion within her MeCP2 gene that manifests as a highly severe phenotype. This patient’s severity is evident by her clinical presentation at baseline. Prior to treatment, she was in a constant state of hypertonia with complete loss of angulation and was wheelchair bound. She had lost the ability to sit or stand by eight years of age as documented in the patient’s medical history. She also became non-verbal at this time. Additionally, the patient had limited body movement requiring constant back support and had lost fine and gross motor function early in childhood. She had very little hand function with essentially no function of her non-dominant hand. She experienced frequent apnea and hyperventilation episodes and had a history of seizures.

The patient’s level of severity is reflected in a baseline scores across efficacy measures including clinical global impression severity of CGIS, which is a seven-point scale anchored to signs and symptoms of Rett syndrome that rate the severity of the patient’s illness relative to the clinician’s experience with participants, who have the same diagnosis. At baseline, the patient’s CGIS score was 6, indicating severely ill. In contrast, the second patient, a 21-year-old female, has a missense mutation in her MeCP2 genes that manifests in a milder phenotype. The patient presented with a milder form of disease which is reflected in her clinical presentation at baseline. Prior to treatment, she had only partial loss of ambulation and could walk with prompting, but she experienced progressive kyphosis and bradykinesia that developed in her late teens, impacting her gait and balance as documented in the patient’s medical history.

Hand stereotypes appeared at three years of age following regression, and she mostly held her hands firmly together. She also became nonverbal at this time. Her ability to reach and grasp objects was weak. Additionally, the patient experienced frequent hyperventilation episodes and had a history of frequent seizures. Her level of severity in her baseline scores across efficacy measures — is reflected in her baseline scores across efficacy measures. Her baseline CGIS score was 4, indicating moderately ill. The key takeaway is that there are phenotypic differences between the two Stage 4 patients, which are correlated to their genetic status. We saw a consistent pattern of improvement across key clinical domains and efficacy measures as early as four weeks post treatment with the low dose of TSHA-102 in both adult patients, despite the differences in their genetic status or severity.

As Sean mentioned, we are pleased to share long-term data showing that both patients are having a durable response. Specifically, both patients sustained improvements and demonstrated new improvements, compared to the initial post-treatment assessments based on the efficacy assessments and observations from the principal investigator. Based on clinical observations from the principal investigator, both patients showed sustained and new improvements across multiple clinical domains, impacting activities of daily living, including autonomic function, seizures, socialization, and communication, and motor skills following treatment with the low dose of TSHA-102. Let’s begin with an overview of the long-term clinical observations for Patient 1. Per the protocol, prophylactic immunosuppressant therapy begin or began prior to TSHA-102 administration.

The first patient’s steroid taper was initiated at week 17 and completed at week 33. At 35 week post-treatment assessment, the principal investigator observed that the patient’s improvements across multiple clinical domains had been maintained following completion of the steroid taper, as well as the new improvements that were observed compared to earlier post-treatment assessments. Specifically, 35-weeks following treatment, the first patient demonstrated sustained improvements from initial four and six-week assessments in multiple clinical domains after the completion of the steroid taper, including motor improvements. At the patient’s initial six-week assessment, she had gained the ability to sit unassisted for the first time in over a decade and had restored movements in her legs.

At week-35, following the completion of the patient’s steroid taper, these improvements of sitting unassisted and restored movement in her legs had been maintained as documented by video evidence. Further, the patient sustained improvement in hand function at week-35, including the gained ability to grasp objects with a non-dominant hand and transfer them to her dominant hand for the first time since infancy, as documented by video evidence. At week-35, she also showed a sustained improvement in her ability to grasp with her dominant hand. Additionally, the patient demonstrated the ability to open her hands, dissociate her fingers, scratch her nose, and touch a screen following treatment. Progressive loss of hand function is a hallmark characteristic of Rett syndrome and a key concern for caregivers that impacts a patient’s ability to communicate and impede daily activities, but ultimately limits independence.

These sustained improvements in hand function, 35-weeks following treatment, which are not observed in the natural history of Rett syndrome, are very encouraging and support the potential of TSHA-102 to bring meaningful therapeutic benefit to patients and caregivers. The patient also demonstrated sustained improvement in autonomic function at week-35 with improved breathing patterns, reduced breathing dysrhythmias, including less breath-holding spells and infrequent hyperventilation, compared to before treatment. As a result, she experienced a sustained improvement in sleep quality and duration through week-35. Caregivers reported that following treatment, the patient sleeps through the night for the first time in 20-years. Therefore, she is much more alert during the day.

Additionally, poor perfusion of the extremities is a characteristic sign in patients with Rett syndrome that is thought to result from dysautonomia, meaning it’s controlled by the autonomic nervous system. Therefore, it’s encouraging that the patient also showed a sustained improvement in circulation at week-35 post-treatment with the patient’s hands and feet restored to normal temperature and color, whereas before treatment the hands and feet were usually cold and blue based on the principal investigator’s clinical observations. At week-35 post-treatment, the principal investigator observed new improvements in socialization and communication since the patient’s initial six-week assessment. As of the week-35 assessment, the patient was more alert and socially interactive with increased communication of her needs using vocalization.

Caregivers reported that she showed an enhanced ability to use an eye-driven communication device, which caregivers said she hadn’t expressed interest in before treatment. Specifically, following treatment, the patient was able to use the device much more efficiently with this gained ability to activate functions on the screen of the device. Difficulty in communication, including loss of speech, is one of the most prominent symptoms of Rett syndrome and is a key area of concern for caregivers as it directly interferes with the patient’s ability to communicate their needs and express their interest. These new improvements observed at week-35 post-treatment are highly encouraging as alternative and augmentative communication speech output technologies activated by Eyegaze can be leveraged by patients and families with Rett syndrome as a supplement to or replacement for natural speech.

We believe that the ability to communicate could give patients a sense of control and greater independence. The principal investigator also observed that the patient’s seizures have overall been well controlled through week-35, following treatment at lower levels of anti-seizure medicines relative to baseline and that the patient no longer experiences unprovoked seizures. These observations are supported by data from the seizure diaries. Now let’s turn to the second adult patient at the 19-week post-treatment assessment, the principal investigator observed that the patient’s improvement across multiple clinical domains had been maintained, while the patient was on decreased steroid levels, as well as new improvements that were observed compared to initial four and six-week assessment.

Specifically, she sustained improvements in motor skills with a reduction in hand stereotypies, which are repetitive, purposeless hand movements and a diagnostic hallmark of Rett syndrome. Before treatment, the patient mostly held her hands firmly together. Her hand stereotypies had improved for the first time since regression at age three at the initial four-six week assessment. Based on the principal investigator’s observations and supported by video evidence, the patient displayed less forceful handling and the hands were more often open and relaxed through week-19. The sustained improvement in hand stereotypies at week-19 post-treatment is encouraging and it provides new opportunities for fine motor skill learning. The patient also sustained improvements in socialization and communication through week-19 with an increased interest in social communication and activities, including increased response to spoken words and eye contact.

She also sustained improvement in autonomic function at week-19 with improvements in breathing dysrhythmias, including hyperventilation and reduced apneic spells. The patient also showed sustained improvement in circulation at week-19 post-treatment with the patient’s hands and feet restoring normal temperature and color, whereas before treatment, the patient’s hands and feet were usually cold and blue based on the principal investigator’s observation. Notably, the second patient demonstrated a pronounced improvement in seizure frequency at week-19 post-treatment, the significant reduction in seizures at lower levels of anti-seizure medicine relative to baseline. These observations are supported by data from the seizure diaries, which I will discuss in more detail later.

Both patients also demonstrated sustained and new improvements across key efficacy measures following treatment with TSHA-102, which reinforces these clinical observations from the principal investigator. Let’s begin with an update on the efficacy data reported at the six-month post-treatment assessment from the first patient. The first patient sustained improvements across key efficacy measures at decreased steroid levels and showed improvements at six months post-treatment. Specifically, she has sustained improvement from the initial four-week assessment in clinical global impression improvement or CGII, clinical global impression severity or CGIS, parental global impression improvement of PGII, the Rett syndrome hand function scale or RSHFS, the revised motor behavior assessment or RMBA and Seizure Diaries.

CGII is a clinician reported 7 point assessment of overall improvement following treatment adapted to Rett syndrome that accounts for key aspects of the disease to determine global change score. A sustained score of two indicating much improved was reported at the six-month assessment, which is consistent with the score reported at the four-week assessment. Additionally, the patient demonstrated a sustained one-point improvement from the baseline score of 6, indicating severely ill, to a score of 5, indicating markedly ill in CGIS at month six, which is consistent with the score at week 4. PGII is a caregiver-reported assessment of overall improvement following treatment that uses a seven-point scale. A sustained score of 2 indicating much improved was reported at month six.

The RSHFS is a clinician-reported assessment of hand function in patients with Rett syndrome, which is evaluated by an experienced, independent physical therapist with expertise in the hand function of Rett patients, who codes and the demonstrated hand function in each video at one of four levels, assessing the best score for large objects, ranging from no active grasping of any object to independent grasping. The highest score that can be achieved for this assessment is a four. The first patient demonstrated a sustained improvement in RSHFS at six months following treatment. Although there are no changes from the baseline score of three indicating the ability to hold an object for at least two seconds in her dominant hand, she was able to increase the number of objects held from one to two.

Additionally, she has gained some basic grasping ability in her non-dominant hand, and sustained this improvement at six months post-treatment. At baseline, she could not hold any objects in a non-dominant hand, and at six months a score of two was demonstrated, indicating the ability to hold an object for at least two seconds when assisted to grasp. Again, it is very important to note that hand function improvements are rarely observed in the natural history of Rett syndrome. The RMBA, which is the 24-question clinician reported scale measuring disease behaviors of Rett syndrome showed a total score improvement of 1 point from the baseline score of 43 to a score of 42 at month six, improvements were observed in motor dysfunction and respiratory behaviors.

Seizure Diaries showed that the patient had stable seizure events at lower level of anti-seizure medication relative to baseline through week-35 post-treatment based on caregiver reported medical history. Before treatment the patient had two to four seizures per year. As of week-35 the patient’s seizures are confined to periods where her anti-seizure medication levels declined to below 50 micromoles per liter. Whereas before treatment with TSHA-102, she required levels of 100 micromoles per liter or greater to control the seizures. Importantly, the first patient also showed new improvement in the six-month assessment in the Rett Syndrome Behavior Questionnaire, RSBQ. In RSBQ, which is a 45-item caregiver-administered questionnaire that assesses Rett syndrome characteristics, the patient demonstrated a 30-point total score improvement from the baseline score of 52 to a score of 22 at month six.

The score was driven by improvements in hand behavior, breathing problems, general mood, repetitive face movements, nighttime behaviors, fear and anxiety, body rocking and facial expressions. Now let us discuss the efficacy data reported at the week-12 post-treatment assessment from the second patient. We call that the second patient had a CGIS severity score of four, indicating moderately ill, versus a baseline CGIS score of six, indicating severely ill for Patient 1. At week-12 post-treatment, the second patient demonstrated sustained and new improvements across key efficacy measures from the initial four-week assessment. A sustained score of three, indicating minimally improved, was reported at week-12 in both CGII and PGII, which is consistent with the score reported at the four-week assessment for Patient 2.

The patient showed a two-point improvement in the RSBQ total score from the baseline score of 37 to a score of 35 at week 12. Improvements are observed in breathing, body rocking, facial expression, general mood, and repetitive face movements. Importantly, the second patient also demonstrated new improvements at the 12-week assessment in RMBA. She demonstrated a 17-point improvement in the RMBA total score from the baseline score of 38 to a score of 21 at week 12, which was driven by improvements in social skills, respiratory behavior, including less frequent hyperventilation and breath holding, seizures, truncal rocking, stereotypic hand movements, and now mouthing and aberrant behavior. The patient also showed new improvements at week-19 in seizures.

The seizure diary showed a significant reduction in seizure events at 25% lower levels of anti-seizure medicines relative to baseline through week-19 post-treatment based on caregiver reported medical history. Relative to the baseline seizure frequency of 2 to 4 seizures per week, there has been a significant reduction in seizures post-treatment with TSHA-102. Since treatments with TSHA-102, Patient 2 had a single seizure event with 17 weeks reported seizure-free as of week 19 posted. There were no changes reported in CGIS or RSHFS at week 12. However, at week 12, the principal investigator reported a sustained improvement in the patient’s hand stereotypies, which are not measured in RSHFS. For the first time since regression at age three, the patient displayed less forceful hand winning and more open and relaxed hands.

More data details on this available data can be found in our press release issued today in our Form 10-K for the year ending in December 31 2023 filed with the SEC. Overall we are highly encouraged by the safety profile and the durable response reported in these long-term data in both adult patients treated with the low dose of TSHA-102. The critical takeaway is that following treatment with TSHA-102, there were early improvements observed across multiple clinical domains in the two Stage 4 adult patients with different genetic mutation, severity and phenotypic expression. And importantly, both patients showed sustained new improvements across those clinical domains at week-35 post-treatment for Patient 1 and week 19 post-treatment for Patient 2.

We believe the safety profile and continued improvements observed even at reduced steroid levels in both adult patients with advanced Stage 4 Rett syndrome support the durability and transformative potential of TSHA-102 across multiple genotypes of Rett syndrome. With the low-dose cohort complete in the adolescent and adult trial, we will focus on collecting data with the high-dose TSHA-102 to further explore the clinical impact of TSHA-102 in patients with Stage 4 Rett syndrome. Based on the IDMC’s review of the clinical data from both adult and the initial clinical data from the first pediatric patient treated with the low dose of TSHA-102, the IDMC approved our request to proceed to an earlier dose escalation in the adolescent and adult trial.

The IDMC also approved dosing in the second pediatric patient in Cohort 1, the low-dose cohort, in a REVEAL Phase 1/2 pediatric trial. Both REVEAL trials have two-part trial design. Dose escalation from Part A will be assessed by the regulatory agencies and the IDMC to provide guidance on key final key elements of Part B or the dose expansion portion of the study, including hierarchy of efficacy endpoints, study duration, and the maximum tolerated dose or maximum administered dose. Therefore, advancing to Cohort 2 in the adolescent and adult trial will expedite our ability to inform our clinical development and regulatory plan for Part B of the studies. This year we are focusing on completing dosing in Part A of both trials. We anticipate significant data collection in 2024 with many clinical catalysts expected in the year ahead.

As we discussed in early January, we expect to report initial safety and efficacy data from Cohort 1 evaluating the low dose of TSHA-102 in the pediatric trial mid-2024. We also expect to report initial data from Cohort 2 evaluating the high dose of TSHA-102 in the second-half of 2024 in both the adolescent and adult and pediatric trial. As Sean noted earlier, our efforts to expand our clinical trials remain underway. And we are currently focused on additional site activation in the U.S. for our adolescent and adult trial with the goal of expanding our adolescent and adult trial in Canada into the U.S. We are also focused on site activation in the U.K. for our pediatric trial with the goal of expanding our ongoing pediatric trial in the U.S. into the U.K. As a reminder, there are no approved disease modifying therapies currently available that create the root — genetic root cause of Rett syndrome.

There is a significant unmet medical need with Rett syndrome caused by a pathogenic, likely pathogenic MECP2 mutation, afflicting between 15,000 to 20,000 patients in the U.S., EU, and U.K., and a high burden of care associated. We are pleased that TSHA-102 recently received ILAP designation from the U.K. MHRA. TSHA-102 has also received Fast Track designation and Orphan Drug designation and rare pediatric designation from the FDA and has been granted orphan drug designation from the European Commission for the Treatment of Rett syndrome. Overall, we are highly encouraged by the safety profile and long-term efficacy reported in the first two adult patients, as well as IDMC’s approval to dose the second pediatric patient following review of the initial six-week clinical data from the first pediatric patient dosed with TSHA-102.

This year we are focused on collecting data across multiple ages of patients with the low and high dose of TSHA-102 to further inform our clinical and regulatory strategy for the next phase of the study. We look forward to sharing additional progress this year. I will now turn the call over to Kamran to discuss our financial results. Kamran?

Kamran Alam: Thank you, Suku, and good afternoon. Revenue for the full-year ended December 31, 2023, was $15.5 million, compared to $2.5 million for the full-year ended December 31, 2022, as revenue was derived entirely from our option agreement with Astellas Gene Therapies. The increase in revenue is primarily a result of Rett syndrome research and development activities performed in 2023. Research and development expenses were $56.8 million for the full-year ended December 31, 2023, compared to $91.2 million for the full-year ended December 31, 2022. The decrease was due to reduced research and development head count, lower research and development manufacturing expenses and a reduction in third-party research and development consulting fees mainly related to preclinical studies and IND-enabling toxicology studies.

General and administrative expenses were $30 million for the full-year ended December 31, 2023, compared to $37.4 million for the full-year ended December 31, 2022. The decrease was primarily attributed to a reduction in compensation expenses as a result of lower headcount and reduced corporate insurance and consulting expenses. Net loss for the full-year ended December 31, 2023 was $111.6 million or $0.96 per share, as compared to a net loss of $166 million or $3.78 per share for the full-year ended December 31, 2022. The net loss includes a non-recurring and non-cash expense of $34.5 million related to the change in fair value from the prefunded warrants as a result of the August 2023 private placement financing. As of December 31, 2023, Asia had $143.9 million in cash and cash equivalents.

The company continues to expect that its current cash resources will support planned operating expenses and capital requirements into 2026. I will now turn the call back over to Sean for his closing remarks. Sean?

Sean Nolan: Thank you, Kamran. As you heard today, we’ve made significant progress in the clinical development of our TSHA-102 program. We are highly encouraged by the safety profile and durable response reported at reduced steroid levels and the longer-term data from both patients in the low dose of our Reveal adolescent and adult trial. These continued improvements in both adult patients with advanced Stage 4 Rett syndrome, coupled with the IDMC’s approval to dose the second pediatric patient following a review of the initial clinical data from the first pediatric patient dose with TSHA-102 reinforced the transformative potential of TSHA-102 across a broad population of patients with Rett syndrome. Building on the momentum from 2023, we believe 2024 is poised to be a transformational year for the company.

This year, we’re focused on data generation across a broad range of ages and stages of patients with Rett syndrome in multiple geographies with the goal of completing dosing in part of both trials with the low and high dose of TSHA-102 to inform the next phase of the studies. With many clinical catalysts expected in the year ahead, we look forward to providing additional updates on our progress. With that, I will now ask the operator to begin our Q&A session. Operator?

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Q&A Session

Operator: Thank you. Ladies and gentlemen, at this time, we will be conducting a question-and-answer session. [Operator Instructions] Our first question comes from the line of Whitney Ijem with Canaccord. Please proceed with your question.

Whitney Ijem: Hey, guys. Thanks for all the updates. I guess to limit myself to one, just can you help set expectations into the pediatric data mid-year and in particular, our understanding of Stage 3, and I think you guys have talked about this a little bit before, but is that the disease is kind of stable, more variable and potentially some improvements in terms of the natural history. So how should we be thinking about kind of what you could show an initial update versus maybe over the longer term in the pediatric updates as we go through the year? Thanks.

Sean Nolan: Thanks, Whitney. I guess I would say that, number one, keep in mind that the pediatric patients will likely be in a severity range of CGI-S of between 4% and 6%, which is similar to what’s happening in the adolescent and adult trial. And I think if you talk to the KOLs out there, you’d get very consistent feedback that that’s the most appropriate severity range to study in a first-in-human trial for gene therapy with this particular disease. So I think, Whitney, to answer your question, you’re going to see a bit of a spectrum of patients, right? Someone who’s a four is going to be different than someone who’s a six. We’ve seen that with our first two adult patients here. The time to impact it’s a new population. You’d like to think that you should see a relatively similar time to effect and hopefully, initial magnitude of effect is relatively similar depending upon the severity of the disease, it’s also possible that it could take longer to see change in someone that’s less severe versus more severe.

So if you think about a midyear readout, I would say that we dosed our first patient at the end of 2023. So we’d likely have between four to six months of data at that particular time. We’ve guided to dosing the second patient this quarter. So you’re probably talking between two to three months of data for that patient and potentially early data for the third patient depending upon the timing of that particular dosing. So hopefully, that gives you a little bit of flavor of what to expect.

Whitney Ijem: That does, thanks.

Sean Nolan: Thank you.

Operator: Our next question comes from the line of Salveen Richter with Goldman Sachs. Please Proceed with your question.

Elizabeth Webster: Hey guys, good evening. This is Elizabeth on for Salveen. Thank you for taking our question and congrats on the data. Mechanistically, what is your hypothesis around what is driving the RSBQ improvement for Patient 1 at week 25, noting that, that score was relatively flat from week four to 12? And then how should we think about expectations for the particular score metric on the forward? Thank you.

Sean Nolan: I can go first and Suku can jump in. But I would say with patient number one, the changes that you saw in RSBQ were primarily driven by anxiety going down, general mood improving and hand function improvement. Those are the three main drivers in the latest decrease in that particular scale. I would just say one potential hypothesis right now on some of the mood aspects is that — these patients are on very high levels of steroids for a long period of time. And we’ll have to see how other patients do as well. But one potential is that you’re reducing the steroids the level of irritability, the impact on sleep, just the overall mood could be improving as a result of that. Put another way, it’s possible that the steroids somewhat masked benefits until they’re either reduced significantly or further withdrawn.

So we’re quite encouraged by what we’ve seen in that aspect of things. And hopefully, that gives you a bit of perspective on how we’re thinking of it and will lead at this juncture.

Elizabeth Webster: Got it, thank you.

Sean Nolan: Thank you.

Operator: Our next question comes from the line of Kristen Kluska with Cantor Fitzgerald. Please proceed with your question.

Kristen Kluska: Hi everyone, thanks for taking my question and congrats on these data updates I wanted to ask about the leap anecdote you shared for Patient 1. So we understand that sleep issues are very common in Rett syndrome patients, but they can present pretty differently depending on the type of mutation. So can you speak more to the background expected for this patient based on their mutation. And essentially what difficulties they were having sleeping through the night. So was there any fleet screaming or laughing or other notable effects and essentially what you believe is happening that you were able to see the drastic change there? Thank you.

Sukumar Nagendran: Yes. So that’s an important question because as you pointed out, many patients with Rett syndrome do have significant sleep abnormalities and sometimes they also correlated with the respiratory abilities that can coexist. And in this Patient 1, what was observed by the parents was that this patient never ever seem to have a reasonable night sleep and always had a very disruptive night sleep, which included restraint features, night teas, et cetera. And post gene therapy, the feedback from the carrier, especially the father was that this patient was now sleeping through the night, and that’s the first time he was getting a good nice sleep. So obviously, the gene therapy itself, I think we’re speculating what we think is restoring a MECP2 function in the sleep centers and probably helping with many features of sleep that resulted in this patient being restored to almost a normal state.

Your second question, I think, was on seizures. So patient one is thought to have about two to four seizure a year, I’m sorry, you have a.

Kristen Kluska: Yes, sorry. No the question was just on the differences about sleep disturbances relative to the mutations that they experience do they have.